25 Aug Retrading 101: The Sophisticated Buyer’s Playbook for Taking Millions Off Your Sale Price

Let me paint you a nightmare scenario . . . One that’s happened to more business owners than you’d ever believe.

You’ve spent decades building your business.  You’ve found a buyer for your business.  The buyer seems professional, interested, and ready to close.  You sign a Letter of Intent (LOI).  You feel like you’re almost home. 

You celebrate. Your family celebrates. Your team celebrates.

Then the due diligence starts.

And before you know it, the buyer suddenly “discovers” a list of issues . . . nothing you’d call surprising, but now they’re treating these issues like dealbreakers.

And just like that, they’re revising the offer downward.

They’re “retrading” the deal.

And now you’re stuck.

Because you’ve turned away other buyers. You’ve invested hundreds of hours. Your employees are suspicious. 

You’re in deep. 

And you’ve emotionally checked out of the business.

You tell yourself, “Well, even after the retrade, I’m still getting a lot of money for my business… right?” But deep down, you know:

You got played.

What Is Retrading—and Why Does It Work?

Retrading is when a buyer renegotiates deal terms after you’ve signed the LOI.  Typically by lowering the purchase price or changing the terms of payment.

And here’s the thing: it’s not always about new facts.

It’s about leverage. Timing. Psychology. And your inexperience.

Sophisticated buyers count on you not being ready for this moment.  For buyers who’ve done hundreds of deals, like private equity and experienced serial strategic buyers, this is part of their playbook.

They know:

• You’ve already mentally sold the company.

• You’ve shut down talks with other buyers.

• You’re emotionally and financially invested in closing.

• You’ll feel deal fatigue.  You’ll cave to their new terms just to “get something done.”

And they use that pressure to surgically remove hundreds of thousands (or millions) from your final payout.

The Buyer’s Playbook: How They Pull It Off

Here’s how a sophisticated buyer executes a textbook retrade:

1. They Win You Over Early

They’ll flatter you. Praise your company. Build rapport. Get you to drop your guard.

2. They Offer a Big Headline Number in the LOI

This “shiny object” gets you to sign quickly. But it’s non-binding—and they know it.

3. They Begin Due Diligence With a Fine-Tooth Comb

Their lawyers, consultants, and accountants are trained to look for problems. Not to blow up the deal.  Just to create leverage.

4. They Wait Until You’re Deep in the Process

At 60 or 90 days in, or even further down the line, your options are limited. You’re distracted. You’re exhausted. That’s when they pounce.

5. They Drop the Bomb

They claim “market conditions changed,” or “the quality of earnings is off,” or “there are unforeseen liabilities.” Then they say they have to reduce your price — sometimes millions.

6. They Pretend It’s a Take-It-or-Leave-It

They know most sellers won’t walk away. They count on your fear of starting over. And they’re usually right.

What Sellers Don’t Know Can Cost Them Everything

Retrading works because sellers don’t know how to fight back.

Most business owners:

• Don’t know how to write a strong LOI that limits retrading opportunities
• Don’t know how to negotiate from strength instead of hope
• Don’t know how to set clear deal timelines and penalties for stalling tactics
• Don’t know how to push back without blowing up the deal

Worse, many go into these deals without a lawyer who lives and breathes business sale transactions.  So the buyer’s team runs circles around them.

The Cost of Getting This Wrong

Retrading doesn’t just cost you money.  It can destroy the entire sale.

We’ve seen:

• Buyers attempt to chop millions off their offer from an LOI almost a year old
• Sellers locked into long earn-outs with impossible targets
• “Adjusted EBITDA” games that reduce value by millions
• Reputational damage that scares off future buyers

And what stings the most?  Most of it is preventable.

How to Protect Yourself from Retrading

1. Get Experienced Legal Counsel—Early

Not your general business attorney. You need an M&A lawyer who’s seen this movie before.  And knows how to change the ending.

2. Write a Strong, Detailed LOI

Include binding provisions, exclusivity limits, a clearly defined purchase price, and clauses that penalize late-stage changes.

3. Keep Running Your Business As If There’s No Deal On the Table

One of the biggest temptations is you mentally check-out of your business and plan to “coast to the finish line.”  But what happens when the buyer keeps moving the finish line further away?  It’s near impossible for you to get up the motivation to get back in the business and right the ship in time to prevent damage.

4. Don’t Let the Deal Get Ahead of Your Legal Strategy

Build your legal and negotiation protections before you sign the LOI—not after.

5. Be Ready to Walk

The only true leverage you have is the ability to say no. If you’re not prepared to walk away, you’re not really negotiating.

You’ve Built It. Don’t Let Them Steal It.

You’ve poured your life into your business. You’ve earned every dollar of the value you’ve created.

But when it’s time to sell, you’re stepping into a game the buyer plays every day and you don’t.

And unless you come in with a real strategy, real legal protection, and the guts to say no when necessary… you may find out too late that you were never really in control.

Apply to Work With Us

At our firm, we work with a select group of business owners every year who are serious about protecting what they’ve built.  And maximizing the value of their exit.

We don’t work with everyone. That is very intentional.  

We don’t do volume. We do custom, strategic legal work for owners who want to sell on their terms, not the buyer’s.

If that’s you, apply here: https://lgarzalaw.com/schedule-online/

Because the deal of your life shouldn’t become the regret of your life.

Let’s make sure that doesn’t happen.