Broker or No Broker ?

[Nick & LA]

I'm looking for a late model, quality, live aboard cat in the 42-47' range - think I have it narrowed down to about 7 possible boats. Would you advise using a buyer's broker for the search, inspection, advice, etc. or do you think their opinions are skewed and biased?
Nick

[sandy daugherty]

A buyer's Broker doesn't get paid if you don't buy, so his interests are not completely one-sided.
Most listing agreements are exclusive: The listing Broker will get his share regardless. If you call another Broker on his listing, they will negotiate the division of the commission. One msy not be as happy as the other, but they both get paid when you close.
Your very best friend in this whole deal is the Surveyor. So you pick him carefully. Don't go by what any broker suggests. Ask here. Then talk to him. Ask him how many of this model he has surveyed, and what peculiarities need special attention. If the boat is bigger than say 34 feet, and the selling price is going to be more than $60,000 dollars, pay extra if you have to to have someone go up the mast, especially on a southern boat that has not had the standing rigging replaced. Ask him how detailed he will be when examining the engine and electronics. If he costs twice as much as you thought, he is still a true bargain.

[shadow]

I fully agree with Sandy!! I've heard of some horror stories that could have been avoided if they only had a thorough survey done. It's like buying a house, I would never purchase a property without it being inspected. It just doesn't make any sense?!?!

What few 1,000's you may spend on a surveyor is nothing with the overall $$$ you will spend if you don't and find out things are really bad. Perhaps even your life when it decides to go south!!

[S/V Illusion]

Originally Posted by Nick & LA

I'm looking for a late model, quality, live aboard cat in the 42-47' range - think I have it narrowed down to about 7 possible boats. Would you advise using a buyer's broker for the search, inspection, advice, etc. or do you think their opinions are skewed and biased?
Nick

To paraphrase what others have said, just substitute "surveyor" where you had "buyer's broker". It isn't essential in your search that you use a surveyor but if you have no prior experience with boats, his assistance will be more professional and objective than a broker's. Once you focus on a specific boat to purchase, the surveyor can do his thing.
There are all kinds of brokers...

[djmarchand]

There are generally three types of listings for boats:

Exclusive Listing- Just like real estate. The buyers and sellers brokers generally split the 10% (typical) commision equally. There is almost no downside to using a buyers broker that you trust in this deal.

Open Listing- In this one the listing broker has no exclusivity. Anyone can go to the seller and offer a deal. You are better off acting yourself in this situation. The only problem is that on Yachtworld, the MLS of yacht brokers, there is no way to know whether the boat is exclusive or open, but 99% are exclusive.

For Sale by Owner- In this case you are much, much better off acting yourself. Any buyers broker you engage is going to cost more. Although arguably he could save you money and possibly offset his fee by being proactive in many subtle ways.

Don''t get me wrong. I am a big proponent of using a buyers broker that you know and trust, but only for exclusive listings.

David

[rebel heart]

We used a broker; he's a great guy in San Diego if you're looking for someone in that area. We put a few things on the contract that he had to work at, like we specified that we wouldn't buy unless we had a slip available at time of purchase. It was on us to pay for the slip, but our broker knew a lot of contacts at the marinas and was able to find a good spot for us that we wouldn't have been able to otherwise.

In short, you can get them to do things for you and earn their commission. The guy we ended up with was wonderful; highly recommended. He sold our friend his Mariner as well.

[bstreep]

Just like in any other business. The good ones are worth their weight in gold - buyer's agents and surveyors.

I would strongly consider hiring a buyer's agent. They get paid by the selling broker, but they work for you.

And, unless you are buying a sunfish, get a good surveyor. Do NOT ask the broker for opinions or recommendations. Ask boaters.

[Therapy]

Originally Posted by bstreep

I would strongly consider hiring a buyer's agent. They get paid by the selling broker, but they work for you.


.

Hmmm.
That just don't seem to add up to me some how.

[CarlF]

I also consider a buyer's broker paid by the seller to be an obvious conflict of interest. They maximize their income by closing as many deals as possible. They get paid about the same regardless of which boat you buy. If you don't buy any boat, they get nothing for their time. Think about that for a moment.....

Brokers can be a service. Without brokers, there would be a lot fewer boats sold because too many sellers (and buyers) are incapable of reaching a deal without help. But in a room with a buyer, a seller, and their two brokers, the two brokers are the only ones with a common interest - to get the deal done.

Carl

[Pelagic]

I think it all depends on your:

Personal schedule:…. If you have limited time to search and in a hurry
Personal knowledge:… If you have limited sailing experience and need someone to help explain the trade-off from various boats designs
Market knowledge:… If you are really clueless about what the real value is.

Those who use buyer’s broker for a long time, tend to get their name “registered” with every other broker, so you are stuck in that mode, whether you like it or not.

As others have said, you have good and bad facilitators within that industry

[Intentional Drifter]

There's already a lot of good feedback and I don't want to repeat it. Instead, I'll try to put a bit of a different twist on it. In the relationship between buyer, seller and broker, where is the fiduciary responsibility? If you're not acquainted with this legal term, wikipedia has a pretty good article: http://en.wikipedia.org/wiki/Fiduciary

What I have seen with brokers, both boats and real estate, there can actually be quite a variety of contracts and relationships. Nothing, legally, prohibits it, but it rarely happens. In the vast majority of the listing and brokerage agreements, there is no fiduciary relationship between the broker and the buyer; and, often, not with the seller, either. Rather, that relationship typically exists only between the broker and the firm with which they are associated.

So, practically speaking, what does this mean for the buyer, or the seller? For me, it tells me that the broker cannot be trusted to be representing my best interests. Their bottom line is that they are interested in making a deal to collect their commission. That's it. They have no responsibility to see that you are happy with the deal, or that whatever boat you buy will actually serve your stated goals.

Now, you might say, isn't it in their long-term best interests to make sure you're happy? That way, when it comes time to sell, or buy another, they are more likely to seek you out? Sure, that makes sense and probably at least some brokers actually work that way. But, they don't have to. And the law of immediate gratification comes into play. If they're a bit hungry and think they can land that deal, today, they're going to do their best to land it.

To directly respond to your question, I think Pelagic is right -- if you have more money than time and more desire than knowledge, then using a broker makes some sense. But, seriously, vet them out, closely. Almost all of them are "nice guys" (obnoxious ones rarely last long); almost all of them will seem excited to work with you (at least at first); and almost all of them will play on your emotions in the guise of offering you knowledge.

Vetting them out, by the way, also includes doing a search for lawsuits against them. You might be surprised by what you will find! (I was, and it made a difference.) Spending a bit of money for a couple of hours of attorney time to check them out might save you a lot in the long run.

If your concern is that you don't have (or trust) your own knowledge, then I suggest that you talk with a surveyor, instead. Develop a relationship with one and pay them, by the hour, for their advise. Bring them some ideas about boats you like and tell them about your intended use. That way, their only interest is in making sure you know what you need to know and they have no money to gain, one way or another, by making a sell.

Maybe I'm a little jaded. Probably true.

ID

[Gemini]

ID has it pretty much spot on. The best use for a broker, yours or sellers is to find the right boat for you. They can only find them, the right boat for you is your part. No! NO! Broker can make the decision for you but remember they can have undue influence on your decision.

If you can find a boat that you like and meets your list of must haves and most of what you desire that is not an exclusive listing with a broker then go for it because the seller can save 10% and you might get to share in that savings if you make the reasonable offer. A good surveyor is a must, need it for bank and insurance and the next is a good maritime attorney to handle the legaleese of the sale. If you have a bank you like to work with then they generally have in their interest a good Maritime title company.

Brokers are really for those who don't want the hassle of trying to sell the boat themselves and are willing to drop 10% of what the agreed sail price is. No skin off the buyers back other than price. Most people cannot afford to sell a boat they are updside down on and unless they are in the position to upgrade they are in a bad position and will need a minimum price which is what they owe to the bank.

Person to Person transactions are not all that difficult. I just completed one which I save $100K on and did all the initial paperwork myself, got a good surveyor and let the Bank and Marine Title company handle all the CG paperwork.

Lucky Me!

[Mustang Sally]

Brokers don't guarantee anything and are a dieing breed with the internet. One post said a buyers broker does not get paid, do you think he is doing your deal for free? The most important part of the deal is a survey and even that can be a positive or negative issue.