“Re-Trading” is the practice of renegotiating the purchase price after the Letter of Intent (LOI) is signed, usually based on minor or manufactured findings during Due Diligence.
Why It Works
Once you sign an LOI, leverage shifts to the buyer.
- Exclusivity: You agreed not to talk to other buyers for 60–90 days. Your other options are gone.
- Mental Commitment: You have likely mentally “spent the money.”
- Fatigue: Predatory buyers know that if they drop the price at the 11th hour, you might say “Yes” just to end the stress.
The VR Defense: Screening for “Need” vs. “Want”
The best way to avoid a Re-Trade is to pick the right partner before you sign. When we generate multiple LOIs, we dig deeper than the price tag.
We help you answer: Who needs this business the most?
- The “Financial” Buyer: They are buying your cash flow. If they find a way to lower the price, they increase their return. They are high-risk for re-trading.
- The “Strategic” Buyer: They need your location, your technology, or your customer list to solve a problem in their business. They are far less likely to jeopardize the deal over pennies because they have a strategic mandate to close.
The Warning Signs
We also screen the LOI document itself for “trap doors”:
- The “Squishy” Offer: If the LOI is full of vague language like “Subject to general review,” we reject it. We demand specific definitions of what triggers a price adjustment.
- The Outlier Bid: If three offers are for $3 Million, and one is for $4.5 Million, the high bidder is often planning to re-trade you down later.
A high offer is worthless if the check never clears. We help you choose the buyer with the highest certainty of close, not just the highest initial promise.