Net Listing Agreement Florida

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If you are looking to sell your property in Florida, you may have come across the term “net listing agreement”. This type of agreement has gained popularity recently, but what exactly is it and how does it work? Here`s what you need to know.

What is a net listing agreement?

In a net listing agreement, the seller sets a minimum price for their property, and anything above that price is considered the “net” price. The real estate agent then adds their commission on top of that price, and that is the final sales price. For example, if you set your minimum price at $200,000 and your agent`s commission is 6%, the final sales price would be $212,000. If the property sells for less than the minimum price, the agent does not receive a commission.

Why use a net listing agreement?

The main advantage of a net listing agreement is that it incentivizes the agent to sell the property for as much as possible. Since the agent`s commission is tied to the sales price, they have a strong motivation to negotiate the best deal for the seller. Additionally, some sellers may prefer this type of agreement if they have a very specific idea of what they want for their property and don`t want to sell for less than that amount.

However, it`s important to note that net listing agreements can be controversial and are actually illegal in some states. This is because they can create a conflict of interest for the agent, who may be tempted to hold out for a higher price even if it`s not in the seller`s best interest.

Are net listing agreements legal in Florida?

Yes, net listing agreements are legal in Florida. However, they are heavily regulated to protect both the seller and the agent. According to Florida law, a net listing agreement must be in writing and must include the minimum price set by the seller, the agent`s commission rate, and a statement indicating that the seller understands they may receive less than the net price if the property sells for less than the minimum price.

Additionally, Florida law requires that the agent must act in good faith and with the seller`s best interests in mind. This means that they cannot intentionally hold out for a higher price that is not in the seller`s best interest.

Overall, net listing agreements can be a useful tool for some sellers, but they should be approached with caution. Sellers should work closely with their agent to ensure that the agreement is fair and in their best interest, and they should be prepared to negotiate if necessary. With the right approach, a net listing agreement can be a effective way to sell a property for the best possible price.