Finder's Fee

What is a 'Finder's Fee'

A finder's fee is 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.

RELATED TERMS
  1. Transaction Costs

    Expenses incurred when buying or selling securities. Transaction ...
  2. Brokerage Company

    A business whose main responsibility is to be an intermediary ...
  3. Flat Dollar

    A fixed dollar amount, generally in the context of fees or commissions ...
  4. Clearing Fee

    A fee charged by a clearing house for its services. A clearing ...
  5. Brokerage Fee

    A fee charged by an agent, or agent's company to facilitate transactions ...
  6. Exchange Fees

    A type of investment fee that some mutual funds charge to shareholders ...
Related Articles
  1. Investing

    What Are Transaction Costs?

    Transaction costs are expenses incurred from buying or selling securities.
  2. ETFs & Mutual Funds

    What Does a Financial Intermediary Do?

    A financial intermediary is an institution that acts as a go-between in a financial transaction.
  3. Retirement

    Are Fees Eating Up Your Nest Egg?

    You may not be able to avoid all fees associated with retirement planning, but you should know what you’re being charged for. Here's a list of common fees.
  4. Managing Wealth

    Understanding Brokerage Fees

    Agents charge brokerage fees for facilitating transactions between buyers and sellers.
  5. Financial Advisor

    How To Optimize Your Portfolio and Reduce Fees

    Investment fees aren't avoidable altogether, but there are strategies investors can employ to keep those fees at bay and reduce the impact on returns.
  6. ETFs & Mutual Funds

    A Guide To Investor Fees

    Fees are one of the most important determinants of investment performance and something that every investor should know.
  7. Retirement

    Are Fees Depleting Your Retirement Savings?  

    Each retirement account will have a fee associated with it. The key is to lower these fees as much as possible to maximize your return.
  8. Personal Finance

    Try These Ways to Reduce Your Bank Fees

    The tables have turned on consumers: Not only are bank account interest rates measly, but fees can take a serious bite out your balance. Here's what to do.
  9. ETFs & Mutual Funds

    3 Investment Fees That Are Negotiable

    Investment fees are a necessary evil but that doesn't mean they have to be overly costly. There are ways to negotiate some of the expenses down.
  10. Investing

    How a 1% Annual Fee Can Ruin Your Nest Egg

    What kind of impact does an annual 1% fee have on your portfolio? The answer may surprise you.
RELATED FAQS
  1. What is the difference between a correspondent bank and intermediary bank?

    Read about the differences between intermediary banks and correspondent banks, why their role is necessary, and where the ... Read Answer >>
  2. What fees can I expect from a financial adviser?

  3. Is a financial advisor allowed to pay a referral fee?

    Understand how financial advisors can legally pay a referral fee to someone for soliciting business, and learn the regulations ... Read Answer >>
  4. My FA recommended a wrap fee for me, is that appropriate?

  5. What kinds of fees are involved in futures trading?

    Learn what the various costs are that are charged by brokerage firms and trading exchanges to individual futures trading ... Read Answer >>
  6. Can real estate agents give referral fees?

    Learn about the process, laws and guidelines of real estate agents paying other real estate agents for referrals and how ... Read Answer >>
Hot Definitions
  1. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  2. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  3. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  4. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  5. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  6. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
Trading Center