Selling a mortgage company can be seemingly tricky. Because mortgage loan officers sell services rather than physical products, it can be very difficult to simply put a value on mortgage origination services. In most states, the owner of a mortgage company must hold his own brokerage license. This means it would be typically illegal to sell your license to someone else. However, there are ways to get a fair price for your company's assets. The process is fairly expensive; however, it can be done.
Instructions
1. Determine your discretionary income. Gather all your company's financial information: stock certificates, bank statements, business taxes for the last 3 years and real state schedules. Hire a CPA to review your financials and compile other data including salaries paid to employees, monthly closed loan reports, expenses and other physical assets you own. This information will be used to determine your discretionary income. Discretionary income is your company's income after necessary expenses to keep the business running are paid.
2. Appraise your business. Consult with an experienced business appraiser. A business appraisal firm specializes in providing independent business valuations for companies in just about every industry. Through the process, a business appraisal will uncover vital statistics including the present value of your company, future value and cash flow reports important to help you determine an asking price for your company.
3. Appraise your physical assets. Hire a real estate appraiser to determine what your office building is worth if you own it. This will also help you determine an asking price. A business broker can also assist you in appraising your furniture, computers, office machines and other physical assets you own (see Resources).
4. Determine what's for sale. After you've determined your discretionary income, the value of your business entity and physical assets, decide what's for sale and what's not. If you own your office building, you may simply wish to sell the building and everything in it. Or, you may wish to only sell your business entity based on the findings of your valuation team. For a mortgage company that owns its office building, the best way to sell the company would be to start with a selling price that includes both the value of real state and the business itself. For example, if a valuation team concludes your mortgage origination business entity is worth $987,000 and your office building is worth $1,234,000, you may ask $2,221,000 for the entire operation. If you don't own your building, simply put your business entity and other physical assets up for sale based on their appraised value.
5. Put your company on the market. Start by contacting your colleagues in the mortgage business, including your competition. One of your competitors may be willing to buy your company and run it as a subsidiary or simply dissolve it to grab a larger share of the market. Or, an experienced loan officer or group of originators may wish to pool their assets and buy your company.
Online business buying and selling services are also good places to list your company for sale (see Resources). Your business broker may also point you in the right direction. If your building is included in your sales price, your Realtor can also list your business entity with your real estate.
