Just when you think there's nothing new about insurance agency mergers & acquisitions, an innovator will arrive and change the game. One such innovation is the unsolicited offer.

Here's a common story:

I got a call from the CEO of a larger brokerage saying he would be in town and wanted to grab breakfast. We're not for sale, but I find it helpful to hear what the big guys are up to, so I agreed. The meeting was casual. We talked about family, golf and our agencies. I didn't share much, just our ballpark revenue, number of producers and total headcount. I told him we were not for sale, and we agreed to stay in touch.

You can imagine my surprise when a FedEx letter showed up from the CEO the next day. It was an offer to buy my business for an astronomical amount. I don't look a gift horse in the mouth, so I moved fast. We tweaked a few things in the offer and are working through due diligence as we speak. The deal has soured a little bit as we've moved along, but we're hopeful we can get something done.

The unsolicited offer technique can be an effective way for a buyer to avoid time-consuming and expensive competition from other buyers. What salesperson doesn't like to avoid competition? But for the seller, the outcome is likely to be suboptimal for several reasons:

1) Terms impact price. With a new car purchase, the sticker price may differ materially from the walk-out number. Buyers like to wow agency owners with sky-high numbers, but the final number will often be very different from the amount in the offer letter. The terms, deal structure, tax implications, overhead charges, deductions and post-close performance requirements will materially impact the ultimate purchase price.

2) Eye-popping numbers are common. Just because an initial offer number is an eye-popper, it does not mean it is the most a buyer will pay—it rarely is. Most unsolicited purchase offers are based on incomplete information and thin on details. At most, an unsolicited offer should be the beginning of a thoughtful conversation.

3) Business fit and potential value. Without comparing multiple offers, what are the chances you picked the best business partner and got top dollar? Very low. It's usually not a wise strategy to marry the first person you date—and the same is true when selling your business. Make sure you know your options and make the best possible decision for you, your employees and your clients. Business fit is the most important issue. The valuation, especially in this market, will take care of itself if negotiated properly.

With amazing valuations routinely placed on quality insurance agency assets, don't assume that the first unsolicited offer you receive will approach the potential value your agency should command. These are incredible times—make sure you know your worth.

Tom Doran is a partner at Reagan Consulting.