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Buyer Beware!

Buyer Beware is a fundamental principle that governs business transactions.  It’s a reminder that the buyer of goods or services must exercise caution and diligence in investigating the purchase, and the seller is not responsible for ensuring the buyer’s satisfaction.

Of course, there are many circumstances in which “Buyer Beware” is not the only rule at play. For example, professionals are held to certain standards of performance within their professions. Real estate agents are required to discover and disclose to buyers material defects in a property they are representing. In transactions involving securities or franchises, the buyer is entitled to receive certain disclosures and information prior to making an investment. However, in the commercial context, it is generally the buyer’s responsibility to ask questions, obtain information and protect himself contractually.

It is simply impossible to discover every potential problem with a business through inspections and due diligence. A motivated seller will always be able to hide a problem. It is the professional responsibility a Business Broker has to not to participate in seller duplicity. At times, a Business Broker must rely on their instincts and advice caution when a seller or buyer just does not seem trustworthy.  Business Brokers must also, provide advice to their clients based on our experiences.

 

 Here some examples of situations which you should be prepared to handle:

1.  Investigate your Seller.  What is their reputation and personal integrity?

2.  Understand the documents.  What is that they say and do not say?

3.  Have qualified professional representation (Attorneys, CPA, CFP, Business Broker etc.)

 

Good Selling!

 

Steve Sink  CBI, M&AMI

ss@phxaffiliates.com

 

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