Acquisition Fee

AAA

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.

INVESTOPEDIA EXPLAINS '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. End-User

    The true consumer of a product or service. The term "end-user" ...
  2. Breakup Fee

    A common fee used in takeover agreements if the seller backs ...
  3. General And Administrative Leverage

    A variable within a cost benefit analysis of an acquisition where ...
  4. Acquirer

    1. The firm which is purchasing a company in an acquisition. ...
  5. Acquisition Premium

    The difference between the estimated real value of a company ...
  6. Commission

    A service charge assessed by a broker or investment advisor in ...
Related Articles
  1. Mergers And Acquisitions: Understanding ...
    Fundamental Analysis

    Mergers And Acquisitions: Understanding ...

  2. New Wheels: Lease Or Buy?
    Home & Auto

    New Wheels: Lease Or Buy?

  3. Defeasance Reduces Commercial Real Estate ...
    Options & Futures

    Defeasance Reduces Commercial Real Estate ...

  4. Cut Your Bank Fees
    Personal Finance

    Cut Your Bank Fees

comments powered by Disqus
Hot Definitions
  1. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  2. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  3. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  4. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  5. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  6. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
Trading Center