Minnesota Finder’s Fee Agreement Regarding Real Property Sales

• Category: Real Estate - Contracts
• State: Multi-State
• Control #: US-0154BG
• Format: Word; Rich Text

Description

In a real estate context, a finder's fee may be paid for locating property, obtaining mortgage financing. or referring sellers or buyers. A finder's fee is money paid to a person for finding someone interested in selling or buying property. To conduct any negotiations of sale terms, the finder may be required to be a licensed broker or he violates the law. However, state laws, which vary by state, may also provide an exemption for certain individuals, allowing them to be compensated without the necessity of licensure. For example, one state's law allows an exemption for either a property management firm or an owner of an apartment complex to pay a finder’s fee or referral of up to $50 to a current tenant for referring a new tenant. The fee can be in the form of cash, a rental reduction or some other thing of value. The party claiming compensation under this exemption is not allowed to advertise for prospective tenants.

In Minnesota, a Finder's Fee Agreement Regarding Real Property Sales, also referred to as a Referral Agreement, is a legally binding contract between a real estate finder (referred to as the "Finder" or "Referrer") and a real estate buyer or seller (referred to as the "Principal" or "Party"). This agreement outlines the terms and conditions under which the Finder will receive compensation for referring a potential buyer or seller to the Principal, resulting in the successful sale or purchase of real property. The Minnesota Finder's Fee Agreement Regarding Real Property Sales is formulated to protect the rights and interests of all parties involved in a real estate transaction. It ensures that the Finder is properly compensated for their efforts in identifying a potential buyer or seller, while safeguarding the Principal's interests by specifying the amount of the finder's fee and the conditions under which it will be paid. Key provisions covered in the Minnesota Finder's Fee Agreement Regarding Real Property Sales include: 1. Identification of Parties: The agreement clearly identifies the Finder and the Principal, along with their contact information and roles in the transaction. 2. Effective Date: Specifies the date from which the agreement becomes effective and starts covering any referrals made by the Finder. 3. Description of Properties: Provides a detailed description of the real properties that are subject to the agreement. This includes the property address, legal description, and any specific conditions or restrictions. 4. Referral Fee Amount: States the predetermined finder's fee percentage or flat fee that the Principal agrees to pay the Finder upon a successful transaction. The agreement may include a separate fee for buyer referrals versus seller referrals. 5. Conditions for Payment: Outlines the circumstances under which the finder's fee will be paid. Typically, it is contingent upon the successful closing of the real estate transaction and receipt of the Principal's payment. 6. Duration of Agreement: Specifies the period during which the agreement will remain in effect. This ensures that the Finder will be entitled to a finder's fee for a specified timeframe beyond initial referral(s) made. 7. Obligations and Responsibilities: Defines the responsibilities of the Finder, such as identifying potential buyers or sellers, providing accurate information, and acting in good faith throughout the transaction process. 8. Confidentiality and Non-Disclosure: Includes provisions to maintain the confidentiality of all information shared between the parties during the referral process and prohibits the Finder from disclosing details regarding the referrer's business or any potential buyers or sellers. It's important to note that there might be various types of Finder's Fee Agreements Regarding Real Property Sales tailored to specific scenarios. These can include agreements specifically for residential properties, commercial properties, vacant land, or different commission structures for exclusive referrals versus non-exclusive referrals. In conclusion, the Minnesota Finder's Fee Agreement Regarding Real Property Sales plays a vital role in facilitating real estate transactions by recognizing the efforts of Finders, outlining compensation terms, and ensuring clear expectations between all parties involved.