Why You Shouldn’t Hire a Real Estate Agent to Sell Your Business
When you put up your company for sale, it involves both major financial and emotional decisions. The whole procedure is a complex set of actions that includes sharp strategies, deep industry knowledge, and a strong grip on negotiations. If you have a business for sale in Alberta, the first thing that might come to your mind is to hire real estate agents for the whole process. But that’s a wrong step, and this blog will tell you why.
Why Are Real Estate Agents Not The Right Professionals to Assist Selling a Business?
1. They’re Not Trained to Sell Businesses
Real estate agents are excellent at selling property. They know zoning codes, how to stage a house, and how to close deals on commercial real estate. But selling a business? That’s not their game. Businesses are valued based on cash flow, goodwill, assets, inventory, and industry trends, not according to square footage and location.
Selling a business requires analysing EBITDA, understanding multiples, navigating tax implications, and interpreting financial statements. Most real estate agents don’t have that training, which makes them ill-equipped for this nuanced process.
2. They Lack Access to Serious Business Buyers
Real estate agents have access to the MLS and a network of homebuyers or commercial property investors. Business buyers? Not so much. Professional business brokers, on the other hand, maintain databases of qualified buyers actively looking for specific types of businesses in specific industries.
When you list your business with a real estate agent, you risk broadcasting it to the wrong audience. Worse, you might scare off potential buyers who assume the listing isn’t legit simply because it’s not coming through a reputable business sales platform.
3. They May Undervalue (or Overvalue) Your Business
Real estate agents typically assess value using comps, comparable properties in the area. That might work for houses, but it’s useless when valuing a company. A dry cleaner with outdated equipment and inconsistent revenue can’t be compared apples-to-apples with a nearby dry cleaner using automation and pulling in steady contracts.
Without experience in business valuation, a real estate agent may set a price that’s wildly off-base. That can either leave money on the table or turn off buyers before they even enquire. Business valuation is both art and science, so don’t trust it to someone who’s guessing based on location alone.
4. They Risk Exposing Confidential Information
Don’t just go on saying, “I want to sell my business!”. It’s not that simple. Selling a business often requires discretion. You don’t want employees, customers, or competitors finding out prematurely. Real estate agents, used to public listings, may accidentally reveal too much.
Business brokers know how to vet buyers, implement NDAs, and control the flow of sensitive information. Real estate agents usually don’t have systems in place for this. One slip, and your entire operation could be compromised.
5. They Don’t Know How to Structure Business Sale Deals
Business sales are rarely simple cash transactions. They often include earn-outs, seller financing, asset-only deals, stock transfers, and non-compete clauses. Real estate agents usually lack the legal and financial insight to structure these deals properly.
A poorly structured deal can expose you to future liabilities, tax penalties, or unexpected obligations. Business brokers work with attorneys and CPAs to ensure deals are clean, compliant, and beneficial to the seller.
6. It’s About More Than Just Location
You’re not just selling a shopfront; you’re selling operations, a customer base, reputation, intellectual property, and brand value. A real estate agent focused on “location, location, location” will miss the big picture.
Buyers don’t just want four walls and a lease. They want assurance that the business has a future. Real estate agents often can’t speak to market positioning, growth potential, or operational efficiencies, all factors that influence buyer decisions.
Final Thoughts
Selling a business is not similar to selling a home or an office space. Because, when you are selling a company, you need financial expertise, buyer screening, strategic marketing, and confidentiality management. A real estate agent won’t be able to help you with all these factors because their expertise is not adequate for the business broking market.
If you’re hoping to maximise the price of your business, do yourself a favour. Don’t hire a real estate agent. If you have a business for sale in Alberta, always hire a professional business broker instead. If you don’t know any, you can contact Performance Business Advisory.
Contact us to discuss the selling or buying of a business.