I expect to collect a finders fee for my part in a development deal where I introduced the builder to a lender who can finance his $400 million project(financing wll be in stages) ,what type of compensation should I expect from the lender/builder? (points,flat fee). I currently have no relationship with the builder. I deal with the lender .I am also a real estate agent.
In general, if you are working as a “broker” in the deal you have established your fees up front with the builder to get them the lender or you have an agreement with the lender on your fee. At this point, you need to find out if the lender will pay you anything and if not, you need to get the builder to agree to it. Unfortunately, if the deal is already in the works, it’s probably going to be hard to bring it up now.
As Tom has indicated, you should have a fee agreement in place before the introduction was made to safeguard your interests.
If you don’t have such an agreement in place, you might want to think about injecting a second financing option (with a lender/broker that you have a signed agreement with).
Regards,
Scott Miller
Thank you both for your input. Neither the lender nor the builder have an issue with signing an agreement and compensating me. I just dont want to charge too little and I dont want to ask for an unreasonbly high amount either. Once i have that figured I can have an agreement written up.
Should I be the one to draft the agreement? If so, will a regular referral fee agreement be suitable?
I’m not one to suggest what you are worth (how much you should charge), but 1% of a 400 million deal is 4 million clams (alot of money for just a introduction IMHO).
As a commercial broker, the honus is always on me to provide the legal assurances between me and the borrower/lender—I use a fee agreement for the borrower and a non-compete/non-circumvent for the lender…
Good luck and congrats on catching the whale…
Regards,
Scott Miller