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Referral Fees

| Posted in Business on February 6, 2002 03:53am

*
Hey there,

Short version: Any of you expect referral fees if you connect a client and a builder on a big job ($100K or more)? Any of you pay referral fees if someone brings you a big job?

Longer version: I’m gonna help someone build a dome. It’s local and convenient and it’s a nice guy I know from out of state and the risk is his and the contacts for local subs are mine and I’ll get either fixed $$ or hourly for a month’s work. Not an issue. Here’s the question. He’d be the perfect contractor for another project where I’ve been helping the prospective homeowner with some of his planning. Quality contractor and coincidentally he lives very near the project. Does match making have a price or is that sleazy in this field?

In my prior business life, if someone was looking for financing, and you brought them a source, you could typically get a 2% finder’s fee and not appear sleazy. Don’t know the protocol in construction.

Thanks. Jim

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  1. Mike_Smith | Feb 05, 2002 05:19am | #1

    *
    cloud...some do and some don't....

    not sleazy.. just another way of doing business...

    some realtors are always looking for referral fees... i never wanted to play ( or pay ).. maybe i missed something...probably not

    1. Tommy_B. | Feb 05, 2002 05:20am | #2

      *Jim,Generally, I would take my 2% in the goodwill generated by the referral.Your situation could be different. I haven't followed to closely but if I understand it right you have expertise in some unorthodox building methods.I guess you would have to be happy telling the prospect that you would hook him up with a contractor for a fee, or vice versa. And be ok if the other party to the agreement eventually found out, for it not to be sleazy. It still might be sleazy for all I know.Whoever said the lending business wasn't sleazy?But that's just me.

      1. Schelling_McKinley | Feb 05, 2002 05:37am | #3

        *I am asked all the time for referrals. The only time I have gotten a finder's fee is from my neighbor who is an arborist. I never asked for it but just found a small check in the mail. I use it to defray the cost of my firewood.Most times I am happy if I can give an unconditional referral. If I have had a positive experience with the person, I am happy to give their name and hopefully add to their success.

        1. Allan_Edwards | Feb 06, 2002 02:45am | #4

          *I have paid Realtors over the years 10's of thousand's of dollars, and really don't mind. It get's me business, and some really expensive new homes to build. I have also paid non-realtors, people who just gave me a tip that their friends were looking for builders. Again, has worked well, I just build the fee in. It's just business.Allan

          1. Jim_Walters | Feb 06, 2002 03:53am | #5

            *>It's just businessI sell jobs....and I buy jobs. It's easier that way...

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