Buyer's Broker

[Nomad57]

I have seen the term, 'buyer's broker', which I understand to mean a broker who acts on behalf of the buyer, rather than the seller. He acts as an intermediary between the buyer and the seller's broker, and splits the commission with the seller's broker.

It has been suggested that a 'buyer's broker' will recommend a surveyor that is more advantageous to the buyer, rather than the seller, although it seems to me that a buyer's broker would also have a vested interest in seeing the sale go through, especially in hard times if he has payments due.

I have had two transactional experiences with brokers. Once, when we bought our Trojan (not a good experience), and once when we sold it (a better experience). The broker who sold our boat struck me as a reasonably honest man, as brokers go.

Of late, we've been looking at listings for boats listed by other brokers closer to us, and I wondered whether or not we ought to approach the broker with which we had a previous relationship to act as 'buyer's broker', rather than contacting the broker who lists a boat of interest directly.

Is this an ethical thing to do? Is there some advantage to me in doing this? Is there a downside?

Thanks in advance.

[djmarchand]

Having been a yacht broker for a short while in my career and bought and sold 6-8 boats of my own, here is my advice and thoughts:

Find a broker that you know and trust. The one that handled your last sale sounds good. Tell him what kind of boats you are interested and any geographical restrictions. Either you are he can search on Yachtworld. It doesn't matter, you both will see the same thing.

Let him call the listing brokers on boats that you are interested in and might want to see. He will generally find out more than you will. Let him arrange the showing. He will negotiate the appropriate comission split with the listing broker depending on how much he handles. Often if he doesn't do the showing and the listing broker shows the boat, he has to give up a point of his typical 5/5% comission split.

There is nothing wrong with this. It is entirely ethical and is the preferred way to work with a broker during the buying process. There is much upside to this as he will be able to work better with the listing broker because he is one. He will do all of the things that are traditional for the buyers side of the transaction- evaluate comparable sales prices to determine an appropriate offer, negotiate the sales price and any contract issues, help with financing, arrange for the survey, negotiate any survey discrepancies, etc.

The only potential downside and I say potential because it did happened to me twice as part of 10 transactions for my own account, is that if you are dealing directly with the listing broker maybe he is willing to shave a point or so off of his comission to close a deal. Neither he or your buyers broker are likely to do that if the commision is split.

In my mind the upsides significantly outweigh the downsides.

David

[speciald@ocens.]

David Walters from Fort Lauderdale was on my boat in Annapolis a few weeks ago to preview my boat for a West Coast customer - that's what a buyers broker will do.

[S/V Illusion]

I've never seen the value in hiring a buyer's broker IF you have had past experience in buying/selling and know the process and pitfalls. The real question is how much protection do you need/want? The often unspoken downside is that there are two brokers involved which inherently lessens your chance as a buyer from negotiating commissions (less wiggle room).

[pullord]

Originally Posted by S/V Illusion

I've never seen the value in hiring a buyer's broker IF you have had past experience in buying/selling and know the process and pitfalls. The real question is how much protection do you need/want? The often unspoken downside is that there are two brokers involved which inherently lessens your chance as a buyer from negotiating commissions (less wiggle room).

-Love my broker and in fact in a few minutes time a righteous guy can usually spot a like -minded broker wghether the broker be he/she..First of all broker offed all dreamers and tire-kickers{slang from car-dealer days} then broker said lets ask % more tocover commision . Well hell. gotta love this and i am buying luncjh and breakfast.. Anyhoo after "i dont know how bmany" as i am i land developer among other trades including "greed" at times i really have nothing "rotten" to say about brokers"..Carpe DIEM..sieze the mnpoment,,and any latin i learned is/or not remembered well except caveot emptor{buyer beware} as rthere is alot of junk out there and people who will tell you to bring cash and the last thing you will remember is a plastic bag being placed over your head ....USE A BROKER..

[Doodles]

Having spent my career in the professional services industry I am most comfortable using other professional services like a buyer's broker. They are going to know more than you about the fine points and will have access to more resources (like SoldBoat.com) since its their livelihood. A good one can open doors and get answers to questions that you probably can't since they know the other brokers. As for the "potential" downside about commission rates and wiggle room, I don't see that as a big deal ... the market is way to soft. As you can tell, my experience has been good using them.

[VirtualVagabond]

Originally Posted by S/V Illusion

I've never seen the value in hiring a buyer's broker IF you have had past experience in buying/selling and know the process and pitfalls. The real question is how much protection do you need/want? The often unspoken downside is that there are two brokers involved which inherently lessens your chance as a buyer from negotiating commissions (less wiggle room).

Not only the commission, but also the purchase price.
There is absolutely no incentive for the buyers broker to haggle for the lowest price because the better he is at this, the less he is going to earn!

Maybe someone a lot smarter than me could come up with a formula where the buyer pays his broker a sliding scale, over and above the 50/50 commission split. The effect would be to give him some kind of additional percentage of every $ he gets the price reduced by, so isn't out of pocket for doing the best he can for you. Maybe even making it worth his while to negotiate hard.
It's not really costing you because you are saving thousands due to his skill, and he gets a bit of it too.

[pullord]

Originally Posted by Doodles

Having spent my career in the professional services industry I am most comfortable using other professional services like a buyer's broker. They are going to know more than you about the fine points and will have access to more resources (like SoldBoat.com) since its their livelihood. A good one can open doors and get answers to questions that you probably can't since they know the other brokers. As for the "potential" downside about commission rates and wiggle room, I don't see that as a big deal ... the market is way to soft. As you can tell, my experience has been good using them.

-- THE cold hard truth is often an eye-openere ,Have fun out there as my mate is calling me to the romper room..enough personal infpo advertized.. zap... mouth shut ..type stopped .YOUX..think of this smart-ass vcomment by a cop ..Y O U X UEZ OFF 10 U BET ..and if you got any more info we bmight need comtact the "cancer centres of america" and perhaps we wil.l bothwer checking the no. STAMPED on your soles before bi heard .... Lightly stamped and so bee it.ll i got my weighs so so long....Cheers. analse this ' YOU LOOKING FOR NSOME OTHER NUTZ TO PAY YOUR WEIGH" Cheers

[Doodles]

Originally Posted by VirtualVagabond

Not only the commission, but also the purchase price.
There is absolutely no incentive for the buyers broker to haggle for the lowest price because the better he is at this, the less he is going to earn!

Maybe someone a lot smarter than me could come up with a formula where the buyer pays his broker a sliding scale, over and above the 50/50 commission split. The effect would be to give him some kind of additional percentage of every $ he gets the price reduced by, so isn't out of pocket for doing the best he can for you. Maybe even making it worth his while to negotiate hard.
It's not really costing you because you are saving thousands due to his skill, and he gets a bit of it too.

I agree to a point but a "good" buyer broker wants return business and referrals, and you don't get that if you are just focused on getting the most out of this sale at your client's expense. I use to charge for my services by the hour and the same argument was made, i.e. I had no incentive to work faster. But that's not so ... I want the client to be happy and come back next year and I want him to refer his friends. Same for a good broker.

Also, a buyer broker knows he is going to get paid eventually assuming you buy SOME boat using him, but a seller's broker only gets paid if he sell you HIS boat and only HIS boat.

[Doodles]

Originally Posted by pullord

-- THE cold hard truth is often an eye-openere ,Have fun out there as my mate is calling me to the romper room..enough personal infpo advertized.. zap... mouth shut ..type stopped .YOUX..think of this smart-ass vcomment by a cop ..Y O U X UEZ OFF 10 U BET ..and if you got any more info we bmight need comtact the "cancer centres of america" and perhaps we wil.l bothwer checking the no. STAMPED on your soles before bi heard .... Lightly stamped and so bee it.ll i got my weighs so so long....Cheers. analse this ' YOU LOOKING FOR NSOME OTHER NUTZ TO PAY YOUR WEIGH" Cheers

English is not your first language I guess?

[pullord]

Originally Posted by pullord

-- THE cold hard truth is often an eye-openere ,Have fun out there as my mate is calling me to the romper room..enough personal infpo advertized.. zap... mouth shut ..type stopped .YOUX..think of this smart-ass vcomment by a cop ..Y O U X UEZ OFF 10 U BET ..and if you got any more info we bmight need comtact the "cancer centres of america" and perhaps we wil.l bothwer checking the no. STAMPED on your soles before bi heard .... Lightly stamped and so bee it.ll i got my weighs so so long....Cheers. analse this ' YOU LOOKING FOR NSOME OTHER NUTZ TO PAY YOUR WEIGH" Cheers

-- ALLDFAT LONG i dealbwith files _landing _on_my_desk..sorrty zeewhaT i am knot biting .;l. Jjust ordered some scaff butn thatb my woimen wont allow ....for real .,,,,clea\r out ...by by

[MarkSF]

Originally Posted by pullord

-- THE cold hard truth is often an eye-openere ,Have fun out there as my mate is calling me to the romper room..enough personal infpo advertized.. zap... mouth shut ..type stopped .YOUX..think of this smart-ass vcomment by a cop ..Y O U X UEZ OFF 10 U BET ..and if you got any more info we bmight need comtact the "cancer centres of america" and perhaps we wil.l bothwer checking the no. STAMPED on your soles before bi heard .... Lightly stamped and so bee it.ll i got my weighs so so long....Cheers. analse this ' YOU LOOKING FOR NSOME OTHER NUTZ TO PAY YOUR WEIGH" Cheers

Could you run that by me again?

[VirtualVagabond]

Originally Posted by Doodles

English is not your first language I guess?

... or second... or third...

[MarkSF]

Originally Posted by VirtualVagabond

... or second... or third...

Reminds me of a scene from Star Trek.

"They're not using any recognised language!"

[pullord]

Originally Posted by pullord

-- ALLDFAT LONG i dealbwith files _landing _on_my_desk..sorrty zeewhaT i am knot biting .;l. Jjust ordered some scaff butn thatb my woimen wont allow ....for real .,,,,clea\r out ...by by

off this .. butn opfd course youn dont