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Handling Brokers

2451 Views 14 Replies 10 Participants Last post by sailingfool, Oct 20, 2009

TSOJOURNER

Discussion Starter · Oct 1, 2009

I'm in the market for a boat (and involved with brokers for the first time). I recently saw a 30 footer I was interested in and emailed the broker listed in yacht world. She told me that she would call the owner and see if he was interested in selling. He was, so I saw the boat and made an offer using the broker's form (which oddly stated that if the seller signed, the broker was entitled to 10% or $3k min). I sent in the offer, and after some haggling we were $2k apart on price. Very close, except the boat is only selling for $10k. Anyway, the broker was offended when I suggested cutting her commission to get the deal done, and I feel I'm at an impasse on a deal that should be done (and her value added to the process has been almost zero).

I recently saw a similar boat for sale, inquired with the broker and again got the, "do you want me to check with the seller" response.

My questions are: 1) In the first situation, can I contact the owner directly or is a selling agreement likely in place or is this just taboo? 2) Should I try to track down the owner of the second boat directly for the same reasons?

Thanks

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xort

· #2 · Oct 1, 2009

on the first deal, the broker will get the 10% unless the broker agrees to less. You could contact the owner to see if the owner can put some heat on the broker.
On the second deal, it can't hurt to contact the owner. Some brokers sign exclusivity deals and some don't.

many brokers put in a minimum $ figure on the listing contract for lower priced boats.

sailingfool

· #3 · Oct 1, 2009 (Edited)

If a broker "introduces" you to a listed boat that you subseqently buy, the seller will need to pay the broker fee as part of the sale, no ifs or buts.

While it is not un-common, with boats or houses, for a broker to kick in a piece to keep a deal from falling apart, I think it more common that brokers want their agreed-on pay. And they aren't likely to kick in BEFORE the deal is made, as they know another round of money talk will follow the survey.

Standard listing agreements give the broker an exclusive, when I had my last boat listed, if a tire-kicker approached me in the yard about my boat, i just gave him the broker's name and number.

JohnRPollard

· #4 · Oct 1, 2009

sailingfool said:
If a broker "intorduces" you to a listed boat that you subseqently buy, the seller will need to pay the broker fee as part of the sale, no ifs or buts.

While it is not un-common, with boats or houses, for a broker to kick in a piece to keep a deal from falling apart, I think it more common that brokers want their agreed-on pay. And they aren't likely to kick in BEFORE the deal is made, as they know another round of money talk will follow the survey.

Standard listing agreements give the broker an exclusive, when I had my last boat listed, if a tire-kicker approached me in the yard about my boat, i just gave him the broker's name and number.

I generally agree with the above.

There's also another kind of broker agreement, the "open listing" (I believe) where the seller does not have an exclusive arrangement with one broker whom all the other brokers must go through. This sounds like the case for the boat you bid on.

Regardless, given the price range of boats you're looking at, my best advice is to avoid the brokerage boats and focus on the For Sale By Owner (FSBO) boats. At +/- $10K sell price, a $3K minimum broker fee ends up at a 30% commission -- a deal breaker every time.

NaviGsr

· #5 · Oct 1, 2009

I just want to point out that if you are going through a broker for anything, boat, house, whatever, the broker is there to work for you as well as for the seller. Instead of browsing listings and calling separate brokers, you should find a reputable broker/brokerage near you who will listen to your needs and take you out in person to several boats that fit what you're looking for. They can should also arrange sea trial/survey for you. Keep in mind that many brokerages also won't have online listings for most of their boats.

If you're looking at less expensive boats, then by owner is probably the way to go, as most 'brokers' of small boats won't take the time to get to know you and your needs. So what are you paying them their fee for?

artbyjody

· #6 · Oct 1, 2009

Having been in the similar situation when I purchased my Barberis. My tip is do a search on Barberis in the boat buying forum as I listed all my adventures but to sum it up:

1. You are not buying from a broker the broker is just the middle-man.
2. Be firm if your offer is reasonable.
3. Don't ask for negotiations and state broker fees - just simply state that the total upfront purchase you are willing to give.
4. Be firm - if they come back with a higher offer after your stated your price - counter offer with a lower offer than you had originally agreed on and state - "lets be serious we know the value and I believe you are wasting my time when I presented a very reasonable offer."

That is exactly how I purchased mine listed at 70K for 52K.

Seems to me that you are just being intimidated - as any commission on the boat is between the seller and their broker. A different case when you use a broker to buy.

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xort

· #7 · Oct 1, 2009

EVERY broker, buyers broker included, get paid by the seller. So who do you think they will work 'for'.

NaviGsr

· #8 · Oct 1, 2009

xort said:
EVERY broker, buyers broker included, get paid by the seller. So who do you think they will work 'for'.

Yes, they are 'paid' by the seller, but their fee is always reflected in any offer accepted, so you are effectively paying them. Why give someone a sale who has done nothing for you?

There are good and bad ones. Deal with a broker who will work with you and not one who makes you do their job for them!

TSOJOURNER

Discussion Starter · #9 · Oct 19, 2009

The seller's Broker works for the seller

To start with, you, as a buyer have no contractual requirements regarding the Seller/Broker Contract.

The seller is probably not aware that his Broker caused his sale to fail.

As for the second boat, if the vessel is documented and you have the boat name, make and approx length, you can find out about the owner from any good Beoker other than the seller's broker.

In the "For what it's worth" column, I have purchased about 10 boats over the years and for the first 5 or 6 I called the Seller's broker. During my hunt for a boat several years ago, it was recommended by a freind that I contact a Broker that he uses and this Broker was a Buyer's Broker.

I used him then and two more times as well and it's the only way to go. He was a negotiating animal and worked every angle thoughout the entire process, looking out for me, not the seller.

BEST OF ALL, HE WORKS FOR ME BUT THE SELLER PAYS HIM !

Best of Luck,
William

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wind_magic

· #10 · Oct 19, 2009

My only advice is to try to forget about the broker and the seller in the beginning and just decide exactly what you want to do, how much you want to pay, what you want to get for your money, etc. Once you have decided what the boat is worth to you and all the rest, then you can make an offer.

It is very easy to lose control of the deal, the easiest way is to just assume you have to follow the broker's game plan, assume you have to use their offer forms, follow their process, agree to their terms, etc, before you know it you're being lead around by your nose which is great for the broker but not so great for you. The way to avoid this is to know what you will and won't do before you ever approach the broker/seller in the first place.

davidpm

· #11 · Oct 19, 2009

artbyjody said:
Having been in the similar situation when I purchased my Barberis. My tip is do a search on Barberis in the boat buying forum as I listed all my adventures but to sum it up:

Do you have that thread handy? I did a search and it did not come up.
I would like to read about your purchase history.

sailingfool

· #12 · Oct 20, 2009

Goodall said:
.... During my hunt for a boat several years ago, it was recommended by a freind that I contact a Broker that he uses and this Broker was a Buyer's Broker.

I used him then and two more times as well and it's the only way to go. He was a negotiating animal and worked every angle thoughout the entire process, looking out for me, not the seller.
....

William,
I concur withthe wisdom of establishing a relationship with a broker and relying fully on that broker's assistance thru the boat search process...let him/her do the footwork, call on their experience regarding a specific boat, use their advice in the negotiating process... But I doubt the broker you used was any more a "Buyer's Broker" than any other broker with a shingle out. As you said, he/she was paid by the seller, and you signed a form recognizing his/her responsibility toeht seller, not to you. So use one, enjoy and employ the relationship, but don't forget there is a diverging motivation at the end of the day.

AndrewMac

· #13 · Oct 20, 2009

If there is one thing I have a lot of experience with, it's brokers. I don't care what the legal papers or their licensing requirements state, their alleigance is to their fee - period. Most good brokers will push both parties to make a deal while keeping a wandering eye to make sure they don't technically step outside of any regulations to which they may be subject. It's in their interest to make a deal happen and they will generally take the path of least resistance towards that end. As others have stated, the only way to handle them is to be firm in your own mind and clearly communicate what are and are not prepared to do.

Bene505

· #14 · Oct 20, 2009 (Edited)

I did all my searching myself on yachtworld and any other site I could find. I did a Google search for "sailboat for sale", for instance, just to find all the sites that I ought to be searching. And then I'd search them over and over. At the end of the day, I got a good deal on a great boat. I literally put in 2 hours each day searching for 5 months. That's what it took and no broker is setup to do that for you (that I know of). If there was a broker like that, they would tackle you at the door and say "look what just came up on Yachtworld!"

Good luck with your hunt. It's a lot of fun visiting boats and looking through them. Remember to bring your significant other on some of those trips, if only so she'll appreciate the boat that you do get. Make it a real outing with a picnic or lunch somewhere.

And post pictures as you go.

Regards,
Brad

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sailingfool

· #15 · Oct 20, 2009

Bene505 said:
.... I literally put in 2 hours each day searching for 5 months. That's what it took and no broker is setup to do that for you (that I know of). ....Good luck with your hunt. It's a lot of fun visiting boats and looking through them. Remember to bring your significant other on some of those trips, if only so she'll appreciate the boat that you do get. Make it a real outing with a picnic or lunch somewhere....

That's precisely what a good broker WIll DO AND DOES DO... And while tire-kicking boats can be some fun, it is also time-consuming and expensive. During my last ,two year search, I'd say that half the boats I went to see, I just turned the car around without ever getting out ...thus my advice NOT to do it that way.
A good broker can better creen candidate boats, and get straight answers fromt he lsiting broker, saving your time and money.

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