Why internet business brokers require an exclusive listing agreement
Selling an internet business is a complex process that involves relationships, trust and time. Finalizing the sale of an internet business transaction typically requires a full 45 days under the "best case" scenario with the average transaction taking up to 60-90 days to finalize from start to finish. Since most internet business brokers don't receive any upfront compensation when the listing process begins, any serious internet business broker will require an exclusive listing agreement before committing to a new listing. Internet business brokers must invest a considerable amount of time, energy and money to properly represent an internet business listing and there is never a guarantee that the business will sell. This results in the internet business broker taking a substantial risk in representing each listing because there is no guarantee the internet business broker will actually get paid. Structuring the sale of an internet business is a delicate process and with emotions on both sides of the deal, these deals can fall apart at any time for any reason. To mitigate these risks, all serious internet business brokers will require the seller to sign an exclusive listing agreement that gives the internet business broker the time needed to get transactions like these finalized.
Exclusive listing agreement terms can vary, but the average exclusivity time period is usually 4-6 months, depending on the website broker firm. In my opinion, exclusive listing agreements should be mandatory when engaging an internet business broker because having several internet business brokers trying to sell the same business at the same time will only undermine the entire process and leave the seller with a subpar end result. While a seller might be reluctant to commit to a single internet business broker for up to 6 months, it's always best to ask your internet business broker for a couple of references from former clients, as this usually alleviates any of the seller's concerns. Dealing with an internet business broker that does not require an exclusive listing agreement should be avoided at all costs, especially since this would illustrate the broker's inexperience with advising on internet based business transactions. In fact, you should want to work with an internet business broker that requires an exclusive listing agreement because it's a huge gesture of faith that the broker is committed to selling your business. From the broker's perspective, signing an exclusive listing agreement demonstrates your seriousness as a seller that's committed to selling their internet business. Ultimately, trust is the main component of any successful internet business transaction and it's important that you feel completely comfortable with the internet business broker that you're hiring to sell your internet based business.