Why I Immediately Reject Most “Full Price” Offers

3:36

Not all full-price offers are created equal. In this video, Quiet Light broker Brad Wayland explains why he pushes back hard on 100% seller-financed LOIs, what the real transfer of risk looks like in an online business sale, and why the buyers sending these offers are usually following bad advice from social media influencers. He also makes the case for why cash buyers at a lower price point are often in a far stronger position than people realize. If you’re buying or selling, this will change how you think about deal structure. Curious about buying or selling? Explore your options…

Chapters:

00:16 – The offer that has no chance of getting accepted

01:19 – The problem with seller financed deals

02:10 – Situations where seller financing works well

02:20 – The better buying strategy for online businesses

02:44 – Why you should avoid seller financing

TRANSCRIPT

Oh, Brad, I’ve I’ve offered you a full price offer. Your seller is going to be getting payments every month of $19,000. You know what the problem is with this offer? The risk is still on you. [music] 

00:16 The Offer Has No Chance of Getting Accepted

Inevitably these days when I launch a listing, I frequently get this email. Hey Brad, this is so-and-so. I love this listing that you’ve just put out. Here I have attached an LOI for full price. [music] Let me know next steps. I’m super excited to move forward. When I first see these emails, I’m like, all right. Full price LOI, let’s go. This is going to be sold right away. Then I open up the LOI. You know what it says on the inside? It says 100% seller financed. 100%. The terms are 10-year payout at some meager interest rate. And I write back those folks and I say, no way. I hate this offer. Why do you send offers like this? And then they come back and they act kind of aloof about it. They’re like, oh, Brad, I’ve I’ve offered you a full price offer. Your seller is going to be getting payments every month of $19,000. You know what the problem is with this offer? There is a transfer of risk that has to happen in the deals that we do. 

01:19 The Problem With Seller Financed Deals

When you sell your business, you’re not just looking for cash. You’re looking for someone else to take on the risk of running it. [music] If we take your business and we go sell it to this person that sent me the email, 100% seller financed. Are you going to sleep at night? The risk is still on you. You don’t have the money for the business. Now you’ve handed the operation of the business over to someone else and you don’t have the money. And you’re supposed to wait to get the money month by month, year by year. And inevitably, I hate to say it, but I don’t think these buyers are very high quality. I think the reality of the situation [music] is that there are influencers out there on Instagram and other platforms that are telling [music] people, “Did you know that you can buy businesses with zero money down? All you have to do is send out a thousand offers a day and some sucker eventually will take it.” 

02:10 Situations Where Seller Financing Works Well

Is there ever an instance where a 100% seller finance deal will work? Yes, there is. Typically, a 100% seller finance deal is really good for buying out a business partner. 

02:20 The Better Buying Strategy for Online Businesses

For those that are buyers that are doing this strategy, you’d be way better off to put together some cash and go buy a business that you can afford. One of the things about being a cash buyer is you are the bell of the ball. When you come in with cash and look at [music] a listing that is the size that that cash will buy, you’ve just become the most important candidate to buy this business. 

02:44 Why You Should Avoid Seller Financing

So, these 100% seller finance deals, don’t go down that road. It’s not a fruitful endeavor. It’s not a great way to buy businesses. It’s not just a numbers game. This is a bad proposition. It’s not just bad for the seller, it’s bad for the buyer. You’re talking about a situation that’s likely to end up in a courtroom somewhere. I would challenge you to think of this a little bit differently. Let’s just say you’ve got $250,000. I know it’s not sexy. If you take that $250,000 and you go find a business [music] that looks like it takes a reasonable amount of time to run, you could find yourself in the spot where you paid a small amount of money for something that can end up being worth millions of dollars. I see this as a great buying strategy. I see 100% seller financing as a terrible buying strategy.