What is a reasonable referral fee for a commercial deal?

[Daniel Hart]

I found a great deal on a piece of commercial property and passed the deal on to someone I know that is seeking this type of property. It's worth about $2.4M and he'll likely be able to get it for $1.3M. What is a reasonable referral fee to ask for?

[Jeremy Cyrier]

Dan,

Since there's no set fee that you should charge, you should tell him that you're happy he's got an opportunity to make some money and that you'd appreciate a fee for turning him onto the deal.

Ask him to tell you what he thinks is "reasonable and fair". How you feel upon hearing his offer (or non-offer) will tell you pretty quickly if you think the value you provided him was worth it or not.

If you're good at sourcing deals, next time make sure your buyer signs a non-circumvent agreement with a named fee before sharing anything with him.

Too many folks get burned on fees because they trust the other guy to take care of them after they've handed over the value before discussing a fee.

Your value declines immediately upon releasing the information, so get the agreement first, then hand over the information.

Money does funny things to relationships. I've seen it more times that I care to mention.

Good luck.