To broker, or not to broker, that is the question...

[JPA Cate]

Thanks, Cotemar,

In countries where brokers are licensed, the license check would be very useful; also the BBB check would be a good deal in the US. Sitting here in Tasmania, I sometimes lose track of where the posters are located, and it does make a difference.

Thanks again,

Ann

[Capt.Alex]

When I was searching for my current boat I started out on my own. I narrowed down the list of boats I wanted to see on yachtworld. I then had to contact each listing broker to set up a time to view the boats. It was a very time consuming and inefficient process. Some of the brokers were a real piece of work, hard to deal with, sleazy, and down right annoying. At the end of the first round of boat searching, I did not find the right boat, however I did come across one extremely knowledgeable and personable broker. I did not buy his listing, but I hired him as my buyers agent. He organized the next round of boats for me to see. We looked at one boat after another with him at my side giving me an unbiased opinion of the various boats. In the end, he found me the perfect boat, handled all of the negotiations and paperwork, set up the survey and the sea trial. In the end, I was very happy with the experience and it cost me nothing! I would highly recommend him if anyone is looking for boats in S. FL.

[DDabs]

I have been researching boats for the past 5 years, finally found a boat that I like and negotiated a deal without a broker to help. Hiring a broker in my mind is basically to help you find the boat that you want if you don't know where to look. In my case, I only had to deal with the seller's broker, who actually graciously kicked in some of his commission to seal the deal- something that may not have happened had I had my own broker.

Capt.Alex gives great advice as well. Most brokers on Yachtworld that I have dealt with are hard to get a hold of and hard to set appts. with. Go figure.... It's almost as if some of them don't even want to sell you a boat! I live in Florida and went to Maryland to look at a certain boat. While I was on this trip I thought it would be a good time to set up some more appointments to view other boats. 3/4 of the other listings either wouldn't get back to me or said I had to set up appointments days in advance. Well too bad for them. The boat I ended up buying; the selling broker answered every single one of my calls and met with me at my convenience.


David

[JPA Cate]

We've had bad experiences and good experiences with brokers. I'm starting to think this all depends on one's own knowledge and abilities as a negotiater........

[svHannabel]

In my experience, it's very difficult to find a good boat buyer's broker/agent who truly has the interest of the buyer at the top of their priority list. Seller's brokers, buyer's brokers, surveyors (and sometimes marine lenders) seem to have a tight network and I think ultimately are all working for each other. This isn't to say there aren't exceptions, but that's been my experience.

[letsgetsailing3]

Originally Posted by svHannabel

In my experience, it's very difficult to find a good boat buyer's broker/agent who truly has the interest of the buyer at the top of their priority list. Seller's brokers, buyer's brokers, surveyors (and sometimes marine lenders) seem to have a tight network and I think ultimately are all working for each other. This isn't to say there aren't exceptions, but that's been my experience.

This is kind of what I think.

After all, you probably won't buy another boat for a while, but these guys depend on repeat business from other brokers.

These days, it seems like most boats are advertised on a relatively limited set of internet databases. If a boat is in yachtworld, sailing texas, craigslist, or boat trader, I can find it without a broker.

[tartansail]

I've used the same broker for my last two boats. I'm with Capt Alex. The overhead to line up the sellers' brokers, screen the boats and schedule visits while working full time is a PITA. It was also reassuring to have my broker handle the escrow part of the deal. I had the broker list my earlier boat as well as help with the new one. Since he was getting two commissions (of very different sizes), he was willing to reduce his sales commission.

Another useful value a seller's broker brings is access to the side of Yachtworld that shows what boats actually sold for. It helped to have someone familiar with the boats I was looking at since he could go down the list and identify the reason that some prices were higher or lower than others. It was a much better assessment of the state of the market than taking a random discount number off the listing price.

[Sailing Cowboy]

I can speak with a bit of knowledge with respect to a buyers broker on the real estate end of things. I am of the opinion that it is good to be represented by a buyers broker in the boating world if it is anything like the real estate world. The buyers broker has a fiduciary duty to represent the client above all else. I do not know if the broker in the boating world is bound by a fiduciary duty or not. The buyer broker helps in many ways. Some good points have already mentioned. They navigate the escrow process by reviewing all paperwork with your best interest in mind. If they are good, they will negotiate a better price than what you can. They are a source of information and local knowledge that you may not have if you are not from the area. The best part of all is, it doesn't cost you anything. Why would anyone not want to take advantage of that. The comments about getting a better price with dealing with just the sellers broker is just non sense. People thing they save money by not using a buyer broker and that simply isn't the case. It is the other way around. The industry is set up on commission splits between seller agent and buyer agent. The sellers agent is rather excited when dealing with the buyer for obvious reasons but he is still bound by fiduciary duty to represent the sellers best interest. If you want to enter a transaction with no representation then you do so at your own risk. An unnecessary risk in my opinion.

[nautical62]

Given the easy access to online resources of boats for sale, I prefer to do my own boat search and look at boats at my own pace, based on my own incentives, and not bring the incentives and limitatiosn of a broker into play. I may want to consider boats for sale by owner for example.

When I find a boat I'm seriously interested in buying, the person I want representing my interests is not a broker, but a good surveyor.

[letsgetsailing3]

Originally Posted by Sailing Cowboy

I can speak with a bit of knowledge with respect to a buyers broker on the real estate end of things. I am of the opinion that it is good to be represented by a buyers broker in the boating world if it is anything like the real estate world. The buyers broker has a fiduciary duty to represent the client above all else. I do not know if the broker in the boating world is bound by a fiduciary duty or not. The buyer broker helps in many ways. Some good points have already mentioned. They navigate the escrow process by reviewing all paperwork with your best interest in mind. If they are good, they will negotiate a better price than what you can. They are a source of information and local knowledge that you may not have if you are not from the area. The best part of all is, it doesn't cost you anything. Why would anyone not want to take advantage of that. The comments about getting a better price with dealing with just the sellers broker is just non sense. People thing they save money by not using a buyer broker and that simply isn't the case. It is the other way around. The industry is set up on commission splits between seller agent and buyer agent. The sellers agent is rather excited when dealing with the buyer for obvious reasons but he is still bound by fiduciary duty to represent the sellers best interest. If you want to enter a transaction with no representation then you do so at your own risk. An unnecessary risk in my opinion.

I don't think you have the same legal protections in the boating world regarding buyer brokers in most states.

And with a commission of 10%, it's not really "free" for the buyer -- any fees are coming out of your transaction, regardless of who writes the check. The seller's real bottom line doesn't change because there is another broker involved.

If you get a good negotiator to represent you, and you're not one, then I could see where this could be of assistance.

[Sailing Cowboy]

Originally Posted by letsgetsailing3

I don't think you have the same legal protections in the boating world regarding buyer brokers in most states.

And with a commission of 10%, it's not really "free" for the buyer -- any fees are coming out of your transaction, regardless of who writes the check. The seller's real bottom line doesn't change because there is another broker involved.

If you get a good negotiator to represent you, and you're not one, then I could see where this could be of assistance.

Yes I believe you may be correct with respect to legalities in the boating world. I.E. the Department of Real Estate is designed to protect buyers and sellers and boating transactions do not fall into this category. I am sure it is covered under some umbrella but not to the extent as a real estate transaction. With respect to commissions, I do not agree with your point. The 10% is contracted and comes out of the sellers proceeds. The buyer pays the full amount of the purchase price regardless of how many brokers are involved. The fees are coming out of the sellers side. Not the buyers side as evidenced on the HUD 1 in a real estate transaction. I believe negotiations and completion of any and all legal forms are the biggest benefit. Helps to have a professional represent you in getting your deposit back as well should the deal turn sideways.

[Capt.Alex]

Originally Posted by tartansail

I've used the same broker for my last two boats. I'm with Capt Alex. The overhead to line up the sellers' brokers, screen the boats and schedule visits while working full time is a PITA. It was also reassuring to have my broker handle the escrow part of the deal. I had the broker list my earlier boat as well as help with the new one. Since he was getting two commissions (of very different sizes), he was willing to reduce his sales commission.

Another useful value a seller's broker brings is access to the side of Yachtworld that shows what boats actually sold for. It helped to have someone familiar with the boats I was looking at since he could go down the list and identify the reason that some prices were higher or lower than others. It was a much better assessment of the state of the market than taking a random discount number off the listing price.

Well said! I agree the "Sold Boats" database is only available to brokers. It gives you real world values based on selling price, not just what most are listed for.

One caveat- don't let any broker choose the surveyor. There is too much of an incentive for the broker to use a guy that will sugar coat the issues he discovers. At the end of the day the broker only gets paid when the deal is closed.

[donradcliffe]

I used a buyer's broker who was recommended by a friend, and I was impressed. The broker spent a morning with me, going through the listings, determining what kind of boat I was interested in. Then we spent a couple of days driving around looking at boats. BTW, he showed me a broker's trick for getting into a locked boat...

I made an offer, which was refused. However, he found out that the owner had another boat under construction due for completion in the winter. We waited six weeks until the fall haul-out season and made another offer, which was accepted. He made all the calls and appointments to see them, and arranged all the paperwork and details necessary for me to by an east coast boat from the west coast.

While he didn't point out the faults in the boats we looked at, I didn't really expect him to, and I had a survey done before I completed my purchase. He's still active, and I would use him again.

Yacht Broker Chris Surprenant | Bradford Marine Yacht Sales

[letsgetsailing3]

Originally Posted by Sailing Cowboy

YWith respect to commissions, I do not agree with your point. The 10% is contracted and comes out of the sellers proceeds. The buyer pays the full amount of the purchase price regardless of how many brokers are involved. The fees are coming out of the sellers side. Not the buyers side as evidenced on the HUD 1 in a real estate transaction. I believe negotiations and completion of any and all legal forms are the biggest benefit. Helps to have a professional represent you in getting your deposit back as well should the deal turn sideways.

I think you miss my point. While the 10% officially comes out of the seller's proceeds, it's based on a number negotiated between you and the seller.

So if you go with the assumption that the buyer is only willing to pay x, and the assumption that the seller is only going to accept y, that negotiated number is somewhere between x and y. I'm saying that the 10 percent affects the amount the seller is willing to accept. Because it affects the possible sales price, it comes out of the deal, not just the seller's end.

[Sailing Cowboy]

Originally Posted by letsgetsailing3

, it's based on a number negotiated between you and the seller.

I think I am following what your saying but just to clarify. The commission amount is not based on a number negotiated between the buyer and seller but between the seller and the listing agent. I think what you are trying to say is the "net" amount to the seller is important to him/her after sales commissions have been taken off and this affects what he or she will accept from the buyer as a purchase price and you would be correct. But that really has nothing do with the buyers agent. The seller is paying 10% to the selling broker regardless and the selling broker either keeps it all or forwards 5% to the buyers broker if he/she is being represented.