Boat Broker vs Do-it-Yourself

[wlboyer]

We are starting to look for a used, well equipped cruiser to be our home for a 1 year cruise. This will be our first ever big boat purchase. Do we need a boat broker? If so, how do you go about finding one that truly has your best interest at heart? Do they need to be in our back yard (we live in Texas) or can they be anywhere?

Any advice is greatly appreciated.
-Wendy

[nautical62]

I've purchased 4 cruising boats so far and have never hired a broker. Most boats represented by brokers are listed online and easy enough to search yourself, and you are still free to look through all the boats not listed with brokers.

I feel a buyer's broker just doesn't add much value and has the negatives of an increased expense and someone who's motivations to sell about may not be the same as your motivations to buy a boat.

If you do choose to go with a broker, the location may depend on the kind of boat you are interested in and where they are located, where you wish to use your boat and how the expense balances against transportation costs.

iboats.com
boattrader.com
yachtworld.com
and your regional sailing mags are a couple good places to start your search.

[Richard Jordan]

The best way to about it is to start seeing boats with all different brokers. If you find a broker you like, stick with them and you'll get better service than if you keep going to the next one. It helps if your broker is located where you want to purchase because they can scout out boats for you, know the local laws, and can recommend good support groups. But it shouldn't be a big problem if they are not.
@nautical62 There is no added expense for a buyer's broker that I know of? In fact one idea is with someone representing you, that your buyer broker can negotiate a better deal. There's so many factors it is hard to say if this plays out. Agreed on the ease of searching and other advise.

[simonmd]

I sold my last boat and bought the present one without the aid of a brooker. However, if the boat is listed with one then there is no harm but remember, no matter how good the deal they 'negotiate' for you, it's always going to include their cut so stands to reason that the seller would take even less if there was no brooker involved.

[nautical62]

Originally Posted by jordanship

The best way to about it is to start seeing boats with all different brokers. If you find a broker you like, stick with them and you'll get better service than if you keep going to the next one. It helps if your broker is located where you want to purchase because they can scout out boats for you, know the local laws, and can recommend good support groups. But it shouldn't be a big problem if they are not.
@nautical62 There is no added expense for a buyer's broker that I know of? In fact one idea is with someone representing you, that your buyer broker can negotiate a better deal. There's so many factors it is hard to say if this plays out. Agreed on the ease of searching and other advise.

Sorry if I misread the question or came across as meaning one should not consider boats listed by brokers. That's not at all what I feel and thank you for bringing that up. I think one should usually consider all boats that might meet their needs whether listed by a seller's broker or for sale by owner.

The basic question as I read it was: Does a buyer need a broker? I'm of the opinion, that not only does a buyer not need a broker but that in many cases, the disadvantages of contracting a buyer's broker may outweigh the advantages.

My point is that in today's world, one can easily find the vast majority of brokered boats for sale without the aid of a buyer's broker, so why accept the limitations that often come with contracting a broker? Why not do your own search, look at all boats that meet your needs and of course ask seller's brokers you come across what else they may have that's not listed yet.

Contracting a buyer's broker from what I've experienced and read, usually comes with some limitations. They need to make their money somewhere. Sometimes that's charging the buyer a fee and/or commission, in which case you are out that money for boats you likely would have known about anyways. Sometimes they get their commission via the seller or seller's broker in which case they have a strong incentive to steer you towards those boats an not others. Contracts my also limit or penalize you for buying boats outside of their service. (While I've never purchased a boat through a buyer's broker, I have talked to a few about their agreements)

I've purchased two cruising boats for sale by owners, one through a seller's broker and one though a charter management company. The logistics in each case were almost identical. In each case, I'm glad I focused on what ever method led to the boat I wanted, rather than focusing on the method of sale.

I also think selling and buying are two very different situations.

I certainly respect that everyone has a different situation, different desires and different comfort levels which certainly can dictate different decisions on this subject, but again, given how easy it is to search most of the market these days, I'd rather do my own leg work when buying.

[Richard Jordan]

No worries nautical. Agree with you except for the worries about extra expenses and some disadvantages of using a buyer broker. Just trying to give a balance to it because i know many clients who love to work with a buyer broker even if they track down the yacht themselves. I guess I should define what a buyer's broker is to me.
A buyer's broker represents the buyer side in a brokerage transaction between two brokerages.
If you are buying from another owner a broker has nothing to do with it by my definition. So search away. I know a client who we show boats to who always buys from an owner in the end. He is a nice guy, and you never know.
If your buyer broker is charging fees or steering you to buy a certain boat because the commission is higher, the problem is your broker and not the institution of having a buyer broker.
Think your last statement is well said about the boat mattering and not the process.

[FSMike]

Originally Posted by jordanship

--
If your buyer broker is charging fees or steering you to buy a certain boat because the commission is higher, the problem is your broker and not the institution of having a buyer broker. --

That's interesting. So how does the buyers broker make a living? If I could find a professional broker to represent me free of charge I assure you he would get a lot of my (admittedly cheap) business.

[CapTim]

I just went through that whole 'buy-the-first-big-boat' process, and ended up not using a broker.

Admittedly, though, part of the reason I was comfortable handling everything myself is that the boat is/was USCG documented, and I'll be keeping it that way, so I knew the title was 'clear'.

If I were purchasing a boat that wasn't documented, and doing it without a broker, then I'd strongly consider some form of title insurance just in case. With a broker (a good one, at least) they assume that risk and in so doing make themselves pretty useful.

Also, it took me about 5 or 6 months to find "the" boat, and I probably stepped on .. oh.. more than 50 and less than 500 boats along the way. I really spent a lot of time looking online, driving around (we put about 8000 miles on our car, considering an acceptable travel range to be anything under 500 miles from the house).

I suppose it stands to reason that a broker might have saved me that time... on the other hand, every time I looked at a boat, I learned something about what kind of boat I wanted, and also how to look at boats to judge their condition.

I wouldn't do it differently (or more rapidly) if I had it to do over again.

Of course, ask me again in a year.. I might look back on it and change my mind!

[s/vfootloose]

I think that boat brokers work like real estate. When you list a boat you agree to a % 5 or 10% of the sale price. If the listing broker sells it also they get the entire amount. If another broker sells it then the fee is split.

[tartansail]

Originally Posted by FSMike

That's interesting. So how does the buyers broker make a living? If I could find a professional broker to represent me free of charge I assure you he would get a lot of my (admittedly cheap) business.

In the US, when a boat is sold by a broker, the broker gets 10% of the selling price. If the buyer has a broker, that 10% is split 50/50 so there is no incremental cost to the buyer.

It is critical to be able to trust your broker. If you don't know someone or can't get a strong recommendation from someone you know who also knows the broker, the cons may outweigh the pros. That said, reasons to consider a buyer's broker:

1. You're working a lot of hours to pay for the d@mn boat and free time is short.The broker can screen a lot of boats for you and only show you the ones that are a good fit to your parameters.
2. You don't live in the area where you need to shop. A good broker can look at the boats that you take seriously before you make a trip. Yachtworld pictures and reality have an almost random concordance.
3. You've never bought a boat before and want help in the process of figuring out what matters, how to evaluate what you see and how to manage the purchase process. Among other things, the broker will have access to actual sale prices for comparable boats which can help you with the negotiation process.

Our broker was recommended by several friends and turned out to be the brother of someone I knew and respected. Since I was in category 1, his ability to take a lot of the busy work out of the process and provide a good sounding board along the way were invaluable. I suppose, in a bidding war, the seller's broker might have steered the seller the other way to protect her commission, but we're not in that kind of a market.

[David_Old_Jersey]

In OP's shoes I would Google on a couple of dozen boats that are listed with Brokers.

From the 50% that respond to you, under half will add any new info......now that we are into numbers that can be counted on one hand it's simply a matter of boots on the ground to actually look at the boats.......at which point you will discover that your list of Brokers shrinks rapidly. possibly down to zero as reality collides with planet Broker...........

....but it's all part of the learning curve

[Fishspearit]

Originally Posted by nautical62

I've purchased 4 cruising boats so far and have never hired a broker.

I feel a buyer's broker just doesn't add much value and has the negatives of an increased expense and someone who's motivations to sell about may not be the same as your motivations to buy a boat.

I think you have some serious misconceptions about a buyers broker, but then you admit that you've never used one, so I wonder why you feel your opinion is an informed one?

A few of the advantages of using a buyers broker:
-It doesn't cost anything. You don't 'hire' a broker. They are working for free until you actually buy a boat, then they split the commission with the selling broker. You have nothing to lose as a buyer, it's the broker who loses if he spends time/gas/effort with you and you don't end up buying a boat.
-Most brokers come into the business with a lot of boating and cruising experience. Their knowledge and experience can be invaluable when deciding which type of boat best fits your expected use.
-A buyers broker can help weed out bad boats. They all look good in the pictures, and when you call the selling broker to ask about the boat he wants you to come look at it. He may not tell you all the flaws until you actually go look at the boat. Brokers tend to be more honest with other brokers and will be forthright, telling them this boat "needs a lot of work" and may not be what the customer is looking for.
-Yes, anyone can find the boats for sale on Yachtworld. You are looking at the asking price of the boats for sale. Only yacht brokers have access to the sold boat prices, so a buyers broker is able to show you what comparable boats are actually selling for, which helps you to make a more informed decision on how much to offer.

There are times when you don't need a buyers broker. If you are buying an inexpensive yacht, (less than 50k) there is not a lot of commission for a broker and they may not want to spend a lot of time/gas/effort with you. When you are 'just starting to look and maybe thinking about buying a boat' a broker may not want to invest a lot of time/gas/effort on you.

It's important to find the right buyers broker for you, also. Some brokers specialize in certain boats, and many brokers don't know or care about sailboats, which is what the majority of people on Cruisers forum are interested in. I've heard, sadly, from many other brokers who don't like dealing with sailboats, because sailboat shoppers tend to spend a looooong time hunting before they decide on a boat(see CapTim's post above), whereas powerboat shoppers tend to know what they want and buy quickly. So if you're looking for a cruising sailboat, be sure to verify that your buyers broker has sailboat cruising experience.

I find it interesting that it's widely considered a benefit to use a realtor when shopping for a house, yet when it comes to shopping for a boat which requires a more arcane set of knowledge, the same people have difficulty realizing the value in using a buyers broker.

To the OP question about do they need to be in your backyard,TX, I would say that yes it would be beneficial to use a local broker. A broker can help you with a boat out of state, but it's best to use one close to where you are shopping.

[sailorboy1]

Another thing to keep in mind; brokers will tell other brokers more info about a listed boat and someone who calls them up to ask about a listing.

We all know the listing pictures make boats generally look good. How much is your time worth in going to look at those. Get a broker to call for you and save some wasted boat looking trips.

[Tim Schaaf]

That is probably because they think the subject and choices are simpler than they are and that they know more than they do! And that all internet advice is spot on! Most people sail their boats so infrequently that they probably never realize another model might have been better. I have bought two boats through brokers, one quite expensive (to me), and the other not, and both times the broker was very helpful. I would have no problem going straight to an owner, but also no problem using a broker. And, I have lived aboard for 25 years, cruising or working as a skipper for most of that, so I do know the pointy end.

[Wavewacker]

I have never sold or purchased any boat through a broker, but this looks alot like real estate to me, commissions, buyer's agency and representations for the seller by a "listing" broker.

Saying a seller pays a fee and there is no cost to a buyer...well, the seller can sell for less if they are not paying a fee. A buyer's broker will represent you and will be liable for misrepresentations and what should have been known by an expert, but generally not to hidden defects. Buying an older boat and having a head gasket blow three days later will probably mean you're on your own, so due diligence is key even using a broker.

Just as anyone out trying to make a living, brokers will work the hardest and give more time to a bigger paycheck, they are not going to be staying up late on a 25K deal when they have a 1,250,000 deal in the pipeline and neither will the broker's manger. Bigger brokerages may only be taking smaller boats as trades and the only reason they will fool with them, just a home builder for example.

Bidding wars can be pure hipe. I have bought enough properties to put the screws to those that pull such tactics in real estate and ensure there is an actual offer from a real buyer, but RE is highly regulated and I doubt boats are, except under the UCC (fed. laws and state business law). So, when you hear "we got another offer" on a boat that has been on the market for 9 months or three years (as some have) be prepared to walk, IMHO.

I'd suggest you get tons of referrences on any broker, and not from their relatives. How long have they been in the business is another thing to look at. I'd also search local court records and see if they are sued on a regular basis, (forget the BBB). Not only is there due diligence required for the boat, but also toward any broker.

I sent emails and called several time on a 45' Carri-Craft, hard to find now, and I was never called back or contacted. Saw the same boat listed again about a year later and still no replies. Asking price was in the mid 5 figures, so not much.

I would also think that many boat brokers would be getting hungry in this economy (but they may be selling repos like hot cakes, don't know) and would spend time with someone on a smaller rig.

I would think that if you're lucky enough to be in the area, that a broker would be pretty helpful on the dock or in the yard. Pricey boats should have a recent survey provided by the broker (seller), but for the cheapies, probably not. Geeez, I doubt we even have a surveyor in my area!

Buyer Beware! I would not avoid buying through a broker, if I thought the price was right. I would never sign an exclusive agreement, besides, buying a boat on your own outside an area is kinda hard to enforce anyway. And that just leads to starw man deals to allow the agreement to expire. As to a buyer's agency, I would be more apt to looking into a flat fee for assistance than on a commission, pay as you go. I have no problem paying for expertise when I actually need it in any deal.

Just 5 cents worth.