Finder's Fee

AAA

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".

INVESTOPEDIA EXPLAINS '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. Financial Intermediary

    An entity that acts as the middleman between two parties in a ...
  2. Open Listing

    A property listing that uses multiple real estate agents in order ...
  3. Real Estate

    Land plus anything permanently fixed to it, including buildings, ...
  4. Real Estate Agent

    A person with a state/provincial license to represent a buyer ...
  5. Realtor

    A real estate professional who is a member of the National Association ...
  6. Medium Of Exchange

    An intermediary instrument used to facilitate the sale, purchase ...
Related Articles
  1. 4 Types Of Home Renovation: Which Ones ...
    Home & Auto

    4 Types Of Home Renovation: Which Ones ...

  2. Uncover The Next Real Estate Hot Spot
    Home & Auto

    Uncover The Next Real Estate Hot Spot

  3. Avoid Capital Gains Tax On Your Home ...
    Taxes

    Avoid Capital Gains Tax On Your Home ...

  4. Find Fortune In Commercial Real Estate ...
    Entrepreneurship

    Find Fortune In Commercial Real Estate ...

comments powered by Disqus
Hot Definitions
  1. Last In, First Out - LIFO

    An asset-management and valuation method that assumes that assets produced or acquired last are the ones that are used, sold ...
  2. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  3. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  4. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  5. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  6. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
Trading Center