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Business Brokers vs Real Estate Agents: Can A Real Estate Agent Sell a Business

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Written By Mark Grossman

Published February 4, 2025

Updated February 4, 2025

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Business Brokers vs Real Estate Agents: Can A Real Estate Agent Sell a Business

The two prominent figures in the business world, business brokers vs real estate agents, are always up against each other due to their close similarities in functions. However, in their similarities lay some distinguishing features that set both professions apart and let business owners know who is to handle what part of their business. 

Key Takeaways 

  • Business brokers and real estate agents differ in scope, even though they may appear to share certain similarities, which are often confusing for small business owners. A business broker is concerned with the sale of a business that consists of some sort of intangible feature: reputation, customer loyalty, and other hard-to-price assets. A real estate agent concerns himself primarily with transactional services involving physical properties. 
  • Both professionals also value their assets extremely differently. Business brokers perform deep financial analyses, studying cash flow and EBITDA; in comparison, real estate agents use comparative market analysis to derive a property’s value.
  • Their commission structures and licensing requirements vary. Business brokers typically receive a 10% to 15% commission on the sale price, though commission rates for real estate agents are also varied. 

Understanding Business Brokers

Buying and selling business is all about understanding the role of a business broker, which is often derived from its definition and the primary roles played in business transactions. Brokers are the lifeblood of brokerage, offering expertise that facilitates transactions, enhances value, and brings about successful results. 

A business broker acts as a linchpin in any transaction by bringing together buyers and sellers, which is how business brokers differ from other sales professionals. They help their clients minimize stress and allow them to keep their focus on closing the transaction with a positive attitude. They act in the best interest of facilitating a transaction that will go well for both the buyer and the business owner.

Can a Real Estate Agent Sell a Business? 

No, real estate agents do not sell businesses. One of the many similarities between real estate agents and business brokers is how they value what they sell. While real estate agents use their experience in property transactions to conduct a comparative market analysis for pricing homes, a business broker would need to examine the financial statements, cash flow, and metrics such as EBITDA that define a business’s value.

Both types of professionals also prepare detailed listings for their clients. Whether it’s a seller’s memorandum for a business or a detailed property listing, these serve as an overall guide for prospective buyers.

Commission-wise, there is a difference: while agents in real estate take commissions as a percentage of the sale price, business brokers often walk away with 10 to 15 percent of the final sale price of businesses.

The most crucial distinction is related to what they sell and how they maintain confidentiality. Realtors sell physical property within known boundaries, but business brokers sell many intangible assets that are part of brand reputation and consumer loyalty. In most cases, selling discreetly is a significant component for businesses since news of a sale might criticize the brand, increase anxiety for employees and customers alike, and lessen enterprise value. Realtors who sell businesses often need to transition into becoming business brokers after meeting the licensing requirements.

FAQs

Can I hire a real estate agent to sell my business instead of a business broker?

Most real estate agents have specialized practices in selling property and lack the acumen and experience to value intangible assets, study financial statements, and negotiate sensitive matters regarding the sale of a business. When you select a real estate agent, make sure that he is trained and licensed to handle a business sale.

How do business brokers differ from real estate agents?

Business brokers are different from real estate agents in many ways. Brokers concern themselves with detailed valuations based on EBITDA and cash flow, while agents concern themselves with property values based on market comparisons. 

How do the valuation techniques differ between the business broker and real estate agent?

A business broker’s valuation methods are rather complex and multifaceted. They include several parameters, such as financial statements, cash flow forecasts, market trends, and intangibles like brand loyalty.

Why is confidentiality more critical in business sales than real estate deals? 

In business sales, confidentiality plays an important role because the news of a sale, when made public, will likely affect brand reputation, employee morale, and customer trust. 

Summary

The qualifications for selling a business as a real estate agent come after a successful transition. To learn how to find the right professionals, choose WebsiteClosers.com. 

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