I once visited a potential client “Bob”, an owner/operator of a muffler & brake shop who wanted to speak to me about helping him sell his business. During our initial call prior to my visit, Bob had mentioned that he had his business listed for sale through another brokerage firm but since he hadn’t seen or heard from that broker for several months he assumed their agreement had expired.
The next day when I met Bob at his business, he had some surprising news. The broker showed up just hours before I arrived, with a new Representation Agreement in place and a “hot” buyer in the mix! Apparently the former listing agreement was set to expire that day and the original broker was keen enough to convince Bob to re-sign for another year.
What struck me as disturbing was not so much the other broker’s shenanigans (unfortunately for Bob the “hot” buyer never surfaced – or was a figment of the broker’s imagination – and the business never sold), but Bob’s comment to me that “What difference does it make who I sign on with since you guys all work together”.
Unfortunately for Bob, his broker’s firm does not co-broker with other business brokerage firms and therefore his broker would not consider working with me and any of the automotive buyers that I had in my rolodex. My willingness to take a minority share of the commission fell on deaf ears.
Many sellers and buyers of businesses do not know that the majority of business brokers do not co-broker. Personally, I feel this is a breach of a broker’s fiduciary responsibility to their seller in terms of doing everything they can to find a qualified buyer at the best price in the least amount of time. Ignoring other brokers and their buyers is limiting the universe of interested buyers and thus decreasing the chances of a successful sale.
Murphy Business & Financial Corporation is a strong proponent of co-brokering and continues to work with other respectable brokers and brokerage firms to introduce each other’s buyers to the others listings to promote a more business friendly environment and lead to more successful business transfers, hence a “win-win” for both sellers and buyers!