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Beware Of These 6 Possible Seller Lies


When buying a business you really need to do your due diligence and be skeptical of owner claims. In this video, we go over six possible lies or untruths, that you may hear from a seller.


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3/9/2017
Contributor: Timothy Cunha JD: Business Broker, SF Bay Area   Post ID: 1218

As Ronald Reagan said, quoting a Russian proverb, "Trust, but verify."

In any business transaction it is important for the parties to have mutual respect for each other and to have confidence in their integrity. But buying a business is a long-term commitment. -- It requires buyers to be skeptical of everything. The assumption in due diligence should be that everything is suspect and in need of verification.

Most sellers are honest. Most responsible, professional brokers won't represent a seller who they suspect of being dishonest; but, there are no guarantees. What one person may consider legally-acceptable "puffery," another may find to be downright fraud.

Part of the due diligence process should include seeking ways of verifying the seller's reputation amongst his peers, colleagues, and local business community; but, in a way that doesn't violate the buyer's obligations of confidentiality. Another important step is using qualified professionals, particularly a CPA and lawyer, to objectively delve into all the seller's representations. And, be sure that anything and everything being relied on is in writing and is signed and dated by the seller.

Last, but not least, if the seller tells a buyer how successful he has been by cheating the government, or lying to customers, or exploiting his employees, he has very effectively told you that he is not to be trusted on anything -- including representations he is making about his business.

2/8/2017
Contributor: Broker/Consultant: Elderly Care Services   Post ID: 1159

Well, I sure hate to use the word "Liar" but I think it is safe to say that some Sellers:

* Tell a Buyer what a Buyer wants to hear vs the whole truth.
* Feel that some information is not relevant to the sale so why share it.
* Remember only the good times of their business and not the bad business times.
* Are afraid to share personal information with potential Buyers for fear of loosing the sale or being reported.
* Feel that some information is really not that important.

This is when an experienced Business Broker can help a Buyer understand and catch some of the potential "White Lies" and help the Buyer process all the information offered or not offered.


  Helpful Resources To Assist In Selling And Buying California Businesses
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.

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.

Elizabeth McGovern: Escrow Services - SF Bay Area

McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.

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.

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.

Shalonda Chappel-Pilgram: Escrow Services - Southern CA

Escrow services to brokers & agents, owner/sellers, & buyers. Established 43 years. Extraordinary service. Experienced with handling difficult transactions. One stop for all your escrow needs: Bulk sales, lien searches, UCC searches, liquor license transfers, publishing & recording services.

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.


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