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Selling 100% of a business for all the money upfront is clearly the ideal situation, however, the total consideration will be substantially less than a deal structure with elements of deferred payments.
In reality, it doesn't benefit a broker to attempt to charge a "high unrealistic price" as the business is likely to never be sold. However, in some cases, brokers can charge on a monthly retainer basis and attempt to hold the client for as long as possible, which is very unethical.
We operate on a milestone payment structure so that we are only making money if the deal is progressing.
In terms of actual deal examples. Most commonly, our buyers like to purchase brokerages with an upfront payment, usually no more than 60% on day 1 and then the remaining 30% to be deferred over 1-3 years.
A popular method our buyers are using to attempt to acquire is a straightforward % share of future business, however, a seller will rarely agree to these terms.
I can't stress enough how although mortgage brokerages are relatively straightforward, many variables affect a deal structure. Both buyers and sellers have their desired outcome and they will both compromise in creative ways to mutually suit.
Maybe I should make another thread with deal examples.
