Ask Your Broker if They’re Willing to Co-Broker
Patrick Lange
Ask Your Broker if They’re Willing to Co-Broker
It’s a big and controversial issue within the business brokering industry: are you willing to work with another broker on a deal and split the fee? For many brokers, the answer is no. However, for our statewide professional organization, Business Brokers of Florida® (BBF), co-brokering is a commitment for its 1,100 members. The Business Brokers of Florida is the largest co-brokering association in the world, and they believe that working together allows brokers to make hundreds of deals a year that might never have happened without cooperation.
I agree. I think every broker should consider working with another qualified broker if the opportunity is right for the seller they represent. Your commitment is to get the company sold, and being open to collaboration increases the odds of finding a buyer. BBF says that thirty percent of the deals completed by members in 2022 were co-brokered between members.
There are caveats, of course. I vet the broker to be sure they understand the business and are competent to work through the deal. I’ll also vet the buyer, to make sure they’re serious and able to make the deal happen. I’ll insist on NDAs from all the parties involved to protect the seller’s confidentiality.
If the buyer is the right fit for the company, both brokers’ interests are aligned: we’re working together to get the best deal possible for our clients. At that point, it makes sense to have two qualified professionals representing two parties in the deal and looking out for their interests. In fact, a buyer’s representative can smooth out questions and concerns during negotiation and help the deal move faster.
It’s possible that the other broker may have deep industry experience or knowledge that will be helpful to both the seller and the buyer. In almost every case, you’ll build trust and a relationship that may yield results down the line when they have a seller or a buyer that’s a good fit for you. Practicing collaboration keeps you open to working with other professionals, including attorneys and lenders, who may make your brokerage stronger and more successful.
I write my willingness to co-broker into all my seller contracts. There are roughly 5,700 licensed business brokers in the U.S. I figure that if I’m willing to work with any or all of them, that dramatically increases the odds that I’ll find the right buyer for my listings. I’m in the business of doing business, and I can afford to split fees. If I can get more deals closed, it’s win/win for me and my clients. Patrick Lange