Sale Contigencies
Due Diligence
Opening Escrow
Publication and Clearances
Satisfying Conditions


Business Due Diligence and Escrow

Sale Contingencies

The Business Sale begins with the Seller’s acceptance of the Buyer’s offer. The resulting Asset Purchase Agreement is subject to certain “Conditions,” also known as “Contingencies.” These almost always include “Due Diligence,” often include “Leasing” and/or “Financing,” and sometimes include “Franchising,” “Liquor Licensing,” or other conditions. Escrow helps protects everyone, by ensuring that the agreed conditions are met before title and funds are transferred.

Due Diligence

The best time for Due Diligence is usually once the offer has been accepted, but before escrow has been opened. Remember that Due Diligence is a two-way street. It gives the Buyer an opportunity to inspect the books, records, and other assets of the Business. At the same time, the Seller has the opportunity to investigate the Buyer’s financials and ability to run the Business. The parties are free to use accountants or other advisors in this process, which should not take more than 1-2 weeks for most small businesses. Afterwards the buyers have three option: (1) open escrow, (2) cancel the agreement and return the Buyer’s deposit, or (3) renegotiate the sale terms.

Opening Escrow

Once the parties are satisfied with Due Diligence, they should take the sale agreement and deposit to a qualified Escrow Company. Make sure that the Escrow Officer is familiar with business escrows, which are completely different than traditional real estate escrows. The escrow officer will incorporate the sale terms into formal Escrow Instructions, which the parties must sign in order to proceed further.

Publication and Clearances

Next Escrow will publish a “Bulk Sale Transfer Notice” in a local newspaper for 12 days, to give creditors an opportunity to file any claims against the Business and/or its Seller. Publication protects the Buyer from such creditors. Escrow will also seek clearances from tax agencies such as the Franchise Tax Board, State Board of Equalization, and the Employment Development Department. The Seller will need to promptly file final returns and payments to these agencies, in order to avoid delaying the close of escrow, and/or the release of the sale proceeds.

Satisfying Conditions

Any remaining Conditions of the Sale Agreement must be satisfied before closing escrow. If the Business leases space, then the Landlord may Assign over the existing lease to the Buyer, or write a New Lease with new provisions, such as a longer term. Any Third Party Financing funds must be deposited into escrow. Some businesses also have franchises, licenses or other agreements that must be transferred before escrow closes. Escrow normally takes 4-6 weeks.


The parties must count the inventory and adjust the sale price accordingly. They also determine the Purchase Price Allocation, because the Buyer usually pays sales tax on the market value of the “Fixtures and Equipment.” Traditionally, the Buyer pays transfer fees, the Seller pays Broker’s Fees and tax liabilities, but the parties split the Escrow Fees. On the Closing Date, Escrow transfers the title and funds, while the Buyer and Seller conduct a final walk-through, transfer possession, and begin training. It is that simple!



“I was happy with my experience with [BestSoCal]. Very professional and willing to help when the time came. Very responsive and hands on, not like my other experiences with agents and brokers. Very appreciated.”

Todd Uyesugi, Seller
Purrfect Auto Service

“[BestSoCal] has handled the sale in the most professional and complete manner possible. I am very pleased with the experience.”

Matt Ouwerkerk, Buyer
Purrfect Auto Service

“(The landlord) was difficult, but with Alan’s patience it all worked out for the best! Lino did an excellent job with customer service, always polite! Thanks!!”

Rich & Trish Lindsay, Sellers
The Good Day Café

“Alan was very helpful. Always returned our phone calls (not everyone does). He made us feel at ease, and found us the perfect business! We were looking for about a year. He made this a great experience. A million thank yous!”

Debbie Rosetti-Colacion, Buyer
The Good Day Café

“I am writing this note to express my extreme satisfaction with the way the sale of my restaurant was handled by Elizabeth Rebufat of [BestSoCal]. It was an amazing accomplishment considering the time of year and the type of business it is. Being the middle of November, I didn’t expect it to be listed and sold within 3 weeks, truly a tribute to the diligence of the agent and the great marketing skills of the brokerage. Excellent negotiating skills kept this in escrow, and kept the buyers motivated to purchase this business. It made the whole transaction less stressful for me. I am so glad I listed with Elizabeth, as I have found a new friend, and would absolutely do business with her and her broker again.”

Jason Reavis, Seller
Jason’s Provence Boulangerie

“You guys made everything very simple, and I never once felt that Elizabeth was biased toward the seller. I like how you did comparisons for us. You went out of your way to find industry information for us. Surprisingly, I bought a business I never would’ve considered because Elizabeth was able to assess our needs.”

Omar Toma, Buyer
Jason’s Provence Boulangerie

“Absolutely superb! Highest recommendations! Extremely professional!”

Marty Johnson, Seller

“Elizabeth kept in contact throughout the entire process and always answered any questions I had. She made me feel very comfortable during the whole experience. Great service!”

James Taylor, Buyer

“Everyone, from Lino to Sylvia to Alan was very helpful and professional!”

Jeff Linder, Seller

“Good, professional, efficient service.”

Jeff Bower, Buyer

“I want to thank [BestSoCal] for your professional services provided in selling my business. Special thanks to Randy Neyland and Jaime Gomez. You guys are special. I couldn’t do it without you. Again, I commend your services and thank you very much.”

Sal Garcia, Seller
La Torta Gigante

“…[BestSoCal] have been helpful and professional. We are satisfied with their performance. We would also like to continue to do business with them in the future. Randy Neyland was nice and great. We are happy and are ready to open. Keep up the good work.”

Omar Romero & Enrique Velazquez, Buyers
La Torta Gigante

“Excellent Rep. Always returns call very promptly. Never left me waiting. Always seems to keep client’s best interest first. A true pleasure to work with.”

Jerry Thibodeau, Seller
J & C Creative Designs

“Outstanding customer service. Easy, smooth transaction. Clear explanations; good understanding. Excellent marketing presentation.”

Joseph Zeeb, Buyer
J & C Creative Designs

“Incredible service from Alan. This was a tough sell and I’ll be grateful to [BestSoCal] forever!”

Tran Tracy, Seller
Ana Christina Salon

“Customer service from Alan Lippincott went above and beyond the call of duty. Alan was consistently supportive; professionally business focused during a very difficult settlement; and with a cheerful spirit. I highly recommend Alan as a business broker and would definitely use his services again.”

Carol Hartman, Buyer
Ana Christina Salon

“Outstanding organization, great teamwork. This was money well spent, and I frankly couldn’t have asked for anyone better than Elizabeth, and there was nothing I would have changed about the way she handled everything – exceptional!”

Stefano Riznyk, Seller
American Immigration Attorneys

“I was satisfied with doing business with Lucky Team Escrow, and would recommend [BestSoCal] to anyone.”

Henry Coronado, Seller
Hacienda Plaza Barber Shop

“We appreciate everything you have done for us. We are really happy about it! Jaime, Alan, and Randy, we appreciate all of you. We appreciate…Carol at Lucky Team Escrow who helped us a lot. Thank you all!”

Juan Ambriz & Laura Padilla, Buyers
Hacienda Plaza Barber Shop

“Our experience working with you has been extremely good. You made the whole transaction completely painless. You guys showed a very high level of professionalism and were very patient when things did not go completely according to plan. You actually helped us bring everything back on track to close the transaction in a timely manner.”

Jatinder Singh, Buyer
Advanced Car Stereo & Systems

“Elizabeth is a “breath of fresh air,” and it made my job so easy!”

Carol Jones, Certified Senior Escrow Officer
Lucky Team Escrow, Inc.

“[BestSoCal] did an exceptional, professional performance of all duties as commercial real estate representatives. I would highly recommend their service to colleagues without hesitation.”

Olva Jang, Seller
Top Banana

“This transaction went quite smoothly. Alan stayed on top of the process and made sure everything went as planned.”

Raili Classen, Seller
Inkwells Paperie

“It was a great experience! Thank you Alan for helping us with this. I’m very happy and we are thankful for all your hard work. You ROCK!”

Karen Abdul, Buyer
Inkwells Paperie

“ [BestSoCal], made the whole process of selling my business as easy as possible. I feel confident that all the legal steps have been taken and I can sit back and enjoy retirement. I would recommend this service to my friends.”

Mick Ofield, Seller
Design Works Advertising Agency

“Thank you for all your efforts! As a point of memorialization, without your help, I would have overpaid the purchase price by approximately $1,000,000!! You have been very professional with much patience! Thank you! ”

Steve Berggren, Seller
Ramtech Laboratories, Inc.

“I was very happy with Alan’s work, and when we met him he was on top calling, informing us in everything. All I can say is that we were happy with his service.”

Raul Rizo, Buyer
Flexible Plumbertool

“Excellent service. Prompt response on each and every issue.”

Alex Friedland, Seller
Baja Fresh Mexican Grill

“I would recommend Joleen to anyone who lists with [BestSoCal].”

Alice Billman, Seller
The Center for Body, Mind & Spirit

“Joleen made it happen! Kind & considerate, helpful! Alan gets things handled! Thanks very much!”

Debbie Drew, Buyer
The Center for Body, Mind & Spirit

“Alan was wonderful to work with, he made the process very easy for us. We would definitely work with your company and Alan again. Thank you for a well handled, smooth experience!

Spienello Deli Inc., Seller
Spinello’s Café & Deli

“The service from Alan was the best!”

Santiago Escobar & Jose Vidal Escobar, Buyers
Spinello’s Café & Deli

“Thank you for everything. I really appreciate your great endeavor to help me.”

Tristan Parque, Seller
Aim Mail Center #24

“It took longer than expected, but Elizabeth was very patient and made everything finish smoothly…”

Young Choi, Buyer
Aim Mail Center #24

“Alan showed the upmost in professionalism while carrying my sale from marketing to close. I would not only recommend him, but I would use him again.”

Xtreme Autosports, LLC, Seller
Xtreme Autosports, LLC

“Alan was very helpful with every step of the purchasing process. He was always available and answered all questions and concerns promptly.”

John Solitare, Buyer
Xtreme Autosports, LLC