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Simple English definitions for legal terms
net sale contract
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A quick definition of net sale contract:
A net sale contract is an agreement between a property owner and a real estate agent. The agent agrees to sell the property for a set minimum price, and any amount over the minimum is kept by the agent as commission. This type of listing is also called a net listing. It is different from other types of listings, such as exclusive-agency listings, general listings, and open listings. A net sale contract is a way for the agent to make more money if they can sell the property for a higher price than the minimum.
A more thorough explanation:
A net sale contract is a type of listing agreement in real estate where the agent agrees to sell the owner's property for a set minimum price, with any amount over the minimum being retained by the agent as commission.
For example, if a property owner sets a minimum price of $100,000 for their property, and the agent sells it for $120,000, the agent would keep the $20,000 difference as their commission.
This type of agreement can be risky for the property owner, as the agent may be motivated to sell the property for less than its true value in order to secure a higher commission. As a result, net sale contracts are not commonly used in real estate transactions.