Hey everyone, long time lurker first time poster. We've been trying to sell our HVAC business for about 8 months now. We've had two buyers make offers, go through due diligence, sign LOIs, and then completely vanish. Not even a 'thanks but no thanks' email. One stopped responding to calls and emails after asking for our customer list. The other kept postponing the closing meeting and then stopped picking up. Is this normal? Do buyers just ghost sellers like this? Starting to feel like the whole process is a waste of time.
Buyer Ghosting
Why do buyers get cold feet and vanish without a word?
Oh man, I ffeel this in my soul. We sold a landscaping business two years ago and had three buyers pull the Houdini act. It's maddening. In our case, one buyer's financing fell through and he was too embarrassed to tell us. The other two I'm pretty sure were just tire kickers who liked the idea of owning a business more than actually owning one.
This isnt unusual, unfortunately. Due diligence often reveals something the buyer wasn't expecting—or they get spooked by something in the numbers. The vanishing part is unprofessional, but it happens. How are you vetting these buyers before signing the LOI? Are you asking for proof of funds?
Proof of funds is a joke. Anyone can photoshop a bank statement. We asked for a letter from the bank and one guy sent a screenshot from his banking app with half the numbers blurred out.
Wait, people actually ghost after signing an LOI? I thought the LOI was the commitment part. Clearly I know nothing about selling a business. Or buying one. Or life in general
An LOI is basically a handshake with a fancy font. Non-binding in most cases. It means they're interested, not that they're legally obligated to follow through. Learned that the hard way.
i've been on the buying side too and I'll say this: sometimes the seller's books are a mess and it takes forever to get answers. Not excusing the ghosting, but I've walked away because the sller couldn't produce three years of tax returns or a clean P&L. Not saying that's you OP, just offering another perspective.
That's a fair point. Communication is a two-way street. But there's a difference between walking away and disappearing. Send an email saying 'we're out' and move on with your life.
Have you considered that some buyers might be competitors fishing for intel? Asking for your customer list is a red flag. They might be pretending to buy so they can learn your pricing, your contracts, your clientele. I'd be careful what you hand over before you have a signed purchase agreement.
This. We had a guy who turned out to be a regional competitor. Wanted 'detailed customer information' and 'vendor relationships.' Thank god our broker smelled it and cut him off.
I didn't even think about the competitor angle. We did share a customer list with the first buyer after an NDA. Now I'm paranoid. And to answer QuietLedger, we did ask for proof of funds but maybe not strictly enough. The second buyer showed us a letter but it was vague.
Honestly every story I hear about selling a business makes me want to just keep running mine until I die at my desk. Very reassuring thread.
It's not all horror stories. We sold ours in six months to a buyer who was upfront from day one. But we also had two previous deals fall apart. The third time was the charm.
Anyone else notice that these cold feet ghost buyers always seem to crawl out of the woodwork when they smell desperation? If the business has been listed for a while, buyers assume something's wrong. Just a thought.
I've started asking for a non-refundable good faith deposit before sharing detailed financials. Weed out the tire kickers real quick. Some buyers balk but the serious ones don't blink.
That's a bold move but I've seen it work. Even a small deposit changes the dynamic. Suddenly they have skin in the game.
Doesn't always stop ghosting though. We had a buyer put down a deposit, go through due diligence, and then disappear for three weeks. Turned out he had a family emergency. Sent us an apologetic email eventually and we ended up closing. People have lives