What Expenses Are Business Owners Responsible for When Using a Broker?
Business owners using a broker in Canada are primarily responsible for the broker's commission (plus GST/HST), professional service fees for their own lawyer and accountant, and any optional enhanced marketing services they choose. The International Business Brokers Association (IBBA), a US-based association, says business broker commissions on Main Street sales can range from 8% to 15% of the final sale price and may be subject to an agreed minimum (IBBA, Your Guide to the Business Brokerage Profession, 2021). Basic marketing expenses are commonly included in the broker's commission, but sellers remain responsible for their own legal and accounting fees, and any due diligence costs such as environmental assessments or equipment appraisals.
Commission vs. Out-of-Pocket Expenses
The broker's commission is paid at closing and is typically the largest single cost. In most cases, basic marketing expenses—online listings, initial marketing materials, and administrative work—are included in this commission and not charged separately. GST/HST applies to broker commissions, so sellers must budget for tax on top of the quoted commission rate.
Some brokers charge an upfront fee, for example for a Broker Opinion of Value, which is then applied against the closing commission (IBBA, Your Guide to the Business Brokerage Profession, 2021). Administrative fees for document preparation, courier services, or listing maintenance are rarely charged separately and are typically included in the commission structure.
Marketing and Advertising Costs
Most Canadian brokers include basic marketing in their commission. Enhanced marketing services such as professionally produced video tours, drone photography, or premium placement on listing sites are commonly offered as optional add-ons with separate fees. Some brokers offer tiered service packages where basic marketing is included but premium services are optional add-ons with disclosed costs.
Travel expenses for the broker to attend meetings or show the business are sometimes passed through to the seller, particularly for remote properties or out-of-province buyer meetings, but this varies by broker.
Professional Service Fees
Sellers remain responsible for their own professional advisors. Legal fees to a transaction lawyer depend on deal complexity. Accounting fees for financial statement preparation, quality of earnings reviews, or tax structuring advice vary with the scope of work.
If a formal business valuation from a Chartered Business Valuator (CBV) is required or desired, the seller pays for it. No survey of Canadian CBV fees is published; the cost depends on the level of report (Calculation, Estimate or Comprehensive, with Calculation the least extensive under CBV Institute practice standards), the business's complexity and the valuation's purpose, so ask CBVs for written quotes (see what a CBV valuation costs). Due diligence costs such as environmental assessments, equipment appraisals, or lease reviews vary widely by business type, commonly $2,000 to $20,000.
Travel and Meeting Expenses
Travel expenses for broker meetings or property showings are handled inconsistently across the industry. Some brokers absorb these costs as part of their commission; others pass them through to the seller, particularly for remote locations or multi-day buyer tours. Clarify this policy in writing before signing a listing agreement.
What Standard Listing Agreements Cover
Standard listing agreements should clearly specify which expenses are included in the commission and which may be charged separately, with itemization required for any pass-through costs.
Transaction-related government fees such as land transfer tax, corporate filing fees, or securities registration costs are the seller's responsibility and not covered by broker commission.
This article is for informational purposes only and does not constitute financial, legal, or business advice. Every business sale is different. Before making decisions about valuation, pricing, or engaging an advisor, consult a qualified professional familiar with your specific situation.
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