Acquisition Cost

Definition

The total amount paid to purchase a property, including the purchase price, closing costs, inspections, and the realtor's commission you definitely didn't want to pay.

Example Usage

Our acquisition cost for the downtown lot came to $2.3 million after all fees.

Origin

General real estate finance terminology from early 20th century

Fun Fact

Acquisition costs typically add 2-5% to the nominal purchase price, which is why your $1M house actually costs $1.05M.

Source: National Association of Realtors

Related Terms

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Hard Money Lender

A lender who will give you cash quickly based on the property's value, not your credit score. The interest rates are steep because they know you're desperate.

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Home Equity Line of Credit

A HELOC—a credit line backed by your home's equity that you can borrow from—basically, a second mortgage waiting to happen.

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Beginner

Capital Gain

The profit realized when selling an asset for more than its purchase price. Uncle Sam would very much like a piece of this, thank you very much.

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Grantee

The person or entity receiving property rights through a deed—basically, the buyer in a real estate transaction. The happy person at closing.

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Inspection Period

The timeframe during which buyers can have the property inspected and back out without penalty, the due diligence phase.

🏠 Real Estate

Intermediate

NNN Lease (Triple Net)

A commercial lease where the tenant pays rent, property taxes, insurance, and maintenance—basically the landlord's retirement plan.

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