Referral fee/Finders fee - Posted by Greg S.

Posted by Thom on June 07, 2000 at 20:03:33:

The amount that is paid to the actual agent depends on the agreement between him/her and his/her broker. It could be anywhere between 50 and 100% split.
As far as finders fees go, in some places it not legal for a RE agent to pay a non licensed person anything. Most of the time that is done in the form of gifts or cash under the table.

Referral fee/Finders fee - Posted by Greg S.

Posted by Greg S. on June 07, 2000 at 19:24:42:

Could someone please explain to me how the following senario
will come out?

I know of an real estate investor, who has a wife, that knows a buyer that is looking for a large commerical investment. $800,000 to $1.3 million. I found one through a Realtor associate of mine, so. . .

What is the normal way to get a finders/referral fee for putting them in touch with each other?

What percentage is normally paid?

Who pays it?

This is what I have been able to gather so far.

It is going through two brokers. The listing broker and the buyers borker. For a total amount of selling fee to the selling broker which is 10%

The listing broker than splits that 10% with the buyers broker = 5% each. Which they split up with the actual Realtos that did the leg work. Right so far?

How much goes to the actual agent?


Re: Referral fee/Finders fee - Posted by Steve R (MD)

Posted by Steve R (MD) on June 09, 2000 at 17:07:35:

It’s not really too likely that this particular investor will like this particular property; meet with the investor and find out what he/she really wants. If this one sounds like a fit, fine - if not, he/she may still be a source for other deals. If the investor is interested, you could follow several paths, including:

  1. create a partnership in which the investor contributes the equity and gets most of the cash flow & profit, but you keep a piece (and maybe handle management).

  2. you place the property under contract and assign it for a $$ consideration up front. Then you’re out of the deal and the investor has the property.

  3. you get the investor excited about the property, he/she bypasses you and buys it. You are left in the cold (I don’t reccomend this one).

Have fun.

Re: Referral fee/Finders fee - Posted by Glynn-va

Posted by Glynn-va on June 08, 2000 at 15:53:59:

Don’t know of any states that allow referral fees to non-licensed people. It is in violation of the Real Estate Settlement Procedures Act (RESPA). Perhaps the property could be listed at 8% brokerage fee with the seller providing a 2% finders fee to you but brokers/agents are prohibited by law.

Re: Referral fee/Finders fee - Posted by Lori Samson

Posted by Lori Samson on June 08, 2000 at 02:01:12:

In our area we haven’t had much luck with agents. They are really quick to send you a potiental buyer and ask for some commission but ask them if you send them a seller will they pay you a finders fee. You will get a long pause…They fight for the commission on their end but I have never had an agent want to send me a dime. Lori