Google+

Broker Pressure Tactic: “There are Other Buyers Interested!”

By Hoke - Last updated: Sunday, February 9, 2014 - Save & Share - Leave a Comment

Use of ” There are Other Buyers Interested!” is a grossly overused broker tactic. Some brokers say this with an air of great urgency to every buyer as a knee jerk reaction. Sellers often encourage brokers to use this tactic.

We discourage use of this tactic when no other buyers exist. First of all, how does this reflect on the integrity of the broker who uses this tactic or the sellers who encourage the broker to use this tactic? Secondly, there is about a 50% chance it will backfire. Often the buyer will be reluctant to feel pressured or engage in a bidding war and asks the broker to call if the other (imaginary) buyers go away. This leaves the broker with the need to spin another fiction to explain why the other buyers cooled their great excitement in the wonderful business. The real buyers will wonder what the imaginary buyers found wrong with the business that the broker is not telling them. When other buyers really do exist, use of this tactic can often backfire for the same reasons. The broker must know the rare instances when using this tactic can be effective and should never use it when no other buyers exists.

For buyers, we recommend that you not become pressured and too emotional about any business acquisition. You should not change your deal timing and process. We strongly discourage placing a deposit to hold the business (“so the other buyers won’t get it first!”) in a broker escrow account see Good Faith Deposit / Beware of Broker Trust Accounts. If there really are other buyers, the listing broker will likely wait for you because he or she will want to submit multiple bids to impress the seller.


Pin It
Posted in Business Brokers, Buyers Beware!, Dealing with Business Brokers • • Top Of Page