Net Listing: What Every Home Seller Should Know in 2025

Are you a home seller gearing up to put your property on the market? You definitely need to understand what a net listing is. It isn’t just a specialized contract. It invites risks, and in most places, is banned outright. Trust me, this knowledge can save you from costly mistakes and legal headaches. 

Read on to learn more about net listings agreements, whether they are legal in your state, and why real estate professionals warn sellers to tread carefully if agreeing to such an arrangement.

What Is a Net Listing?

A net listing is a unique type of real estate agreement where a home seller sets a minimum price they want to receive from the sale of their property. Any amount above this minimum is pocketed as commission by the real estate agent. 

This is different from most real estate agreements, where commissions are usually a fixed percentage of the sale price. This commission is usually split between the seller’s and buyer’s agents. In a net listing, the agent’s incentive is to sell for as high as possible—but your payout never changes regardless of the final selling price. This can be a bit of a downer for a home seller. 

How Does a Net Listing Agreement Work?

The home seller decides on the lowest amount they’re willing to accept when selling the property. The real estate agent markets the home but gets to keep any surplus between your baseline and what the buyer pays. 

However, if the buyer’s agent is involved, their commission typically comes out of your minimum, not the agent’s surplus. That means your actual “take-home” could be lower than expected after these deductions. Ouch! 

Net Listing vs. Standard Listing Examples

In the case of a net listing, if you set your net at $300,000 and your real estate agent finds a buyer willing to pay $340,000, you get your $300,000—and the agent’s commission is the extra $40,000.

With a standard listing agreement, on the other hand, you pay a commission (usually 5-6% of the sale price) no matter how much the house sells for. If your house sells for $450,000, the total commission is $27,000, which is split equally between the agents. You get to keep $423,000.

This arrangement aligns your agent’s interest with getting you the highest possible price. Net listings, in contrast, risk putting your interests and those of your agent at odds.

Are Net Listings Legal in the U.S.?

Net listing agreements stir up controversy for several reasons, mainly because they can create a conflict of interest between the agent and the seller. Sometimes, agents might push sellers to accept a lower price to boost their commission. To prevent this, the National Association of Realtors (NAR) bans net listings in some states and requires agents to disclose their commission to the seller. It also prohibits net listings from being listed on Multiple Listing Services (MLS). This means, even if they’re allowed by law, few reputable real estate professionals will touch them.

In states where net listings are allowed, the seller must consent to the agreement. In most states, net listings are illegal. Only California, Texas, and Florida allow net listings—and even there, strict rules apply:

• California: This is allowed only for “highly sophisticated” or independently represented clients, and agents must fully disclose every possible conflict of interest.
• Texas: This is legal only if the seller specifically requests it and can demonstrate a deep understanding of current market values for real property.
• Florida: Net listing agreements are valid but are discouraged by most professionals due to ethical concerns.

Why Are Net Listings So Controversial?

Net listings are unpopular for a good reason:

• Conflict of interest: Since your agent receives a commission only on the surplus, they may pressure you to set a low minimum price—maximizing their cut, but minimizing yours.
• Reduced transparency: Off-MLS listings shrink property exposure, meaning fewer buyers see your home, and you could get less from the sale than with a traditional agreement.
• Legal and ethical pitfalls: Many real estate professionals refuse net listings since they can result in agents putting their own profit ahead of your interests. This can lead to possible lawsuits or disciplinary actions for both parties.

As of August 2025, major sites such as Zillow will not display net listings unless they’re sourced from an MLS feed. This action will further reduce their practical usefulness and reach.

Can a Net Listing Ever Benefit a Home Seller?

Occasionally, net listings make sense—usually for sellers with very specialized needs:

• Sellers who only care about receiving a certain amount from the sale and don’t mind if the agent profits more.
• Owners of unique real property that may attract offers above market expectations.
• Sellers who need to offload properties quickly and are comfortable trading risk for speed.

But even then, the “hefty commission” the agent can receive may leave the home seller dissatisfied, especially if the market value rises unexpectedly.

The Bottom Line: Should You Ever Sign a Net Listing Agreement?

For most people, the answer is a firm NO. Even in states where net listings are legal, such agreements are risky. Most real estate agents avoid net listings due to the potential for conflicts of interest and reduced transparency. And, yes, if your agent suggests a net listing, it’s wise to find another one! Or at the very least, get advice from a qualified attorney with experience in local real estate law. And here’s another tip: NEVER sign an agreement you don’t fully understand.

Remember, your protection as a home seller should always be the top priority. In nearly every case, it’s better to stick with a traditional commission structure where your agent’s interests truly align with your own.

Written by Ramona Sinha. July 12, 2024

Ramona is the Senior Content Writer for Kukun. This experienced blogger uses simple and succinct words to decipher the complex phenomenon called life. She has written articles covering a broad range of topics, such as real estate, lending and mortgage, finance, business, taxation, home designs, home improvement projects, decor concepts, and more. An avid traveler, she’s a digital nomad at heart and an animal lover from the depth of her soul.