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A finders fee is a commission paid to a person who identified for, brought to the attention of, or facilitated a business transaction between interested parties.
A finders fee isnt legally binding, so it is often simply a gift from one party to another. This is commonly seen in real estate deals. If someone is selling their home and their friend connects them with a potential buyer, the seller might give their friend a small portion of the sale when the deal is finalized.
Referral fees become unlawful kickbacks when they are involved in a fee-generating home sale. Typically, a broker or agent earns fees as a result of services rendered here, the only service rendered in exchange for the referral fee is, well, the referral. But why are kickbacks against the law, anyway?
A finders fee isnt legally binding, so it is often simply a gift from one party to another. This is commonly seen in real estate deals. If someone is selling their home and their friend connects them with a potential buyer, the seller might give their friend a small portion of the sale when the deal is finalized.
What is a finders fee agreement? A finders fee agreement is a document between two parties which states that the person who will help facilitate business transactions will be rewarded with a finders fee, which is a form of commission or referral fee. This fee is only rewarded if the deal goes through.
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People also ask

Agencies typically pay referral fees of 5% to 10% of the revenue they receivebut theres plenty of nuance on how you handle it, and many agencies pay 0% in referral fees.
Referral fees become unlawful kickbacks when they are involved in a fee-generating home sale. Typically, a broker or agent earns fees as a result of services rendered here, the only service rendered in exchange for the referral fee is, well, the referral. But why are kickbacks against the law, anyway?
Licensed brokers and agents owe fiduciary duties to the principals they represent. Fiduciary duties require licensees to perform on behalf of their client with utmost care and diligence. A finder has no such agency duty.
In exchange for introducing the parties, the finder takes a commission from the brokered deal. In some situations, the finders fee is paid by the buyer of the transaction, and in other cases, it is paid for by the seller. A finders fee isnt legally binding, so it is often simply a gift from one party to another.
The terms of finders fees can vary greatly, with some citing 5% to 35% of the total value of the deal being used as a benchmark. Its a staple of Funderas business model. In many cases, the finders fee may simply be a gift from one party to another, as no legal obligation to pay a commission exists.

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