Property Sourcing | What Should My Finder Fee Be?

As a property sourcer, you can expect to earn a finder fee of between one and five thousand pounds a deal... and that's quite a spread. To calculate what you are worth you need to ask yourself a few questions. What is my time worth? How much work am I prepared to work? And exactly how much value am I providing?

Video Highlights

What Should Property Sourcing Fees Be?

Property sourcing fees in the UK are around one to five thousand pounds depending upon particulars of the property such as location and value. The experience of the property sourcer can also be a factor.

Today's question is a follow-up from last week's when Frank Hamilton asked about the contracts one would expect to use when property sourcing.

Frank asks...

"Hi Rob, I appreciate your reply. The information you provided was very helpful. I also wanted to know about fees. How much should I charge for a finder's fee? How much would I charge, for instance, if I found a flat, found an estate agent, found something through my own leads? Regards, Frank."

1. How much are you worth?

Your fee is whatever you feel comfortable charging within what the market will sustain. Most property sourcing fees are charged at around one to five thousand pounds depending upon particulars of the deal such as the location and value of the property, but also taken into consideration will be the property sourcer's level of experience and the amount of work they're putting into the property deal.

Rob Jones Answers Your Questions

1. Should I Use My Deposit to Buy One House or Two?
2. Do Estate Agents Have Any Secrets?
3. What Kind of Contracts do Property Sourcers Need to Use?
4. Property Sourcing | What Should My Finder Fee Be?
5. What Qualifies as a Quality Property Sourcing Deal?
6. What Is The Best Way To Work Out Rental Demand?
7. How Do I Go About Raising Property Investment Finance?
8. There Are Lots Of Properties On The Market – Is This Good Or Bad?
9. Is Investing in Property with only £20,000 Realistic?
10. What Are The Property Growth Areas Of Manchester?
11. How Do I Find Repossessed Property To Buy in London?
12. Should I Invest In South Manchester Or The City Centre?
13. How Do I Evict A Tenant? (Section 8 Notice to Quit)
14. How Can I Buy a House Without a Mortgage?
15. What Exactly Is Property Due Diligence?

2. How much work have you put in?

For example, say you're brand new to property sourcing and you've found a potential lead or homeowner who's looking to sell their property at a good price to an investor. If your role is only to introduce the two parties, then that's going to be worth a lower fee than if you find the property, get it negotiated under contract and find a pro-active role within the sales process. You could also be helping by sourcing refurbishment quotes (or even assisting with refurbishments). In short, when you are more involved you are more justified in charging a higher amount.

3. How much is the deal worth?

Often, if there is a level of discount or you've sourced a higher, rental-yield property then you can expect a higher fee as well (dependant on experience). The industry standard puts a finder's fee between one and five thousand pounds, which gives you a rough guide as to what's possible.

4. Putting it all together with examples

I hope that helps, Frank. With this video we've also included a link to some of the live property deals that we currently have available so you can see how we present them to our prospective clients. If you have a look at these deals then you'll be able to see what fees we charge for the level of service we provide. We suggest that you take the time to consider how you will want to pitch yourself and which services you wish to provide as a property sourcer. Ultimately it will be these things that will determine your fee.

5. Join Our FREE Training Today

Thank you for watching this video. If you like this content and would like to join our free online property training course we’ve got a link for it on this page. In there we cover a range of different property strategies to help you get started on building a long-term property portfolio or creating a cash flowing property business. We also look at ways to increase your return on investment with any of the properties you may be considering and we also have a couple of cheat sheets and downloadable documents. Simply click on the image below to join the free training course today.

You can also visit our Facebook page and there's our YouTube Channel where we're posting weekly property investment tips.

If you have any questions or want to share your own property sourcing strategies then please post your thoughts in the comments section. We'd love to hear from you so why not get in touch..?