Yes, in most cases you should use a business valuation service before a sale. An independent number protects your asking price, gives you something to defend in negotiation, and tells you how much cash you will actually keep, which decides what you can do next. I am Duane Buziak, NMLS #1110647, and I am a mortgage broker, not a valuation firm. I will not tell you what your business is worth. This article covers when a valuation pays off, what to buy and how to vet it, and what a veteran or self-employed owner needs to know about turning sale proceeds into a home purchase. That includes how to check your standing with a soft credit pull mortgage option before you list.
When a Valuation Pays for Itself and When You Can Skip It
Get a valuation if the business is likely worth six figures or more, if there are multiple owners or heirs, if a divorce or partner buyout is involved, or if you have never put a defensible price on it. Skip it only for a very small, asset-only sale where a buyer has already committed to a firm price and nothing in the deal depends on the number being defended.
A few terms decide whether a valuation makes sense to you:
- Fair market value: the price a willing buyer and willing seller would agree on, both informed, neither forced.
- Seller’s discretionary earnings (SDE): pre-tax profit plus one owner’s salary, perks and one-time expenses. It is the usual yardstick for owner-operated businesses.
- EBITDA: earnings before interest, taxes, depreciation and amortization. It is more common for larger companies with paid management.
- Earnings multiple: the number applied to normalized SDE or EBITDA to reach a price. It is applied to earnings, not revenue. A business with $2 million in sales and thin profit is not worth a revenue-based figure.
The most common mistake is pricing from a rule of thumb or from what a friend’s company supposedly sold for. Those numbers rarely include the details: how much of the sale was an earn-out, whether equipment was included, what the owner’s real hours were. The trouble surfaces during buyer due diligence, when the accountant tests your add-backs and some of them do not hold. Personal expenses you ran through the company are the usual casualties. When add-backs shrink, earnings shrink, and the price follows, often after you have told your family and your next landlord or seller what number to expect.
Keep the tradeoff in view. A valuation is a defensible estimate, not a guaranteed sale price. The market, the buyer’s financing and the deal terms set the final figure. What the report gives you is a floor for your own thinking and documentation that a buyer cannot dismiss as wishful.
Valuation Types, Credentials and Costs: What to Buy
Three products are sold under the word “valuation,” and they are not interchangeable.
- Broker’s opinion of value: a quick market-based estimate, often free, produced by a business broker hoping to win your listing. It suits a first conversation, not a dispute.
- Calculation-of-value report: an agreed, limited-scope analysis. It is faster and cheaper than a full report and fits a listing, internal planning or a negotiation where both sides accept limited procedures.
- Full certified appraisal or conclusion-of-value report: a detailed, independent analysis with a stated conclusion. This is the one to buy for divorce, estate, partner buyout, gift or tax events, where someone may challenge the number.
Credentials and questions to ask
Common credentials include ASA (American Society of Appraisers), CVA (National Association of Certified Valuators and Analysts, NACVA) and ABV (Accredited in Business Valuation, from the AICPA). Titles and requirements change, so confirm the current designation with the issuing body before you hire. Ask for a sample report with client details removed. Ask which approaches will be used: the income approach (what the earnings stream is worth), the market approach (what comparable businesses sold for) and the asset approach (what the holdings are worth). A credible report explains why it weights one approach over another.
Cost and conflicts
Fees vary widely with business size, record quality and report type. I will not quote a price range as fact. Get written quotes from at least two providers, confirm what is included, and treat any figure in this article as an illustration only.
Finally, check for conflicts of interest. A business broker paid by commission has a built-in reason to suggest a high price to win your listing, and a high ask can sit unsold for months. An independent valuation, paid by flat fee, works as a cross-check on whatever number a listing agent hands you.
Worked Example: A $600,000 Valuation and What the Proceeds Can Buy
The following is a hypothetical illustration, not a real business, a market multiple or a tax opinion. Suppose an owner-operated company earns $200,000 in normalized SDE. An independent valuation applies a 3.0x multiple and concludes $600,000. The owner’s gut-feel ask was $750,000, or 3.75x. The gap is $150,000. If the buyer’s accountant rejects $40,000 of add-backs, SDE falls to $160,000 and the same 3.0x multiple gives $480,000. That is how an optimistic ask turns into a renegotiation in week six.
Now the proceeds, before taxes, at the valuation price:
- Sale price: $600,000
- Hypothetical 10% brokerage commission: minus $60,000
- Hypothetical valuation fee: minus $5,000
- Pre-tax proceeds: $535,000
Had the sale closed at the $750,000 ask under the same assumptions, pre-tax proceeds would be $670,000, a $135,000 difference. That is why the ask matters, and why an unsupported one is risky. Taxes depend on how the price is allocated among assets, so confirm treatment with a CPA. The IRS explains asset-sale rules in Publication 544, and the allocation statement buyers and sellers file is covered on the Form 8594 page.
Now the home. Say a veteran plans a $450,000 purchase with a VA loan and no down payment. As of the schedule on the VA funding fee page, the first-use fee with zero down is 2.15%. That is $450,000 x 0.0215 = $9,675. It can be rolled into the loan, making the balance $459,675, or paid in cash. Veterans receiving VA disability compensation, and certain other groups, are exempt. Confirm your status and the current rate on VA.gov before you rely on this number.
The real value of the valuation shows up here. You can choose a home price, a reserve level and a payment knowing roughly how much you will keep, rather than budgeting from a number nobody has tested.
Selling a Business and Buying a Home: The VA Loan Mechanics
The timing problem is income. Mortgage underwriting looks at income history, and when you sell a business, the income that qualified you may disappear or change shape. For self-employed borrowers, Fannie Mae’s Selling Guide page on self-employed borrower documentation shows the type of history underwriters typically want, generally tax returns covering a multi-year period. Closing on the home before the sale, or documenting the new income source (an employment offer, a consulting agreement, a note payment schedule), can matter. Investor overlays differ, so raise this at the start, not after you have a contract on the business.
On the VA side, you will need a Certificate of Eligibility, which you can request through the VA.gov COE page, and an understanding of your entitlement and the funding fee exemptions, all explained at VA.gov home loans. Many programs allow a VA loan up to 100% loan-to-value, though overlays vary by investor.
Credit flexibility is where a broker earns its place. Duane Buziak can place VA loans with investors that accept scores down to 500 FICO. Individual investor overlays vary, and approval is never guaranteed. Veterans United publishes a 620 minimum, which is a reasonable standard for a direct company with its own guidelines, but it is one standard. If a sale, a divorce or a stressful stretch has dented your score, a wider field of investors changes the conversation.
For planning, NoTouch Credit Pull is a soft pull mortgage option: it lets you see where you stand with no hard inquiry mortgage pre approval, so mapping a post-sale purchase does not cost you points. A standard pre-approval generally runs a hard inquiry first.
If you are not VA-eligible or your income is irregular, two other paths exist. Bank statement loans qualify self-employed borrowers on deposits instead of tax returns. DSCR loans qualify investors on a property’s rental income rather than personal income.
Comparison Table and Why Broker Independence Matters After a Sale
Here is how the structures compare. Competitor figures reflect published standards as of October 2026 and can change, so verify them directly before you decide.
| Company | FICO Min (VA) | Lender Type | Loan Shelf | Fees | Credit Pull at Pre-Approval | Down Payment Options |
|---|---|---|---|---|---|---|
| VaLoansPro.com by Duane Buziak | 500, subject to investor overlays | Independent broker | Hundreds of wholesale lenders | Broker-negotiated and shop-able | Soft pull via NoTouch Credit Pull | VA 0% down; FHA, conventional and assistance programs where eligible |
| Veterans United | 620 per its published standard | Direct lender | Single shelf, VA-focused | Set by the company; compare Loan Estimates | Standard application credit check | VA 0% down |
| Rocket Mortgage | Varies; no public VA-specific floor | Direct lender | Single shelf | Set by the company; compare Loan Estimates | Full online application with a hard pull before final numbers | VA, FHA and conventional options |
| Movement Mortgage | 580 | Direct lender | Single shelf | Set by the company; compare Loan Estimates | Full application with a hard pull | VA, FHA and conventional options |
Each has real strengths. Veterans United’s VA specialization is deep, and Rocket and Movement offer polished digital experiences and national scale. The difference is structural. A direct company prices from one rate sheet and one set of guidelines. Duane Buziak, a Scotsman Guide Top Originator ranked #114 nationally, shops one application across hundreds of wholesale lenders. A seller whose income picture is changing can then find an investor whose guidelines fit, instead of being limited to one company’s shelf.
Two tools help with comparison. Dare to Compare is a pricing challenge: you bring an existing quote and Duane Buziak shows how it stacks up, line by line. And a mortgage pre approval without hard pull through NoTouch Credit Pull lets you gather numbers without stacking inquiries. For background on how shopping affects scores, see the CFPB’s home-buying resources.
One state-level point, since Duane Buziak is licensed in VA, FL, TN, GA, DC, NC, SC and MD: neither Florida nor Tennessee levies a state tax on personal wage income, per the Florida Department of Revenue and the Tennessee Department of Revenue. Tax on a business sale is a separate question, so have a CPA model it for your state.
Frequently Asked Questions About Valuing a Business Before You Sell
1. Should I use a business valuation service before selling?
Yes, in most cases, especially if the business is worth six figures or more, has multiple owners, or you have never priced it. An independent valuation gives you a defensible price and a realistic estimate of proceeds. Very small asset-only sales with a firm buyer price may not need one.
2. How much does a business valuation cost?
Cost varies widely with business size, record quality and report type, so get written quotes from at least two credentialed providers. A calculation-of-value report generally costs less than a full certified appraisal. Treat any figure in this article as an illustration only.
3. How long does a valuation take?
Timing depends on scope and how quickly you supply financial records. Limited reports are generally faster than full appraisals. Ask each provider for a delivery timeline in writing, and have several years of financial statements and tax returns ready.
4. Is a valuation the same as a broker’s opinion of value?
No. A broker’s opinion of value is a market-based estimate from someone who may earn a commission on the listing, while an independent valuation follows documented methods and carries no stake in your sale. Many owners use the independent figure to cross-check the broker’s.
5. Can a valuation lower my asking price?
Yes, it can, and that is often useful. A lower, supported number sells faster and survives buyer due diligence better than an inflated ask that collapses mid-deal. The valuation is a defensible estimate, not a guarantee, and the market still decides.
6. Do I need a valuation to get an SBA-financed buyer?
Not always, but SBA-backed acquisition financing can call for an independent valuation in certain situations, such as sales between related parties, and the buyer’s financing institution may require one regardless. Check current requirements on SBA.gov’s 7(a) loan page and ask the buyer’s financing institution.
7. Will selling my business affect my VA loan approval?
It can, because underwriters evaluate income history and a sale may end or change the income that qualified you. Closing on the home first, or documenting your new income source, may help. Review eligibility basics on VA.gov and the self-employed documentation standards in the Fannie Mae Selling Guide.
8. Can I check my mortgage options without a hard credit pull?
Yes. NoTouch Credit Pull is a soft credit pull mortgage option that shows where you stand with no credit hit mortgage application. Approval is never guaranteed, and a hard pull comes later when you move forward. Tax questions on the sale itself belong with a CPA, using IRS Publication 544 as a starting reference.
Know the Price, Know the Proceeds, Then Choose the Home
Get an independent valuation before you list. It tells you what to ask, what to expect after commissions and fees, and how much room you have for the next purchase. Plan the home around those numbers, not around the optimistic ask.
The next step is to start a NoTouch Credit Pull with Duane Buziak, so you can see your standing without a hard inquiry while the sale takes shape. Learn more about our services
Legal disclaimer: This article is educational and is not financial, tax or legal advice. Rates, fees and program rules are subject to change, and no rate or approval is guaranteed. Consult a licensed CPA, attorney or valuation professional about your situation. Equal Housing Lender.
Operated by Duane Buziak Mortgage Maestro, Coast2Coast Mortgage, LLC NMLS: 376205
Duane Buziak NMLS#1110647
Legal Disclaimer, “Equal Housing Lender” This information is not intended to be an indication of loan qualification, loan approval or commitment to lend.
About the author: Duane Buziak, NMLS #1110647, is an independent mortgage broker serving veterans and self-employed buyers across VA, FL, TN, GA, DC, NC, SC and MD. He is a Scotsman Guide Top Originator (#114 nationally) with 1,400+ five-star reviews, and he places VA, FHA, USDA, conventional, DSCR, bank statement and ITIN loans through hundreds of wholesale lenders.