The 7 habits of a high volume broker office

The 7th habit


(Keeping control of the transaction)

By Stephen Mariani

The attorneys and consultants involved can make all the difference in the world


When was the last time an attorney cost you a deal and made for a long drawn out, even painful experience? We see it more than we choose to admit and discovering this early could be a key to closing your transaction.


We, as transaction professionals, have to include many additional “consultants” in each and every transaction we close. This can include a buyer’s attorney, accountant and any number of “professionals” that the buyer chooses during the actual purchase and due diligence process. In my many years in this business it still surprises me when weeks into a transaction a buyer requests that I explain the entire process with a personal consultant they just chose. Many times that consultant is a brother, dad or some other family member that is looking to voice their opinion. They comment on the transaction, purchase price or some other fact that believe to be relevant information for the buyer to further explore. Sometimes the buyer actually loses sight of the true business model during this exercise and the items that captured his attention and interest in the beginning.


So the question becomes: How do we interact with these so called consultants moving forward in a way to not cost us a closing? First I try to understand their true motivation and level of concern. If this is an accountant, I bring a higher level of understanding to them and allow them to follow the thought process of the underwriter. By explaining the view of the actual lender I find the accountants to be more receptive and open to the SDE of a business and become less focused on the asset values. I have, on one of my deals, spent 3 hrs. with the buyer’s accountant and walked him through the cash flow based off tax returns until he was comfortable with each and every number. Before the call he was only focused on balance sheet items and what the sellers “did” with the money in the previous years. He was able to follow along and understand the numbers verification process from our end and the deal ultimately closed. This can be an easy work through when addressed in the early stages of a transaction. It was worth the 3 hrs. and the buyer signed off on due diligence that same day.


Sometimes the buyer hires a less experienced attorney because of cost or a previous relationship. Specific attorneys provide specific services and when I see a buyer hire a real estate attorney to close a 2 million dollar business acquisition, I cringe. But it happens all the time as buyers utilize their uncles, cousins and brothers or anyone that can to save them some money. Well, as we all know, this can be the kiss of death for our deal unless we set a clear understanding upfront. Establishing initial control over your deal is key to your success and the success of your office. Control is not bullying people into doing something they wouldn’t normally do but rather it is more respectful of all the parties and setting up the clear understanding, responsibilities and timelines for each. I find that a quick conversation with the buyer’s attorney upfront can save countless hours down the road and even the deal, in some cases.


What we see the most successful broker offices do in the first few days after a signed LOI is set up a conference call with the professionals included in the transaction. They request a list of consultants from the buyer and specifically determine the interest levels of each. They can sometimes include the spouse of a buyer, attorneys, accountants or whomever the buyer feels he needs on his side during the next few weeks or months until closing. As suggested above, establish control and a clear understanding of what each person will require to complete their individual task and when those tasks will be completed. Typically this is done during the initial due diligence period and all questions have been asked and answered within weeks. It is important to keep the seller and his business in mind as time expires and the questions wind down as the deal moves toward closing.



As a buyer’s first contact it is of great importance to establish that control we describe above. Why not recommend an attorney and an accountant that has done work for your previous clients.  This is where your buyer recognizes the experience of your office and allows you to suggest an attorney and/or accountant to represent them during this transaction. Keeping in mind any conflict of interests, I always suggest more than one name, usually three. Experienced professionals that understand the acquisition market and what it really takes to bring a deal to closing. Many broker offices have a “referral sheet” to hand out with local experienced professionals on it. Much of the time we find that a buyer doesn’t want to complicate the transaction but just wants to have a second, unbiased, set of eyes confirming what you have presented to him as an opportunity.


With the lending markets heating up these days, high volume broker offices around the country are controlling their deals and using lender competition to their advantage to get more deals done, shouldn’t you be too? is always available for specific questions regarding this or other SBA rules.