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Hi Folks,
I am just new to Property & have MANY questions !!!
I live in Scotland - check out Local Knowledge threads - & as I am just starting & making initial contacts I have been asked by three people to source property for them.
What is the "going rate" for finders fees, as figures I have been quoted ( & read about ) vary wildly & whilst I don't want to scare off any potential profits I also want to build my own fund for purchasing as quickly as possible.
If you would prefer you could email me : Peter.Cairney@Gmail.com
Thanx in advance for any info offered.
PeterC. |
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I think its 1% - 2%?
Matt |
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Hi Peter
I think you take what you can in my experience. I'm not a sourcer, but people who have sourced for me generally charge £1000-£2000 per property. They were also generally the managing agents, so I think this included other fees too. I only deal in a very small part of the market (props worth less than £100k for a start) so not necessarily typical, but that's my experience!
cheers
John |
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Hi Matt & John,
Thanx both for the speedy replies & apologise for not getting back sooner, been "viewing" ;o).
People expect to pay the "lower end" figure if you just bring them an address, but will pay substantially more if you provide "add-on's" such as viewing, value/ profit, initial interview of customer etc. , just found this out! Also seems people a bit reluctant to discuss specific figures....
Have been meeting with some investors & I'll be using this method to finance my start & also - just as important - establish new contacts.
Thanx again folks,
PeterC.
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peter,
a word of caution.
the sourcing world unfortunately has its share of rogues so be careful to distance yourself.
also, remember that while you may only have taken a fee of £1,000 from someone they have put a huge amount of capital on the line and they will be unhappy if an investment does not meet their expectations.
such investments may not meet an investors' expectations simply due to market performance but the investor will still be angry at you.
going rate? £500 - £1,000 a property.
tom
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Finders fees can be justified if you're not local. I personally would drive 200 miles to look at a selection of properties.
Further than that and you're in danger of spending a lot of time and effort on dead ducks. In this case, £500 is well spent on a property sourcer. After all, they don't take payment until they have found you the right property anyway. Think how much you might personally spend sourcing one.
Landlord Trader serves this function to a degree anyway, that's why I'm here.
To The Landlord Team: Do you do sourcing or have thought about it? Would you ever charge people to browse? |
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I charge 1.5%-2% on land with PP I source in the UK. |
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what kind of land do you source david?
what are the typical lot sizes of the properties built on the land you source?
thanks,
tom |
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Hi David,
Is this a typical sourcing fee for land? I am unsure whether to explore this area of investment and still need PLENTY of convincing.
Presumably land is as hard to source as property, or do people buying land generally not have a clue and pay these sorts of fees?
I am intrigued who is buying this stuff in the first place!! |
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For prime sites without planning I do not charge, but am offered 2% plus a 10% profit share. This may seem crazy, however that is what the major players will pay UP TO to get there hands on offmarket products.
These are mostly private investors who will push through planning, be it outline or detailed and "turn" asap. |
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Sorry not to have answered sooner Tom & Bob. I source land with planning consent in the south east and my fees are up to 2% but not less than 1%. I am just about to go retained with a housing manafacturer (kit type housing, more on this when it happens)so am looking, I hope, at £500-£600 per commissioned retention by the person seeking the land plus a percentage on top. This is in London and sourcing land is an awful lot harder than sourcing housing as there is far less of it. |
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To Phil RE charging to browse.
Given the market, I don't think charging to browse would work. In a way that's a property club effectively isn't it, if you're charging.
Then investors expect first rate, heavily discounted property all the time. Furthermore, vendors would be put-off listing on the site if they thought nobody would look at an income producing, sound investment property that wasn't discounted.
I hope this answers your question (..months late, sorry!)
All the best,
Dan
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dan,
i agree with you. i think it is the sellers responsibility to pay to sell. glad the system will not change!
tom
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