Acquisition Fee

DEFINITION of 'Acquisition Fee'

A fee charged by a lessor to cover the expenses incurred in arranging a lease. Acquisition fees may also refer to charges and commissions paid for the acquisition or purchase of property, such as closing costs, real estate commission, and development/construction fees. Acquisition fees may be paid up front by the buyer or lessee or added to the loan amount and paid over the term of the loan.

BREAKING DOWN 'Acquisition Fee'

Acquisition fees are sometimes hidden in the purchase or lease price, which can add significantly to the acquisition price for the unsuspecting buyer or lessee. The buyer or lessee should therefore insist on a clear explanation and breakdown of the acquisition fee.

The acquisition fee should also be preferably paid up front, rather than including it in the loan or lease amount, since this would result in significantly higher interest expenses over the term of the loan.

RELATED TERMS
  1. Drop Dead Fee

    Fee paid by a borrower to a lender when an acquisition deal falls ...
  2. True Lease

    A specific type of multi-year lease which does not pass on ownership ...
  3. Lessor

    The owner of an asset that is leased under an agreement to the ...
  4. Break Fee

    1. A fee paid by a target company to bidders (during an acquisition) ...
  5. Exchange Fees

    A type of investment fee that some mutual funds charge to shareholders ...
  6. Leveraged Lease

    A lease agreement that is partially financed by the lessor through ...
Related Articles
  1. Economics

    Who is a Lessor?

    A lessor is the owner of an asset that is leased.
  2. Investing

    What's an Acquisition?

    In corporate terms, an acquisition is the purchase of a company or the division of a company. Some acquisitions are paid in cash, while others are paid with a combination of cash and the acquiring ...
  3. Retirement

    Are Fees Depleting Your Retirement Savings?  

    Each retirement account will have a fee associated with it. The key is to lower these fees as much as possible to maximize your return.
  4. Personal Finance

    Are Financial Advisor Fees Too High?

    Fees charged by financial advisors run the gamut. Are you getting a fair deal or paying too much?
  5. Mutual Funds & ETFs

    A Guide To Investor Fees

    Fees are one of the most important determinants of investment performance and something that every investor should know.
  6. Investing Basics

    How To Optimize Your Portfolio and Reduce Fees

    Investment fees aren't avoidable altogether, but there are strategies investors can employ to keep those fees at bay and reduce the impact on returns.
  7. Investing Basics

    3 Investment Fees That Are Negotiable

    Investment fees are a necessary evil but that doesn't mean they have to be overly costly. There are ways to negotiate some of the expenses down.
  8. Retirement

    How Much Do You Know About 401(k) Fees?

    Here is a quick breakdown of fees that most people should know about when they look at their retirement account.
  9. Economics

    How Does an Operating Lease Work?

    Operating lease is a term used mostly in accounting to denote a lease that gives the lessee rights to use and operate an asset without ownership.
  10. Budgeting

    Everyday Fees And How To Avoid Them

    Keep an eye out for these charges, and you'll save a bundle.
RELATED FAQS
  1. What kinds of fees are involved in futures trading?

    Learn what the various costs are that are charged by brokerage firms and trading exchanges to individual futures trading ... Read Answer >>
  2. What are typical trust fund management fees?

    Learn about trust fund management fees, such as the annual management fee, annual expense ratio, brokerage commissions and ... Read Answer >>
  3. When is an underwriting fee too high on a commercial loan?

    Learn about underwriting fees and when they're too high. If the underwriting fee exceeds 2% of the total loan size, the fee ... Read Answer >>
  4. How can I prevent commissions and fees from eating up my trading profits?

    First off, understand that there is no universal system regarding trading commissions charged by brokerage firms. Some charge ... Read Answer >>
  5. At the beginning of the year, ABC Corp. began to lease a major piece of equipment ...

    The correct answer is: A) Under the capitalized lease method, the lessee must treat the asset as if it was purchased with ... Read Answer >>
  6. What fees can I expect from a financial adviser?

Hot Definitions
  1. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  2. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  3. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  4. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  5. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  6. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
Trading Center