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- Letter of Intent – The Letter of Intent sets the stage for the overall terms of the dental practice sale. It will include many of the overall items such as purchase price. It is typically non-binding and all the details will be in the final documents of the transition.
- Non-disclosure Agreement – Many times a Non-Disclosure Agreement is filled out by the prospective purchasing dentist. Among other things, it ensures that if the sale does not happen, the prospective purchaser does not disclose the details of the selling dentist’s practice.
- Due Diligence – The Purchasing Dentist needs to preform their due diligence and review the data of the dental practice they are looking at purchasing.
- Valuation – When a prospective dentist is reviewing the purchase of the dental practice, they use the details found whiled doing their due diligence to help ensure that the value of the practice makes sense compared to the asking price of the seller. A trusted CPA can help in reviewing the numbers of the dental practice and help ensure there is nothing hiding or the books do not look to be inaccurate.
- Financing – A majority of the time the purchasing dentist will use a lender to help fund the dental practice purchase. Similar to buying a house, the lender will have different requirements and do their due diligence before they lend the money.
- Real Estate – In some dental office purchases, the selling dentist owns the real estate that the practice is located in. If the real estate is going to be sold with the practice it is a separate transaction. If the real estate is not going to be sold, the purchaser will typically have to get an assignment of lease and approval from the landlord.
- Closing – When all of the documents are approved and the lender and other requirements are finalized the closing of the dental practice takes place. All of the documents are executed and the money is wired to the seller along with paying any other items that are being settled with the sale.