When selling a business plus inventory, is a commission paid on the inventory since it is part of the sale pri

If the listing is for building, business plus inventory, is the sale of the inventory included as part of the total selling price and therefore subject to a percentage of commission paid.
In Selling Property - Asked by Vickie H. - Nov 15, 2010
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Answer(s)

Robert D.
Broker/Agent
Mission Viejo, CA

Generally, not.
Inventory is customarily not included in the sales price of the business.
If it were, the seller could manipulate the inventory by selling it down during an escrow period.
There must be, however, some agreement as to how the inventory which will transfer from seller to buyer is to be valued: (90% of cost, 95%, or ...?)
An inventory of stock is usually taken immediately prior to closing and the value of the inventory charged to the buyer.
Therefore, inventory is not made subject to a commission.

Nov 16, 2010
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Joseph C.
Broker/Agent
Braintree, MA

Just make sure that when you list the business, you state the inventory is not included in the sales price and the commission will only be paid on the sale price of the business and not the inventory. Also inform the buyer's that the inventory will be audited prior to close and the amount due must be paid at closing.

Nov 16, 2010
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Rob B.
Chandler, AZ

Vickie....
The above two answers are on target. It is fundamental and essential in the sale of a business that a UCC search be done on all personal property items (equipment and other items in the transfer).
Good luck....
Rob Baird, CA RE License #544165 (One of the oldest, active licenses in CA) 951 515-5855 Email: rob@capratecommercial.com

Nov 16, 2010
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Gail S.
Broker/Agent
Rehoboth Beach, DE

Inventory is personnal property. The sale price should be for the business only. The inventory should be sold separate. You should pay for the actual inventory at the time of settlement. For tax reasons the inventory should never be part of the actual sale, therefore commission should not be paid on the inventory.

Nov 17, 2010
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HANI G.
Broker/Agent
Torrance, CA

WHEN SELLING A BUSINESS YOU GET PAID ON THE BUSINESS PURCHASE PRICE WHICH IS DOES NOT INCLUDE THE INVENTORY PRICE WHICH WILL BE DETERMINE LIKE ONE DAY BEFORE ESCROW CLOSE.

Nov 23, 2010
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