Finder's Fee

DEFINITION of 'Finder's Fee'

A commission paid to an intermediary or the facilitator of a transaction. The finder's fee is rewarded because the intermediary discovered the deal and brought it forth to interested parties. Depending on the circumstance, the finder's fee can be paid by either the transaction's buyer or seller.

Also known as "referral income" or "referral fee".

BREAKING DOWN 'Finder's Fee'

Often, the finder's fee may simply be a gift from one party to another, as no legal obligation to pay a commission exists. For example, let's examine a real estate transaction. Let's say that a friend is selling a property and you discover a potential buyer. If the transaction goes through, your friend may give you a small percentage of the sale, as a reward for finding the purchaser.

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