When you first start out in business brokering, you’re aware of the statistics of failure. 90% failure rate is intimidating so one can assume that for someone to even attempt to get into the business they have to be aggressive, confident and determined. In the beginning you’ll take almost any kind of listing to get your business moving but over time you realize the sense in being a little more discriminating. I use the word discriminating in its most positive use, choosing listings with cleaner books and records, believable sellers etc..
I’ll never forget one of the first listings I ever took. I met with woman who sold me this sob story about how her husband had a gambling problem and after leaving her destitute, with her two kids, had run off (whereabouts unknown). Now after only owning the business 6 months she was forced to sell her little cafe. Then she insisted on an open listing agreement. I wasn't happy about it but the combination of empathy and desperation was fatal and I gave in.
I sent many people there but the fact she had only been there 6 months and there was something odd about the lease turned people off. One day I called her to check in with her and she informed that she sold it. I was shocked, as I had to call her to find this out. I asked her if she opened escrow and she informed me that she and the buyer had opted to not go through escrow. I asked the purchase price and then informed her that it was illegal to not go through escrow according to the bulk sales law, she didn't seem to care. It irked me and I vowed to not take any more listings like that. I want to work with my seller not view him or her as my competitor.
About 5 months went by, then one day I was in a meeting and a strange number came up on my cell and I was compelled to see who it could be, 000-0000. It was the justice department; they wanted to know what my involvement was in the listing of this little cafe. I told them what I knew, of course. They informed me that this woman was a professional con artist.
This woman's husband had a job in a flower shop where he process telephone orders. Except that he opened a very similar credit card account for himself and was filtering the money into his personal bank account, his wife, his accomplish. When I met her to take the listing she knew exactly where her husband was.. in jail! She racked up tons of bills and then declared bankruptcy but she listed the little café as having no value to her trustees, then she sold it to a unsuspecting older lady and convinced her to not go through escrow to save a couple bucks, silly move. The buyer then became liable for the sellers debts associated with the business and it became a huge nightmare for the buyer. When I spoke to the district attorney's office they planned on prosecuting her. I’m not sure whatever became of this woman but if she did have children (that could have been a lie too) I feel sorry for them.
It was a good lesson for me to learn early on in my career. If it doesn’t feel right, don't take the listing. There are plenty of good people out there, just exercise a bit of patience and you’ll find them.
About The Author: Christina Lazuric is an Orange County Business Broker who shares her broker experiences with BizBen readers and has had varied direct small business experience in the past but now assists small business owners sell their business and offers business buyers find their dream business to operate. Phone Christina direct at 949-257-7823.
Watch for more blog posts / articles from me in the future!
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