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Discussion Starter #1
With the presumption that we were in a ‘buyers’ market and you believed that boat values were/had fallen would you use a buyer’s broker in your boat search?

Some underlying criteria would be: 15 year-old, production sailboat with an adjusted value of 40k – 45K being sold through a broker.

I look forward to hearing potential pros/cons of using a buyer’s broker in this scenario.

Thanks,

Jim
 

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bell ringer
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I would always use a buyers broker! If you want to run around looking at boat condition lies from the seller, go ahead. Lots of seller brokers wouldnt even return a phone call from a direct buyer because they get tired of the “tire kickers”.
 

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Master Mariner
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Even as a professional in the field, I think a buyer's broker is well worth the money. Mine flew from WI to NY and back on his own nickle and all it cost me was lunch. Great guy.
 

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Is the commission split between the buyer and seller brokers or does the buyer pay the buyer broker directly?
 

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Some underlying criteria would be: 15 year-old, production sailboat with an adjusted value of 40k – 45K being sold through a broker.
Jim
Nope, no way (in my opinion). Part of figuring out what you want and need is doing research online, walking boatyards and speaking to folks on docks to figure out the "right" boat. Once you have a good idea about that you can find them the same way a broker would - on the internet.
The person you need to spend money on is a good surveyor.
 

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bell ringer
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Personally none of the boats have brought were recommended by my buyer broker. Instead the way i worked it was that I send him the boats I was interested in and told him to check into them.
 

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Nope, no way (in my opinion). Part of figuring out what you want and need is doing research online, walking boatyards and speaking to folks on docks to figure out the "right" boat. Once you have a good idea about that you can find them the same way a broker would - on the internet.
The person you need to spend money on is a good surveyor.
So how do you find out what the actual sail price of the sold boats?

You plan assumes you are a good qualified subject matter expert. I would still do what you said in terms of research. I wouldn’t really ask others in a boatyard as they all have different requirements they find important.

What I did 23 years ago when we purchased Haleakula was look for a year at different brands and set ups. Looked for build quality, accompanying winches engines , and narrowed down to 5 models/ makers. I made a. Spreadsheet with comments. In general I wanted something 35 ft.

There were certain dealbreakers for me. They were engines ( no Volvo) and preferred Yanmar, decent sized V berth full, headroom over 6’10, open salon with no mast in the way or center table, no open transom, , high set companionway, not much teak topside, but the opposite downside , good pointing ability, in the top 25 % PHRF rating, masthead, straight across spreaders,

Then I went aboard lots of boats, the broker enter the picture as he knew ones to look at and gave me other siggestions. I wound up narrowing to 37 Tartan, 36 Sabre, 35 C&C MKIII., Tayana 37, and Bristol 35.5

I had $65,000 for the boat and allocated $20;000 for upgrades.

The brokers scoured the listings . Contacted other brokers, found out the dogs...the extras. It narrowed to 3 eliminating the Tayana and Bristol. Also not many available. At this point it became a comparison of care and. Condition of the boat. While Haleakula a 35 MKIII C&C wasn’t the largest or beamiest, it had the best engine condition, best overall condition, great living room below, nice safe decks, rod rigging, fast and nimble and pointed extremely well, not a lot of PO Rube Goldberg projects, warm teak interior including the head, chain plates inspectable, set up for single handing, and in my eyes a looker with the old school design .she also was the best condition. .the broker was very helpful with the comps. Oh yes she had a centerboard as a secret weapon.

I had a good broker, well known in the Annapolis areA. Well known brokerage, good reputation, lived on his own sailboat. He had seen our boat over a few years being sailed and was a good wealth of knowledge.

23 years later as Haleakula has aged, I have never looked back on my specific choice. I still like the Sabre and Tartan and have friends with both and would have been happy with them. But our boat has been a good send.
At averaging 2500-3000 nm sailing per yer, 1500 on weekends, 1000-1500 in vacations you can do the math. Last year we went past the 64,000 nm mark on our Long Island Vacation.

I still talk to and see as well as recommend our broker. The sailing community in Annapolis can be a tight one . Most brokers have good knowledge but you must shop for a good one.

As far as going it alone. You can think you know enough to be a self proclaimed expert in anything. A good broker can really help.
 

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Nope, no way (in my opinion). Part of figuring out what you want and need is doing research online, walking boatyards and speaking to folks on docks to figure out the "right" boat. Once you have a good idea about that you can find them the same way a broker would - on the internet.
The person you need to spend money on is a good surveyor.
I don't think you understand what a buyer's broker is.
I told him what I wanted and using a nationwide network of brokers he found out if the pictures in the listing were current, got someone to take a quick look (saved me gobs on plane fares and/or road trips and helped me whittle down a nationwide list to a hand full of boats.
During negotiations, he was my representative, and gave me enough information to save me over 1/3rd off the asking price. He held my money in his escrow account which, with all the shady brokers out there, made me feel much more comfortable. His company did a title search and made sure there were no hidden debts owed by the boat. And all it cost me was lunch and taking the guy to and from the airport.
I'm really glad you have the time and are are capable of doing all that on your own, at no cost to you, but I really didn't have the time or desire to fly all over the US looking at a whole lot of boats that might be misrepresented on Yachtworld (or wherever), plus all the other stuff.
 

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$40k (in the grand scheme of things) is not a lot of money and the selection of 15 year old production boats at that price isn't immense.
At a much higher price point or if looking for a specific boat I would agree a buyers broker might make sense. If a boat fitting the criteria showed up beyond the distance I'd look but within the distance I'd buy a buyers broker might make sense.
If I had no inclination or time to look at boats a broker might make sense.
Call be skeptical, I think every hand in any deal is going to be reflected in the sale price. Nobody works for free. In my opinion I'd rather do my own boat work wherever possible, including finding the boat.
Looking at boats is not something to outsource, there is a lot of information in the boats you won't like. Knowing what looks or feels wrong is important. People you meet along the way in the initial search will give you leads, advice and maybe warn you away from some problems.
With luck after a short while you'll board the boat that just "feels right" (thats the time to call a really good surveyor).
 

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Old soul
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If you can find a buyer's broker that will really work for you, then great. But at this price range, you're likely not going to be able to buy a lot of professional service.

Unless you're hiring the broker and paying them out of your pocket, they will be splitting the already small commission with the seller's broker. The typical commission is 10%, so on a $40K boat that's $4,000, which is then divided by two. That's not going to buy a lot of professional service.

I wonder if selling brokers avoid working with prospects who use buyer's brokers?
 

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Master Mariner
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$40k
Looking at boats is not something to outsource, there is a lot of information in the boats you won't like. .
However, weeding out the chaff is.
 

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Master Mariner
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I wonder if selling brokers avoid working with prospects who use buyer's brokers?
In my experience, they are one and the same, for a true professional. It all depends on who has the listing.
Still, $2k is not a bad payday if a broker is involved in a half dozen sales or more a month, IMO.
 

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Old soul
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In my experience, they are one and the same, for a true professional. It all depends on who has the listing.
Still, $2k is not a bad payday if a broker is involved in a half dozen sales or more a month, IMO.
Yes, most of the time there is only one broker, especially at this lower end of the market. They act for both sides to facilitate the sale, but if they are a seller's broker they are (or should be) working to maximize the benefit to the seller.

I'm sure there are scenarios and brokers where it makes financial sense. But complaints already abound regarding poor service received from selling brokers. Most of these tend to be in the lower end of the market like this one. The reason seems clear: the expected fee doesn't buy a lot of service.

A buyer's broker could structure an agreement to limit the amount of work they do. Or a buyer could hire the broker directly. Both of these would probably work well. But I just don't see it making financial sense in general.

And like I say, I wonder if selling brokers try and avoid working with potential buyers who use their own broker. They'd certainly have an incentive given that their expected fee is going to be cut in half.
 

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Yes, most of the time there is only one broker, especially at this lower end of the market. They act for both sides to facilitate the sale, but if they are a seller's broker they are (or should be) working to maximize the benefit to the seller.

I'm sure there are scenarios and brokers where it makes financial sense. But complaints already abound regarding poor service received from selling brokers. Most of these tend to be in the lower end of the market like this one. The reason seems clear: the expected fee doesn't buy a lot of service.

A buyer's broker could structure an agreement to limit the amount of work they do. Or a buyer could hire the broker directly. Both of these would probably work well. But I just don't see it making financial sense in general.

And like I say, I wonder if selling brokers try and avoid working with potential buyers who use their own broker. They'd certainly have an incentive given that their expected fee is going to be cut in half.
In a buyer's market, as it has been since the last financial upheaval, most brokers of lower end sales would rather take less and move boats, than sit on a listing indefinitely, I believe. The longer the boat goes unsold, the less it will probably sell for anyway.
Since the buyer's broker costs neither the seller nor the buyer a cent, where's the down side for either? If a seller's broker won't work with a buyer's broker, he's lost the sale, so gets nothing and retains a listing on a fast depreciating boat. There's little advantage in that, in the lower end of the market, unless it is a brand new listing, as I see it.
 

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Would be nice if an actual broker posted here.

Instead we are forced to amateur intellectual conjecture and speculation.
 

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Discussion Starter #17
Thanks, there are a lot of helpful posts on this thread.

In a buyer's market, which I think we are moving towards, I think 40K - 45K is doable for the boat I am interested in, as there are several boats currently listed around 55K (actually 17 on YachtWorld priced between 50K - 60K). In the right economic environment this is a 20% reduction in the current price of these boats.

Realistically, I'll probably buy one of these boats anyway, the difference being in timing (either later this year or in two years when I retire).

One of my concerns is pricing a boat in a changing market. I don't mind paying a fair price for a boat, but I don't want to overpay, either, if market values change.

My biggest question is with a 5K commission (2.5K to a buyer's broker) on a 50K boat enough to make it worth a buyer's brokers time. I don't necessarily need a broker to hold my hand during the process, I know the make/model that I want to buy (might go up/down one model for the perfect boat) but I would want an appropriate valuation of the boat I have in mind, and the ability of the broker to help me narrow my quest towards the right boat that fits my wants.

Jim
 

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Old soul
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In a buyer's market, as it has been since the last financial upheaval, most brokers of lower end sales would rather take less and move boats, than sit on a listing indefinitely, I believe. The longer the boat goes unsold, the less it will probably sell for anyway.
Since the buyer's broker costs neither the seller nor the buyer a cent, where's the down side for either? If a seller's broker won't work with a buyer's broker, he's lost the sale, so gets nothing and retains a listing on a fast depreciating boat. There's little advantage in that, in the lower end of the market, unless it is a brand new listing, as I see it.
In understand, and I know we're all just theorizing here. But I also know it's not hard to find complaints about poor service from selling brokers. This is usually in the lower end of the market. When I've probed on this a few brokers have confirmed that it is due to simple economics: low fee means they can only afford to devote a small amount of time to that sale.

This makes perfect sense to me; it's how all businesses work. So while the cost of the buyer's broker is neither paid directly by the seller, nor the buyer, there is a clear incentive for the selling broker to avoid working with a buyer's broker. And the overall financial gain to both brokers is small (and now cut in 1/2 in the mind of the selling broker).

Knowing that humans feel losses stronger than gains, it makes sense to me that a selling broker will avoid working with a buyer's broker if the market allows. Whether they actually do this is obviously dependent on the market, and how they run their business. But the financial incentive is clear.
 

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Old soul
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My biggest question is with a 5K commission (2.5K to a buyer's broker) on a 50K boat enough to make it worth a buyer's brokers time. I don't necessarily need a broker to hold my hand during the process, I know the make/model that I want to buy (might go up/down one model for the perfect boat) but I would want an appropriate valuation of the boat I have in mind, and the ability of the broker to help me narrow my quest towards the right boat that fits my wants.

Jim
This is exactly the question I'm raising. Personally, I think at this range of the market it is better for both seller and buyer to avoid brokers all together. I don't say this because I think brokers bring no value to the table -- they do (at least the good ones do). But at this financial range the broker must be careful not to over-spend their time. Time is money, and time spent on a low-end sale is time not spent on a higher paying sale. It's just basic economics.

Market demands will dictate how these incentives operate, but given the number of complaints around brokers operating in the lower end of the market, I think it's clear lower fees tend towards lower service.

All this said, if you can find a broker to work for you, then go for it. But you might be better served by hiring a buyer's consultant, as opposed to a broker. I know of a few folks, like Bob Perry, who run a consulting service to fill this need.
 

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Thanks, there are a lot of helpful posts on this thread.

In a buyer's market, which I think we are moving towards, I think 40K - 45K is doable for the boat I am interested in, as there are several boats currently listed around 55K (actually 17 on YachtWorld priced between 50K - 60K). In the right economic environment this is a 20% reduction in the current price of these boats.

Realistically, I'll probably buy one of these boats anyway, the difference being in timing (either later this year or in two years when I retire).

One of my concerns is pricing a boat in a changing market. I don't mind paying a fair price for a boat, but I don't want to overpay, either, if market values change.

My biggest question is with a 5K commission (2.5K to a buyer's broker) on a 50K boat enough to make it worth a buyer's brokers time. I don't necessarily need a broker to hold my hand during the process, I know the make/model that I want to buy (might go up/down one model for the perfect boat) but I would want an appropriate valuation of the boat I have in mind, and the ability of the broker to help me narrow my quest towards the right boat that fits my wants.

Jim
There are so many more places than Yachtworld that boats are sold though I wouldn’t exclude it. My question is what do you have to loose by going to a broker. If you are well read ....and you do your research as expected ....the final decision always rests with you.

The more information the better the decision you make

Most of the boats on YW never met my criteria and I was willing to wait until one did. The money didn’t burn a hole in my pocket. O didn’t have to accept a brand/ model which really wasn’t in my 5.

Maybe that’s why I’ve been satisfied with her for 23 yers despite having the money to trade to a different / larger boat. Actually there is one boat I would have made that move. As I sailed I became aware of a Manson 44 which I wanted. That’s when long range cruising was in our plans.
 
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