Short Answer
A net listing is an agreement where the seller sets a minimum net amount they want to receive from the sale, and the agent keeps everything above that amount as their commission. Net listings are illegal in New Jersey and most other states because they create a conflict of interest. The agent is incentivized to get the highest possible price, which can lead to unethical behavior and pressure on the seller to accept terms that benefit the agent rather than the seller.
Net listings create an inherent conflict of interest between the agent and the seller. In a traditional listing agreement, the commission is a set percentage or flat fee agreed upon in advance, so the agent is motivated to get the best price for the seller without an incentive to inflate the price unreasonably. In a net listing, the agent's commission increases with every dollar above the seller's net amount, creating a direct financial incentive for the agent to push for the highest possible price, even if that price is unrealistic and causes the home to sit on the market. New Jersey, along with most states, has banned net listings to protect sellers from this inherent conflict of interest. Any licensed agent who proposes a net listing is violating the law and could lose their license.
Bob's Advice
Redfin Senior Agent · AI Certified Agent
If an agent ever proposes a net listing to you, run the other way. It is not just unethical, it is illegal. A good agent will be transparent about their commission from the start and will work to get you the best price because that is the right thing to do, not because they have a hidden incentive. If you have questions about how listing agreements work, I am happy to explain every line so you feel fully informed before you sign anything.
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