Practice transitions: buyer vs seller market in 2025

2025 is a buyer's market for practice transitions. Sellers are desperate.

Valuations have dropped 15-20% from the peak in 2022-2023. Seller financing is back (it died for five years). Earnout terms are longer. Warranties are being waived. You're negotiating from power if you're buying right now.

The DSOs and PE-backed platforms who overleveraged in 2022 are now shedding practices. Banks tightened credit. Interest rates killed the leverage game. Sellers who bet on a 2024 exit are now negotiating 2025 transitions at 40% of their expected price.

If you're thinking about buying a practice, this is the window. Rates might drop later, but seller desperation won't last forever. Once the market stabilizes, valuations tighten again and sellers get picky.

If you're thinking about selling, you're on the wrong side of the cycle. Wait. Buyer inventory will eventually reduce. Supply-demand flips in your favor around mid-2026 or 2027. Three years of patience beats selling now at a haircut.

Don't get caught between. Decide if you're a buyer or holder. Sellers trying to time the bottom are losing.