29 Jul The 7 Costly Assumptions Sellers Make That Buyers Exploit
You’ve put in the work. Built something from scratch. Took risks. Missed vacations. Rolled profits back into the business while others were cashing checks.
And now? You’re thinking about the exit. The reward. The liquidity event that’s supposed to validate all those years of blood, sweat, and balance sheets.
But here’s the cold, brutal truth no one wants to say out loud:
Buyers are not your friends.
In fact, the smarter and more experienced the buyer is, the more likely they’re actively hoping you’ll walk into the deal with a head full of assumptions.
Because assumptions are the easiest way to strip millions off your sale price — legally.Let’s pull back the curtain on the 7 costly assumptions sellers make that buyers exploit every time.
Costly Assumption #1: “The Buyer Wouldn’t Waste Time If They Weren’t Serious.”
Reality: Buyers run a numbers game.
They’ll “explore” dozens of deals to keep options open, run competitive analysis, or distract your leadership team. Just because they issue a Letter of Intent (LOI) doesn’t mean they’re committed.
Sophisticated buyers use exploratory interest as leverage to gather intel, test your valuation, or pressure another target. Don’t assume engagement equals intent.
Protect yourself early — especially in the LOI phase.
Costly Assumption #2: “The LOI Isn’t Binding, So It’s No Big Deal.”
Reality: While the LOI may not be binding in full, the economics often are.
Buyers use it to lock in valuation, structure, exclusivity, and timelines that favor them. If you’re not careful, you’ll have zero leverage left by the time you negotiate the definitive agreement.
Your walk-away power vanishes once you’re boxed into exclusivity with little clarity or control. LOIs are not throwaways. They are pre-negotiated leverage tools.
Costly Assumption #3: “I’ll Just Use My Regular Business Attorney.”
Reality: This is bringing a knife to a gunfight.
Your trusted corporate attorney may be fantastic. But if they haven’t negotiated dozens of 8-figure M&A deals, they’re overmatched.
Meanwhile, the buyer has a full squad of attorneys who do this all day, every day. They speak fluent “purchase agreement,” and they love sellers who don’t.
If your attorney has to Google “indemnity basket,” you’ve already lost.
Costly Assumption #4: “I Know the Buyer. We Trust Each Other.”
Reality: Trust is great. Until it’s weaponized.
Plenty of sellers get lulled into a false sense of security because they’ve done business with the buyer before or are referred by mutual contacts.
But when the deal hits due diligence… or cash flows shift… or lawyers get involved… that “trust” disappears in favor of favorable terms, retrades, and control.
Friendship won’t protect you. Contracts will.
Costly Assumption #5: “The Headline Purchase Price Is What I’ll Actually Get.”
Reality: This is where sellers get crushed.
That $40 million deal? After:
- Escrows
- Working capital adjustments
- Seller notes
- Earn-outs
- Taxes
- Post-closing liabilities
…you might walk away with $25 million. Or less.
Buyers love to dangle a big number — then chip away at it piece by piece. And if you haven’t structured your deal properly, you’ll have no legal basis to push back.
Costly Assumption #6: “If There Was a Problem, My Accountant or Advisor Would’ve Flagged It.”
Reality: Your CPA might be great at taxes.
But do they know how to spot red flags in reps and warranties, indemnity caps, or working capital pegs?
What about your wealth manager? Have they negotiated reps and escrows in a $50 million stock purchase agreement?
If your team isn’t made up of M&A veterans, you’re playing with an amateur squad against professionals. This isn’t the time to assume someone else has it covered. It’s time to assemble your A-Team.
Costly Assumption #7: “The Deal Is Almost Done—They Wouldn’t Change Terms Now.”
Reality: Welcome to the 11th-hour retrade.
It’s the buyer’s favorite play. Right before closing . . . after months of diligence, distraction, and growing emotional investment … they tell you:
“Something came up in diligence… we’ll need to reduce the purchase price.”
Now you’re boxed in. You’ve already celebrated. Told your spouse. Started making retirement plans.
The buyer knows it. They’re counting on it. And they just shaved 10% off the deal.
This Is a One-Time Shot. Don’t Blow It.
You only sell your business once.
The buyer? They do this for a living.
That’s why they love sellers who make these assumptions. It gives them leverage. Access. And the ability to legally walk away with more of your money.
But it doesn’t have to be that way.
Apply to Work With Us
At Garza Business & Estate Law, we work with a select group of business owners every year who are preparing for a sale or already in negotiations.
We don’t just “review documents.” We strategically protect your deal from start to finish, so you walk away with what you deserve, and don’t leave money on the table.
Apply here: https://lgarzalaw.com/schedule-online/
We’re not the right fit for everyone.
But if you’re serious about getting this once-in-a-lifetime deal right, we’re ready when you are.
Let’s make sure the buyer doesn’t write your cautionary tale next.