What is a Finders Fee?
Buying and selling is not always easy, especially if the item in question is a multi-million dollar company or a valuable parcel of real estate. Mortgage companies and other lenders may be anxious to do business with a qualified buyer, but they can’t always make the phone calls and do the legwork themselves. This is where a middleman usually enter the picture, and his or her financial reward is often called a finder’s fee. A finder’s fee is an amount of money, usually calculated as a percentage, given to the person who brings buyer, seller and possibly lender together. For many transactions, a finder’s fee is negotiated ahead of time and put in writing before the sale is completed. Licensed real estate agents and mortgage brokers commonly collect a ‘referral fee’, which is simply another form of finder’s fee. Some finder’s fees can run as high as 10% of the total selling price, but it’s far more likely to earn around .5% to 1%. This can still be a hefty amount if the transaction is a c
