Determining practice value is critical when selling your practice. Much of our business involves providing accurate practice valuations for a variety of reasons, including practice sales. Often we are asked whether a seller and potential buyer can split the valuation fee. While they can split the fee, there are some important items to consider whether it should be split.
First, it is important to note that our value for the practice doesnt change if we represent the seller, the buyer, or both. Rather the difference is that the party who pays for the valuation, in essence, owns the report and can decide how much of the information she wishes to share with other parties, and equally important, when to share it.
During our valuation, the seller provides substantial confidential information. There may be sensitive items involved with the valuation that the seller wishes to not disclose to the buyer; items beyond sharing the value (and financials) of the practice. Additionally, the seller may wish to be the only one who participates in our discussion about the practice. This discussion may include problem areas or things that negatively impact the value. If the buyer has paid for half of the report, the seller loses these options.
Notably, we have seen situations where the valuation leads the seller to decide to wait to sell the practice. Instead, he chooses to incorporate our suggestions to increase the value and revisits selling later.
In short, there is no universal answer to splitting the valuation fee. At Simmons, were happy to discuss your particular situation to see what is right for you.
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