Business Brokers in Florida and Co-brokering

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April 12, 2022

by a searcher from North Carolina State University in Sykesville, MD 21784, USA

I am trying to understand the arrangement of business brokers in Florida. It has been mentioned here in the past, but they have an MLS style system for business listing if the broker is a member of the Business Brokers of Florida. Of the dozen brokers I have spoken with, they all want to use that system to help me search and find a Florida business. One called it co-brokering, and from what I understand, they share commissions much like those on residential real estate. My understanding is that it won't cost me in financial terms to let them help me. But, I am concerned it might cost me a chance at closing a deal.

Why in a seller's market would a broker work with another broker to bring a buyer? I would think that if I go that route, I will be disadvantaged going in by the listing broker. Has anyone else run into this situation, more specifically has anyone bought a business this way recently? I asked a couple of these brokers how it works, and they say it's the law in Florida and if the listing broker wants to stay in business, it won't be a problem.

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Reply by a searcher
from Yale University in Rochester, NY, USA
I've had that issue come up. I think the best way to mitigate that is to always deal with the listing broker. Having a "buy side" broker involved seldom adds any value. Although the system in FL does incentivize brokers to "place nice" with each other, my advice is not to "marry" any particular broker in Florida--always go to the source (i.e., the listing broker). I also agree with Neel's analysis/comment above.
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Reply by a searcher
in Lake Mary, FL 32746, USA
It's an odd system and from what I understand, it's basically transactional so not as much of the "concierge" type relationship a larger selling business would see from an investment bank. They work on deal quantity, so the more brokers who see the deal, the more revenue they'll each get. While there may be some good deals there, they will be on the smaller side (sub $1M ebitda unless real estate is attached).
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