Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Net Proceeds

What it is:

Net proceeds refers to the amount of money remaining after an asset has been sold and related expenses have been paid.

How it works (Example):

For example, a homeowner sells his house for $100,000. After deducting real estate agent fees and closing costs of $10,000, his net proceeds equal $100,000 - $10,000 = $90,000. 

This can also apply to selling stocks and other assets, where the expenses might include broker and other transaction fees. 

Why it Matters:

Whenever an individual or business sells assets, it's important to make sure net proceeds, not gross proceeds, are being maximized.  This means that perhaps the best sales price is not the highest price. The highest price does not always reward the seller with the most net proceeds. Transaction costs must be scrutinized as closely as the selling price -- if not more so -- since these costs are often hidden or obscured.