True story… after several months spent by a business broker helping a business owner sell his business, a viable buyer surfaced with pre-approved funds and a serious offer to purchase the enterprise. Several weeks were spent in the due diligence process, and while the buyer actually discovered some troublesome issues, they were not sufficiently significant to sink the deal. Everyone was reasonably happy with the terms and the proposed closing date.

The buyer had extended a written contract offer with a specific deadline for the seller to respond. The business was owned by a husband and wife, and all the negotiations had been handled by the husband. Three hours before the contract was due to be executed to confirm the purchase, after the husband had signed the contract electronically accepting the agreed-to terms, the business broker received a text from the wife. She stated that she had changed her mind, she did not want to sell the business.

The husband confirmed that yes, his wife had changed her mind. After the broker got over the shock, anger and acceptance of the situation, he informed the sellers that the decision not to sell at this stage constituted a breach of the listing agreement, which implied that the sellers would have to pay the brokerage firm a significant amount of money. What ensued was a bit messy, as the sellers then tried to change the terms of the sale in order to avoid having to pay the large sum to the brokerage firm.

No one likes litigation. At the end of the day, the business brokerage owner and the business broker who endured the indignity of the business deal go haywire at the 11th hour, simply decided to allow for the cancelation of the listing agreement (several months still remained on it) and move beyond the whole issue.

And the moral of the story? Well, this is a bit of an extreme situation – but it highlights the need for the sellers to be transparent about the intention to sell, and it places the responsibility of performing “sellers’ due diligence” on the business broker. Complete trust between the seller(s) and the business broker must be established from the get-go, and the facts surrounding the sale must be confirmed from time to time by the business broker. In the case described above, a big red flag was the minimal border line non- participation by the wife in the negotiations.

If you decide to sell your business, make sure it is a solid decision – it should never be a tentative step to see what potential offers might come in. The sale process represents a significant amount of time and money spent by the stakeholders, which should not be minimized or disrespected.