Finders fee for finding a land seller?

Question

Hi BP folks! Thought I'd tal into tour wisdom. I'm a Realtor, I only do residencial, I just got out of a listing appointment with a seller that is sitting on an OK home with over 1 acre of subdividable land, at least 5 lots, neighbor which can do 9 lots may also want to sell. I dont do land, but know some folks that do. What kind of finders fee can I expect if I put these folks together? Any rule of thumb? For residential I would ask for 25% of the agents final commission on the deal. I was also thinking of a flat $10K fee (my typical commission). Would love to hear your thoughts.

Mike Salisbury · Answer

Just a couple of thoughts. Sight unseen 1 acre likely will not yield 5 lots once you factor out road, right of way, utility easement, storm water management. These things limit your useable land when subdividing- also check local development code which may have lot size restrictions.

When doing this type of deal my broker at the time wanted 10% of the deal. His thinking was that there are far fewer buyers in this space than residential. Longer listing agreement too -  for this reason.

As far as the neighboring property an assemblage like this is tricky because you will need the approval of the local planning dept. If a future land use map is available that would be starting point to know where the local govt. feels that development should go. Any contract should be contingent on that approval which could take several months (3-9). That approval may never come and sometimes just for political reasons. Your deal is in their hands.