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Old 27-03-2011, 13:05   #1
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Brokers ?

I wanted to go over this weekend and look at 5 different boats in the Northwest. I know casually a broker who is associated with a charter firm we have used several times in the past. He is a nice guy. I have about 4 makes I am interested in. I asked him if he could tell me if there were any boats that I was not aware of off of Yatch World. Everything he came back with I already knew about.

He wanted me to sign a broker agreement. My goal is to buy the boat in about 12 months. This months trip was to step foot on and see a couple of models I have not been on and see how they felt.

Another broker I had met last year at the All Sail Show called me about a boat he had. He gave me a lesson in boat brokers. No matter how remote the connection they will claim some sort of relationship with the purchaser. I do mind paying someone who worked and helped me, but not much on freeloaders.

What sort of experiences have you guys had?

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Old 27-03-2011, 13:25   #2
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Re: Brokers ?

DW, not good experience I am afraid and I certainly wouldn't sign any agreement with a broker this side of the pond. Remember they work for the seller not you as a buyer, unless you want to take one on for a finders fee.

Estate agents and second hand car salesmen fall into the same category in my opinion, that said, the last one we bought through was excellent but they charged the seller 8% plus 17.5% VAT.

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Old 27-03-2011, 13:52   #3
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Re: Brokers ?

I've signed agreements with a broker to sell but not to buy. Even then, the agreement for him/her to list the boat was for no more than 6 months and sometimes less. After all, if they are not moving the boat maybe someone else can.

I had a friend that was a broker. For a while, he talked about me joining him part time. He explained that whoever lists the boat gets a commission when it sells, even if it sold by another brokerage or salesperson. The salesman gets a commission, and the brokerage also gets a "house" cut. As the buyer you pay NO commission, that comes out of the sales price. If your acquaintance wants a deal with you then it sounds like you would have to also pay a commission but this time out of your own pocket. I'd run, not walk from that deal.

Reminds of the time I bought a hunk of land to build a house on. The realtor got her commission on the sale, which was fine. I then found out she told all the contractors that she should get a commission on the building of the house. I said no way, we had no contract and she'd already been paid. It was illegal. When she balked, I suggested a talk with the board of realtors and then she backed off. It was going to cost me another $6-7K.

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Old 27-03-2011, 13:55   #4
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Re: Brokers ?

I don't have much experience with brokers there (except that they can't use email)

Certainly here in OZ I would never have done it, and after my experiences here (search frogs in CF and you will see) I wouldnt do it EVER.
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Old 27-03-2011, 15:18   #5
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Re: Brokers ?

I had a broker who helped me buy. I didn't pay anything. He split the commission with the seller's broker so the only person who lost out was the selling broker since she got half a commission. The broker didn't find boats that I couldn't find, but he was able to provide selling prices, asking prices and time on the market for comparable boats for the past two years. He knew a lot of detail about a couple of the transactions that helped me figure out what was likely to be a reasonable offer and eventual deal price. The broker was also helpful in putting together the documentation and setting up the escrow accounts since I won't be able to sea trial until May. Since the dollars were coming out of my pocket, I found it reassuring to know the person who was handling the account. Would I have paid him out of pocket? No. But, at least here in the Northeast US, that's not how it works.
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Old 27-03-2011, 17:00   #6
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Re: Brokers ?

My experience in Maryland and Florida in the purchase and sail of three boats mirrors that of Tartansail.

There are certain things you can do yourself, like search Yachtworld. There are some things you can't do, like search Yachtworld for comparables (unless you paid their subscription fee). There are other things that are better left to those who do it all the time so that no mistakes are made in handling the paper work for the tax authority, the bank, your insurer, and your surveyor.
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Old 28-03-2011, 10:36   #7
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Re: Brokers ?

In my opinion, when buying a boat you don't want a broker. It is just another mouth that has to get fed when the deal is struck. The sellers broker has to get paid and if there is a buyer's broker the two have to split it. This leaves less room for negotiation.

My advice is to call the selling broker(s) for any boats you want to see and strike your own deal. The surveyor is the one who will be looking out for your interests, and that is done after the offer is accepted.
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Old 28-03-2011, 10:43   #8
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Re: Brokers ?

Quote:
Originally Posted by PamlicoTraveler View Post
In my opinion, when buying a boat you don't want a broker. It is just another mouth that has to get fed when the deal is struck. The sellers broker has to get paid and if there is a buyer's broker the two have to split it. This leaves less room for negotiation.

My advice is to call the selling broker(s) for any boats you want to see and strike your own deal. The surveyor is the one who will be looking out for your interests, and that is done after the offer is accepted.
I am with you 100% with your comments above, but are there boats that I will not find? Some of the time someone in the business is going to come up with a boat that never found it's way onto Y. World. They sold the boat before, repo, etc. You are limiting yourself to what you can find personally.

DW
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Old 28-03-2011, 11:12   #9
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Re: Brokers ?

Echoing what Pamlico Traveler said, I feel a buyers broker brings more negatives than positives, but see no reason to avoid boats which have a seller's broker. The comission to the seller's broker are paid by the seller. The seller's broker has the incentive to see the boat get sold, which can be to your advantage and can also help should any issue arrive while considering the boat. The last boat I purchased was actually not yet listed publicly, but a seller's broker made me aware of it.

As you said however, these days it's easy to find very through boat listings without needing to retain your own broker.
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Old 28-03-2011, 11:17   #10
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Re: Brokers ?

Being a real estate agent, and looking to buy a boat in the next couple of years, this thread raised some questions. In real estate, the commission (if listed with a selling broker) is bulit in the price and if a buyer's broker is involved, the commision is split, but with no buyer's broker the selling broker gets the entire commission, resulting in no more money being paid to use a buyer's broker. Is this the same in boat brokerage? If you buy property without a buyer's broker, you are unrepresented. Like being charged with a crime and saying I trust the prosecutor to do whats right. In real estate a brokerage agreement can be signed for a specific transaction or any preiod of time,i.e. one month to prevent you from being tied to a particular broker forever. Plus you can even put in a termination clause to fire him if he doesn't do a job. I suspect that a boat purchase contract can get as hairy if even more so than a real estate purchase and to someone who has never or rarely does them it can get overwhelming and confusing. I believe in both, a good buyer's broker is worth his weight in gold, and can prevent alot of problems down the road, just make sure you can get rid of him if he doesn't do his job right.
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Old 28-03-2011, 11:50   #11
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Re: Brokers ?

As a buyer, you shouldn't be paying anything to use a broker as it will come out of the selling price. A good broker (I know one and have used one in the past) can really be worth it. They want you to sign something because they're going to go through a lot of work to find boats for you, and if you do the deal with the seller's agent and bypass them, they don't get paid. It's nothing that anyone else wouldn't do: just making sure they get paid.

If there are two brokers involved, as in a buyer's agent and a seller's agent, they usually will agree to split the broker fee along a given percentage.

I ran into a pretty crumbcake broker over the weekend who works for a great broker. They come in different shapes and sizes.
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Old 28-03-2011, 13:20   #12
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Re: Brokers ?

After reading the posts in this thread, I'm contemplating the use of a broker. Why? They split the commission with the listing broker, and the money comes out of the purchase price. I'm getting pretty fed up with the headaches of acquiring info. on a boat of interest; it seems that asking for inventories, condition & age of fixtures/equip./etc. is like pulling teeth, too much trouble for the broker. In these days of lower sales, you'd think that brokers would be more accommodating. No skin off of my nose. If I buy privately, I save some of the tax & the seller saves the commission. But, maybe a buyer's broker will get the info. that I have such a tough time getting? So, this thread has me thinking about that. I hope some CF members who are brokers share their opinions regarding this.
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Old 28-03-2011, 14:33   #13
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Re: Brokers ?

When you use a buyer broker and they start showing you boats that meet the interests you defined, they are then protecting themselves to get 1/2 of the commission if you buy that boat, regardless of how much actual work is involved. My thought has always been, find the boat you want and then go look at all of them you can find - contact the broker representing the seller and go look.

I don't know what boats aren't on www.yachtworld.com. If someone really wants to sell, they need to be there. One thing to ask a sellers broker for is a list of all recently sold boats of that type. They have access to that information, and it can help you distinguish between asking prices and actual values. If someone wants to sell, they are going to have to sell it for "market value" and as a buyer, having that information is helpful.
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Old 28-03-2011, 15:51   #14
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Re: Brokers ?

Quote:
Originally Posted by PamlicoTraveler View Post
When you use a buyer broker and they start showing you boats that meet the interests you defined, they are then protecting themselves to get 1/2 of the commission if you buy that boat, regardless of how much actual work is involved. My thought has always been, find the boat you want and then go look at all of them you can find - contact the broker representing the seller and go look.

I don't know what boats aren't on www.yachtworld.com. If someone really wants to sell, they need to be there. One thing to ask a sellers broker for is a list of all recently sold boats of that type. They have access to that information, and it can help you distinguish between asking prices and actual values. If someone wants to sell, they are going to have to sell it for "market value" and as a buyer, having that information is helpful.
1. Finding the boat is not where the expertise of a buyer's agent will come in handy, it is handling all the details and protecting your interests.
2. "contact the the broker representing the seller" he is doing just that and is there to protect their interests not yours.
3. I am not sure if boat purchase prices are a matter is public record as in real estate (US at least) so you have no idea if he is picking sales that are favorable to his client (seller)
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Old 28-03-2011, 16:13   #15
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Re: Brokers ?

Boat sales are not a matter of public record, so fat chance finding out what the actual selling price was. Most people deal with a broker who gets paid by the seller of the boat, but theoretically that broker represents the interests of both parties. In some states these brokers are actually licensed and have some theoretical expertise, but in many states there is no licensing for this position. In those states anyone can put up a shingle and call themselves a broker. However, no broker will stay in business long if he doesn't handle the buying/selling transaction in a legal and business-like manner. Try to deal with a brokerage that has been around awhile and chances are pretty good that they will at least handle the transaction professionally. The hard part is to get them to tell you honestly about the boats in question, because most of the time they really don't know much about them and may not have even looked at the boat. They will tend to show you the boats that they want to sell, which are usually the ones that are the most expensive. Therefore, they are not much help on finding boats costing less than $100K, in my experience, but they will gladly handle the transaction if you happen to find one that they are a listing broker on. Nearly 100% of the boats that are for sale are listed somewhere on the Internet these days, even if they are being sold by the owner. Google is your friend. By the way, I have never received or found an accurate inventory of what comes with the boat or the equipment--there are always major errors.
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