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Old 05-01-2016, 05:52   #31
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Re: Why would broker ask me not to disclose price paid to surveyor?

Seems there are a lot of paranoid people who think there is some conspiracy going on.

I think if the boat in question is a "standard" boat then the value is easy to figure out as there are lots of data. In which case it probably doesn't matter if the surveyor, who in the end is going to establish the boats value, knows.

But if the boat falls outside common boats that are easy to establish comparable boats for a value comparison it is a harder thing. If I were buying one of these boats I don't think I would want the surveyor to know what I was paying unless I was really sure that I already knew somehow. I would instead want to truly know what value the surveyor independently determines.
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Old 05-01-2016, 05:54   #32
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Re: Why would broker ask me not to disclose price paid to surveyor?

As already pointed out - the surveyor works for you period. Without consulting the responses given, what would you do? Did you consider that giving the surveyor the cost of the boat was a bad idea before the broker asked you not to do it? Alarm bells rang when he did yes? Trust yourself. If you go cruising you will have to anyway.
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Old 05-01-2016, 06:12   #33
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Re: Why would broker ask me not to disclose price paid to surveyor?

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Originally Posted by Sun and Moon View Post
...the seller will say "your surveyor said the boat is worth way more that you are paying, so we're not fixing anything".
No, the seller won't say any such thing, unless you make the HUGE mistake of handing the survey over to the seller.

The survey belongs to you. It is yours. No one other than you and the surveyor needs to know what is in it. If you wish to show the seller some specific excerpts, in order to justify a renegotiation, that's fine. But you certainly don't share the entire survey with the seller!

As for telling the surveyor ahead of time what you are paying for the boat... I wouldn't. He should come up with an estimated value on his own, not base it on what you have agreed to pay. AFTER he has delivered the survey, if you want to talk to him about why there might be a difference between what you are paying and his estimate, then at that point telling him your price wouldn't hurt.
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Old 05-01-2016, 06:18   #34
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Re: Why would broker ask me not to disclose price paid to surveyor?

I just thought of another possible explanation.

Maybe he's thinking that if the sale doesn't go through, that you'll give him a copy?

Honestly, I don't see it being too big a deal one way or the other, but the surveyor works for you, so do what you want.
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Old 05-01-2016, 06:34   #35
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Re: Why would broker ask me not to disclose price paid to surveyor?

Thanks for your assessment Going Walkabout. I think you did an excellent job of succinctly capturing and to explain the various forces at work in the pre-owned boat industry.

The highlighted pre-owned industry market manipulations create inefficiencies. Lack of parity if unabated leads to abnormal profits to a party or group who holds market domination. In turn ineffective cost models develop. Markets fail to clear.

It can be argued that boat builders, boat dealers, brokers and charter companies comprise the dominate players in this market. Firms such as Yachtworld and their subsidiary Soldboats are incentivized by these same players to facilitate their domination. Individual consumers both buyers and sellers of boats are disadvantaged in some important ways, most importantly a constrained flow of information.

The Internet can go a long way to remedy the restriction of information. One part of the internet solution requires a third party who is not financially supported by dominant players, as now is the practice ( e.g. Practical Sailor's business model stipulates NOT to accept advertising dollars from vendors. PS performs unbiased, independent testing by competent professionals on marine equipment.) PS has grown into a trusted resource for mariners.
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Old 05-01-2016, 06:41   #36
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Re: Why would broker ask me not to disclose price paid to surveyor?

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Originally Posted by WindwardPrinces View Post
I agree that the OP should do what he wants, but it's a little irregular for the broker to indicate to the buyer what he should or shouldn't tell the surveyor. The surveyor works for the buyer. The broker works for the seller.
Excellent point
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Old 05-01-2016, 06:49   #37
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Re: Why would broker ask me not to disclose price paid to surveyor?

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title should have said 'price paying'...

my offer on a sailboat was accepted, i arranged for survey and haulout for next week.

My broker called me later in the day after confirming all this and asked if i would not disclose the amount i'm paying for the boat to the surveyor. he did not demand it just asked if i wouldn't mind. he stated it would allow the surveyor to place a more fair value on the vessel if he didn't know the amount i'm paying.

it sounds good and it makes some sense, the broker seems like a decent guy and i dont feel like he's trying to con me in any way, i like him but it just seems a bit odd to ask.

this is my first boat though and i really have no idea how the industry works. any insight or idea why he might ask such a thing? seems there has got to be more to it than stated.
The surveyor should be working for you and not the broker. I assume you're paying for the survey.

Do not let a broker dictate suspicious terms like this.

If you are paying for the survey you own the report. The broker has no right to the survey report unless you gift or sell it to him.

I also pay the surveyor direct and not through the broker.

Finally we had a buyers broker. This means he works for us. I wasnt interested in dealing with the sellers broker. He is incentivized to keep the price high.

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Old 05-01-2016, 06:55   #38
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Re: Why would broker ask me not to disclose price paid to surveyor?

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Originally Posted by sailorboy1 View Post
Seems there are a lot of paranoid people who think there is some conspiracy going on.

I think if the boat in question is a "standard" boat then the value is easy to figure out as there are lots of data. In which case it probably doesn't matter if the surveyor, who in the end is going to establish the boats value, knows.

But if the boat falls outside common boats that are easy to establish comparable boats for a value comparison it is a harder thing. If I were buying one of these boats I don't think I would want the surveyor to know what I was paying unless I was really sure that I already knew somehow. I would instead want to truly know what value the surveyor independently determines.
Conspiracy?

Getting the best boat at the best price is my goal. Call it paranoid but I call it being sensible.

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Old 05-01-2016, 07:11   #39
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Re: Why would broker ask me not to disclose price paid to surveyor?

Withhold the agreed purchase price information from the surveyor prior to their performing and delivering the finished report. There is no valid reason why a surveyor needs this information apriori to perform the task hired. Providing this information apriori, can diminish the value of the surveyor's report - human nature being what it is, this could influence the findings and ultimate valuation established by the surveyor. A biased influence, even if subtle, could take hold. More importantly you may never know if it did.

It is typically beneficial to a buyer of the survey report (don't see any issue not to share this information with the surveyor post the report findings). Hold a discussion with the surveyor to explore and explain any significant gaps between the surveyor's valuation and the agreed purchase price.

There can a variety of valid reasons for a significant difference between a surveyor's valuation and the agreed purchase price - excluding incompetence of the surveyor.

For instance, I was recently alerted to the fact that a Island Packet 45 currently for sale the owners were preparing to significantly reduce the asking price. Some due diligence on my part uncovered that due to a personal relationship which has recently reached a breaking point, the owners desperately wanted to get rid of the boat quickly. Situations like this are infrequent, but do occur, just as unforeseen medical issues require a "fire sale." price.

A purchase price based on these facts would typically be beneath a surveyor's valuation and explain the gap. In this case I hadn't shared the agreed purchase price with the surveyor and allowed him to do his job with this influence.

As expected his valuation came in higher than the agreed price. This information confirmed the value I placed on this seller's situation and my expectation that discount I had negotiated given the unique situation. I also knew that this information had not inadvertently "tainted" my surveyor's assessment. Now, instead of having possession of one piece of market price information I had two very informative pieces.

As a closing note, my surveyor appreciated my withholding the information and felt his valuation was validated by my independently negotiated purchase price that reflected abnormal selling pressures. Who didn't appreciate me withholding the information - both the listing broker and my own buyer's broker Go figure!
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Old 05-01-2016, 07:31   #40
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Re: Why would broker ask me not to disclose price paid to surveyor?

Do not over-estimate the buyer's broker support to the buyer: his "best interest" is a high purchase price, as this results in a high broker
commission paid by the seller, in which he shares with the seller's broker.

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Old 05-01-2016, 07:39   #41
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Re: Why would broker ask me not to disclose price paid to surveyor?

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Withhold the agreed purchase price information from the surveyor prior to their performing and delivering the finished report.
That would make sense if we didn't live in a world where the surveyor could google the asking price.

I can't see that it makes a great deal of difference in this day and time.
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Old 05-01-2016, 07:59   #42
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Re: Why would broker ask me not to disclose price paid to surveyor?

In "theory" a buyer's broker concept sounds good, in reality it often lead to unanticipated consequences to a buyer. These consequences are easily foreseeable if you look.

Most of us are more familiar with real estate (home) transactions than the purchase process for a boat. Just as in real estate, the commission is paid to the listing and selling broker's from the close proceeds. Some will argue that all real estate and boat commissions are paid by buyers, not sellers. After all, who is providing the transaction funds? But let's don't go there, instead consider the broker motivations and how and where the incentives are to brokers. They lie in making a sale at the highest price possible to close a deal. No rocket science there.

What is often overlooked by a naive or inexperienced boat purchaser is that the longer it takes and the more boats the buyer reviews, the pressure to make a deal and conclude a sale builds on a buyer's broker. This pressure to get a deal done and move on to a new client often causes the buyer's broker allegiance and loyalty to shift to themselves - placing their own financial goal as the predominant priority.

How can this happen you ask, the guy seems so trustworthy, likable and don't fellow sailors look out for each other? Welcome to the "real" world. All of the above can be true and as a buyer you could still be headed for the "ditch" financially or purchase an un-seaworthy boat.

Ask yourself this question. How reasonable is it to expect a buyer's broker to travel with a buyer to an unlimited number of boats (at the broker's expense) before the broker tires of this, needs to stem the expense and get on with their business of selling boats? Three, four maybe five boats but after this significant amount of expended time and cost how excited do you think this broker is to travel to inspect the sixth boat?

If you are just starting your search or unfamiliar with boats, this review process can be a lengthy journey - if you are being prudent. After all any fool with a big enough bank account can write a check and buy a boat, you don't need to understand the complexities of a given boat.
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Old 05-01-2016, 08:09   #43
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Re: Why would broker ask me not to disclose price paid to surveyor?

Windward Princes - you seem to place a significant emphasis on the public asking price and its impact on a surveyor? Often times this has little to do with agreed purchase price.

More importantly, you may wish to consider that the surveyor should already have a good understanding of market valuations and assuming their are prudent in their work, generate comparables, (e.g. similar to real estate comparables).

Keeping an agreed purchase price confidential does make a difference.
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Old 05-01-2016, 08:30   #44
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Re: Why would broker ask me not to disclose price paid to surveyor?

I do not think that it is a good idea to allow the broker, the seller, or anyone else with a vested interest to arrange and hire the surveyor as there is always a question of influence, if not collusion.
IMHO the surveyor does not need to know all the details of the transaction.
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Old 05-01-2016, 09:06   #45
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Re: Why would broker ask me not to disclose price paid to surveyor?

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Keeping an agreed purchase price confidential does make a difference.
Please explain.
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