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Open Listings vs. Exclusive Listings


a href="http://www.bizben.com/business-brokers/27015.php">Joe Robertson, a principal and business broker with Southern California Business Brokers has written a great article on the representation differences business owners can expect from business brokers listing their business. Some exerpts from this article include:

When it comes to selling your business, an exclusive listing with a business broker provides the greatest likelihood of success for both the seller and the broker.

Only a limited number of business brokers will accept an open listing, and typically, a broker that chooses to work with such a limited commitment from a seller will NOT provide the greatest amount of effort to sell the business.  Likewise, the commitment level of the seller is questionable.  To understand this point in more detail, let's start with a definition of the two types of listings.

Open Listing:

An Open Listing is an authorization to sell a business or property.  It may be given to several brokers concurrently or the business may be sold by the owner himself.  There is usually no time limit associated with this type of listing.  If the owner sells the property through his own efforts, he is not responsible to pay commissions to any of the listing brokers.  An open listing may be canceled by either party at any time.

Exclusive Right-to-Sell Listing:

The Exclusive Right-to-Sell listing is the most common type of listing.  It provides one broker the right to sell the business exclusively.  This listing entitles the broker to commissions on the sale during the life of the listing agreement, even if the owner himself sells the business.  This type of listing runs for a specific period of time, usually six months.  The agreement may only be cancelled by the listing broker during that period.

Initially, the open listing may sound like a great way to maintain more options; however, typically this type of listing agreement is a waste of time for both the seller and the broker.  Here are a few reasons why this agreement can be counter-productive.


Categories: Selling A Business



  Helpful Resources To Assist In Selling And Buying California Businesses
Mark Chatow, Esq.: Legal Services For Buying, Selling Businesses

Mark has a broad range of small business purchase & sale experience from analyzing potential acquisition targets to successfully guiding buyers and sellers through the purchase & sale of small businesses. Mark can assist with contracts, negotiations, legal matters, etc. Reach Mark at 949-478-8393.

Janet Carrera - Escrow & Bulk Sale Services - SF Bay Area

Redwood Escrow Services, Inc. is a full service, licensed independent escrow company. We are EAFC Fidelity bonded, fully insured & licensed with the Department of Corporations. Committed to offering our clients the most comprehensive variety of escrow services available. Phone Janet at 510-247-0741.

Joe Sandbank, Esq. - Legal Services

I have provided legal counsel to business buyers, sellers and brokers for over 17 years. With prior experience as a business broker and SBA loan officer, Joe brings both a practical and legal approach to all aspects of the business acquisition process.

Diane Boudreau-Tschetter: Escrow And Bulk Sale Services

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.

Willard Michlin, CPA, Certified Fraud Examiner, Due Diligence Services

Willard Michlin, CPA #106752, offers buyers step by step training & assistance in doing Due Diligence Services when they are thinking of making an offer, or are in process of investigating a business purchase. He helps to determine the actual net profit even when there is cash. Call 805-428-2063.

Helen Yoo: Escrow & Bulk Sale Services - Southern California

New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.

Ranvir S. Sandhu, Esq. - Legal Services For Buyers And Sellers

I've worked at top Bay Area law firms and have extensive experience with business entity formation, mergers, dissolutions, conversions, employment matters, including experience in reviewing and negotiating transactional documents such as leases and purchase agreements.

Brad Steinberg, Broker - Laundromat Specialists

PWS is the leading laundromat broker in California. Since 1968 PWS has brokered over 2,500 laundromat sales. With over 90 employees dedicated to the coin laundry industry, PWS has 18 licensed agents, a 3 person in-house finance department, 10 service technicians and a 20 person parts department.


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