Let’s clear the air on something that surprises a lot of first-time commercial real estate borrowers:
Yes, you’ll need to pay fees before your loan closes.

And no, they’re not junk fees—they’re part of the lenders due diligence process.

Here’s what you need to know:

💰 Why Do These Fees Exist?
Because lenders don’t lend blind.  They are using resources and have to work with third party specialty vendors. There is a real cost to doing business and there is no guarantee you will get approved or go through with the loan. They want to see you have skin in the game.

Ahead of closing, they need to verify:
• Property value (appraisal)
• Environmental risk (Phase I ESA)
• Your financials and credit
• Possibly property condition reports

These reports cost money—and that cost falls on you.

📅 When Will You Pay?
After signing the term sheet or conditional approval.

This is your lender’s way of saying:
“We’re serious—now you need to be serious too.”

💵 How Much Should You Set Aside?
For $1–3 million deals, budget **$5,000 to $15,000 USD**.
Larger or more complex deals? $25,000 to $50,000+ USD.

Two Main Fee Structures:
1️⃣ **Pay-As-You-Go**
• Each vendor sends a link for payment
• Pros: Transparent, itemized
• Cons: More coordination on your part

2️⃣ **Retainer Model**
• Pay one lump sum upfront
• Lender manages vendors from that pot
• Pros: Easier for you
• Cons: Less visibility, possible non-refundable balance

✅ Bottom Line:
Don’t start the loan process without knowing how your lender handles fees—and don’t start unless you have the funds ready.

Got a deal under contract and ready to see what else you will need? Grab our 5 minute scorecard to see if your deal is funding ready.

DISCLAIMER: This is not real estate, legal, or financial advice. Please contact your preferred attorney or financial adviser for help specific to your needs or issue.