About a year ago, my neighbor put their house on the market. It sold in 3 hours for $30K over asking. I’m sure you’re asking, what did they do? It’s simple, they did their research; they knew the market and they knew how to strategically price it for multiple offers.
If you were going to sell your house, what would you do? Would you sell it to the only person that knows that it is for sale or would you want to understand the market, create demand and give all possible buyers the opportunity to make an offer?
Most people want as many buyers to be aware that their house is for sale so they can find the best possible match and get the best possible price – therefore they list their house with a real estate agent or “put their house on the market”. My opening story proves, by listing your house at the right time with the right conditions, you can receive multiple competing offers for your house based on the demand in the marketplace. A high demand and receiving multiple offers is the best possible scenario for you as the seller because it gives you choices – and the ability to find the best fit for you and your situation. “Wouldn’t you want to know that there are several great options to consider when it comes time to sell your agency?”.
Agency Link is the marketplace for your agency!
The basic principles between selling your house and selling your agency are the same with one huge exception – CONFIDENTIALITY. We know that selling your agency is not something that you want your competitors, clients, and carriers to know you’re considering as that could be detrimental to your business. When you know that you want to sell your agency, we can list your agency confidentiality so you can understand the marketplace, find the best fit for your agency and ultimately locate the best buyer based on your specific criteria without the risk of losing any business.
Here is how Agency Link works:
Know your agency’s Fair Market Value
It is important for you to know the value of your agency as you enter the process of selling your agency. You will need to obtain the Fair Market Value in order to adequately assess any offers you may receive for your agency.
Define Your Priorities
It is critical that you decide what is most important to you as you sell your agency. We will need you to tell us exactly what you are looking for in a buyer and what is most important to you as you sell your agency.
Are you looking for an agency that has the same or similar carrier mix so you can ensure that your clients can stay with their same carriers?
Are your employee’s futures what is most important you?
Is maintaining the location and current management of the agency the highest priority for you?
Are you looking for the highest price for your agency?
It is important to understand that priorities are different for everyone. There is no right or wrong answer, but it is important that you are clear on what is important to you as you consider your options.
List your agency
You will complete a list of questions about your agency and communicate your priorities to OIA so we can fully understand your agency and what is most important to you as you sell your agency.
Complete a confidential search
OIA will complete a confidential search to find the agencies that are looking to buy that best fit your criteria. The search will be 100% confidential meaning that the potential buyers will NOT know your agency name at this point in the process. They will be given enough information to make a preliminary offer for the seller to evaluate, but the name of the selling agency will not be revealed. The selling agency will pay a fee to OIA to conduct the search. If you choose not to pursue any of the potential buyers, OIA will conduct another search until you find a buyer that you are interested in pursuing.
Assess the matches
The selling agency will be provided a list of potential buyers, their offers and listing of all of the areas of matches between the selling agencies priorities and the buying agencies priorities or characteristics. Again, the potential buyers will not know the name of the selling agency at this point in the process, but the seller will know the names of the potential buyers.
Select a fit
Once the selling agency chooses a fit, the potential buyers that were not selected will be notified that their preliminary offer was rejected. The selected potential buyer and seller will execute a NDA agreement in order to move to the due diligence and negotiation process.
Both the potential buyer and seller will obtain separate legal representation that will lead them through the due diligence and negotiation phase. OIA will not represent either party in this phase of the process. Our role is to create a market and provide the sellers with several offers for their agency.
Fee to OIA
Once an agreement has been reached between agencies that OIA has linked together for this transaction, OIA will be paid a fee for their services that is equal to a percentage of the transaction. The original search fee that was paid to OIA will be deducted from the percentage fee that is charged at the time the agency sale has been completed. For further details on the fees, please contact OIA.
If you are looking to sell your agency, which is likely to be your single largest asset, it is in your best interest to have a solid understanding of the marketplace. OIA can help you every step of the way with our Agency Link program.
Based on our demographic data on over 1,300 agencies in Ohio, we know that 45% of our agencies will transition their ownership over the next 10 years. Any agency that is interested in buying an agency should be listed on Agency Link. There is no fee for an agency to be listed as a potential buyer on Agency Link. You can expect that we will keep in contact with all potential buyers on a quarterly basis to ensure that your preferences are up to date and accurately reflect what you are looking for in an agency.
To get started, list your agency on Agency Link. For more information on Agency Link, please contact Carey Wallace at Carey@ohioinsuanceagents.com.