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.

A finder's fee is typically associated with the services provided by a broker in facilitating a real estate transaction. When the closing statement clearly indicates that this fee is being paid to the broker, it is considered legal and acceptable practice.

A) lender.

The lender is primarily involved in financing the property purchase and does not typically receive a finder's fee. Their role is related to providing the loan and ensuring the borrower meets the financial requirements, not in finding or facilitating the real estate transaction.

B) broker.

The broker is the correct choice as they are often compensated through a finder's fee for their role in connecting buyers and sellers. When such a fee is disclosed on the closing statement, it confirms that the broker's services are being officially recognized and compensated, making it a legal practice.

C) escrow officer.

The escrow officer manages the escrow process and ensures that all documents and funds are handled appropriately during the closing. They do not receive a finder's fee as their responsibilities do not involve finding buyers or sellers; therefore, this option is incorrect.

D) title officer.

The title officer is responsible for ensuring that the property's title is clear and transferable. Like the escrow officer, the title officer's role does not include finding parties for the transaction, so they would not be the recipient of a finder's fee, making this option also incorrect.

Conclusion

The legality of a finder's fee at a real estate closing is dependent on the fee being paid to the broker, as their role directly involves the facilitation of the transaction. Other options, including the lender, escrow officer, and title officer, do not fulfill the necessary criteria for receiving a finder's fee in this context, thereby reinforcing that option B is the definitive correct answer.