Using a business escrow company when buying or selling a business is always recommended. Business sales can be a complicated transactions. It’s important to choose an experienced and knowledgeable firm to ensure no detail is overlooked.
Business Escrow services provide the security and peace of mind that both buyers and sellers need during the process of making sure that the sale goes smoothly. Using a business escrow company is the smart way to protect yourself during the sale of a business whether you are the buyer or the seller.
How Escrow Services Help Business Sales
There are a lot of steps to go through in the sale of a business. Using a business escrow for a business sale assures both the buyer and seller that their interest will be protected by an impartial third-party fiduciary.
Purchase Contacts are used to open a business escrow with a neutral third-party company. The buyer traditionally makes an “earnest money” deposit that is held “in escrow” by the escrow company until the transaction is closed. This provides the seller with a level of confidence that the buyer is sincere in their desire to purchase the business.
The Escrow Company is responsible for adhering to the instructions outlined in the signed contract. Once all escrow instructions are complete, the Escrow Officer will finalize the transaction and disburse funds as specified in the escrow instructions.
Choosing A Business Escrow Service
If you’re buying or selling a business and you want to make sure that you’re working with a reputable business escrow company, you should always:
- Get Recommendations
Ask your colleagues what business escrow services they have worked with and what companies they would recommend. Talk to other business owners to find out what escrow companies they have successfully worked with to buy or sell businesses in the past. You can also read online reviews of local Arizona business escrow companies.
- Make Sure They’re Experienced
Any escrow company that you are considering should be happy to share how much experience they have dealing with business sales from simple sales to complex deals involving lots of moving parts. You can do some research to find out about the company’s experience or just call them and ask what expertise their Escrow Officers have with business sales.
- Ask Questions
Before opening an escrow account for business sales speak with the Escrow Officer, make an appointment to sit down and talk with an escrow officer at any business escrow firm you are considering working with. Reputable escrow firms won’t mind taking the time to sit down with you and answer your questions. They understand that when you’re buying or selling a business it’s a very personal event and you need to know that the firm is dedicated to escrow business.
We know that selling a business or buying one can be confusing. Call us today at (602) 956-2629 and one of our experienced team members would be happy to answer your questions regarding business escrow transaction.
