How much do property deal sourcers charge? Sourcing fees explained

Most UK deal sourcers charge either a fixed fee, commonly £2,000 to £5,000 per deal, or a percentage of the purchase price, usually around 2 to 3%. The right number depends on the deal, how much work you've done and what the investor would otherwise have to do themselves.

What pushes the fee up or down

• The type of deal. A straightforward buy-to-let usually earns less than an HMO, a conversion or a development site, which take more work to find and prove.
• How far you've taken it. A deal with the price agreed, the survey booked and the numbers checked is worth more than a lead.
• The discount and the returns. Investors will pay more for a genuine 20% below value than for a home at market price.
• Your track record. Sourcers with completed deals and happy investors can charge more.

Reservation fees

Many sourcers take a reservation fee when the investor commits, often a part of the total fee, with the balance paid on exchange or completion. Say clearly in your sourcing agreement when it's refundable, for example if the seller pulls out or the survey reveals something material. Unclear refund terms are one of the most common causes of complaints about sourcers.

Structuring your fee

• Agree it in writing before you share the address, in a sourcing agreement.
• Split it: a reservation fee on commitment and the balance on exchange or completion.
• Say exactly what's included: finding the deal, negotiating, liaising with agents and solicitors, a deal pack and any refurb or letting help.
• Charge VAT if you're VAT registered. Registration is compulsory once your taxable turnover passes the VAT threshold (£90,000 at the time of writing).

What investors look for before paying

• Your HMRC anti-money-laundering registration and redress scheme membership.
• A clear deal pack with evidence for the value: comparable sales, rent and refurb costs.
• A written agreement with fair refund terms.
• No promises of guaranteed returns.

Upstream works out discount, stamp duty, cash needed and yield on every deal, builds investor deal packs and produces your sourcing agreement and invoice. You can make a deal pack now with the free deal pack generator.