Business broker Los Angeles is the person you need when you want to sell your business fast and at the best price. The broker will help with everything from listing to negotiations to closing the deal. The support you get from the broker will enable you to focus on the core operations of your business and never have to worry about the sale. All in all, before you make up your mind to work with a business broker Los Angeles, there are a couple of things you need to understand about the business brokers’ commission.
Amount of commission is dependent on what is agreed – ranges from 5 to 15%
The most important point you have to understand is that the amount of commission is dependent on what the seller and the business brokers Los Angeles agree. With most brokers, you will be required to pay a commission of 10% of the selling price. There is usually a minimum fee which is about three to six thousand dollars. This will depend on the brokerage. If the listing broker is the one who obtains the buyer, he will get the whole commission. However, if there were other brokers involved, the commission will be split among them.
Just because the average commission is 10% does not mean it cannot go higher or lower. Considering the commission is what you and the broker agree on, it is always wise to negotiate. The commission can even go as low as 5% if you have a good negotiating power.
Only paid once the deal closes – in most cases
The best thing about working with a business broker Los Angeles is that you never pay him until the deal closes. This simply means that no matter how hard he works, if you don’t sell your business, he will not get any money from you. This is what makes it a great idea to work with business brokers LA because they are committed to helping you sell your business since their pay is dependent on their success.
However, there are unique cases in which you will have to pay the broker even if he doesn’t help you sell. For example, most brokers will ask for a down payment. This is meant to cover the initial costs of marketing. Other times, if the buyer was introduced to the business by a different brokerage and not the listing broker, the commission will be divided by both the selling and the listing brokers. This is usually split 50/50. The terms and conditions outlined in the contract may also state that you will have to pay the broker even if he doesn’t help you sell the business. Always pay attention to all the clauses in the contract. Every detail about the commission is outlined in the listing contract.
The seller pays the fee
Last but not least, you need to understand that in nearly all cases, the commission is paid by the seller and not the buyer. This is paid at escrow to the broker that listed your business for sale.