What does a bird dog owe a lender when the lead turns into a loan and not a purchase

The one thing I have never seen work is a verbal "we will sort it out later" arrangement, and what actually happens is the bird dog gets paid zero because by closing day the lender remembers a referral fee and the buyer's broker remembers an introduction fee and both figures are different from whatever the bird dog thought was agreed. If I were building my fee agreement right now I would define "closing event" as any funded note where the subject property is the collateral, not just a deed transfer to a buyer I personally sourced. That one sentence probably covers 80 percent of the situation you are describing. Around here a 90k note at 1 percent is 900 bucks, small enough a lender does not push back, specific enough that nobody rewrites history at the table.

The fee agreement almost never survives contact with a capital event because nobody wrote "loan closing" into the trigger language.

Most bird dog agreements I've seen are written around a purchase closing, full stop. The assignment language points at the buyer, the fee triggers on a sale, and nobody thought to define what "closes" means when the same address funds as a note instead. That gap is not an accident, it's just sloppy drafting that nobody catches until exactly your situation.

What I'd want to know is whether the bird dog knew you were a lender when they brought the address, or whether they thought they were feeding a buyer who happened to use your money. Because if they understood the capital structure, they arguably surfaced a lending opportunity and not just a property, and that changes what the agreement should have said from the start. Did they know?

Probate side here so my leads are slow-burn and the timeline between surface and close is long enough that fee language gets fuzzy by the time money moves. What I've started doing is writing my agreements to say "closing event" instead of "purchase" because a funded note on a property I surfaced is still a closing event, the capital just came from a different pocket. In my two counties the private lenders are a small enough circle that I actually know who's likely to fund any given buyer before I bring the address, so I'll sometimes negotiate a split arrangement upfront that covers both outcomes. The rate I've settled on for a loan event is about half what I'd expect on a straight acquisition fee, because the lender's margin is thinner and the ask feels smaller. If you're on the capital side and a bird dog surfaced the borrower-plus-property combination, I'd say something is owed, even informally, because that referral relationship dries up fast if it goes unacknowledged.

Depends whether the bird dog's paper says "closed transaction" or specifically "purchase."