Would you pay a broker fee at closing if you were the buyer and the broker
August 16, 2022
by an intermediary from University of Nevada - Las Vegas in Henderson, NV, USA
The question is would you pay a broker fee at closing if you were the buyer and the broker represented the seller.? I am interested in hearing everyones take on this, please comment below and let me hear your opinion. Thanks!
from University of Texas at Austin in Austin, TX, USA
In the sale of a business, there is usually only one broker/agent that represents and is paid by the Seller.; and brokers operate usually off of a success fee schedule that's double Lehman formula (or a flat fee that's a variant of this).
There are brokers out there that represent buyers (my firm being one of them) - but as I've posted here previously, we would *never* represent both buyer and seller and get paid on both sides of the transaction. Conflict of interest.
On our sell-side offerings, we offer complementary buy-side advisory - mostly for first-time business buyers, we connect them with lenders and other deal professionals (always 3, never take referral fees), to support them through the transaction. We still vigorously represent our client's interests.
On our buy-side offerings, the buy side does pay our success fee, which is usually about 20-30% lower than our sell-side success fees. If there is an opportunity for us to co-broker with the listing broker, that's great, but most brokers don't want to cobroker. Short-sighted in my opinion. I love co-brokering because it helps get deals done quickly and smoothly for clients.
Be wary of "buyside brokers" that charge monthly fees or hefty (25K retainers) and I would recommend against the brokers that charge ongoing phone-bank fees or mailing fees. They're just passing on their overhead costs to you.
from Western Michigan University in Grand Rapids, MI, USA