Brokers forcing their own Buy/Sell Agreement in place of LOI?

searcher profile

June 03, 2025

by a searcher from The University of Texas at Austin - Red McCombs School of Business in New York, NY, USA

Has anyone dealt with brokers who force their process through their own "Business Sale Offer and Acceptance Agreement" (BSOAA) instead of accepting LOIs from buyers? I've read the agreement and while many of the terms seem normal, others do not including limited contingencies to pull out, earnest payment (deposits of $50K to 10% of PP), and potentially some other things. I don't want to name the specific broker because I'm sure there are a few others that try to use this format to try and streamline a process. I can understand the broker's desire to streamline, but frankly, I don't see why I should care given these are large meaningful transactions to both buyer and seller and although LOIs might be bespoke for each buyer, some of that is quite important to mitigate unique risks. I also don't like the fact that the document seems to be forcing both buyer and seller to use the same counsel for negotiating the final purchase agreement, which seems like a massive conflict of interest.
1
9
287
Replies
9
commentor profile
Reply by a professional
from Pace University in New York, NY, USA
Hi Justin My client was presented with this document, and I advised against it for many of the same reasons you just outlined. The broker attempted to assure us that it functioned the same way as a combined LOI and purchase agreement, and insisted it was the only way to proceed with the transaction. Ultimately, my client chose to pass on the deal. Regarding the suggestion that both parties use the same counsel, I see that as a significant conflict of interest. I’m continually surprised when brokers encourage this—it not only poses serious concerns but can also possibly expose everyone involved to liability. While parties may get along well, they each have distinct interests that require independent legal representation. All the best
commentor profile
Reply by an intermediary
from Massachusetts Institute of Technology in Houston, TX, USA
Run as fast as you can away from any broker who does this. Would you really be comfortable putting hundreds of thousands to millions of your personal wealth on the line due to some unscrupulous intermediary? The answer is easy to me.
commentor profile
+7 more replies.
Join the discussion