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Archive for 'Dealing with Business Brokers' Category

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

By Hoke - Last updated: Sunday, February 9, 2014

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 […]

Good Faith Deposit / Beware of Broker Trust Accounts

By Hoke - Last updated: Friday, January 3, 2014

A Good Faith deposit is often required to accompany the offer. The amount is typically 10% to 20% of the sale price. Because it is impossible to really really know if the sellers claims are valid without solid verification, most reputable business brokers will hold the Good Faith Deposit uncashed until Due Diligence is successfully […]

Business Broker Industry Fees

By Hoke - Last updated: Monday, September 3, 2012

Business Broker fees are set by the individual Business Broker firm and vary. Most firms work on a “Success Fee” where they earn a fee only if the transaction closes. Commission is typically paid from the sale proceeds. Some firms require an upfront retainer fee. Although there are exceptions, the Commission Percent charged averages about […]

Beware the Inept Business Broker

By Hoke - Last updated: Friday, July 27, 2012

I recently sat in a disaster of a closing meeting as a paid consultant (not as Broker). The purpose of this meeting was for the buyer, seller and landlord to sign a Lease Assignment and close the deal. Unfortunately, the broker who was to provide the Lease Assignment never showed this complicated three page lawyer […]

Why do Business Brokers get 10% and Real Estate Brokers get 6%

By Hoke - Last updated: Sunday, August 15, 2010

Ten Percent is the longstanding traditional Business Brokers Commission. Why? It’s the Market Fee that almost everyone else charges.  Why do Real Estate Brokers get 6%? It’s the Market Fee that almost everyone else charges. Is 10% too high? Aside from the required Accounting and Financial background, here is our take on this issue. The […]

Some Brokers offer 5% and 6% Commissions

By Hoke - Last updated: Sunday, August 15, 2010

Most of the 5% to 6% Commission Brokers I’ve met are Residential Real Estate Agents anxious to get a Listing or try something new. They assume Business Listings get the same commission as selling a home. While selling a home and business require the same Real Estate license, the skill sets and marketing venues are […]

When Will Open Listings Work?

By Hoke - Last updated: Tuesday, August 10, 2010

An Open Listing where the Business Seller recruits multiple Business Brokers on a “whoever gets the sale gets a Commission” can be successful in a simple transaction where the Business Seller is confident they can manage the sales process, so Business Broker quality and also confidentiality is less important. It helps if the Business Seller […]

Does A Seller Really Need A Business Broker?

By Hoke - Last updated: Friday, August 6, 2010

As a successful Business Owner you are an expert in your industry and dealing with your Customers. No one knows more than you about your business. So why have a Business Broker sell it? Fair question. Selling a business is a different paradigm from operating the same business. Selling a business is a bit like […]

Bigger Versus Smaller Business Brokerage?

By Hoke - Last updated: Tuesday, August 3, 2010

Business Brokerage being a person-to-person rather than team-to-team endeavor, the experience and skill of the individual Business Broker rather than size of team is the key determining factor in the success of a transaction. Although larger Business Brokerages have a bigger footprint and theoretically more exposure, because of high agent turnover in a straight-commission job […]

What is the key experience factor when selecting a Business Broker?

By Hoke - Last updated: Sunday, August 1, 2010

In any profession, the best means to get experience is to actually do the specific work from beginning to end. The more times the better. Unrelated or partially related prior experience while helpful is not a predictor of success in a different field. Business Brokerage is a transactional business not a tenure business. Experience is […]