Buyer broker and Initial Bidding Strategy - SailNet Community
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post #1 of 27 Old 03-24-2008 Thread Starter
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Buyer broker and Initial Bidding Strategy

  1. How many of you all have used a buyer broker what are the pro's and cons?
  2. Does it really make a difference in terms of selection of boats or negotiating?.
  3. I noticed on a few sites that they often offer the buyer service for free - and it comes out of the sellers pocket? If so what is the normal percentage for that or is it usually a straight fee.
  4. And lastly - what resources do you use for finding boats for sale by owner. 99% of ads seem to be brokered....(I already use Craigslist, Yachtworld, and BoatTrader...)
  5. Have any of you negotiated a deal where you paid cash and did 1/2 on initial purchase and 1/2 60 days later?
  6. How do you negotiate a price initially without survey on higher priced boats? Say you have one for 64K is it unreasonable to start at 45 or 50K as initial bid (Anyone with success on that?"
I am currently looking into 34-40 foot range and I would rather this time actually get something that I will be content with for many years. Some of the boats are in the 60K range which I can afford to pay cash for but would prefer to slide it in half as it just makes more sense financially for me as one can never tell when something is going to happen. Naturally I can go for a lesser cost boat (several are decent range of 30K - but then that same conundrum of its not everything I want....

-- Jody

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Last edited by artbyjody; 03-24-2008 at 04:11 PM.
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post #2 of 27 Old 03-24-2008
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Jody,

I’ve utilized a broker three times in the last 7 years. I bought and sold my original boat a 1976 27 Catalina on my own, Selling period was very short and buyers were numerous. I think it’s got something to do with the price range of the 27 Catalina, and it’s reputation or perhaps ubiquitous nature.

I fell in to the broker relationship at a boat show, and acknowledge it was somewhat of a trap, but I think it worked out to my benefit and the broker, not to me, would say it worked out to his benefit. My wife and I priced a brand new 33 in 2006, and were ready to purchase, when the broker, read tricked, asked why I wanted a new boat. He then produced two used 2005’s at the length of 35 that were cheaper and loaded with more than I priced on my new one. I can say that I was conscious of his bait and switch, but passed it off as his commission was greater on a used boat, which it was. He wasn’t the listing broker, but he later confirmed that he pocketed more of the sellers commission than he would have on the new boat.

Nevertheless, it used the same broker when selling that 2005 two years later. This time I bought the new boat, because of lack of inventory and foolish impatient childlike reactions to the late spring sale of the last boat.

I can tell that the broker placated certain inexperienced ideas I had, and other intangibles. Along the way we did become friends and I came to rely oh his thoughts.

I always felt comfortable with the surveyer.

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post #3 of 27 Old 03-24-2008
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A buyer's broker is actually a seller's broker since they share the commission with the direct seller's broker. Nonetheless, I still recommend the use of one. A good broker will listen to what your needs are and direct you towards boats you may not have thought of. They can also access comps (real selling prices of comparative boats) so you can figure out what to offer. Be careful though - they will make their money if you buy the boat, so they will tend to push you hard down that path.

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post #4 of 27 Old 03-24-2008
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I used a buyers broker and he did all the things Labatt said above. He also helped us better frame our wants and needs and therefore was invaluable in steering us towards the right boat for us.
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post #5 of 27 Old 03-24-2008
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The only other caveat I would have Jody is that when you use a buyers broker you are getting into a split commission scenario and the selling broker has less $$ at stake. I have been in situations where the selling broker has thrown something in on the deal because he was getting the full 10% and could afford to in order to make the deal. This won't happen in a split sale.

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post #6 of 27 Old 03-24-2008
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Quote:
Originally Posted by camaraderie View Post
The only other caveat I would have Jody is that when you use a buyers broker you are getting into a split commission scenario and the selling broker has less $$ at stake. I have been in situations where the selling broker has thrown something in on the deal because he was getting the full 10% and could afford to in order to make the deal. This won't happen in a split sale.
Had the same thing happen to me. The Broker gave back 5% of his 10% contract to the seller so he could accept my offer. Half the loaf was better than none I guess.

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I also had a similar scenario as cam's. The sales agreement for selling our last boat, was recorded at a lesser amount than the actual selling price, due to a three-way negotiation.

Since I would not bend or compromise on my listed price, and the buyer claimed his offer was as much as he could budget, my broker split the difference with the buyer in a cash settlement - thereby reducing his commission. The higher selling price may have not been possible, if this was a co-broke situation.

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post #8 of 27 Old 03-24-2008 Thread Starter
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Thanks for the replies thus far....I think I will shy away from the buyer broker aspect for the time being and try the haggling aspect on my own. So, if I may redirect this to the other 2 points:
  • Have any of you negotiated a deal where you paid cash and did 1/2 on initial purchase and 1/2 60 days later?
  • How do you negotiate a price initially without survey on higher priced boats? Say you have one for 64K is it unreasonable to start at 45 or 50K as initial bid (Anyone with actual success on that approach?)
From what I can deduce is that most sellers expect a buyer to counter with at least 10% reduction of asking price as a bid. But then I am also researching boats interested in and the NADA value is usually 40-50% of the sellers asking price. I have also been doing price compares using the online sites like Yachtworld and even then - it reflects the same discrepancy NADA does (Although I find the more expensive the vessel or the more of them that are out there - the prices usually avg closely....)

I plan on looking at two boats on Wed, which I consider the top tier of what I am looking within the budget I have earmarked for this....So buying strategies welcome

-- Jody

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post #9 of 27 Old 03-24-2008
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I can't imagine a seller doing 1/2 now 1/2 later and transferring ownership with only 1/2 in hand. Now if you put a 50% deposit down with balance pending survey and told the seller that it would be in 60 to 90 days you might have a chance. Regarding the offer of 10% less is too lean, 25 to 30% under ask is where I would place my initial offer if the boat is up to standards.

Most important issue is there are no rules and it can't hurt to ask.

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post #10 of 27 Old 03-24-2008
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One advantage to a buyer broker is that you will gain access to the Yachtworld sold prices. I don't know how you can obtain these otherwise. In some cases, these may provide a good deal of negotiating ammo.

Personally, I see nothing wrong with an offer of 45K on a boat listed at 64K. In fact, that may well be a good price for the seller in this market. Whether it is a "good" offer or a lowball will depend very much on the make and condition of the boat -- some boats have more active markets and predictable price points.

Luck!
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