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Old 19-10-2012, 17:22   #1
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Protocol for working with buyer broker

Hello out there in CF world. I need advice on how to handle a business relationship with a broker. Let me 'splain...

I have decided to buy my first boat and I've been working with a buyer broker. While I've done all the research to identify boats that appeal to me, he has arranged about a dozen showings and accompanied me on about half of them (some were out of town). I'm happy with the advice he's been offering, especially since this will be my first boat and there are things I would not have considered without his guidance.

Nearly all the boats I've been considering are listed on yachtworld and are offered for sale through (selling) brokers. No problem there, as I understand the seller is responsible for the commission and the selling and buyer brokers typically split it 50/50. However, some boats I'm considering are for sale privately by owners and I don't know the proper protocol for seeing to it that the broker gets paid for his services in that scenario. I would not expect the seller to pay the broker a commission so I'm thinking I would be expected to compensate my buyer broker. So it comes down to this: how much would be right/fair to pay the broker? I would ask him to assist me all the way through the transaction if I purchase a FSBO boat. Since he would under most other circumstances get about 5% of the purchase price, should I expect to pay him that much out of my own pocket? Would a flat fee (slightly less than 5%) be proper and under what circumstances?

I intend to do the right thing and make sure this guy gets paid for all the guidance he has given and the transaction assistance I expect him to provide. It's really a question of how much is right/fair. Thanks for your advice on this, and if you are a broker please indicate so in your reply.
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Old 19-10-2012, 17:45   #2
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Re: Protocol for working with buyer broker

If your broker has put a lot of time and effort in, in might be nice to reward him some. OTOH, he failed to bring you the boat you wanted. It's a tough world!
I've always wondered if having two broker's splitting the commission makes the selling broker less likely to advise the owner to sell or to negotiate much.
At any rate, if you feel obligated, slip him 1-2% (500-1000 bucks on a $100k boat) Heck.... some people disappear and never buy a boat after he's put time in with them.
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Old 19-10-2012, 18:06   #3
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Re: Protocol for working with buyer broker

The brokered boats obviously work themselves out with the brokers splitting the commission. On the FSBO boats, I think you need to talk to your broker and make sure you both agree on all arrangements ahead of time. Is he bringing you FSBO boats or are you finding them yourself and then wanting him to help with checking the boat out and helping with the transaction? All things tend to go more smoothly wen all parties know the full deal upfront. If he helps on a FSBO boat expecting 5% and you offer him $500, probably ruins what seems to be a decent relationship.
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Old 19-10-2012, 19:54   #4
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Re: Protocol for working with buyer broker

Generally, brokers work for money, not because they are compensated by being nice and helpful. In a FSBO deal, the broker is unnecessary and you can and should learn to do the deal just as you would buying a used or new car. If you really need someone to do paperwork for you, figure out what his value is to you for that purpose. If you are relying on his advice, STOP and hire a surveyor who's advice might actually be reliable.

Just because he tagged along with you looking at other broker-represented boats is part of doing business and this is business, not some entitlement program some people feel compelled to perpetuate.
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Old 19-10-2012, 20:05   #5
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Re: Protocol for working with buyer broker

i think you need to talk to the broker, asking him what his fee arrangement is when showing you a fsbo boat. better to know up front then have him hit YOU with the 10% commission during the sale. he may have already talked to the fsbo owner before showing his boat and got him to agree on paying his fee...
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Old 19-10-2012, 20:08   #6
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Re: Protocol for working with buyer broker

and, if he suggests that YOU will be paying his fee on an fsbo boat, go see it yourself. if you decide you like it, you can get a surveyor for $500 to $1000, a lot less than the brokers commission...
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Old 19-10-2012, 21:00   #7
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Thanks for the replies. To clarify, I found all the boats, including the FSBOs. The broker has arranged showings for the brokerage boats and offered his insight on subtle points, like which manufacturers tend to be better and what kinds of issues to look for. His advice has been valuable so I will not just leave him hanging. However, I don't want to pay him more than would be fair. I've never purchased a boat so I don't know how the process goes and would be looking to him to make it smooth.

I can certainly speak with him about his expectations but want to have some idea what is common practice before doing so. Please keep the replies and suggestions coming. This is good feedback.
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Old 19-10-2012, 21:40   #8
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Re: Protocol for working with buyer broker

keep one thing in mind; when a broker spends time with you he is WORKING, for which he expects to get paid. he gets paid when you buy the boat. so his ultimate goal is to get you to buy the boat. and to that end he may (and most likely will) not point out faults with the boat unless they're of a minor nature. even if you love it, get it surveyed. it's the cheapest $500 you will spend as a boat owner.

ask the broker for the name of a surveyor. he will give you one or more names. put them on your 'do not call' list and get someone else. too many surveyors depend on repeat business from brokers so their is at least the hint of a conflict of interest. i paid my last surveyor to come from across the state to survey my boat. the broker was not happy, but that's too damn bad.

i don't want to turn you off on buying a boat. just keep in mind that, at the end of the sale, you will be left with the boat. it had better be a good one.
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Old 19-10-2012, 21:53   #9
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Thanks, onestep. I will absolutely have any boat surveyed prior to buying and I'll insist on a sea trial as well. I'm not relying on the broker's judgment of the boat's condition. He's offering pointers on things like how to check for rot near chain plates, pluses and minuses of different layouts, etc. he actually showed me one boat that was a mess just so I could see what NOT to buy. He's been honest and straightforward so far but I will not take his word for boat or engine condition. He has even told me to get a survey. Good advice about not using his surveyor, though. I'll seek recommendations here on the forum.
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Old 19-10-2012, 22:07   #10
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Re: Protocol for working with buyer broker

I would echo S/V Illusion and onestepcsy’s experienced advice.
First time buyers often place too much emphasis on one resource (or broker)
Time to get unbiased advice via an independent surveyor, whom you should interview in detail about their knowledge base and experience.
  • · Hire chosen surveyor to do a preliminary inspection and privately decide what is that maximum you are willing to pay,
  • · Then negotiate with Owner a price subject to detail survey and sea trial
  • · If Owner is unwilling to handle the refundable deposit escrow and transfer details, you can bring your broker friend into that part for a fixed fee that would be split between Buyer and Seller.
  • · If your broker gets proactive in negotiating a much better price, then a gift or bonus is in order
  • · This way you maintain control and broaden your knowledge base.
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