buyer's broker payment questions
MY wife and I are in the market for a used boat.
However, my wife and I can't seem to trust a buyer's broker. They are paid by commission and as such are fundamentally pushed away from really viewing boats the way we view them. We can't figure out how to take money out of the equation with a buyer broker, especially in economic hard times. It is not really the fault of the broker, but of the commission model.
But we want someone to help us narrow down our list of over 80 boats that we are looking at in the NE. It takes too much time to go look at all these boats. We want someone to help us find the best surveyor and find a good yard to help fix up any problems with the boat we buy. We don't mind paying the proper price for a good broker who really was finding our best boat with us. At this point we would like assurance this is even possible.
Surely we are not the first people to have lost trust in the commission method of payment for a buyer's broker, so what are the alternatives? Is there a broker in the NE that works off something other than commission that is any good at helping narrow down the many choices?
I'd start with finding a yard that you want to work and keep your boat with. Then see if the yard will help you find a boat to purchase. They'll be biased towards newer more expensive boats, but often for good reasons, as they know how much work and money it takes to get a needy boat back to seaworthy.
80 boats, huh? I think you need to narrow that down a little before speaking to a broker. I have never met a broker that knew about than many boats.
We can help you narrow that list down. Post the list, your budget, your needs and wants in order or priority.
Once you and the great folks here help you narrow down your list, you should not even nedd a buyer broker.
I should do that. I will post to the "boat review and purchase forum"...
I need to be given some time to properly set up the thread so that everyone understands our needs / desires. I also need to figure out how to format the list of boats.
Perhaps it would be better if I simply focused on listing the boat models and years than the actual boats as listed in yachtworld? That would also narrow down the list considerably, since there are a lot of repeat models in my list...
Look for a thread in the next few days. I will work with my wife on it.
As someone who works on commission, I will argue that if you want results, hire a guy who doesn't get paid unless he gets the job done.
Of course, there are those who argue that "well, because a broker works on commission, he is going to steer me toward higher priced boats so he can make more money."
It makes no sense to a commission broker to steer you toward a boat you won't buy. It wastes his time and money, because if you don't buy he makes nothing. He also runs the risk of losing you as clients, because he is wasting YOUR time, too.
A GOOD broker will find you the right boat, at the right price, as quickly as possible.
I agree with you. I worked on straight commission for 29 years - electronics - and nobody wants you to be as happy with your purchase as someone on commission.
In your case you definitely want to work with an experienced broker...just remember his/her split motivations. It's OK, it can work well for you..just remember his/her split motivations.
An experienced broker can save you a lot of time and effort, and make your search successful...just remember his/her split motivations. It's really pretty much the same as buying a house...find someone that you enjoy riding around with, seems to know the market, and you feel a rapport with...like buying a house...just remember...
You can get advice on this board, worth all what you pay for it...but a 20 minute conversation with an experienced broker, face-to-face will take you far further and far faster, towards finding a good boat for you needs.
Plus, if you are happy with their services, who will you go to in 5 years when you decide that what you really need is a boat just 2 feet longer? Then you'll not only be purchasing another boat, but selling your existing boat. The broker gets two commissions.
I'm a bit biased because when I bought my current boat I used a buyers broker. She was not only someone that I trusted, but someone in my Yacht Club so she had lots of incentive to look out for my interests.
Find a boat owner that has a good relationship with a broker and get referred to them. No one wants to disappoint a friend or associate.
In the case of the real estate example, I bought my last house with a broker in 2005 that saw our finances and decided we needed a bigger house x2. We hesitated, but we were eventually convinced by our broker in spite of our original instructions. Because of that, this housing crisis hit us harder and impacted our cruising plans to a far greater extent than if we had stuck to our guns and fought our broker.
When we tried to sell our house a year and a half ago to save up for our cruising, our broker had our house on the market too high. A year and a half was lost on the house, but for yet another broker... We switched to "by owner" and we accepted an offer at a realistic price.
This weekend at the boat show, I went to talk to brokers and they said things that scared me. If nothing else, the tone of the brokers is very authoritative to the point of not hearing what I am saying. One broker would not listen that I had already found a large list of boats. He felt it was his job to find my boat. I wanted to say "I DO NOT TRUST YOU," but was too polite. I felt this way with every broker I talked to.
I don't know how to work with a broker, even though I think I need one.
There has to be some better arrangement than commission for someone working with the buyer. I would like to tell a broker he will get the equivalent of $200,000 commission whether we buy a $200,000 boat or a $75,000 boat and fix it up... The truth is that a jump from $75,000-$200,000 makes a big difference to a broker in this economy. Brokers won't look at boats the same way we are looking at them. Brokers will say "this more expensive boat already has all these things that you would need to buy anyway making the final cost of the more expensive boat less." But of course, that is a type of fallacy that people like me fall for eventually.
One thing I will never do again is reveal my finances to a broker. I will simply get pre-approved for some amount and show the broker that amount. One thought is to start out with lower pre-approval numbers with the broker so the broker begins thinking that the hard limit is lower than it is. If a boat can't be found, then raise the limit by 25,000 - 50,000 and see what happens. I don't like that approach. That just seems like playing games with somebody and wasting all our time. Really there must be a solution to the commission problem.
As for reputation, really how am I going to check??? If I were to post a bad experience with a broker to this bulletin board or the chamber of commerce, do you really think it matters? How do I know whether I was never shown a good boat in order to complain? I simply would never know that the cheaper better boat was skipped over...
Finally, I could avoid this and simply buy a new boat, but they are more expensive and what I saw at the boat show did not impress me enough.
Ask other sailors which broker they have used - more than once preferably.
Budget is up to you - a good broker will stick to it unless it is totally unrealistic to get what you want for the price you want to pay. You have to like the boat and its price. If you don't you don't have to buy it. A broker that is paid on commission wants you to be happy. Someone that agrees to a flat rate isn't as motivated in my opinion.
You don't have to trust anybody but it sure helps if you can find a broker who has pleased other buyers multiple times to trust.
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