How to pick and interview a broker

This is educational. It is not a referral, and NewHands does not name a broker you should hire. The directory lists a practice only after a claim is verified. Until then it stays empty.

You can sell without a broker. Many owners do, with a lawyer and a CPA. A broker is useful when you want someone else to find buyers, hold the confidential process, and run the meetings. Ask whether that is the work you want done.

Questions to ask

Who will actually work the file, and how many other listings do they have? Ask for the names of businesses they have sold that are a similar size, and call one seller. Ask what they will not take. Ask how buyers are screened before they see the numbers. Ask what stays confidential, and for how long, if you take the business off the market.

Ask for a sample teaser with the name removed, and for the engagement letter before you sign it. Ask what happens if you already know the buyer. Ask whether they will co-broker, and how the fee is split. Ask which states they are allowed to work in. Licensing rules are state law. NewHands does not summarize them.

How fees are shaped

Fees are negotiated. Three shapes show up in engagement letters. A success fee is a percent of the price, or a percent that changes with the price, paid if a sale closes. A retainer is a monthly or upfront amount, sometimes credited against the success fee and sometimes not. A minimum fee is a floor, so a small sale does not produce a small check.

This page does not state a typical percent. Publishing one would be inventing a market. Ask two brokers for their letter and compare the letters, including the tail: how long after you end the engagement they can still claim a fee on a buyer they introduced.

What to keep in writing

The engagement, the fee, the tail, and who pays the lawyer and the accountant. A handshake on the percent is how a closing gets argued. IBBA educates intermediaries. That education is not a rating of any person, and NewHands does not confer it.