Seven common mistakes & the post-closing obligations — where deal-fatigue concessions get expensive.

Sellers do not lose deals to ignorance. They lose them to fatigue. Sixty days of due diligence, dozens of requests, multiple advisor calls, and a buyer that keeps pushing — by week eight, the seller signs things they would have rejected on day one. Naming the seven mistakes does not prevent them. Knowing the dollar consequences sometimes does.

§ 01 · The seven Phase-4 mistakesWhat each one actually costs.

Mistake #1: Fixating on the headline price. The seller hears "$3 million" and celebrates. But $3M at 60% cash + $900K earnout (50% probable) + $600K seller note = $1.8M net in Year 3. A competing offer of $2.8M at 85% cash + no earnout = $2.4M net in 30 days. Fix: stop negotiating price. Start negotiating structure.

Mistake #2: Accepting an unsecured seller note. A $400K seller note with a Stock Pledge and UCC-1 is solid. A $400K seller note with no security is a prayer. If the buyer's agency struggles, the seller is just another creditor, often collecting cents on the dollar in liquidation. Fix: every seller note must be secured by the equity of the agency. File the UCC-1.

Mistake #3: Accepting EBITDA earnouts without shadow accounting. Buyer offers a $600K earnout if EBITDA stays above $200K. Seller hits $195K — but the buyer loaded $50K in corporate overhead (CEO bonus, CFO time allocation). The seller cannot collect because they did not negotiate shadow accounting and pro-forma adjustments. Fix: demand revenue-based earnouts. If accepting EBITDA, require specific pro-forma adjustment language written into the APA defining exactly which expenses are excluded from the calculation.

Mistake #4: Trusting handshakes on earnout covenants. Buyer says "Don't worry, we'll keep your people, we'll support your client relationships." Seller signs the APA with no written covenants. Six months later, the buyer cuts staff, consolidates clients, and the earnout is impossible. No contract language means no legal recourse. Fix: every earnout covenant is written into the APA. No exceptions.

Mistake #5: Skipping the tax modeling. CPA advises that asset sale vs. stock sale will change after-tax proceeds by $180K. Seller remains focused on headline price, not net proceeds. Six figures are left on the table. Fix: before negotiating any deal structure, have the CPA model the full tax impact. Use the model to push back on terms.

Mistake #6: Not negotiating holdback reduction. Buyer asks for a 15% holdback. Seller accepts immediately without consulting the advisory team, who was prepared to negotiate for 10%. The 5% difference on a $2M deal is $100K of the seller's own money tied up for 18 months. Fix: let the advisory team negotiate. The seller's job is to set guardrails — "I need 80%+ cash at close and no more than a 10% holdback."

Mistake #7: Accepting earnout forfeiture on resignation. Earnout agreement says "Earnout forfeits if you resign." Year 2, the buyer is running the business into the ground. The seller wants out but resigning means losing $200K in earnout. The seller is trapped. Fix: "Earnout is based on business performance, not employment status. Performance is measured at the Measurement Date, independent of whether I am employed."

§ 02 · The Transition Service AgreementWhat the seller actually owes after closing.

The TSA defines the seller's post-close role with specific scope and duration. Weeks 1–4: full-time transition — client introductions, explaining client preferences, walking through agency processes. Weeks 5–12: half-time — responding to buyer questions, client calls as needed. Months 4–6: on-call — available for questions, occasional client calls.

Common fees: $5K–$15K per month for full-time, less for part-time. The critical point: the TSA must have defined deliverables. "As needed" language allows the buyer to extract unlimited seller time.

§ 03 · Non-Compete and Non-SolicitationThe standard post-close restraints.

Standard in virtually every agency transaction. Non-Compete — seller cannot start a competing agency within a defined geographic radius for 1–2 years. Non-Solicitation — seller cannot solicit clients or employees for 3–5 years.

These are generally enforceable and reasonable. The negotiation point: if the seller has personal clients (friends, family, prior business relationships) they want to retain post-sale, carve them out explicitly. A blanket non-solicit that captures personal relationships is an over-reach worth pushing back on.

§ 04 · Earnout Monitoring and DisputesWhat active management looks like.

If the deal includes an earnout, the seller must actively monitor performance. Required protections: Regular reporting — demand monthly or quarterly metric reporting; do not wait for year-end surprises. Audit rights — contractual right to audit the buyer's books to verify calculations. Dispute resolution — arbitration clause (faster and cheaper than litigation). Pro-forma adjustments — if negotiated, require exact clarity on what adjustments are permitted.

The honest realism: disputed earnout calculations are the single most common source of post-close friction. If a dispute arises, expect to settle for 70–80% of the disputed amount. Budget for this reality rather than assuming full collection.

§ 05 · The deal-fatigue ruleHow to stop trading concessions for sleep.

Most of the seven mistakes happen in the last two weeks of the 60–90 day window. The seller is exhausted. The advisory team is exhausted. The buyer's team has been pacing themselves and is fresher. The pattern is predictable, which means it is manageable. Build the guardrails before exhaustion sets in: holdback ceiling, earnout floor, security requirements on the note, audit rights, pro-forma language. When concessions are being requested at 11pm on a Thursday, the guardrails are the answer.

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