By Max Wilson, DDS
Finding the right person to represent you as your broker in the sale of what is probably your most valuable asset — your dental practice — is critical to the success of your practice transition. You want someone who will look out for your best interests, someone who has your back.
In this article, I will recommend a tool for selecting the right broker to represent you in your practice sale. This tool is called common sense. There is a questionable trend today wherein an individual practice broker will attempt to represent both the buyer and seller in the same transaction. This is called dual representation. Is it a good or bad thing for you? Let’s examine this scenario based on the common sense principles we each learned as a child at our mama’s knee.
Imagine that someone intentionally burns down your house, and the offender is captured, arrested, and going to trial. You’ll certainly need an attorney to represent you in this legal matter, as will the person who started the fire. Would you feel comfortable if the same attorney defending the arsonist also represented you? I think not! First of all, it would be unethical for any attorney to do so, but it would also be unbelievably naïve for either side to do the same.
It is the same situation when you sell your dental practice and use dual representation. Your broker must have your best interests at the core of his or her focus if he or she is to represent you as you should be represented. The same is true if the buyer hires the broker to represent him or her in the purchase of a practice. Does this mean that the seller’s broker can’t be fair and honest when dealing with a potential buyer? Absolutely not. Most brokers sincerely want a win-win transaction in any transition of which they are a part. Not many want to see one party or the other taken advantage of in any way.
However, if a broker has contracted with both the seller and buyer and is receiving a fee from both, then doesn’t it make sense that the broker would be contractually obligated to negotiate the best deal possible for the buyer also, even at the seller’s expense? Wouldn’t it tempt the dual representative broker to encourage a sale at any cost in order to gain the increased commission due collectively from both buyer and seller? What does your common sense tell you?
An interesting hitch here is found in the semantics of the broker’s presentation to the potential seller, in his or her hopes of obtaining the practice listing. I have seen in some of the dual representation advertising that they do not call themselves practice brokers, but rather boast about being transition specialists capable of serving both sides of the transaction, and capable of receiving money from both sides.
Don’t be blindsided. It seems to me that if it walks like a duck, looks like a duck, and quacks like a duck, then perhaps it really is a duck, even if there is an attempt to hide behind the clever use of words. Common sense will confirm that it is a duck.
Whether you are a person of faith or not isn’t of any importance to this article, but I think we can agree that there is much wisdom to be gained from the words of scriptures of almost all faiths. There once was a sermon delivered to the multitudes on a mountain and the teacher said, “You cannot serve two masters.” Think about this as it relates to the sale of your very valuable dental practice, and how dual representation may not be to your advantage. Listen to what each broker you interview has to say, but then apply those common sense principles that we all have within ourselves and make your choice. I hope common sense prevails and you choose well.
Max Wilson, DDS, is the founder of ADS Professional Practices, a full-service practice brokerage firm doing business in Oklahoma and Arkansas. He is a member of American Dental Sales, American Academy of Dental Practice Administration, American Dental Association, and Oklahoma Dental Association. He may be reached at (888) 419-5590 ext. 405 or firstname.lastname@example.org.
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