Pratt’s Stats Help for Brokers
Pratt’s Stats, published by Business Valuation Resources, LLC, is a great resource for GABB members.
While GABB no longer get complimentary access to this valuable service, members who submit qualifying sales can get free access from the company. GABB also requires Million Dollar Club members to submit their deals to Pratt’s Stats as a qualifying condition, and we encourage all members to submit their deals to Pratt’s Stats.
Business brokers find Pratt’s Stats a valuable tool. It offers market comparables, shows the Broker’s client the resources the Broker has, which helps clients trust the Broker’s experience, and provides a great gut check as to what businesses really sell for.
For example, when you are looking at a home, do you trust your Realtor with just giving you a number to buy a house? Or do you compare it to other homes in the area to see what the value should be
Some brokers have told us that they find it difficult to submit deals to Pratt’s States. A Pratt’s contact estimated “it would take a max time of 15 minutes for every deal. But for a broker who just finished the deal, is familiar with the deal and the organization of the file, I would say it takes less time.”
Pratt’s is willing to help brokers write up the deal for anyone who wants to submit. So if a broker has files on the computer (PDF, Excel, etc…) the broker can then email the files to Pratt’s and they will write up the deal.”
As of February, 2017, the Pratt’s Stats contact is Mitchell Cameron, Senior Financial Analyst at Business Valuation Resources, LLC.
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Georgia Real Estate Commissioner Spoke About Licensing to GABB
Georgia Real Estate Commissioner William L. Rogers, Jr. talked about licensing and new training requirements at the Georgia Association of Business Brokers’s meeting on Sept. 29.
Roger serves as the Executive Officer for the Georgia Real Estate Commission and the Georgia Real Estate Appraisers Board where he oversees the day-to-day operations of the state agency responsible for implementing the license law regulating Georgia’s more than 82,000 real estate brokers and salespersons and the law regulating Georgia’s 4,700 real estate appraisers.
Under Georgia law, a business brokers must have a real estate license to buy and sell any businesses in the state that involve the transfer of the lease or ownership of real property. Under state law, neither business brokers nor their associates may “negotiate or attempt to negotiate or assist in procuring prospects for the sale of a business” where the sale “involves the transfer of any interest in real property, or where the payment of all or part of a commission or fee to the business broker or any of the business broker’s associates in the sale of a business is contingent upon the transfer of an interest in real estate.” (See the applicable law below)
Rogers told GABB that his office answers questions about licensing and investigates complaints. Recent laws also require his agency to ensure that everyone who holds a state real estate license is either a citizen or legally present in the U.S.
The commission offers coursework online and in person, and also occasionally pursues judgments against licensees, and maintains a recovery fund. Rogers said only one payment has been paid out of recovery fund in recent years, about $7,000. Georgia law was amended law in 2012 to make it easier for non-licensees to recover payments.
Most of the commission’s investigations involve trust funds and earnest money. Rogers said the commission backed law changed that enable licensees to do certain activities that are not considered illegal practice of law. For example, licensees may provide advice to clients about listing management, leasing optioning and any other conveyance of real estate without that advice being considered the practice of law. Rogers says this allows agents to fill in certain forms that had been prepared by an attorney. However, Georgia law does not give brokers the authority to give a legal opinion or to the authority to close a transaction.
Effective July 24, licensees, other than certain grandfathered license holders, must complete 36 hours of Commission-approved continuing education during each four-year renewal period, of which three hours must be on specific license law. The commission has approved 63 license courses. “Hopefully, this will be helpful to stop the violations and protect the public.”
Even at the rate of nine continuing education hours per year, Georgia is still below the national average of 9.3 hours per year. However, Rogers said real estate licensees should have training commensurate with other professionals.
Rogers urged licensees to take courses that are educational, and not to wait until the last minutes to take coursework. He also discussed new rules that make it easier for licensees to work as support persons for brokers in other towns.
The commission has been flooded with cases in which brokers representing buyers have presented offers directly to the seller. However, the listing broker needs to examine the offer first before showing the offer to the seller, Rogers said.
GABB member Kathryne Pusch provided this citation of the specific language related to business brokers in Georgia law.
520-1-.12 Business Brokerage.
Unless otherwise excepted from licensure requirements by O.C.G.A. Section 43-40-29, a person who brokers the sale of a business must hold an appropriate license issued by the Commission if the sale of the business involves the transfer of any interest (including, but not limited to, leasehold or ownership interest) in real property. A business broker and any of the business broker’s associates who do not hold licenses issued by the Commission may not negotiate or attempt to negotiate or assist in procuring prospects for the sale of a business where:
(a) that sale involves the transfer of any interest in real property,
or
(b) where the payment of all or part of a commission or fee to the business broker or any of the business broker’s associates in the sale of a business is contingent upon the transfer of an interest in real estate.
An unlicensed broker may not perform or attempt to perform the acts in the preceding sentence and then secure a person licensed by the Commission to approve that transaction.
see also O.C.G.A. §§43-40-1; 43-40-2; 43-40-29; and 43-40-30.
Authority O.C.G.A. Secs. 43-40-2, 43-40-14. History. Original Rule entitled “Examinations” adopted as ER. 520-1-0.1-.12. F. and eff. July 12, 1973, the date of adoption. Amended: Permanent Rule entitled “Licensee’s Duties Upon Surrender, Suspension, or Revocation of License” adopted. F. Dec. 7, 1973; eff. Dec. 27, 1973. Repealed: New Rule of same title adopted. F. June 4, 1980; eff. July 1, 1980, as specified by the Agency. Amended: Authority changed. F. Aug. 5, 1982; eff. Nov. 1, 1982, as specified by the Agency. Amended: F. May 9, 1985; eff. July 1, 1985, as specified by the Agency. Repealed: New Rule entitled “Business Brokerage” adopted. F. Nov. 12, 2003; eff. Dec. 2, 2003.
Negotiating Commissions is Bad Business for Business Brokers
Negotiating commissions is not in the best interest of business broker’s clients, a leading business broker told the GABB Board.
Andy Cagnetta
In August, the board met for a strategic planning session with Andy Cagnetta, owner/CEO of Transworld Business Brokers, LLC., of Ft. Lauderdale, Florida. Andy is also past chairman of the International Business Brokers Association, and a current chairman of the Business Brokers of Florida.
To illustrate his opposition to negotiating commissions, Andy told a personal story. Andy sold a business to a friend, and within 3-4 months, the friend was upside down in the business. Andy decided to discount his minimum commission by $3,000.
While the listing was active, a Florida broker called Andy and told him he had a buyer for the business. But when the other broker heard the amount of the commission, he said, “I’m not showing it to the buyer.” Instead, he showed the buyer a similar business in his office.
“My guy crashed and burned. He never got his money back, and got sued by landlord,” Andy recalled. “I didn’t help my seller.” He explained that the commission is part of the process to motivate brokers in the marketplace to bring deals to the table.
So now, Andy says at every listing appointment, he tells clients we’re not going to negotiate the commission. If they start scratching their heads, he tells them the story and says he’d be doing them a disservice.
“You’ve got to believe that motivating the marketplace is the right thing for you,” said Andy.
Read MoreGeorgia Real Estate leader to speak to GABB on Sept. 29
William L. Rogers, Jr., Executive Officer for the Georgia Real Estate Commission and the Georgia Real Estate Appraisers Board.
The head of Georgia’s Real Estate Commission will speak to the GABB member’s meeting on September 29 before the group’s a strategic planning meeting to discuss and plan the future of the organization, to fortify GABB and the profession of business brokering.
The GABB meeting will be held at 10:30 a.m. at the South Terraces Conference Center, preceded by coffee and a light breakfast/networking session with fellow members before the meeting. The South Terraces Conference Center is at 115 Perimeter Center Place, Atlanta. Because of the nature of our discussions, this meeting is for members only and will not be open to the public.
Georgia Real Estate Commissioner William L. Rogers, Jr. serves as the Executive Officer for the Georgia Real Estate Commission and the Georgia Real Estate Appraisers Board. He oversees the day-to-day operations of the state agency responsible for implementing the license law regulating Georgia’s more than 82,000 real estate brokers and salespersons and the law regulating Georgia’s 4,700 real estate appraisers. All Georgia business brokers must have a real estate license to do business in the state.
A native of Gainesville, Rogers earned a Bachelor’s degree in History at Emory University and a J.D. degree from the University of Georgia School of Law. After a brief stint as a 2nd Lieutenant in the U.S. Army Signal Corps, Rogers was admitted to the State Bar of Georgia in 1971. Prior to joining the Real Estate Commission, he was a partner at Whelchel, Dunlap, Jarrard & Walker, LLP in Gainesville practicing real estate and banking law.
Rogers is a past President of the United Way of Hall County, past President of the Gainesville Northeast Georgia Bar Association as well as past President of the Kiwanis Club of Gainesville. He serves on the Board of Directors at Chattahoochee Bank of Georgia. He and and his wife, Mary, have been married more than 43 years and have three adult children and six grandchildren. He is a lifelong member of the First United Methodist Church of Gainesville.
GABB Member Meeting Agenda
Following the commissioner’s talk, GABB Board members will solicit input to help guide GABB’s primary objectives and adopt courses of actions to achieve these objectives. Committees or areas to move forward include:
- Co-brokerage
- Professional Rules / Accountability
- Education
- Membership
- Media
We need everyone to pull together to work on this. Please attend the Sept. 29 meeting to express your opinion, or email your opinion to the board at board@gabb.org.
Read MoreGABB Sept. 29 Members Meeting for Strategic Planning
The GABB will gather on September 29 for a strategic planning meeting to discuss and plan the future of the organization, with an eye towards strengthening GABB and the profession of business brokering.
Because of the nature of our discussions, this meeting is for members only and will not be open to the public.
GABB Board members want member input to assist us in determining GABB’s primary objectives and adopting courses of actions to achieve these objectives.
Committees or areas to move forward include:
- Co-brokerage
- Professional Rules / Accountability
- Education
- Membership
- Media
In August, GABB Board members met with Andy Cagnetta, founder and CEO of Transworld Business Advisors, LLC., of Ft. Lauderdale, Florida. Andy is also past chairman of the International Business Brokers Association, and current Chairman of the Business Brokers of Florida. Here are some issues that arose during that meeting.
Co-brokerage: We will discuss how to make co-brokering more desireable and effective between GABB member brokers.
Professional education: Due to an increase in tuition for IBBA classes, the GABB and other professional business brokerage organizations are seeking new options for professional education for business brokerage.
Membership: How do we make membership more valuable and desirable in the business brokerage profession in Georgia?
Marketing & Media: How do we best use GABB dollars to market GABB members as the “go to” business brokers and M&A advisors in Georgia?
Rules and Accountability: What do we need to do to strengthen the professionalism of our broker members and hold those that engage in unprofessional or unethical conduct accountable for their actions?
We need everyone to pull together to work on this. Please attend the Sept. 29 meeting to express your opinion, or email your opinion to the board at board@gabb.orgGABB meetings begin with guest and member introductions.
The meeting will be held at 10:30 a.m. at the South Terraces Conference Center. Arrive early with your own cup of coffee to network with fellow members before the meeting. The South Terraces Conference Center is at 115 Perimeter Center Place, Atlanta.
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