Broken deal costs

Definition

What a buyer has already spent on a deal that then dies before closing.

Why It Matters

It is the cost nobody budgets and every searcher pays several times: a quality of earnings, a lawyer's first pass at a purchase agreement, and a lien search are all spent whether or not the deal closes. Each check looks proportionate on its own. The number that matters is what they add up to across the deals that went nowhere. That total is what decides whether the next three thousand dollars is a question or a reflex.

In numbers: Two dead deals at $6,000 and $11,000 of diligence is $17,000 of a $150,000 search budget gone before a business is bought.