Sell-side Broker Comp?

searcher profile

October 15, 2025

by a searcher from Purdue University in Indianapolis, IN, USA

Hey all, Do sell-side business brokers typically get paid on total purchase price (including seller notes) or just on cash at closing? I'm trying to get a sense on what is market. Thanks! Nick
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Reply by a professional
from University of Toronto in Toronto, ON, Canada
^redacted‌, I agree with both ^redacted‌ and ^redacted‌ above; if you combine their responses, they've covered the topic well. In a nutshell, sell-side brokers' commissions are calculated on the full value of the transaction regardless of the form of the consideration paid for the value. Timing of commission payments is usually negotiated to match the timing of the payment of the underlying consideration in the transaction; i.e., commissions on deferred consideration would be paid when the deferred consideration is received by the seller.
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Reply by an intermediary
from Indiana University at Bloomington in Carmel, IN, USA
Total purchase price is always the case. Earnouts are usually paid when paid (although can be negotiated as most brokers don’t want to keep track of it). Erosion clauses (reverse earnout- which is SBA compliant) is paid as part of seller note, so can be tracked and paid differently by broker. The buyer doesn’t really care how the seller broker is paid, except can help seller understand walk away $, but the broker should be the one doing that.
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