This week, we had a quarterly meeting of our co-broker group, BBANE. This group was started late in 2008 by four New England business broker agencies. When it started there were about 50 businesses that the group had available for sale. Today, BBANE has 12 agency members with about 50 individual business brokers selling businesses. BBANE has over 200 businesses for sale.
The benefits of co-brokering have been known for a long time in the sale of residential real estate. Sellers recognize that it exposes their property to many more potential buyers. So, why hasn’t co-brokering become widespread in the sale of businesses? Brokers, who do not co-broker, give various reasons for not doing so. One is a concern that there is more potential for breach of confidentiality. Another concern cited is competency of other brokers. This writer suspects that the primary reason for many brokers is greed. They don’t want to share their commission with another broker.
The most successful business broker co-broker group in the country is in Florida. The Business Brokers of Florida have co-brokered for 20 years with over 1,000 sales a year. Almost half of the sales done in Florida are co-brokered. This shows that co-brokering of business sales can be done successfully.
Co-brokering is a win-win-win for sellers, buyers, and brokers. When businesses are sold by more business brokers, they are exposed to more buyers which should result in a faster sale at a higher price for the sellers. Buyers can save time by seeing more businesses from one business broker in a co-broker group. By co-brokering, the business broker sells more businesses and makes more money.
Business owners understand the benefit of co-brokering. We give them a choice of whether to co-broke the sale of their business and virtually all choose to do so. It’s clear that co-brokering is a trend that will only continue to grow in the market.