If you go into a deal where both sides of the transaction are represented by the same broker, is this a good thing or a bad thing? The answer is it depends on the deal.

This situation works best when a broker has a listing with a seller and also knows of buyers that they have worked with previously or they have been working with for awhile. If the two sides are aiming for the same goal then it could be a good match, and since both parties are familiar with the broker it will work well to have just one intermediary involved. It is also beneficial during negotiations to have fewer intermediaries in the deal, as it can streamline the process significantly. There are other situations where having a sole broker to represent both sides of the deal is useful, but the situation will depend on those involved and the transaction at hand.

On the other hand, if you are a buyer who is trying to go it alone, what may end up happening is your transaction will be represented by a single broker. That broker, who at this point has only been working with the sellers with whom they have the listing, may not be the best representative for your side of the deal.  You enter this relationship as a bit of an outsider, never a good proposition.

By having your own representative in the transaction – someone who you have had a chance to talk with, someone who understands what your goals are for business ownership, and someone whose opinion you can trust – you can eliminate the worry that the broker is not on your side and is only interested in what the sellers want.

Another really good reason to have your own broker is that if you become unsure about buying the business, like after discovering problems during due diligence, the seller’s broker still has to work with that seller for the duration of the listing agreement. It is in the best interest of the broker to maintain a good and positive working relationship with their client so as to keep things amicable for the next deal. The broker is not going to make their client unhappy for the sake of a buyer who might ultimately walk away.

The moral of the story is a business buyer needs help navigating the complex world of business transactions, and that person needs to be someone that you know and can trust. Find yourself a good business broker to assist with your journey to business ownership.

Are you thinking about buying a business and want to know what a business broker can bring to your side of the deal? Please leave a question or comment here and we will be happy to assist you.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com