Exclusive Listing Agreements are almost always the method used by business brokers who do not charge Retainers or Listing Fees. These business brokers are telling you that he or she will market your listing at his or her own expense in return for the exclusive right to sell the business. THIS IS ONLY FAIR considering that many business brokers will spend in excess of $700-$1,000 per week on resources and services rendered. YES that's PER WEEK!

FYI: If giving an Exclusive Listing Agreement then make sure the business brokers are willing to co-broker with other reputable business brokers - this is vital and allows you to draw on multiple business brokers while having a exclusive with the business broker you feel most comfortable with.

Now if a Retainer or Listing Fee -see below- is required and you follow the directions next below then there should be some leeway. Some business brokers will require and Exclusive Listing Agreement if no retainer is charged or a Non-Exclusive if a retainer is being charged.

The moral here is that a Retainer or Listing Fee charged by business brokers should be used and documented for expenses and services rendered. A retainer should not be used as a revenue source for the business brokers. UNFORTUNATELY, most - yes most, business brokers charging retainer or listing fees use this fee as their primary source of revenue - this is wrong!

If the business brokers you are speaking with require a Retainer or Listing Fee then...

1. Ask for a Fee Agreement then review it carefully and/or have your attorney review it. The Fee Agreement should be very clear on how the retainer or listing fee is being allocated and what the hourly fee charged for services that is being applied to the fee
2. Make sure there are no ongoing fees or escalator clauses
3. Ask for monthly updates on the expenditures complete with receipts for expenses
4. Ask for a itemized breakdown of services charged against the fee
5. Consider asking to have the retainer fee amount backed out of the business brokers commission

If the business brokers your are dealing with differentiate from #'s 1-4 above then find other business brokers. The commission clause in #5 above should not be a deciding factor but try.

In addition, don't you agree that business brokers that are not charging up front fees are far more motivated to close than business brokers charging up front fees? They make NOTHING $0.00 if they do not sell your business.

Make sure the business brokers do all of the following.

1. Determination Of A Market Value For Listing
2. The listing
3. Buyer Marketing
4. Qualify Buyers
5. Get Qualified Buyers Under Confidentiality
6. Full Disclosure To Qualified Buyers
7. The Business Tour With The Qualified Buyer The Business Broker And You
8. The Business Financial Review To The Qualified Buyer
9. Due Diligence - Getting Updated Info For Qualified Buyer
10. The Offer
11. Offer Negotiations
12. Accepted Offer
13. Due Diligence Making Sure All Contingencies Are Met
14. Due Diligence Making Sure Financing Is In Place and Other Like Lease or Real Estate
15. The Closing And Dispersal Of Funds

FYI: Not only are Step #'s 13-14 above vital - it is also where many lazy business brokers falter and create the cancellation of the deal. If the business brokers you are talking to do not cover #'s 13-14 then find other business brokers.

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