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.