Here's what happens at each stage of a broker-managed sale in New Zealand, roughly how long it takes and what you'll be asked to do.
Stage 1: Appraisal and agency agreement
Usually 1 to 3 weeks, depending on how quickly you can supply your figures.
Your broker reviews your accounts, adjusts them to show true owner earnings and tests the result against comparable sales. You receive a written appraisal. Under the Real Estate Agents Act rules it must reflect current market conditions and be backed by comparable sales.
If you decide to go ahead, you sign an agency agreement. It sets out the asking price, marketing, the broker's fee and how long the agreement runs. Read it carefully and ask questions. Your broker should explain every clause.
Stage 2: Information memorandum and marketing
Usually 2 to 4 weeks to prepare.
The information memorandum, or IM, is the document serious buyers read before making an offer. It covers what the business does, its history, its earnings, the lease, staff structure and the opportunity for a new owner.
At the same time, your broker prepares a listing that describes the business without identifying it. Think "established café, Waikato, strong weekday trade" rather than a name, an address or photos of a recognisable shopfront.
Stage 3: Buyer enquiries and screening
Ongoing from the day the listing goes live.
Enquiries come in and your broker filters them. Genuine buyers sign a confidentiality agreement before receiving the IM. They're also asked about their funding, experience and timeframe.
This stage protects your time. Most owners don't want to meet every curious competitor or under-funded dreamer, and a good broker makes sure you don't.
Stage 4: Meetings and site visits
Shortlisted buyers meet you, usually outside trading hours or away from the premises to keep things quiet. They'll ask about the day-to-day, your reasons for selling and what the business could do with fresh energy. Be open and consistent. Buyers compare what you say with what's in the IM.
Stage 5: Offers and negotiation
Offers come in on a sale and purchase agreement. Price is the headline, but just as much gets negotiated in the detail: settlement date, handover period, which conditions apply, how stock is valued and what's included.
Your lawyer should review the agreement before you sign. Your broker is required to recommend it.
Stage 6: Deposit and conditions
Commonly 2 to 6 weeks.
Once the agreement is signed, the buyer pays a deposit, usually into the broker's trust account. Under the Real Estate Agents Act, an agent generally has to hold money received for 10 working days before paying it out.
The agreement then works through its conditions. Common ones include:
- Finance approval from the buyer's bank
- Due diligence on the figures, lease, staff and compliance
- The landlord's consent to assign the lease
- Franchisor approval for franchise resales
- Any licence or permit the buyer needs
Due diligence is where prepared sellers pull ahead. If your records are ready, the buyer's accountant gets answers fast and the sale keeps its momentum. This is the stage where vendor due diligence pays for itself.
Stage 7: Unconditional
When every condition is satisfied, the agreement goes unconditional. Both parties are now committed. This is usually when key staff are told, if they haven't been already, and when planning for handover starts in earnest.
Stage 8: Pre-settlement
Usually 2 to 6 weeks.
There's a fair bit to arrange before settlement day:
- Staff arrangements: final pay, holiday pay and any new employment agreements with the buyer
- Utilities, phone numbers, insurance and supplier accounts
- Licence transfers or new applications
- A settlement statement from your lawyer, apportioning rent, rates and other running costs
Keep trading strongly. Buyers watch the numbers right up to settlement.
Stage 9: Settlement and handover
On settlement day, stock is counted and added to the price, funds move through the lawyers and the buyer takes over. Then the handover period begins, where you train the new owner, introduce key customers and suppliers and answer questions. The agreement sets how long that lasts.
How long does it take to sell a business in NZ?
From appraisal to settlement, a well-priced, well-prepared business commonly takes several months. Preparation before listing can add 6 to 12 months if the business needs work, and that time usually pays for itself in the price.
The biggest delays come from overpricing, records that aren't ready, slow landlord consent and buyers who can't secure finance.
Start with the first stage
A free, confidential business appraisal shows you what the business would sell for today and what to sort out before listing. If you're still deciding whether to sell at all, start with how to sell a business in NZ.