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Last week, the CABB Weekly Connection ran an article titled, "Up Front Broker Fees for the Business Seller," which was published by Tom West, an national industry expert and author on business brokerage. It is important to note that this article referenced upfront fees and a survey that was based on national input. In California, we have specific guidelines set by the DRE for Business Brokerage, which may or may not conflict with some of the opinions published. For clarification, we are re-publishing an article written by Ron Johnson (CBB, CBI, M&AMI, IBBA Fellow and Past CABB President), based on his dealings with the DRE regarding upfront fees.

By: Ron Johnson, CBB, CBI, M&AMI, Fellow of the IBBA

A few years ago, I spent a number of months working with the California Department of Real Estate ("DRE") regarding business brokers/intermediaries collecting fees for appraisals and marketing packages prior to selling a business and collecting a commission. In the process, I submitted two "strawman" engagement agreements to the DRE's Advance Fee Review Desk (Gary Sibner, Senior Deputy Commissioner). Both agreements contained language to collect fees for (1) an appraisal, and (2) a marketing package. Business brokers need to understand that "Up Front Fees" may not be synonymous with the DRE's definition of "Advance Fees." The following is a synopsis of the DRE's interpretation and comments.

By: Tom West, BBP Co-Founder

Originally appeared on www.bbpinc.com

It is extremely important that you know why you are taking a listing and how to make your listing saleable. Don't forget, before your listing can be sold to the public, you must sell it to yourself and your associates. Bear in mind - "expired" listings will never put one dollar in your pocket. We are not dealing here with the "mechanics" of a listing but rather, how to make it attractive and meaningful.

By: Tom West, BBP Co-Founder

Originally appeared on www.bbpinc.com

To guarantee your seller's complete cooperation in the sale of any listed business, it is always wise to "alert" him to the possible annoyances he may be subjected to before a sale had been consummated. A few "do's" and "don'ts" at this point should eliminate most of these problems. Before doing this, however, your listing should be completed and signed.