POLICIES AND PROCEDURES
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QUALIFICATION OF BUYERS AND SELLERS

Most Buyers and Sellers want to know we will not be wasting their time and will not be involving them with inexperienced referral agents.  ‘Majors’ are ‘prequalified’ and transaction can be as simple as “commercial invoice / ‘dip’ / pay and ‘lift’” They ask two questions.

1.  How close are You to the Seller (Buyer)?  (They want to know if a "broker chain is involved!)

2.  Have You closed a transaction with them?  (They want to know if the Buyer (Seller) is "real!  (not a fraud or someone "fishing" to build his database.")

PEOPLE:  “How close are you to the Seller, or Buyer, or have you closed a transaction with them?

• Buyers and Sellers do not like working with broker chains and know that the industry is filled with inexperienced agents who will never close a transaction and fraud artists and agents trying to fill their database with prospects or sell documents.  Sophisticated Buyers and Sellers will ‘walk away’ when they realize there is more than one or two intermediaries and facilitators.

PRODUCT:

·          “Are they title holders, or next to the Sellers, or Buyers?”  “Have you verified the Buyer or Seller?”  They want to be assured that the product is real and available.  Conversely the Sellers want to that we are introducing them to a real Buyer who has financial capacity to close a transaction.

POLICIES AND PROCEDURES:

·         We do not work on deals where the person or firm is not the Mandate or next to him and we recommend one commission allocation.  If there others involved they and any compensation they may receive remain invisible.

      If we do not know the person or firm we are introducing we perform a background check.  If there is no positive information we assume it is negative. 

DUE DILIGENCE:

      The process starts with our request for a web page and, Dun’s No., 
If this is not available we ask for Registration information,
If this is not available we ask for a Company Profile and History. 

      We pull a background report with financial and organizational information.

      We explore information available from public sources.

The offer of a PB (performance bond), BCL (Bank Comfort Letter), Bank Probe or promise to pay by MT after receipt of a Commercial Invoice indicate plausible intent but not capacity.

CONFIDENTIALITY:

      Brokers and Referring Agents do not like to provide information about their Buyers or Seller.  Neither do we.  We don’t advertise our clients unless we are mandates.  It is a good way to loose them.  Sophisticated Buyers and Sellers provide this information automatically.  Referring Agents and Brokers fight it – at least until they have a signed NCND IMFPA.

      The confidential information is not passed along to Buyers or Sellers unless and until it is necessary to complete or address Soft Corporate Offers (SCO’s) or Letters of Intent (LOI’s) or Irrevocable Corporate Purchase Orders (ICPO’s).

      Offers and requests from Buyers and Seller are sanitized and circulated on our own forms with a simple comment

We know the Seller (Buyer) and recommend them without reservation. 

Information from the Company indicates completion of similar transactions.

We have no information about the Buyer (Seller) but have no reason to doubt their ability to complete the proposed transaction.  Additional information will be provided as it becomes available.

BACKGROUND REPORTS:

      Web pages should include professionally designed and maintained web sites with corporate, personal and product information.  B2B, free sites and site with lots of unrelated advertising do not count.

      Background checks include financial, legal, and corporate history.  It indicate financial strength and any past or present litigation and their credit rating.

      If not a Publicly Traded Company, information from the Buyer or Seller should include a Company Profile, Company History of recent transactions completed or contemplated, an Executive Summary regarding the Principals Vision of the Company and it’s aspirations, and Products and Services offered by the Company.

COMPANY RATINGS:

      FUNCTION:  We use 5 asterisks to show function. 

      FINANCIAL:  We use 5 “$’s” to show financial strength and/or potential. 

NON-COMPETITION and FEE PROTECTION AGREEMENTS

NCNDA IMFPA (Non-complete, non-disclosure, non-circumvention and Fee Protection agreements.

      Everyone involved except the Seller or Buyer want to protect their fees and maintain confidentiality.  Most Agents and Brokers use the ICC form and use it illegally.  It contains references and language that pertains only to functions available only to paid ICC members in good standing.  It cannot be used legally and must be used if any participant to the transaction is an ICC member.

      We are “close to” many Buyers and Sellers now, and a mandate for a few.  Procedures are extremely important.  Some want nothing to do with these documents.  The Objective is to put the Buyer and Seller together as quickly as possible.

We will assess a situation and walk away from them if we cannot establish these criteria.

TYPICAL PROCEDURES

TYPICAL PROCEDURES for MAJORS 

  BANK PROCEDURES

As agreed between the parties.

TYPICAL COMMISSION ARRANGEMENTS

 TYPICAL PROCEDURES for MAJORS

BANK PROCEDURES 

As agreed between the parties.
 

TYPICAL COMMISSION ARRANGEMENTS

REFERRAL FEES and GRATUITIES

GRATUITIES: When someone gives you the name and coordinates of someone who wants to buy or sell something.  This does not constitute a contract or a legal obligation.  It is a kind gesture and our policy should be to acknowledge it.  As an independent contractor it is up to the individual agents to choose their personal policy.  I know from real estate that this practice builds friendships and business relationships.  Realtors have “birddogs” who feed them information about people ‘moving up’ creating listing and selling.  They might give them $300 to $1,000 depending on their commission.  Most of the information is a simple comment or note that someone is moving.  This would be work anything from a “thank You” to a dinned when a commission is earned.  

REFERRALS: A formal referral will have an acceptance and consideration (amount of money or percentage to be paid when a sale including the person referred is earned.  This should not be confused with the broker chains who perform a form of “highway robbery” when they hold up a transaction until they have a signed and sealed NCND IMFPA agreement.  They then demand to be involved in passing information back and forth.  These deals seldom close and these referral agents do not deserve a commission share for passing along information in an attempt to make themselves indispensable.  To become a binding contract It will be in writing, signed and dated by all parties to the agreement.  It will mention a percentage or amount of money.  This could be in the form of a letter, facsimile or e-mail or a NCND IMFPA agreement. 

“Major Buyers and Sellers want nothing to do with any deals with broker chains.  I abhor them  because it delays the game, seldom provides current and accurate information and seldom close.  They fight for a full share of the commissions although three of them are doing one persons job.  They expect to be paid on any subsequent deals.  They threaten to sue and blacklist you.

OUR POLICY is ‘JUST SAY NO!  If you receive a letter or e-mail SEND IT BACK with a “No Thanks!  …unless they are willing to provide an introduction to the Buyer or Seller and Mandate and what information they have about the deal.  Get the amount to be paid and conditions approved by management.  It should be for one deal plus R & E and be modest.  Why?  Because You / We will be giving up part of the commissions you worked a long time for and because other approaches work better. 

Do not sign any NCND IMFPA until it has been reviewed and approved, or use ours.  Most referral agents are using a modified ICC agreement.  It cannot be used unless someone in the transaction is a member, then all must use only a verified original, unabridged copy from the member.

Net working with people you know is great!  We subscribe to services that allow us to come up with hundreds of names.  Google frequently provide the information we need.  We have thousands of names in our database all categorized.  Recently when searching for suppliers of a certain product we added hundreds more.  This number will shrink!   Most of them will be discarded.  We are looking for “quality” not “Quantity!”  We want to be next to a few good sources and a few good buyers and do the best job we can for them.    

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