Clarification on "finder's fee"

Assume the following:
Major sales brokerage (i.e. CBRE) lists office building for sale at $14M.
Agreement calls for 4% to listing agent if no co-op broker, or 5% if there is a co-op broker.
After 2-3 months of limited action, CBRE stops marketing the property (although they still have listing under agreement with ownership)
The leasing team at the subject property (let's call them ABC Realty) contacts me, tells me that the know ownership very well, and a deal can be had at, say, $10M.
The leasing agent signs the confidentiality agreement under the "Buyer's Broker" section, and asks me to fill out the Buyer section.
In addition, the leasing agent sends his own "representation agreement" which calls for 0.5% of PP to be paid to him as a finder's fee.
My question:
Is the leasing agent in this scenario trying to get paid by splitting the commission on sale PLUS getting half a point from me? Due to the fact this was mass marketed, should there really be a finder fee???
In Buying Property - Asked by Eric G. - Jul 14, 2009
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Answer(s)

Paul S.
Broker/Agent
Glendora, CA

If licensed they are probably able to ask? That doesn't necessarily mean you have to pay it. Have them explain why and if you don't agree find someone else to represent you. There may be a benefit to you if you pay the "additional" fee? Some states may have rules that would prohibit the additional fee? In California if the selling broker is not satisfied with the compensation being offered by the listing broker there is no prohibition to the selling broker asking the buyer to pay an additional amount to make up the difference. The leasing agent may have something in their leasing agreement that would prohibit them from getting a commission on a sale (seems unlikely but who knows). Ask why they need the additional .5% if they are getting the selling commission? If they are able to get a $4M price reduction that nobody else can .5% would seem to be a bargain?

Jul 15, 2009
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Davide P.
Broker/Agent
Pinole, CA

I would agree with Paul. Without knowing all the facts, if the leasing agent has some leverage to get a $4M discount for only .5% ($50,000) I would think that proves his value. Especially considering if you contacted CBRE and they informed you the asking price was still $14M.

Jul 16, 2009
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