Net Payoff

DEFINITION of 'Net Payoff'

The profit (or loss) from the sale of an item after the costs of selling it and any accounting losses have been subtracted. This term is commonly used in describing real estate and investment transactions.

BREAKING DOWN 'Net Payoff'

When considering the sale of an asset, the seller should take into consideration not just the sale price, but how much she will actually receive at the end of the transaction – the net payoff. For example, if Amy sells her house for $250,000, she will need to subtract her mortgage payoff amount, real estate agent's commission and any settlement fees from $250,000 to determine her net payoff.

As another example, consider the sale of some shares of stock. The net payoff would be the amount received for the sale minus the trade commission.

RELATED TERMS
  1. Asset-or-Nothing Put Option

    An option payoff that is equal to the asset's price if the asset ...
  2. Payoff Statement

    A statement prepared by a lender showing the remaining terms ...
  3. Multi Index Option

    A type of investment in which the payoff depends on the difference ...
  4. Discounted Payoff

    The repayment of a loan in an amount that is less than the principal ...
  5. Average Price Call

    A type of option where the payoff is either zero or the amount ...
  6. Short Sale

    A market transaction in which an investor sells borrowed securities ...
Related Articles
  1. Investing

    NYIF Instructor Series: Synthetic Stock

    In this short instructional video Anton Theunissen explains how to replicate a levered stock using a combination of options.
  2. Markets

    Advanced Game Theory Strategies For Decision-Making

    The importance of game theory to modern analysis and decision-making can be gauged by the fact that since 1970, as many as 12 leading economists and scientists have been awarded the Nobel Prize ...
  3. Personal Finance

    Key Reasons To Invest In Real Estate

    There has been a lot of negativity over the real estate sector since 2008. Here are the reasons why you should be investing in it.
  4. Personal Finance

    Becoming a Real Estate Agent Or Mortgage Broker

    Considering a career as either a real estate agent or a mortgage broker? Here are some factors that might help you choose between them.
  5. Investing

    4 Key Factors That Drive The Real Estate Market

    The size of the real estate market make it an attractive sector for many investors, but understanding the factors that drive it is essential.
  6. Investing

    NYIF Instructor Series: Married Put

    In this short instructional video Anton Theunissen explains what a married put is and how it works.
  7. Personal Finance

    How to Invest in Real Estate Without Buying Property

    Investing in real estate can require more capital than most investors have available, but there are options to invest in real estate for less.
  8. Personal Finance

    10 Habits Of Highly Effective Real Estate Investors

    The best real estate investors all share these traits and practices.
  9. Personal Finance

    How Real Estate Agents Sell Their Homes For More

    A well-publicized statistic finds that when real estate agents sell their own homes, they tend to get a higher price. But why?
  10. Managing Wealth

    4 Key Factors That Drive The Real Estate Market

    Whether you are investing directly or indirectly in property, you need to know the factors that affect its value.
RELATED FAQS
  1. Short selling vs. purchasing a put option: how do the payoffs differ?

    Purchasing a put option and entering into a short sale transaction are the two most common ways for traders to profit when ... Read Answer >>
  2. What components are factored in determining net sales?

    Understand the key components that factor into determining a company's net sales. Learn about the underlying drivers of those ... Read Answer >>
  3. What can gross sales tell you about a business?

    Learn more about gross sales and net sales. Find out what the gross sales figure reveals about a business and how investors ... Read Answer >>
  4. What economic indicators should an investor in the real estate sector consider?

    Find out about economic indicators and which indicators investors in the real estate sector should take into account before ... Read Answer >>
  5. Do real estate agents get paid hourly or by salary?

    Learn about real estate commissions and how real estate agents, including listing agents, buyer's agents and real estate ... Read Answer >>
  6. What is the point of calculating gross sales?

    Learn how doing simple gross sales and gross profit calculations can serve to help change a company's profit ratio and overall ... Read Answer >>
Hot Definitions
  1. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  2. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  3. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  4. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
  5. Russell 3000 Index

    A market capitalization weighted equity index maintained by the Russell Investment Group that seeks to be a benchmark of ...
  6. Enterprise Value (EV)

    A measure of a company's value, often used as an alternative to straightforward market capitalization. Enterprise value is ...
Trading Center