Acquisition Fee

  

You thought the building cost a million bucks, but you forgot about acquisition fees. There was the commission, the bug inspection, the guy who crawled around the roof and under the building, looking at plumbing, pipes, and electrical wires, and another guy who stomped around the roof checking shingles.

You had closing costs, like filings you had to make with the city, and then final construction inspection fees, and other random fees, like the "coffee bar access" fee, and you didn't realize that egress down the hall into the corporate washroom with the fountain cost another five grand. But what could you do? Just hold it all day?

Acquisition fees are some form of commissions, and are just leakage on top of the purchase price of things you can buy.

Related or Semi-related Video

Finance: What is commission?112 Views

00:00

finance a la shmoop. what is commission? well it's the greatest motivator for

00:08

salespeople in the world. it's the money some people make above and beyond their [ commission explained on a large screen]

00:13

salary. a little monetary carrot dangling out in front of a salesperson to you

00:18

know encourage them to sell sell sell. alright you're an agent who just sold a

00:22

house good for you. you get a 3% Commission. the house went for a million

00:27

bucks well you get 30 grand for the privilege or at least your brokerage

00:30

does, and then you get some piece of that. ok now you're the stock broker who sold

00:34

3 million shares of stock. well good for you

00:37

you get four cents a share in Commission 120 grand in the pocket of your

00:41

brokerage and you get some piece of that Commission. you're the Hollywood agent[equation]

00:45

who just inked Brad pitiful into a movie deal worth 20 million bucks, well good

00:49

for you your agency gets a 10% commission or two

00:53

million dollars. yeah that's for a Dewey Cheatham and Howe agency best one in

00:57

Hollywood. yeah they rep Harvey Weinstein. now for someone who's attempting to sell

01:02

a polished version of that Harvey Weinstein story well that's a commission

01:07

impossible. [man frowns]

Up Next

Finance: What Does an Investment Banker Do?
450 Views

What do investment bankers do? Investment bankers help corporations make smart financial decisions, in the simplest terms. They help them make inve...

Finance: What is an Investment Adviser, and an Investment Adviser Representative?
4 Views

What is an investment advisor? Well, as a registered Shmoop advisor, we'd advise that you watch this video.

Finance: What is the Investment Advisers Act of 1940?
32 Views

What is the Investment Advisers Act of 1940? Must be pretty special if we're still talking about it seventy years later.

Find other enlightening terms in Shmoop Finance Genius Bar(f)