Broker is privately "flipping the good deals"?

[Be Free Sailor]

I made an offer on a boat today, and received the following email response from the assigned broker (US based brokerage firm, and "World's Leader in Mutihull Sales");

..."owner would rather sell her to me at that price, I would definitely buy her and flip her (resell her again) within a few hours"....

FYI; My offer was around 25% below the advertised price.

"The owner says bring offers!", was the headline of the brokers advertisement, thus I expected my offer would be presented to vendor.

I am surprised the broker did not pass my offer on to vendor, and I am "chocked" he would suggest to buy the boat himself, if in such case the vendor accepted my offer.

Any thoughts?

Is it OK for a broker to buy and "flip" (resell) his clients boats, in the situation where an attractive (i.e. low) offer is accepted?

[Chotu]

That’s not at all what he is saying.

You are misinterpreting the fine points of discussing the offer with the broker.

What he is saying is your offer is so low that he could sell it in a few hours at that price.

He’s kind of saying that as an expression. He’s not flipping boats. He’s saying that he could if it was that cheap.

[Snore]

Yes that is 100% legit! You are low-balling and may end up nickel and dime’n the deal. The broker will pay the same price, likely take it as-is, and flip the boat.

Suggest counter-offer at 18% below and take it as-is. If you are not willing to do so, then you were outbid.

[Kettlewell]

I try to always find the owner and deal directly with him/her, circumventing the broker. You will usually be able to get a better deal that way, and learn a lot more about the boat. Good brokers are few and far between. A good one can help you find the right boat for you at the right price, but many are simply looking to maximize their commission by directing you to the boats that will make them the most. Remember, the more you pay for the boat, the more the broker makes. Every incentive is against them helping you get the best deal.

[sandy stone]

I was under the impression that brokers had an ethical (if not legal) obligation to present every offer to their client, not to reject offers without their knowledge. Of course, that would apply to written, legally binding offers, not casual internet discussions. And anyway, it's better for the broker to close a sale with a lowball offer than to not have a sale at all.

[S/V Illusion]

Originally Posted by sandy stone

I was under the impression that brokers had an ethical (if not legal) obligation to present every offer to their client, not to reject offers without their knowledge. Of course, that would apply to written, legally binding offers, not casual internet discussions. And anyway, it's better for the broker to close a sale with a lowball offer than to not have a sale at all.

While the original description was somewhat ambiguous, it is only an assumption that the broker didn’t present the offer. Likely he did. The broker seems to be telling him that the offer was unacceptably low. It should have been written more clearly.

[Cheyne]

When we thought about selling our boat our broker would usually increase our asking price by 50% if we got a lowball offer as the counter. Also if someone tried to go around the broker I would just refer them to the broker. If I’m paying the broker I don’t want to talk to the buyer until we have a contract.

[Kettlewell]

A friend who has bought and sold a bunch of boats, just like I have, once advised me that you need to establish what the boat is worth to you when making an offer. In other words, don't necessarily start at what the broker's listed price is. There are always other boats to look at and buy!

[boatpoker]

Originally Posted by Kettlewell

and learn a lot more about the boat.

Been involved in thousands of deals and have met only a handful of owners I would believe about their amazing boats.

an example from last week ...

me - Four of your seacocks as seized.
owner - Whats a seacock ?

This from an owner who claimed to have meticulously maintained the boat for his 16 years of ownership

[Iron E]

Originally Posted by Kettlewell

I try to always find the owner and deal directly with him/her, circumventing the broker. You will usually be able to get a better deal that way, and learn a lot more about the boat. Good brokers are few and far between. A good one can help you find the right boat for you at the right price, but many are simply looking to maximize their commission by directing you to the boats that will make them the most. Remember, the more you pay for the boat, the more the broker makes. Every incentive is against them helping you get the best deal.

I'll just say that while I may be in the minority, I've liked every broker I've met and I wouldn't want to screw someone out of their commission (If that's even possible when they have a contract) I want my Karma and boat Karma to be clean... maybe I'm weird

[Kettlewell]

I'll just say that while I may be in the minority, I've liked every broker I've met and I wouldn't want to screw someone out of their commission (If that's even possible when they have a contract) I want my Karma and boat Karma to be clean... maybe I'm weird

No, use the broker for broker stuff, but try to talk to the owner about the vessel including negotiating price. The broker will still get his commission. Here's the difference. I was looking at a production 38-footer that looked quite clean and in good condition for its age. The broker was showing me the boat when the owner showed up and pointed out what a great repair job had been done when the boat crashed into a breakwater and sunk! They literally took the ruined engine out of the side of the hull through the hole. It did look like a professional repair, but wasn't mentioned in the advertising, by the broker, or on any paperwork.

[Iron E]

Originally Posted by Kettlewell

No, use the broker for broker stuff, but try to talk to the owner about the vessel including negotiating price. The broker will still get his commission. Here's the difference. I was looking at a production 38-footer that looked quite clean and in good condition for its age. The broker was showing me the boat when the owner showed up and pointed out what a great repair job had been done when the boat crashed into a breakwater and sunk! They literally took the ruined engine out of the side of the hull through the hole. It did look like a professional repair, but wasn't mentioned in the advertising, by the broker, or on any paperwork.

Okay, I see what you're saying. Sorry, I read that completely wrong.

[leecea]

Yes that is 100% legit! You are low-balling and may end up nickel and dime’n the deal. The broker will pay the same price, likely take it as-is, and flip the boat.

This is exactly the way I would interpret it.

[Tin Tin]

Know one knows what instructions the vendor has given the broker, for example "Don't bring me any offers less than X, it is a waste of my time" if a broker insists, that may annoy the owner and he drops the broker, there are some very difficult owners out there, some people are happy to wait months or years to get what they think is the right price despite what the broker may say. They doggedly hang in their paying dockage and insurance and possibly another bottom paint. Brokers do not try and up the price to get a better commission, they want to get paid a commission - maybe unless the market is super hot - no sale no pay.

[Toccata]

A local broker and friend gave an example of a typical sale. At least 30 phone calls and many hours of driving and showing time to get a straightforward sale through to completion.
Add the many sales that require all the extra tact and sensitivity he can muster.
Add the sales where the vendor won't fix the boat ready for an inspection let alone a sea trial
Add the sales where the buyer just goes away leaving everyone hanging....
He's worth his commission
Do you really want to deal with the clowns asking stupid questions/sending stupid emails?