Why might a Finder not be recognized in all states?

A Finder, often referred to in real estate as an intermediary who connects buyers and sellers, may not be recognized in all states primarily due to the requirement of holding a broker's license. Many states have strict licensing laws that govern the real estate industry, necessitating that individuals who engage in activities such as finding or facilitating property transactions obtain a valid broker's license. Without this license, they may be operating outside the legal framework established for real estate transactions, which can lead to penalties or the inability to enforce agreements related to their services.

In contrast to this correct understanding, the other factors mentioned in the other choices do not consistently influence the recognition of Finders across different states. The nature of their involvement in property sales, their status as part-time agents, or their commission structure are not the fundamental reasons for the lack of recognition. Licensing laws are a more definitive and legal aspect that varies significantly by jurisdiction, shaping the operational validity of Finders in the real estate market.