The commission to sell my business will be $80k, half to the broker, half to his firm. Can I contract the broker directly and pay less commission?

Basically, no, you can’t bypass the brokerage. Brokers fall under the Real Estate Act (2008), which requires them to be licensed salespeople, and to work under the supervision of a licensed real estate agent. The licensed agent is part of the brokerage (often an owner). A broker therefore cannot act independently.

The essential definition of a broker is someone who acts on behalf of a vendor, and is paid a success fee, this fee being linked by a formula to the sale price achieved (this is a bit of a simplification, but illustrates my point). Anyone acting in this capacity (other than a lawyer) must be licensed under the Real Estate Act (2008).

Other professionals can work with you on the sale of your business (in addition to or instead of a broker) as long as they do not charge a success-based percentage fee. Accountants, for example, may do this. Similarly M&A advisors can also assist you to sell. The fee structure of accountants and M&A specialists is quite different from brokers. And you always have the option of trying to sell your business yourself.

Don’t focus on the commission; focus on the outcome – getting your business sold. If you want to sell, using a broker is typically the best was to go.

Leave a Reply