closing fees

(noun)

a variety of costs associated with the transaction (above and beyond the price of the asset itself) and incurred by either the buyer or the seller. These costs are typically paid at a future point in time, known as the "closing" when title switches hands.

Related Terms

Examples of closing fees in the following topics:

  • Current Obligations Expected to Be Refinanced

    • To reduce the monthly repayment amount (often for a longer term, contingent on interest rate differential and fees)
    • To free up cash (often for a longer term, contingent on interest rate differential and fees)
    • Most fixed-term loans are subject to closing fees and points and have penalty clauses that are triggered by an early repayment of the loan, in part or in full.
    • Penalty clauses are only applicable to loans paid off prior to maturity and involve the payment of a penalty fee.
    • The above-mentioned items are considered the transaction fees on the refinancing.

  • Securitization and the 2008 Financial Crisis

    • Banks earn short-term profits from the mortgage closing cost fees and managing the fund.
    • In addition, attorneys earn legal fees from the fund's setup.
    • This payment does not include property taxes, homeowner's insurance, and other fees.
    • Consequently, the investment banks earned fees from the fund's setup and from the fund's management.

  • Disadvantages of Franchises

    • Thus, the company's focus was on profits through fees and sales to franchisees rather than royalty payments.
    • The franchise fee may range anywhere from $5,000 to over $1 million and hence can be a major expenditure for the franchisee.
    • They are either a percentage of an outlet's gross income—usually under 10 percent of an outlet's gross income—or a fixed fee.
    • - Uninterested franchisors: Some franchisors may have little interest in their franchisee's success and may be more interested in just collecting the fees associated with the franchise.
    • On the other hand, start-up costs for a company like J.O.B.S., based in Clearwater, Florida, can be as little as $45,000, including a $30,000 franchise fee.

  • Natural Resource Market

    • This means that anyone can use these goods without paying a fee, and if one person uses the good it does not limit the ability of another to use the good.
    • While not a market, these taxes are essentially a fee charged to producers for using public natural resources and can make the production process more expensive.
    • The challenge of this process is that for these closed deals, the producer has to find the resource that they need, determine who owns it, and then negotiate with that person to obtain the resource.

  • Resolving Problems Quickly

    • By ensuring a close relationship with the customer, knowing their wants and needs and avoiding any misunderstandings, a company is able to ensure that problems of a non-technical nature are minimized, often before they even arise.
    • Others provide a fee for technical support or a fee for premium support services (no waiting in line or talking to a machine, for example).

  • Consumer Penalties

    • Penalties, in the form of fees and restricted user access, exist for consumers who violate terms in contracts.
    • Penalties, in the form of fees and restricted user access, exist for consumers who violate terms in contracts.
    • Other forms of penalties can exist as fees or surcharges.
    • The fees typically negate this advantage, at least in part.
    • Mobile phone service providers often charge an early termination fee on their service, which is a form of consumer penalty.

  • Illegal Price Advertising

    • These are fees that are not stated in the advertised price.
    • Generally, companies get away with it, because the fees are hidden in fine print and obfuscated by technical language.
    • Another case, at liquidating stores (if it is a retail chain), the sales prices at the chain's other stores is lower than the liquidator's prices at the closing stores.

  • Clean production and water reduciton

    • Second, discarded water accrues expenses because most municipalities compute their sewage fees as a percentage of metered water use.
    • Install closed-loop compressor cooling systems.
    • Close your company's wastewater loop by reusing what was previously discarded (e.g. filter what has been used and re-route it back into the production system).
    • For example, Simon Fraser University in Burnaby, British Columbia, installed a closed system to reduce domestic water use and saw its water bills fall by $35,000 in one year.

  • Limited Liability Companies (LLCs)

    • For example, you invest $100,000 into your business but it goes through tough times after a year and you decide to close.
    • Before you close the business you may have to pay your creditors.
    • In essence, this franchise or business privilege tax is the fee the LLC pays the state for the benefit of limited liability.
    • There can also be some combination of the above factors, or simply a flat fee.

  • Accounting Perspectives on Long-Lived Assets

    • Items that can be capitalized when the firm purchases a machine include the machine itself, transportation, getting the machine in place, fees paid for having the machine installed and tested, the cost of a trial run, and alike.
    • So, for example, the cost of land would include any attorney fees, real estate fees, title fees, back taxes that need to be paid, and the cost of preparation for the lands intended use.
    • Buildings also have additional costs such as legal fees and remodeling fees to prepare it for use.