appropriate finders fee

**North Carolina Builder** · 02-21-2009, 09:44 AM

Good afternoon all,

Question: is there any rule of thumb regarding finders fees?

We build new homes, (affordable housing) and I'm going to contact the realtors in my area for leads.

In my area, a lot of initial contacts are made by out-of-staters thinking about relocating, so the realtors are the first people they contact.

There are very few affordable homes here, so I am going to see if the realtors will help me with by providing new construction leads.

The homes average $160K-$170K, I was thinking along the lines of a two percent finders fee, does this seem too low? Also, does this put the realtor in any kind of an ethical or legal bind? Perhaps instead of having the realtor recommend us, it would be more appropriate to have the realtor make the customer aware that we build in that price range, and leave it at that.

Any thoughts on the subject?

Regards,

Alexi

**Greg** · 02-22-2009, 05:56 AM

Why are you trying to reinvent the wheel? List the houses for sale in the MLS and pay a commission to any agent who brings you a buyer.

**North Carolina Builder** · 02-22-2009, 05:30 PM

Originally Posted by Greg

Why are you trying to reinvent the wheel? List the houses for sale in the MLS and pay a commission to any agent who brings you a buyer.

C'mon folks, we can do better than this...

Obviously, these homes are not yet built, therefore, won't be on MLS.

Bottom line, the world is changing, and you need to change with it.

If you can't sell $500,00 houses, because the market is full of them, why not sell $160,000 homes to the workforce?

I would appreciate more intelligent responses....

Alexi

**Greg** · 02-23-2009, 05:35 AM

Originally Posted by North Carolina Builder

I would appreciate more intelligent responses....
Alexi

Then ask a more intelligent question. Why would an agent turn over a lead to you with the hopes that when you build your house and one of their leads buys it they get a referral fee?

Agents get buyers and sell homes. Builders build houses. I have been following your posts and it is no wonder you are not being accepted in your new town. You are not being realistic.

This has nothing to do with the cost of the houses. They don't exist. You keep asking for advice on how to sell your houses but you don't have anything to sell.

Without a product to show you are just talking. If you are so sure of your product then build it.

**agentsranking** · 02-23-2009, 12:40 PM

Unless you are the only builder in town with homes in that price range I doubt most agents are going to be interested. The average builder in Minnesota will pay 2.7% for bringing a buyer to the table. I'm currently working with a client thinking about building and therefore I've approached five builders on their behalf; all of them were willing to pay 2.7% to 3.0%. The agent will also receive a commission on the sale of the land.

**Jenie0109** · 02-23-2009, 07:21 PM

Hello there guys, while I was browsing some web sites a while ago, I came across this one. It has facts on finder's fees. Just follow the link. Have a nice day.

http://www.businessweek.com/smallbiz...926_032511.htm

**North Carolina Builder** · 02-24-2009, 08:31 AM

Originally Posted by agentsranking

Unless you are the only builder in town with homes in that price range I doubt most agents are going to be interested. The average builder in Minnesota will pay 2.7% for bringing a buyer to the table. I'm currently working with a client thinking about building and therefore I've approached five builders on their behalf; all of them were willing to pay 2.7% to 3.0%. The agent will also receive a commission on the sale of the land.

Agentsranking,

Thanks for the info, now we're getting somewhere...I thought that 2% might be too low,
Regards,

Alexi

**North Carolina Builder** · 02-24-2009, 03:43 PM

[quote=Jenie0109;51590]Hello there guys, while I was browsing some web sites a while ago, I came across this one. It has facts on finder's fees. Just follow the link. Have a nice day.

Jenie0109,

Thanks for the link, that's a pretty savvy way to look at it...

Make the fee a part of the deal up front, determine the price, and go forward..if/when the house is built, the referring agent picks up the fee...
everyone treats each other fair and square, move on to the next house.

Regards,

Alexi

**North Carolina Builder** · 03-03-2009, 04:18 PM

Originally Posted by North Carolina Builder

Agentsranking,

Thanks for the info, now we're getting somewhere...I thought that 2% might be too low,
Regards,

Alexi

Agentsranking,

Thanks much, I contacted my local reators, they had 2 clients ready to build. We will be ready to pull building permits in a couple of weeks.

3% was the deal, I just put it into the cost of the house, and will pay them with the construction draws. Thanks again,

Alexi