Business Brokers in Los Angeles – Important Terms and Conditions to Consider in a Listing Agreement

Working with a business broker in Los Angeles will not only save you time and money but also protect you from the ill-minded buyers. The broker has been selling businesses for years and he understands the secrets of advertising to the right buyers and closing the deal fast and at the best price. Even so, before you pick a business broker to work with, it is imperative that you pay attention to the terms and conditions.

The exclusive listing agreement is the most widely used contract by business brokers in LA. This is an agreement that states that you can only use the broker you hire and regardless of how you end up finding a buyer, you will still pay the broker a commission. There are two other types of agreements available; open listing and exclusive agency listing. Regardless of the type of agreement you end up using, there are four important terms and conditions you need to consider.

Length of the listing
Most contracts will require you to commit with a business broker in LA for at least a year. However, this is not mandatory. You can negotiate the terms. You can try a 3 months or 6 months contract. This is more so if you are not comfortable with the broker you are working with. However, if you have full confidence in him, you can sign a contract of even more than one year. Although selling may not take that long, it will give the broker adequate time to find the right buyer for your company.

Contract cancellation
There is no guarantee that you will love how the LA business broker works months down the line. The worst thing that can happen is for you not to have a way to exit the contract. Before signing a contract with a broker, make sure you discuss the cancellation rights with him. Some brokerage firms will allow you to cancel any time while others will have penalties. By getting the cancellation rights, the business broker is giving you a way to opt out of the signed contract if you are unsatisfied.

Contract expiration
What happens when the contract expires and you still haven’t sold your business? The contract will expire when the agreed time has been reached. The two parties can choose to renew the contract if they are happy with each other or part ways. Even so, the broker should provide you with the list of prospective buyers he acquired during the duration of the contract. You need to remember that with the exclusive listing, if you close the sale prior to the expiration of the contract, you will have to pay the agreed commission.

Brokers compensation
Last but not least, the contract should give details on compensation. Compensation is done per hour, through a retainer or a commission once the business sells. The commission is the most common option.

Never sign a contract you do not understand. You must also never be afraid to negotiate for better terms. Lastly, only sign a contract with a business broker in Los Angeles that you have confidence in.

What Client’s Say

We Couldn’t Be Happier

"When we thought about selling we had no idea what our business was worth or how to go about selling. What you were able to do was to cut through the fog so that we understood the valuation issue and had a comfort level with the process. As you know we ended up selling for somewhat more than the original valuation and we got all cash and our CPA loved the way our tax liability was minimized. We couldn’t be happier!"

Over $250,000 More

"Our first contact with you shocked us when you suggested that we wait 18 months before selling because you believed that if we hit our projections that the value would be significantly greater. As it turned out we not only followed your advice but also got slightly over $250,000 more than we originally had hoped for. It is seldom that we have had the opportunity to deal with a firm that doesn’t want both money and a commitment NOW. It was clear and obvious that you had our best interests at heart."

You Got the Valuation We Agreed On

"You did a great job on the sale of our business in really beating the bushes for buyers, including a UK company that was an active suitor. You managed to get the valuation that we had all agreed upon and got it substantially all in cash and got the transaction closed with little to no problems or expensive lawyers involved."

Thank You for Handling Our Business

"Our business was smaller than what your firm normally handles but it was a BIG part of our net worth and savings. Thank you for handling our business and we were very pleased and delighted with the results."

More Than Anticipated

"Our transaction was involved as we had different corporate entities located in different states. Our only regret is that we didn’t retain your services before 2012 when we paid $25,000 to a firm in Texas that did a valuation and market analysis for us before then failing to do anything in the way of trying to sell our business. You got it sold for more than anticipated."

The Sales Process