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The first quarter of 2014 was a great period for Management Rights buyers, sellers and brokers because the demand was high and lots of contracts were signed. Although there are many cashed up buyers who are ready to buy, however there is a shortage of Management Rights to supply the demand. Furthermore, the buyers that missed out on these opportunities are still looking for the next good business to buy.
We often found ourselves getting into conversations that the buyer had a “bad experience” and missed the good opportunity of buying a great Management Rights business. Some of these buyers previous experiences made them feel somewhat unhappy with the broker who sold the business to someone else.
So this post is about how to avoid missing out on a great Management Rights opportunity again.
Firstly, buyers need to talk to the Management Rights specialized financiers as early as possible to ascertain their financial capability and look for the Management Rights that are in your price range.
Secondly, once you find a business that suits your personal, family and business requirements, make sure to put an offer in quickly. This is because most of the time if you don’t make an early offer, someone else will right after you had a look. Good Management Rights do not last long on the market, especially now. We have sold many Management Rights within days of listing them and some are sold before hitting the open market. The initial offer is a non-binding document to simply have the price, terms and conditions in writing so the seller and yourself knows the details of the offer. It is only a starting point for you and the seller to reach an agreement.
Thirdly, understand the contract and due diligence process. When you purchase a Management Rights normally there will be 2 contracts, one for the manager’s unit which often includes the manager’s office or reception for short/holiday letting. The second contract is for the Management Rights business. Management Rights Specialists in SIRE Management Rights will always make sure there is adequate protection in the contract to protect the buyer’s interest. We will not ask you to sign a contract when we know the purchase will not go though to settlement. There will be a waste of time and money not only for you as a buyer, but also the seller and it is not a good outcome that we want for ourselves. We will qualify you and make sure everything stacks up so the process is smooth and successful for every party involved.
One of the main reasons that the buyers miss out on a great opportunity is they spent lots of time trying to verify the P&L themselves. As buyers ourselves, we can fully understand why you want to make sure the figures are accurate. However, please remember that from our experience, no two accountants will agree 100% of the time in terms of P&L, some will be very close and some may be 5% or more difference. Once again talk to a SIRE Management rights sales specialists about how to solve this potential issue.
We even came across a CPA that included GST in the P&L they prepared and charged the vendor dearly. So keep in mind that Management Rights purchase contracts are subject to financial verification, legal due diligence, financial approval and then finally the Body Corporate approval after the previous three are satisfactory to the buyer and the financier. So let the professionals to do their job and make a commitment when you see a business that suit you. At SIRE Management Rights, we can talk to you about how to make an offer that will protect your interest so you can put pen to paper before everyone else and secure the next best Management Rights for you and your family.
If you have any questions, please call the SIRE Team 0404 331 310 or email us now.