The prospective buyer and seller has a responsibility for understanding the business for sale. Or do they?
The listing agreement said…
The offer said…
The various amendments said…
The buyer or seller says: “but does it say this?” The wise broker will say at the very most: “My interpretation of the language is this….but you should check legal and accounting counsel.”
In a recent transaction the seller said, “I learned in my last business-for-sale transaction that asking the attorney or the accountant meant it cost me more money. So, this time I did not engage either.”
In another transaction, the seller said “you piss me off because…” Then, when checking the records, the professional they paid had given the instruction that they accepted and then, subsequently, “piss(ed) me off…”
Reality: The buyer and seller (Principals) can not relinquish responsibility to the broker or seller/buyer to be responsible for the Principal’s decision. The Principal is responsible and should use professionals to advise them. It is important to take the time to review.
Wisely spend money on these professionals, CPA and attorney, but don’t throw it away.
Perhaps the Principal is not a word person but nonetheless, stretching to understand is important.
