Think you need a real estate agent to sell your prized dental practice? Think again!
- They charge excessive fees for the services they provide (10% for an appraisal and an open house?!? We do the same for less!)
- There’s an apparent conflict of interest when a real estate agent both appraises a business AND charges a 10% commission on the sale. We’ve heard stories of real estate agents justifying it by saying, “we’ll just appraise higher to recoup our 10%.” But the practice is worth what a buyer is willing to pay, based on their ability to finance the deal and their future growth projections of cash flow. So the real estate agent is justifying their big cut to stay relevant when the dentist could have gotten the same price but SAVED more.
- They don’t and shouldn’t be drafting complex legal paperwork (they didn’t go to school as long as a lawyer or dentist did and their insurance won’t help them out if they give legal advice).
- They don’t understand and have no experience with complex employment, family, lease, commercial, corporate or tax matters. And your sale transaction WILL likely require ALL of these things to be done.
- They try to find a buyer to recoup their costs as quickly as possible and then hand it off to a lawyer to finish the job. The lawyers are the ones who actually PUT the deal together and deal with the buyer’s representatives and your accountant and banker for a number of months. The real estate agent is typically not involved other than to pressure everyone to close so they can get paid and recoup their marketing expenses. This does NOT put the client’s needs first. Nor does it address the devil in all the details (and trust me: there’s a whole lotta details that need to be figured out!).
- They keep you on the hook for a term (e.g. 1 year). Then, even AFTER the term is over, they still try to get their commissions through a HOLDOVER period (if a buyer comes to know about your practice sale through their advertising and buys the practice – even after the term expires, you still owe the real estate agent!). We lawyers don’t do that. If we can’t find you a buyer or get you a deal you’re comfortable signing, then you’re free to go and use someone else (who will do MUCH less than we do in terms of services and will probably charge way more!).
- They try to get you to agree up front to accept a minimum purchase price (this is to protect THEM and their bottom line, not necessarily yours).
- You do NOT need a real estate agent to sell your practice. You DO need a lawyer. And you can use a lawyer who can prepare, market (yes, we at DMC LLP do the marketing of dental practices on www.DentalPlace.ca and through eBlasts and networking within the dental industry), and actually CLOSE the deal (through the mountain of legal paperwork that needs to be thoroughly reviewed and negotiated in any sale transaction.
Is a real estate salesperson going to help you structure your practice sale to save taxes? NO. And they shouldn’t be.
Is a real estate salesperson going to advise you on legal liabilities concerning your lease, employees, the sale and post-closing matters like your associateship? NO. And they shouldn’t be.
Is a real estate salesperson going to give you tips and tricks when it comes to multiplying the lifetime capital gains exemption on a share sale OR allocating proceeds in an asset sale to pay less tax OR selling real estate through a holdco to try to qualify for the capital gains exemption on both practice and property sales OR purifying your corporation YEARS in advance so you do qualify for the capital gains exemption when the time is right? NO. And they shouldn’t be.
Stop buying into the argument that you need a realtor. You don’t. You never did. You can save yourself a LOT of headaches and time by skipping going Broke-Er and going straight to DMC for all your sale requirements. Don’t take it from me… look at our testimonials and recent Google review.
Besides that, we like to think we’re very nice and decent people to deal with. That’s why we have so many dentist clients who come with us on our annual dental charity programs in the Caribbean. That’s why we do (and have done) lots and lots of free education for the dental community at large – whether it’s through seminars, publications, blog articles, speaking engagements in North America or the Caribbean, etc. We want dentists to be educated throughout all stages of their careers so they can focus on what they do best: DENTISTRY! And leave the legal stuff to the professionals.
If you have questions and want a free consult (which is quite informative since we address things like: your practice valuation metrics, employment and lease related liabilities and issues, your tax planning and corporate structure, and any other issues (e.g. post-closing associateship and/or employment for a spouse who also works at the practice) in our initial 1-2 hour consult. COMPLIMENTARY!
And we give you an upfront quote/pricing so there are no hidden fees. Typically, we don’t do hourly fees either. And we’ve helped our dentist clients sell to DSOs (dental services organizations), which can be very complex too, and there’s no reason for a real estate agent to be involved in those deals (and they typically are avoided/bypassed altogether).
If you’re thinking about selling now or in the next 5 years, give us a shout. You can reach out to me directly at 647.680.9530 or michael@dentistlawyers.ca.
