A finder's fee is money paid to a "finder" for his service in a transaction. It's commonly associated with real estate or other business transactions. For example, a new business may agree to pay a finder a specified fee for a list of prospective clients. A finder's fee agreement states the compensation, terms and conditions of the deal.

Agreement Basics

The agreement makes the details of the compensation clear for both parties. It's typically generated by the company receiving the service. The agreement states the names of the company and the finder. It also outlines the details of the fee, such as when the finder receives payment. For instance, in a real estate transaction, the finder is generally paid when a purchase agreement between the company and the real estate owner is executed. The fees vary depending on the company and type of transaction. Some companies offer a percentage of the sale, while others pay a flat rate for each lead. A standard finder's fee agreement also includes an expiration date. Both the finder and the company must sign the agreement to make it valid. Templates and sample finder's fee agreements are available online. However, it can be helpful to have an attorney draft a professional finder's fee agreement.