Texas-wide · Choosing an advisor
What business broker fees should a seller expect in Texas?
The fee structures Texas sellers will see, what is normal, what to push back on, and how MDR & Associates charges.
By Michael D. Rubin, CEO & Founder · September 2026 · 833 words
Most Texas sellers of established companies should expect a success fee: a percentage of the sale price, paid at closing, with the percentage falling as the transaction grows. Some firms add upfront or monthly retainers, and those deserve questions. MDR & Associates charges no retainer: its fee is 100% performance based, an industry-standard success fee owed only if and when the company sells.
Exact percentages vary by firm, deal size and complexity, and they are set in the engagement letter, so we will not quote a number here. What you can control is the structure. Here is what each part of a fee proposal means and what to ask about it.
The parts of a broker or advisor fee
Most fee proposals combine some of the elements below. Two proposals with the same headline percentage can cost you very different amounts once these details are counted.
| Fee element | What it is | What to ask |
|---|---|---|
| Success fee | A percentage of the transaction value, paid at closing | How is transaction value defined? Does it include seller notes, earnouts and assumed debt? |
| Declining scale | A lower percentage on each higher band of price | Where do the bands break, and does the scale reward a higher price? |
| Retainer or upfront fee | Paid at signing, whatever the outcome | Is it credited against the success fee? What if the company does not sell? |
| Monthly fee | Charged while the company is marketed | Does it stop at a set point? Is it credited at closing? |
| Minimum fee | A floor amount owed at closing | Is it reasonable for your likely price? |
| Tail period | A fee owed if a buyer introduced during the engagement closes after it ends | How long, and does it cover only buyers the firm actually introduced? |
Why the structure matters more than the percentage
A firm paid only when the company sells has one incentive: close a sale at a price you accept. A firm paid largely upfront or monthly is paid whether it sells or not. Retainers are common in parts of the industry, and firms sometimes justify them by the work of preparing materials, but you should know exactly what you are buying and what you get back if the sale does not close.
Also look at what counts toward the fee. If it applies to the full headline price, including a seller note (a loan you make to the buyer) or an earnout (part of the price paid later only if targets are met), ask whether the fee on those amounts is paid when you actually receive the money or at closing. Paying a fee today on money you may never collect is a point worth negotiating.
A declining scale works like tax brackets: one rate on the first band of the price, a lower rate on the next band, and so on. The effect is that the overall rate falls as the price rises. The simplest way to compare proposals is to ask each firm to show you, in dollars, what its fee would be at three different sale prices, including your realistic low case. In a typical sale of a company this size, the seller pays the fee out of the proceeds at closing, so it never comes out of your pocket beforehand unless a retainer is involved.
Costs that are not the broker's fee
A sale has other professional costs. Budget for them separately, and do not let any of them be folded into the advisor's fee without a clear description:
- Your transaction attorney, who drafts or reviews the letter of intent and the purchase agreement.
- Your CPA, for tax planning on the deal structure and preparing financial statements a buyer will rely on.
- A formal third-party valuation, if you need one for partners, lenders, estate planning or a dispute. At MDR & Associates this is a separate, optional service with its own price; see business valuation.
- Pre-exit consulting, if the company needs work before it is sold. Also separate and optional; see pre-exit consulting.
Red flags in a fee proposal
Most fee disputes between owners and brokers start with terms nobody read closely at signing. Watch for these, and read the engagement letter with your attorney before you sign it:
- Large upfront fees with no credit at closing.
- A vague definition of transaction value.
- A long exclusive term with no obligations on the firm's side.
- A tail period that covers any buyer, including ones you found yourself.
- Fees owed even if you reject an offer that does not meet the terms you set.
- Pressure to sign before you have had time to review the letter.
How MDR & Associates charges
Our fee is paid only when the company sells, and if it does not close, you owe nothing. The percentage falls as the transaction grows and is written into the engagement letter before any work begins. The first discovery meeting and opinion of value are free. See our fees page and the frequently asked questions, then start with a free valuation snapshot.
Where this fitsTexas M&A advisors and business brokers →