Question concerning off-market CRE deal finders fee.
So, I just had someone (not a realtor, not a broker, not the owner, just the guy currently using the space) let me know about a potential off market deal in the $350-400k range. It is something I might be interested in, but he is asking for a $100k finders fee...

How politely should I laugh in his face?
[{"id": "hn6vqq3", "text": "If the deal makes sense including the finders fee  then it\u2019s almost like a wholesaler. Especially if he has it under contract and can assign it to you. But that seems to be a steep fee for such a low purchase price.", "replies": [{"id": "hn7gude", "text": "I would not (generally) disagree with this; in this case, he's essentially, just a lead generation that wants to be cut into any deal by heaping a very generous \"add\" to the  purchase price.", "replies": [{"id": "hnbs4rf", "text": "I would tell him no and move on. He will likely come back and agree to lower the \u201cfinders fee\u201d. My guess is you don\u2019t know the building/aren\u2019t able to get in contact with the owner directly? \n\nBecause he\u2019s not affiliated with the owner you should feel ok just circumventing him and going directly to the owner if that\u2019s the way to get the deal done. The owner probably doesn\u2019t want him collecting a fee anyway", "replies": [{"id": "hncsmac", "text": "It's a property that I've kinda looked at before. It's in an area I see potential growth into, and it is large enough for the development I would do.  \n\n\nThe information that the current seller might be interested in selling is new, and has some value; but yea, if it's a play I want to move forward on I'll just reach out directly.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hn6xvoq", "text": "Big difference between just knowing a deal and if it's a wholesaler like the other poster said and he already has it under contract. If he can assign it to you directly then possibly if it makes sense.   But honestly I can't see a deal like that making sense due to the low price compared to fee.    No way would I pay that.   If it's so desirable and such a great top secret deal then why wouldn't the owner not want to take the public market himself or with a broker and get more money.   That finders fee is larger than the commission would be.   If it goes public, you could find it yourself or have a broker look for it for a much smaller fee.", "replies": [{"id": "hn7gjks", "text": "Yea, it's basically a random guy who happened to be in the right place, trying to insert himself into the process for a huge cut.    \n\n\nHe has no contract, no skin in the game, no resources, no value add to the deal other than a potential lead generation.", "replies": [{"id": "hn7on3r", "text": "I would low ball him if you are really interested.  Tell him the max broker commission on this would be 5% on a buyer side, let's say 25k for simplicity for someone who has done a lot of work.  Most likely a lot less.  Then a High/generous referral for just a lead is 25% of the commission and not the deal price, so let's say 6-7k.  Most likely it's a lot lower.   If you want to add a premium, then offer him 10k for doing no work.  If not, call his bluff because no one will pay 100k for that low of a deal price", "replies": [{"id": "hn8edh2", "text": "To me this definitely seems like the right way to go. Not entertaining his BS, but also not spitting in his face.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hn72bs4", "text": "I have seen a 150k profit in a similar deal size.", "replies": [], "depth": 1}, {"id": "hn7cwaw", "text": "I\u2019ve seen people bring up wholesalers and wanted to ask how that would work if he\u2019s not a licensed realtor/broker.. in that case is he a savvy buyer who got it under contract with another broker and would assign it to OP, and charge him $100k for the service?", "replies": [{"id": "hn7h1mi", "text": "He's just a guy that happens to know that the current owner is thinking of selling. No contract, just wants to add on a substantial  \"finders fee\" to any potential deal.", "replies": [{"id": "hnaepgm", "text": "Just go around him. Get the owner information and reach out. I work acquisitions for a Fortune 500 and people like this piss me off. I always screw them and just go direct to the owner.\n\nEdit: if he\u2019s not a broker he\u2019s not owed anything. If he knows the owner is willing to sell, it\u2019s equally as like\nY that one of the reputable brokers in town already knows this. You can have them get the info and then have them do a bunch more legwork for less money.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hn7egl3", "text": "I think it depends on your relationship with this guy. If the sales price is way under FMV you could price him in a certain amount like others commented. Up to half of the discount?Alternatively, offer him 3-5% \\* FMV. Again this assumes the 350-400k is below FMV for you paying the fee to make sense.\n\nYou could call the owner directly and cut this guy out, but obviously that has a reputational cost.", "replies": [{"id": "hn7i1sb", "text": "I have no problem paying finders fees for deals, or rewarding lead generation, but what he's angling at is taking the owners price, adding six figures to it, and presenting it to me as if he is the owners official representative (which I know he's not). Hell, if they thought that they could get an extra $100k on the sale price, just list it at that with broker, give up 8%, and pocket the rest.  \n\n\nI'm looking at a \\~$2MM development at the site, so I don't mind kicking some over to those that helped; this just seemed really pretentious to me.", "replies": [{"id": "hn7qo6z", "text": "It does seem out of proportion.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hn8173b", "text": "Laugh in his face. 1% finders fee MAX.", "replies": [], "depth": 1}, {"id": "hn83ksl", "text": "Pinch him out of the deal like Daniel Day Louis tries to do\n\n\"We're going to pay quail prices\"\n\nWhen he calls later to bitch about his $1000 finders fee: \"I DRINK YOUR MILKSHAKE\"", "replies": [], "depth": 1}, {"id": "hn86wjn", "text": "Are you speaking with the seller? If so, go around him. If he insists on being unreasonable then you need to do what you need to do. \n\nWhen he complains, post closing. Cut him a $20k check.", "replies": [], "depth": 1}, {"id": "iy1w20z", "text": "It is absolutely illegal for someone who isn\u2019t a real estate broker to accept a commission on a sale. I\u2019m almost certain this a federal law, and not just my state. I\u2019d inform him of this, and use that as your reason why it won\u2019t work, but you really appreciate the lead.", "replies": [], "depth": 1}]