The difference between Business Brokers and Real Estate Brokers

Those involved with the selling of businesses in California are required to have a real estate license issued by the state.  This is the same license that is required to sell a home, a commercial property, or to be involved with property management. What does selling a house and selling a business have in common?  Other than sharing the same license, very little!

Real estate brokers deal with zoning, housing types, mortgage rates, flood zones, physical inspections, and the personalities involved with emotional buyers and sellers.  Business Brokers deal with financial statements, leases, covenants not to compete, and work with the other professionals involved with the transaction, such as Attorneys, CPAs, Wealth Managers, etc.

Residential Brokers list and sell houses. According to the National Association of Realtors, the average house sold had been on the market for 3 weeks.  Business Brokers list and sell businesses. According to Business Brokerage Press, the average time on the market for a business is a little over 7 months.

Real Estate Brokers typically advertise their property on a Multiple Listing Service (MLS) where brokers all over the state can see what is available.  Business Brokers, because the information about the business is more sensitive and confidential, must “make the market” for the business, rather than rely upon an MLS.  This can include advertising on websites, print media, direct solicitations to likely buyers, exposure to Private Equity Groups, etc.

The skillset and knowledge base necessary is vastly different between the two. So, if you are selling a home seek out those who are Realtors.  If you are selling a stand-alone commercial property without a business, then look for a commercial broker. And if you are selling a business, find a Certified Business Broker or Certified Business Intermediary.