Buyers Broker

[sailorboy1]

I read past posts on this that kind of asked my question. But I would like to try a new one focused on this question:

When boat shopping do you think it is better, worst, doesn't matter, if you go out and find yourself a buyer broker? On this assume you (I) have done a good job of narrowing down what features you want and have done your reading/research etc. Also assume the price range is $100-150k for the boat to set the potential commission for the brokers.

Even though the broker is working for you, they think they are working for the seller (yes the commision comes out of the sellers funds, but of course the sellers funds all come from the buyers funds). So do they really have much incentive to work the price etc. down for the buyer. Or do they really only want a quick sale for this level of commission and figure they are never going to have to work with you again anyway. Seems to me that a seller broker who gets to keep all the commision is going to work harder to work the deal for you because there is more in it for them(assume you did your homework and can "protect" yourself from them) may be as much or more "value". One of my worries of using a buyer broker is getting a bad one that I get stuck with (I then am pissed off that they get a commision later for the "help" they provided). If brokers really care overall about the buyer, why do most people recommend you find your own suryer insyead of using the one recommended by the broker?

[svHyLyte]

Google "Buyer's Broker" and read through the results. Most will apply to real estate but, frankly, there isn't much difference. If you sign an agreement with an agent to serve as your "Buyer's Broker" he/she is working for you only.

For the most part I think most brokers--of any type--get a lot of undeserved derision. I know quite a few and most are pretty hard working, honest people that work hard to meet their clients requirements. Bad ones are identified and weeded out pretty quickly. If someone has been with an established brokerage company for some while, they are usually pretty reliable as it is definately not in the company's interest to keep someone who isn't. We have dealt with Annapolis Yacht Sales and Massey Yacht Sales and both have an established cadre of knowledgable, reliable, agents.

FWIW...

s/v HyLyte

[JusDreaming]

We did the same as you speak of as far as narrowing things down! Then used Phil Berman as our "buyer's broker" and had absolute success. He pretty much only deals with cats but, he was fantastic. And he did beat up the other broker on price to the point I was embarrassed with the offers. But in the end he saved us a ton of money. All escrow money was in his/our hands, which meant we pretty much controlled what happened. Bottom line is I would highly recommend him or at least using a "buyers broker"
About commissions as our house broker told me, " If they tried to get too much money for a house to boost his commission as much as possible, they would never sell anything". The percentage that they make would be nullified by not selling as many deals

[bob_77903]

Don,
I bought my boat using a broker in Long Beach, Ca., and was a little leery of the used car salesman syndrome. However, when all was said and done i was quite pleased. He represented me well in the negotiations, handled the National Registry transfer, and allowed me to use their brokerage discount to buy some new electronics equipment.

I was also working with a broker here in Texas prior to the Ca. purchase, and have remained on a friendly basis with him since.

So i believe that though there are surely a few bad apples in the barrel, for the most part i agree that the majority of brokers are honest and hard working, with your interest in mind.

[Pblais]

I've had great results just working with the selling broker. Twice as a buyer and once as a seller. The bottom line is the best brokers sell the most boats and have the best reputation with both buyers and sellers. Most brokers sell the least amount of boats. It's always been much like real estate where 20 to 10 percent of the brokers close 80 to 90 percent of the total sales. The real shocking story is you have to work hard to sell boats. You have to really work hard to be good at it.

If you are going to use a buyers broker you need to communicate your desire to actually buy a boat, your ability to pay and some level of expression about what you want and what you know. A good brokers also wants to know they will be paid. While they expect to get a cut of the commission, they also need to feel you are not going to be a tire kicker or just bolt when you feel you can cut a better deal on your own. Expect the broker to be sizing you up while you are doing the exact same thing to him. If you don't really trust the broker I would suggest you don't hire them.

If you can find a local broker that you like and feel they have a good reputation, I think it could be a great way to go. If you are going to spend $30,000 then you can't expect a broker to put in 100 hours of work on your behalf and travel the planet to check out boats in person. In your own mind you need to do the math to figure out how hard you can expect them to work.

[Bradley]

I purchased a boat in Europe while living in the USA. I think having a buyer's broker was very helpful. If I were looking at a local boat that was listed with a reputable broker, I probably would handle on my own and ask for a reduction in the commission toward the end of negotiations.

[bstreep]

Unless you have the skills: negotiation, knowledge of the market, and a deep knowledge of boats (like Paul), I would definately go the buyer's broker route. You will sign an agreement with them, and they work for YOU, rather than the seller. In real estate, UNLESS you have a buyer's broker agreement in place, both brokers work for the SELLER.

[skipmac]

Good question with no easy answer. I was a yacht broker many years ago and saw the business from the inside, and I saw all kinds. First, there are two commissions involved in a sale, the commission for the broker that listed the boat for sale and a commission for the selling broker. These of course can be combined in one sale with one broker.

The core of the potential conflict of interest in a yacht sale comes down to this. There is an obligation to get the best (ie lowest) price for the boat to the buyer and an obligation to get the best (ie highest) price for the sale to the seller, obviously mutually exclusive goals. This conflict is exacerbated if the broker sells a boat that he or she listed but does still exist even if listing and selling brokers are different.

One would think that engaging a buyer's broker might resolve the conflict but as you point out, there are not a lot of repeat customers in the yacht business. However, there is a lot of repeat business with other brokers in the area so there is a motivation to keep good relationships with fellow brokers in the business. Also you have to understand that brokers, like everyone else have their own opinions and prejudices so their recommendations will be colored by their own preferences.

From all this it may sound like the cards are stacked against the buyer but in the real world it comes down to finding the right broker. Just like sailors there are all kinds. I had one boss that told me I should tell a customer anything they wanted to hear (true or not) to close the deal. I didn't work for him for very long. Most brokers however were honest and tried their best to balance the deal for the buyer and seller; finding the right boat and price for the buyer while still insuring a fair return for the seller. However in the end, no sale no commission, so at least in regards to price you can usually assume the broker will do his best to get your offer accepted.

Surveyors bring up similar concerns and conflicts. In Ft Lauderdale one of the largest, big name surveying companies was well known in the trade as a seller's surveyor. The company would not comitt outight fraud and pass a boat with major structural problems but they would not look too closely at the details and the writeup was usually, in my opinion, sugar coated. This company got a lot of business from certain brokers.

So bottom line, again there is no easy answer. Best you can do is research your particular market, talk to other buyers, ask questions about specific brokers on this forum, etc. Then choose a broker and surveyor that will look out for your interests, but still caveat emptor. If you are shopping in the south FL market (my former home) send me a PM and I will be happy to make some specific recommendations.

Skip

[Palarran]

I just signed up with Phil Berman also and so far am impressed. I have narrowed my search and there are currently 30 of the model specific boats I'm interested in. Of the 30 there are 15 in my price range and these are spread all over the world. He has contacts in many of the islands and med who can do a once over on these boats before we make an offer and go to survey. I'm not in a big hurry and plan on using the current market conditions to my favor so in the end, he is going to have to work for his commission either through time or negociation.

[JusDreaming]

Originally Posted by rigamarole

I just signed up with Phil Berman also and so far am impressed. I have narrowed my search and there are currently 30 of the model specific boats I'm interested in. Of the 30 there are 15 in my price range and these are spread all over the world. He has contacts in many of the islands and med who can do a once over on these boats before we make an offer and go to survey. I'm not in a big hurry and plan on using the current market conditions to my favor so in the end, he is going to have to work for his commission either through time or negociation.

Tell Phil Denny and Diane say hello

[sailorboy1]

Thanks for the input. While I have made no decision overall of whether to use a buyers broker, I did the other day inquire to a listed boat (told him I was kind of "kicking the tires" at the moment till I sell my house) . The list price was $109,900 and the broker responded to my questions and told me some more about the boat (most of it negative) and said in his option the boat should sell for $70-80k (made me wonder why did he had it listed so much higher). So I responded with a straight question of how much in his option it would cost to get the boat in shape, to which he said $35k. So at list price (which he already told me could be reduced at least $30k) that comes out to $145k. Now here it comes; he then said (email) that in his option he had other boats that would be better for the money. Thing was the other boats he listed were $200k+ (the first 1 he pushed was $300k). So he has a big creditabilty problem with me now. On one hand he was upfront to my orginal inquiry, even though that lost some with the difference between the his lsiting price and the price he told me I could get the boat for (I never even asked for a price reduction). Then he lost creditabilty by saying for the money I should spend a lot more. I pointed this out to him and am waiting a response and hope it is just a "communication" problem.

[Meck]

What is the normal broker fee? I have heard a few different numbers and have been wondering if it is negotiable?

Thanks,

Meck

[Palarran]

JusDreaming - I'll do that.
Meck - I think it is 10% which the selling and buying broker split, unless the selling doubledips. What I don't know is how often the selling broker lowers their commission to make a sale if they are doubledipping.