Broker wants me to sign a purchase agreement within 14 days of accepting LOI. What should I do?

searcher profile

May 02, 2025

by a searcher in New Jersey, USA

I have an LOI in on a business listed by a commercial RE broker. The way he is running this M&A process is nothing like the way other brokers I have been dealing with run their operations. For starters, he only provided a P&L for 1 year and requested an LOI if interested. No Q&A or seller's meeting. Next, he says upon acceptance of the LOI, he wants me and the seller to immediately began negotiating on the purchase agreement. Additionally, he only wants to offer 30 days for due diligence and a 10 day closing after that. My concerns are: needing to spend money on a lawyer to negotiate the purchase agreement before I even find out what's under the hood of the business in regards to finance, operations, etc -- and agreeing to such a short timeline when I know it will take longer to close the deal. Anyone experienced this seemingly rushed and disoredered process and have insights on how to possibly deal with it?
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Reply by a lender
from State University of New York College of Technology at Farmingdale in Melville, NY, USA
If you have a bad feeling this early in the process, listen to your gut.
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Reply by a searcher
from University of Pennsylvania in Boston, MA, USA
Lot of flags in this one. It could be either the broker has something he wants to hide or he’s not familiar with the M&A process or he’s trying to strong arm you into making a hasty decision Absolutely you need more than 1 year P&L. With the information he provides an LOI here is worth as much as an IOI, and since neither are binding you may as well send in an LOI to try to find more You’re not closing in 30 days. Not as a searcher. It just won’t happen. Don’t spend money on advisors until you’re under the hood. Lawyers especially you should not hire until you are very confident of the business and financial. If he refuses to play ball then walk away. Likely he’ll acquiesce to your demands post LOI (more time for diligence) since he’ll want to get his closing fee.
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