RSS
FINDERS
Another adviser that might play a role in the early stages of the selling process is a finder. Finders are only rarely involved in big-ticket deals. Most finders work with or for brokers. Such a finder continually puts out feelers for businesses that might be looking to sell and tries to connect any live prospects to a broker, who then pays the finder a fee. A finder might have relationships with any number of brokers, and a broker might have dealings with any number of finders. They work in conjunction, with the finder playing a decidedly junior role.
Because of the limited role (really it is about introducing parties), a finder has no fiduciary relationship of trust with the seller, although there is a contract between the two parties. If a transaction is completed, the finder gets a fee. But since the services and duties are not as onerous, the fees tend to be smaller -- perhaps equivalent to 5% to 10% of the broker's fee. A finder incurs no legal liability for making a reference, even if the broker is paying him a fee for his trouble, unless the finder lies or misrepresents.
Many sellers prefer dealing only with a broker to avoid building in extra fees. Note that even if a finder locates a buyer, the seller usually will still need to retain a broker for the negotiation phase.
It's no surprise that the lines of demarcation can get tricky: If a finder also negotiates a deal on your behalf, the relationship may transmute into a broker structure, in which case the fee will be higher. It's not always easy to determine when such a shift occurs.
