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.