The fees charged by a lender for a commercial real estate transaction can vary depending on the specifics of the transaction and the lender’s policies. However, here are some of the typical fees that may be charged:
- Loan Origination Fee: This is a fee charged by the lender to cover the costs associated with processing and underwriting the loan. This fee is usually a percentage of the loan amount and can range from 0.5% to 2% of the loan amount.
- Appraisal Fee: Lenders often require an appraisal of the property to determine its value. The cost of the appraisal is usually passed on to the borrower and can range from a few hundred dollars to several thousand dollars depending on the complexity of the property.
- Environmental Assessment Fee: If the property being financed has any environmental concerns, such as potential contamination, lenders may require an environmental assessment to be conducted. This can include a Phase I Environmental Site Assessment (ESA) and/or a Phase II ESA, and can cost several thousand dollars.
- Title Search and Insurance Fees: Lenders require a title search to ensure that there are no liens or other issues with the property’s title. The cost of the title search is typically passed on to the borrower, along with the cost of title insurance to protect the lender against any issues with the title.
- Credit Report Fee: Lenders typically require a credit report to assess the borrower’s creditworthiness. The cost of the credit report is usually passed on to the borrower and can range from a few dollars to a few hundred dollars.
- Underwriting Fee: Some lenders may charge an additional underwriting fee to cover the costs of evaluating the loan application and making a lending decision.
- Legal Fees: Borrowers are typically responsible for their own legal fees, as well as any legal fees incurred by the lender. Legal fees can vary widely depending on the complexity of the transaction.
It’s important to note that not all of these fees may apply to every commercial real estate transaction, and there may be additional fees not listed here depending on the lender and the specifics of the transaction. Borrowers should carefully review their loan documents and ask their lender about any fees they may be charged.