Would you compensate your boat broker when there's no commission split?

[reed1v]

Never use a buyers broker for house, boat, nor cars. Lots of reasons. Just go to a boat broker and tell them what you are looking for. They will do the looking, figure out the commission split, and so forth. Boats are so subjective that its not likely a buyers broker will be on the same wave length about what will be your dream boat. And you can land up in court with an expensive lawsuit or an impossible to fight contractor's lien.

[Scout 30]

Originally Posted by Paul L

If you want to pay your buyers broker something, then make a contract with them up front on how they will be compensated. A buyers broker should already have terms available for you. Otherwise they are being paid for by the seller and in the end represent the seller's best interest. If you want to compare real estate agents to boat brokers -- it is a toss up as to which group has more smooth talking, incompetent and untrustworthy individuals. The real estate side just has a lot more oversight.

Absolutely not true. Your broker represents you, his client, regardless of who pays him. Otherwise he's committing fraud. If your broker represents you in a transaction he should be compensated.

[duefocena]

Your post is very telling. First that you are honorable and feel you owe your broker a compensation regardless of what contract he provided you. You are having him contact the selling broker for you, ( some here apparently think you are working with a private owner calling it a fsbo). If he is providing you guidance on the survey, paperwork, lien search, individuals to work on your boat etc. you are getting service. I would keep in mind that he may be instrumental in guiding you after the sale as well. Finding the proper haul out and how to save on work and services can save you more than the commission you pay him. In the low priced boats there is generally a minimum of $3k commission split between brokers. If he is an agent and not a broker that would get split again. So, $750 to $1,500 would be fair and again, he may guide you to save more than that going forward.

[JulieMac]

Originally Posted by Mike OReilly

JulieMac, at that price range you are likely far better off not dealing with any brokers if you can. If they are really in it as a business, then the potential commission off a $25k-$35k sale buys you very little of a brokers time. And to split a tiny commission just makes it even less likely you'll get the service you want as a buyer (or as a seller).

If you really need an agent to act for you I would hire them at a fixed rate. But from my personal experience as both buyer and seller in your price range I believe brokers are more of a hinderance than a help. Not b/c brokers are bad. It's simply that as business people they can only afford to give each job the amount of time/effort that its worth. At the low end the commision simply does't buy enough of the broker's time.

I respectfully disagree. Here's my rationale: The seller has a broker representing his or her interests. They will get 100% of the commission.

If I call this broker, and ask to see the boat, they will show it to me. However, I may not get any insights into the boat, without paying a surveyor.

By using a buyers broker on a Yachtworld listing, I stand some chance of having one broker tell the other a bit about the boat before I ever see it. Professional courtesy, if you will.

If a boat is FSBO, I may call the seller myself. Personally, I like dealing direct with the owner, without the filter of some broker. I can get a sense as to how knowledgeable the owner is regarding maintenance.

We bring our own high quality moisture meter to the boat viewing, along with a camera and flashlight. We saw a boat recently, and I noticed the broker do a big gulp when I was putting the meter on the decks. Wet decks, no deal.

[Paul L]

Originally Posted by Scout 30

Absolutely not true. Your broker represents you, his client, regardless of who pays him. Otherwise he's committing fraud. If your broker represents you in a transaction he should be compensated.

And how is it your broker when you have no contract with them and they are paid by the seller?
If you want to have a buyers broker then sign a contract with them that clearly lays out what they do for you and how they are compensated.

[hellosailor]

Broker has no contract and is not only willing, but is actually working for free??


Are you sure the broker isn't actually a front for a major money-laundering operation? That's just, most peculiar for a real business of any sort to be working without any terms of compensation. Even if the broker is Mother Teresa's youngest nephew.

[Schooner Chandlery]

Boat brokers are not state-licensed the same way that real estate agents and brokers are. In the USA, in all states that I know of, the agent/broker has fiduciary responsibility to the SELLER not the buyer unless the agent is acting as a buyer broker and has 1. signed a contract with their buyer/customer and 2. the buyer has agreed to compensate the agent/broker (typical language says the split from the traditional sellers' fee and if that is not available (e.g. FSBO) a different fee will apply). A boat "buyers' broker" doesn't have a yacht broker/agent license (do they?) and so I'd think a normal contract for where you're agreeing that s/he will act as your agent and for explicit fee agreed to makes sense.

When you're looking for something a little "different" you will sometimes spread the word in a group of experts or people who really know the kind of boat you seek. We sail a pre-WWII schooner and searched for her using a network of schooner owners and the brokers or surveyors who specialize in wooden boats of that vintage.

I have asked professionals to keep an eye out for me for an item with the "understanding" that the professional would benefit from the transaction in their normal capacity. For example: boat surveyor looking for a suitable boat knowing that I use their survey services and will likely use them for the same on the new boat. Another example: my piano tuner looked for a good used piano for a friend of mine knowing that the tuner would become the tuner of the friend's newly aquired piano. This is not "active" looking by any means but it does result in finding good boats or boats with known defects (as the surveryor knows from his professional dealings with many surveys...) and the same with music instruments, cars, and the like.

Having someone act as your agent does carry the responsibility of compensating them in some way that is reasonable --yes. Best of luck in finding a great boat for your purposes.

[duefocena]

Originally Posted by Schooner Chandlery

Boat brokers are not state-licensed the same way that real estate agents and brokers are. In the USA, in all states that I know of, the agent/broker has fiduciary responsibility to the SELLER not the buyer unless the agent is acting as a buyer broker and has 1. signed a contract with their buyer/customer and 2. the buyer has agreed to compensate the agent/broker (typical language says the split from the traditional sellers' fee and if that is not available (e.g. FSBO) a different fee will apply). A boat "buyers' broker" doesn't have a yacht broker/agent license (do they?) and so I'd think a normal contract for where you're agreeing that s/he will act as your agent and for explicit fee agreed to makes sense.

When you're looking for something a little "different" you will sometimes spread the word in a group of experts or people who really know the kind of boat you seek. We sail a pre-WWII schooner and searched for her using a network of schooner owners and the brokers or surveyors who specialize in wooden boats of that vintage.

I have asked professionals to keep an eye out for me for an item with the "understanding" that the professional would benefit from the transaction in their normal capacity. For example: boat surveyor looking for a suitable boat knowing that I use their survey services and will likely use them for the same on the new boat. Another example: my piano tuner looked for a good used piano for a friend of mine knowing that the tuner would become the tuner of the friend's newly aquired piano. This is not "active" looking by any means but it does result in finding good boats or boats with known defects (as the surveryor knows from his professional dealings with many surveys...) and the same with music instruments, cars, and the like.

Having someone act as your agent does carry the responsibility of compensating them in some way that is reasonable --yes. Best of luck in finding a great boat for your purposes.

Once again, untrue information. Various states have state licensed sales agents as well as brokers, ( California for example), that require the buyers broker to have a fudiciary duty to " honesty, integrity and fair dealings" with their client. Except when they are representing both buyer and seller in which they must sign a dual agency agreement stating they are equally dutied to both. State regulated, violations result in suspension as well as revocation.
IMHO having a surveyor find your boat , especially one that will derive repair or maintenance work from the boat is a bad move for obvious reasons. I use surveyors that do not work on boats they survey. I want an unbiased appraisal of the boat and a list of repairs that the surveyor has no benefit from.

[Pelagic]

JulieMac.......Think of it this way......
....You have given "a broker" the opportunity to find a boat for you and make a commission.

However, there are thousands of brokers out there equally willing to do the same.

You know what will fit, ....so reward the one who actually finds that boat.

Commissions are reward oriented, not a guaranteed income

[ArtM]

There's more than one way to skin this cat. I agree with all that Mike O'Reilly wrote on this.

Ask your guy if it is a limiting factor, and if it would help if you would guarantee him a minimum on the purchase.

Who knows this guy's motivation? Some guys are in it for the game, and don't care if they make a big sale or a small one - they just want the sale! Maybe he wants your future tradeup. Maybe he is only showing you boats he can get a cut on.

If he's doing a wide search, there will probably be 2 or 3 comparable boats that will split for every 1 boat that will not split, and you're probably not losing anything unless you're being VERY particular. If that is the case, then you should check with him to be sure he's not overlooking any "perfect matches".

[Schooner Chandlery]

Originally Posted by duefocena

Once again, untrue information. Various states have state licensed sales agents as well as brokers, ( California for example), that require the buyers broker to have a fudiciary duty to " honesty, integrity and fair dealings" with their client. Except when they are representing both buyer and seller in which they must sign a dual agency agreement stating they are equally dutied to both. State regulated, violations result in suspension as well as revocation.
IMHO having a surveyor find your boat , especially one that will derive repair or maintenance work from the boat is a bad move for obvious reasons. I use surveyors that do not work on boats they survey. I want an unbiased appraisal of the boat and a list of repairs that the surveyor has no benefit from.

Interesting, what you said does not disagree with what I said at all. It confirms and reinforces the bit I said about the contract between buyer and his/her broker. I don't know if CA has the requirement that both/all agents represent the seller if no buyer broker under contract to the buyer is in the deal or not. CA has more regulations than most states so may have flushed it out much more fully.

It's not nice to say what someone else said is untrue. One can say "in error" or "not complete" or even "clarify" what the other person said without being rude enough to say they're being untruthful. Since I did qualify it with "all the states I know of" why would you find me to be untruthful? You have no idea which states I know the real estate buyer broker and standard broker practices of. I actually just quoted something a friend of mine who IS a buyer broker in DC shared with me.

Like you, I do not use boat surveyors who will also be doing physical work on the boat. Indeed that is a BAD move for obvious reasons. I didn't say one should do that. But I do ask a surveyor who has done SURVEY work for me to be on the lookout for a particular boat -- and I will hire him/her to do the SURVEY and I will use him/her repeatedly for boat surveys in the future. The surveyor who only does surveys will be unbiased, we can hope.

Perhaps you were reading my prior post very quickly. Since we're both stating the same stuff though, it's nice to have smilies and "I agree but want to say more" rather than "once again, untrue information" from others in the forum.

Take care,
Brenda

[Mike OReilly]

Originally Posted by JulieMac

I respectfully disagree. Here's my rationale: The seller has a broker representing his or her interests. They will get 100% of the commission.

If I call this broker, and ask to see the boat, they will show it to me. However, I may not get any insights into the boat, without paying a surveyor.

By using a buyers broker on a Yachtworld listing, I stand some chance of having one broker tell the other a bit about the boat before I ever see it. Professional courtesy, if you will.

I get what you're saying JulieMac, but my experience, and therefore my point, is that brokers on low-end deals can't afford to spend the necessary time that you the buyer, and indeed the seller, wants and needs in YOUR boat purchase.

Low end buyers and sellers are usually better served doing the job themselves. Of course you will need to know how to survey the boat yourself, and a professional surveyor is usually a good idea. But as I say, if after all this you prefer to have buyer's broker, and want to ensure they are compensated fairly AND therefore are able to put in the necessary time, then why not just contract the person for a specific sum. Specify clear terms of the contract, and make it all clear what is expected on both sides.

[JulieMac]

Truth be known, I can't say that I've ever met a boat or real estate broker who isn't representing "the deal".

Sure, if it's an obvious dud of a house or boat, they'll said something to reinforce their credibility.

Most boats and homes have some redeeming quality, however. In my experience, it's at this point that most brokers and agents get quiet. They're looking for their opening to focus on the positives, and understate the negatives so as to close a sale.

[GordMay]

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