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What are the avg closing costs for seller financed sales?

I am buying a seller financed business with no real estate attached.

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Answers (2)
Douglas Batts
Murphy Business & Financial Corporation
Collin County, TX
Premium Broker

Amy, the most significant factor influencing seller related closing costs of business acquisitions is the value of the business broker's commission, if applicable. (Typically commissions are paid by the seller side only but other agreements are possible as well.) It also depends on whether real estate is included. When real estate is included and a broker is used, seller side closing costs could easily top 10% of the contract sales price. Lastly, closing costs can vary slightly by region. We do plenty of deals here in N Texas where the escrow/attorney fees for drafting/executing closing transactions up to $1M, are less than $5K and are generally split between seller and buyer.

Feb 13, 2010
Robert Cutler
Attorney
New York County, NY

Amy, it all depends on how the deal was structured, whether tangible assets subject to sales tax or special permits are involved and the cost of negotiating the deal and diligencing the business, but as a general rule of thumb I think you could expect the closing costs to be about 5% of the total purchase price.

Feb 12, 2010