Incentivizing Sell-Side Brokers
August 02, 2022
by a searcher in United States
Have any buyers explored (or heard of) incentivizing sell-side brokers to prioritize socializing new opportunities with you before other contacts with a fixed or variable "success fee" included in the close price (paid by the buyer)?
Does this defeat the fiduciary of the sell-side broker to their client?
Ex. 150 Basis Points contractual success fee - Transaction Value $3.3mm - "Bonus" to sell side broker paid at close =$49,500.00
from University of Texas at Austin in Austin, TX, USA
We do offer buyside respresentation, with a 1-time engagement fee, no 'ongoing fees' and success fees that are paid by buyer and are lower than our sell-side success fees.
So, let's say I'm retained by a buyer, and a new sell-side offering comes available that would be a good fit for my buyer. We generally represent whoever was retained FIRST. Sometimes our represented buyer would prefer that we represent the sellside (and have the seller pay the success fees), in which case - there is a FULL DISCLOSURE and WRITTEN ACKNOWLEDGEMENT that we represent the seller, and not the buyer.
If a broker is trying to get paid on the buy and sell side in a single transaction, that seems rife with issues.
in Boston, MA, USA
Be specific with what you're looking for, understand the business or industry youre inquiring on, don't put an LOI out there for something you can't afford, if you're financing it be sure to have a competent & capable banker behind you that will get the deal done. Its not hard to tell when a buyer doesn't have any idea what they're talking about and will never close/be able to close on a deal.
But to answer your questions, realistically you're just going to get the deal passed on to you at the same time as all other prospects unless you've hired a broker to do a buyside engagement for you.