Question 71

A finder's fee is legal at a real estate closing when the closing statement shows the charge being paid to the broker.

In real estate transactions, a finder's fee is typically paid to the broker for their role in facilitating the deal, and this fee must be clearly documented in the closing statement.

A) lender.

A finder's fee is not paid to a lender in real estate transactions. Lenders primarily earn their income through interest on loans and fees related to the loan process, not through finder's fees.

B) broker.

The broker is the correct answer as they are the party who can legally receive a finder's fee for bringing buyers and sellers together. This fee must be disclosed in the closing statement to ensure transparency and compliance with real estate regulations.

C) escrow officer.

Escrow officers facilitate the closing process but do not typically receive finder's fees. Their role is to manage the transaction and ensure all documents and funds are handled appropriately, rather than to bring parties together for the sale.

D) title officer.

Title officers are responsible for ensuring that the title of the property is clear and that there are no liens or issues. They do not earn finder's fees as their compensation comes from title insurance and related services, not from facilitating the sale.

Conclusion

The finder's fee is a legitimate charge that can only be paid to the broker, as they are directly involved in the transaction and are responsible for connecting the buyer and seller. All other options are incorrect as they do not receive finder's fees in the closing statement, thus highlighting the broker's unique role in this context.