Posts Tagged ‘Accounting’

Co-Brokering a Business Sale Can Be Critical For Both Buyers and Sellers

March 15th, 2022

Co-Brokering A Minnesota Business Sale Can Be Critical For Both Buyers And Sellers. Here’s why…

Cooperative or Co-Brokering is common in Minnesota real estate and has been for many years. Yet, many Minnesota Business Brokers resist it. Some states forbid the real estate practice of dual agency, (representing both buyer and seller) thus requiring the transaction to be co-brokered. However, Minnesota business sales industry, this just isn’t the case.

Most Minnesota businesses are not listed in the MLS and there are a number of Minnesota Business Broker companies that refuse to co-broker listings. If you use a business broker, make sure you understand their policy on co-brokering.

The most common reasons you will hear for not co-brokering are:

1. My competitors are incompetent

2. I don’t want to share my fees (if they are honest with you)

3. When I get a really good listing, I want to sell it myself

4. I lose control

5. I am concerned about breach of confidentiality

6. It violates my fiduciary responsibility to my client

None Of These Reasons Hold Much Water

1. A competitor that is incompetent or not proficient provides both parties with an opportunity. When sellers or buyers come into contact with two brokers, one who is proficient and one who is not, the outcome is always the same. They will do business with the competent broker and they will seek him out.

2. Not wanting to share fees. This is the classic half full or half empty glass scenario. Consider that 100% of nothing still equals nothing. Minnesota Business Brokers who co-broker actually experience 30 to 40% more business due to co-brokering. Good brokers get increased exposure and more transactions, a good thing for sellers and buyers.

3. Not surprisingly, Minnesota Business Brokers would rather sell their own listings because they make more money on the transaction. However, co-brokering expands the opportunity for the right buyer to come in contact with the seller and a broker who is open to co-brokering is actually working in the best interests of the seller.

4. As for losing control, that only happens if a broker lets it happen. There are many safe guards for a listing broker to protect a seller and still remain in control.

5. Confidentiality is rarely, if ever a problem simply from a co-brokering arrangement. The same precautions are taken with every buyer no matter who is acting as the broker.

6. Fiduciary Responsibility. Professional Minnesota Business Brokers are hired to do a job. They are expected to do that job to the best of their ability, in a professional manner. A professional Minnesota Business Broker must maintain high standards, be honest and ethical in all dealings and never do anything that will harm a client. Co-brokers have chosen to be transaction brokers and this seems to fits well for both buyers and sellers.

In the final analysis, co-brokering is the right thing to do for the client. Buyers get extremely frustrated when having to work with an agent from every business brokerage in town. Furthermore, it places the seller at risk by not allowing every qualified buyer to purchase the business. The fact is that as fiduciary agents, good business brokers will do what is best for their clients.