Catamaran Buyer’s Broker

[2Hulls]

Originally Posted by BlueBuddha

I'm probably missing something obvious but If anyone out there ever uses this method and gets a good deal, buy me a beer if you ever see me at an anchorage :-)

Hey Buddha - I don't ever expect to buy another boat, but I'll buy you a beer (or offer you a rum, neat) just to make a new friend.

Where'd you get the 2.5% buyer broker commission? Seems to me the current practice is for the typical selling commi$$ion is 10%. If the listing broker has to share this with a broker bringing a buyer, they split it 50/50.

2 Hulls Dave

[BlueBuddha]

Originally Posted by 2Hulls

Hey Buddha - I don't ever expect to buy another boat, but I'll buy you a beer (or offer you a rum, neat) just to make a new friend.

Where'd you get the 2.5% buyer broker commission? Seems to me the current practice is for the typical selling commi$$ion is 10%. If the listing broker has to share this with a broker bringing a buyer, they split it 50/50.

2 Hulls Dave

Looking forward to the rum!

Sorry about the 2.5%. I got that info from my land-lock rookie head. yet, the essence of the suggestion would still apply and work the same way

[BlueBuddha]

Here is the original idea but fixed to reflect the correct standard 5% commission for the buyer broker. I had to adjust the offer to make the numbers work, but it is actually easier to understand. You offer your buying broker a 1% of asking price commission for every 10% reduction from the asking price he/she is able to negotiate.

One way to have a standard broker work for you (and not the seller) without paying a flat fee and also guaranteeing that the broker will fight for the lowest price, is to offer an additional commission as an inversed function of discount obtained. This makes the broker work for you while matching your extra expense to his/her value to you.

Specifically, you would offer the buyer’s (you) broker the following:
1% of asking price if boat sells for 90% off asking price.
2% of asking price if boat sells for 80% off asking price.
3% of asking price if boat sells for 70% off asking price.
4% of asking price if boat sells for 60% off asking price.

For example, let’s say a boat is for sale at a 500,000 asking price. Assuming a buyer broker commission of 5%, the broker is expected to make at most $25,000 if boat sales for asking price. But the broker can make more if the boat sales for less. Let’s see:

Example #1. Boat sells for 90% of asking
Asking price 500K
Sale price 90% = 450K
Standard commission 5% = 22,500
Add on commission = 1% x 500K = 5,000
Total Commission = 27,500 ($2,500 more than if boat had sold for asking price)

Example #2. Boat sells for 80% of asking
Asking price 500K
Sale price 80% = 400K
Standard commission 5% of 400K = 20,000
Add on commission = 2% of 500K = 10,000
Total Commission = 30,000 ($5000 more than if boat had sold for asking price)

Example #3. Boat sells for 70% of asking
Asking price 500K
Sale price 70% = 350K
Standard commission 5% of 350K = $17,500
Add on commission = 3% of 500K = 15,000
Total Commission = 32,500 ($7,500 more if boat sold for asking price)

Example #4. Boat sells for 60% of asking
Asking price 500K
Sale price 80% = 300K
Standard commission 5% of 300K = $15,000
Add on commission = 4% of 500K = 20,000
Total Commission = 35,000 ($10,000 more if boat sold for asking price)

The earnings for the broker exponentially increase as the selling price of the boat drops and so does your savings even though you are paying the broker more.

If anyone out there ever uses this method and gets a good deal, buy me a beer if you ever see me at an anchorage

[smj]

The brokerage company will receive 5% but I wonder how much of that the actual broker receives.


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[admiralslater]

Cal landau at Edwards Yacht Sales in Florida, we worked with him last year and he was very helpful and is really interested in cats in fact he owns a 40 footer himself. We signed a deal that we later had to back away from and he was very gracious about it. We saw a bunch of interesting boats. I would highly recommend him.

[DucTrip9]

Blue Buddah - You are definitely on to something here for Buyers and Sellers of Boats and even our houses. Why not take charge of the buy/sell process of the highest capital investments (for most of us) in our lives. I like it...and will try to use it soon in our cat shopping process. Beers to Ya !!

[M47]

BlueBuddah, It may work in some cases. But the buyer's broker is still better off selling you anything at all and getting at least minimal commissions, than 'missing the boat" chasing higher commissions. Both brokers will still push boats in imperfect conditions. The buyer can offer what he is willing to pay, brokers do not negotiate between themselves. As of current standard, instead of getting a premium they should agree on less cut commissions to make a sale at all. Looks like I talked myself into not getting a buyer's broker.

[M47]

I did not mean to offend brokers. A Good broker does provide valuable services and can save time researching boats and necessary docs. I was referring to the contest of latest posts only.

[BlueBuddha]

Originally Posted by DucTrip9

Blue Buddah - You are definitely on to something here for Buyers and Sellers of Boats and even our houses. Why not take charge of the buy/sell process of the highest capital investments (for most of us) in our lives. I like it...and will try to use it soon in our cat shopping process. Beers to Ya !!

Let me know how it goes! Make it an IPA, although now that my sights are focused on the Caribbean I should start getting used to drinking laggers. yuck!

Originally Posted by M47

BlueBuddah, It may work in some cases. But the buyer's broker is still better off selling you anything at all and getting at least minimal commissions, than 'missing the boat" chasing higher commissions. Both brokers will still push boats in imperfect conditions. The buyer can offer what he is willing to pay, brokers do not negotiate between themselves. As of current standard, instead of getting a premium they should agree on less cut commissions to make a sale at all. Looks like I talked myself into not getting a buyer's broker.

Yes, I was thinking the same. The same is true of real state agents. The buyer's agent works primarily as a message pigeon (a very expensive one!).

[watervan]

Hi all!
I am looking for a buyer's Broker in Croatia. I have seen a Lagoon 440 there that I am interested in.
Is it true that the seller's Broker needs to split his commissions with the buyer's Broker? So I, as the buyer, need only pay the survey?
This will be my first boat, so all advise is welcome!
Oh and since I am new, I have not found out how to start a new thread yet..

Thanks!


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[Sand crab]

In real estate the buyers broker splits the listing commission evenly. They are bound to you legally and/or by the Realtor rules so that what you say in confidence shall not be repeated to the other side. I suspect it's the same with boat brokers except there is no actual law.

Typically the 2 RE brokers companies will split the commission and each broker will receive half of that or 25% of the total commission. It really doesn't matter that much on what the sales price is regarding normal boats. An L440 which sells at $400K generates $40K commission which each broker pocketing $10K. If it sells for $350K the individual commission will be $8750 and not many brokers are going to work too hard to chase down that $1250 difference. The buyers broker doesn't cost the buyer anything more than the actual commission that the seller pays.

BlueBuddha, have you gotten a broker to agree to your formula?



See this:
http://en.wikipedia.org/wiki/Yacht_broker

[BlueBuddha]

Originally Posted by Sand crab

....
BlueBuddha, have you gotten a broker to agree to your formula?

I have not even tried. It was just a fun intellectual exercise

[Sand crab]

Originally Posted by watervan

Hi all!
I am looking for a buyer's Broker in Croatia. I have seen a Lagoon 440 there that I am interested in.
Is it true that the seller's Broker needs to split his commissions with the buyer's Broker? So I, as the buyer, need only pay the survey?
This will be my first boat, so all advise is welcome!
Oh and since I am new, I have not found out how to start a new thread yet..

Thanks!


Sent from my iPad using Cruisers Sailing Forum

Welcome to CF. You don't say where you are from but I think it is wise to use a broker from your country. That way your deposit is held there and if there is a problem then you can deal with them in a language that you speak and read.

However the big guys like the Multihull Company, Catamaran Company, Denison and others are international and do worldwide sales all the time. Multi Co will act as your buyers broker.
How to Buy Your Multihull
I'm sure the others will as well.

[Heath68]

This is going to sound a bit lame but I'm a newbie so...
well I was expecting to "negotiate" the price of my own boat and as 2hulls said be my own broker as such.. now I'd expect a buyers broker to negotiate like hell if he was a buyers broker.. but what else do they do? Help you find your boat? Check it over for faults? Check the legalities of the purchase (if its on HP etc)???

[Sand crab]

Heath you can't act as a buyers broker. If you don't have one then the seller will just pay the entire commission to his broker. But an experienced cat broker can steer you in the right direction and give you comps on sold boats for guidance on your offer. They will look for boats, and some have a knowledge about a particular cat that is either a good or bad deal. The negotiation will all be done by contract not verbally which is just like real estate. They can "negotiate like hell" but within the limits of the contract. Verbal offers are worth the paper they are written on but sometimes you can get a feel for the price before submitting a written offer with deposit which is generally 10% of the price. You might not ever meet the seller or speak to them. You will have several "outs" like your personal inspection, survey and seatrial or loan if you are getting one.
My buddy bought a Lagoon 380 in Panama and his broker flew out there from Fla. to to be at the survey with him.
If you are looking at a FSBO then everything changes.