Total Seller Consideration

Total Seller Consideration

Some of you may already be doing this, but I have started adding a standard extra page to the “Seller Carry” version of a valuation. This is only for the purpose of “selling” the idea of Seller Carry to my Client Prospect.

Below you will find an example for a large company I am about to list (I hope).

There are two objectives:

1. To show them how much more they will receive from the sale if they carry a note. Notice that these sellers would earn another $59,188 in interest

2. To get them used to the idea that our commission is coming out of the cash at closing. Note that, after interest, they would receive 96.3% of the purchase price.

I do not make an attempt to compute the savings in taxes from the installment note vs. a lump-sum at closing.


Company Name, Inc.

Assuming 50% Cash, 50% Seller Carry

Summary of Total Consideration Received By Seller
Assumes that Buyer does not purchase accounts receiveable

Dollar Amount Totals Percent
Selling Price $740,000 100%
Recieved in Cash at Closing:
     Purchase Price $370,000 50.0%
     Lease Deposit 3,000 0.4%
     Less: Broker Commission (88,800) -12.0%
     Less: Seller’s 50% of Closing Costs (900) $283,300 -0.1%
          Total Received at Closing  $283,300  $283,300  38.3%
 Received on the Note:
     Principal $370,000 50.0%
     Interest      (60 Monthly Payments of $7,153) 59,188 8.0%
          Total Received on the Note  $429,188  429,188 58.0%
Total Consideration Received By Seller $712,488 96.3%