Broker vs. Private Seller

[Steve Olson]

I will be looking to buy my first boat this Summer and was wondering if there are any advantages of buying through a broker verses buying from a private party. Am I right to think that prices will pretty much always be higher with a broker? I'd love to hear some opinions and get some advice.

[Pelagic]

Many owners overvalue their boat as they try to reclaim the labor they put into it and ignore depreciation.

Brokers often guide them into being more realistic as their motivation is to make a sale
However, the real determining factor is always your own knowledge base in buying wiseley

[rivonia]

Usually cheaper buying privately

[denverd0n]

Like Pelagic said. A lot of owners haven't a clue what the market for boats is. The result is that they over-price their boats. Then, too, a lot want to sell without a broker because they hope to make more by not paying the commission. So, no, prices will very definitely NOT "pretty much always be higher with a broker."

Yes, sometimes you can get a better deal from a private seller. Sometimes you can't. And sometimes you will find that private sellers are a huge pain in the backside to deal with directly.

In the end, you really can't make generalizations.

[boatsail]

lots of people selling thing that the sales price is the payoff, plus whatever number the want/need, plus hte commission they are not paying to a broker, plus the sweat equity and the sometimes value their time higher than a licensed professional who does quality repairs all day long.

The best deal is the best deal regardless of who is advertising it.

[Kettlewell]

IMHO, having bought eight cruising boats, it is almost always better dealing direct with the owner, even if the boat is listed by a broker and he will get the commission. The owners know more about their boats, are usually more open to dealing, and tend to be much easier to deal with. I think most brokers are honest, but all the incentives are for them to seek fast sales at the highest possible price to maximize their income. I get suspicious if the broker tries to keep me away from the owner. OTOH, brokers can be very useful for handling the paperwork, holding deposits in escrow, and making sure that everything is legal and above board. There are lots of owners out there who haven't paid dockage or taxes on their boats, or haven't registered them properly, etc. Hopefully, a broker would be able to keep potential buyers from wasting time on those.

[Mike OReilly]

Having gone through both the buying (via a broker) and selling (private sale) process, my observation is that in general brokered boats tended to be priced higher than private sales. But, this would likely depend on a number of factors, including where you are in the market. Geographic location also matters.

I would certainly not steer away from a broker-offered boat. Good brokers provide a valuable service that is worth paying for. But I would strongly agree with Kettlewell's comments about talking to the owner. No broker will know as much about the boat as the owner. A broker that blocks access to the owner is not someone I'd want to deal with.

[Kettlewell]

"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"

Upton Sinclair

[skipmac]

Possibly things have changed since I was a yacht broker thirty years ago but I often looked at boats advertised by private sellers, both to check market prices and to find a boat for a client when I couldn't find the right boat in the brokerage market.

Very often boats listed for sale by the owner were priced higher than brokerage boats. Sometimes because the owner didn't really want to sell so listed the boat at a high price but usually because they just overvalued the boat due to their emotional attachment.

However like all generalities there were plenty of exceptions. So bottom line, I would not limit myself to any particular source but look for the best deal, no matter how listed.

[jeremiason]

A Broker will normally receive 10% commission for the sale of a boat in the US, with a minimum fee of somewhere between $2500 and $5000 (US) depending on the location. So yes, the boat will be more expensive.

On the other hand the Brokers, once in a while will take in a relatively low value boat, (under $30k) on trade. Because they are making less commission and paying dock fees, they will be more motivated to sell the craft, especially at the end of the month when dock fees and Floor Tax/Interest become due.

In the USA, a Broker is a Licensed individual (Not to be confused with a saleman, who may not be licensed or riding on a Brokers license). A Broker is subject to the laws of the paticular state they are selling, so you could have a legal recourse if something goes bad. It also holds the Broker/Seller to a little higher standard in disclosers and money transfers.

If I were purchasing a boat over $100,000, I would use a Buyer's Broker, who would then split his commission with the selling Broker. Having a Buyer's Broker would tend to give you more protection and someone in your corner as opposed to using the Selling Broker, whos obvious interest is in the Seller, not the Buyer of the boat.

If you do this yourself and you dealing large sums of money(Which means to you it is a large sum) or there is a loan involved, I would definity use a Marine Title Company to do the paperwork on the vessel, to ensure it has clear title and the sales paperwork is in order.

[letsgetsailing3]

Originally Posted by skipmac

Possibly things have changed since I was a yacht broker thirty years ago but I often looked at boats advertised by private sellers, both to check market prices and to find a boat for a client
^^^^^^^^^^^^^
when I couldn't find the right boat in the brokerage market.

Part of the problem is that people use list prices to help figure out what their boat is worth, instead of sold prices.

I think the answer is that you can look at boats sold by brokers or private sellers. Where the private sellers can give you a better price is if you know about it before it gets listed -- you might get a better deal if they are willing to share the savings of not using a broker, eliminating carrying costs during the sale, etc. Kind of a win-win.

[letsgetsailing3]

Originally Posted by jeremiason

A Broker will normally receive 10% commission for the sale of a boat in the US, with a minimum fee of somewhere between $2500 and $5000 (US) depending on the location. So yes, the boat will be more expensive.

You know that deep down, the seller is adding that 10% to the amount they need to get out of the boat.

[zeehag]

i found brokers are unable to realistically price many boats and over price em..despite condition.
the owner is able to think and consider all cash options.
broker has to consider his 10 percent or 3000usd minimum commission.

[s/v 'Faith']

Not only will a broker raise the cost of the transaction, (add % to sellers lowest price) but they also often complicate the sale by not having the correct information about the boats they represent.

I have looked at, and helped others purchase boats and usually found the broker to be a hindrance to the sale. I am sure there are exceptions, but I have not encountered them.

[OldFrog75]

Do brokers have a legal (or ethical) responsibility to disclose known defects or problems to a potential buyer or is it totally caveat emptor? If asked a direct question, such as "when was the bottom last painted", are they obligated to provide the information if they know it and do they have any liability for withholding relevant information?