Buyers Broker, Pros / Cons

Hello All, I was wondering what the Pros / Cons for employing a Buyers Broker? In my case, I am selling a Sailboat (Sabre 32) with a Sellers Broker and now looking for my next boat Nordic Tugs 32 (2000-2006). Since I know exactly what I want, is their any advantage of having a buyers broker? Other then getting past "sold" data for determining what a good offer would be? Thanks in advance, Dan

We used a buyers broker. We had issues of driving hours and the boat was not as represented in ads and phone conversation. Sometimes it was hard to get the listing broker to call back.

One boat we lined up a showing with a listing broker, the boat was 4 hours away. Asked the normal questions about gel coat, engines etc. everything good to go.

This was the first boat on our list that the buyer broker looked into at the same time. Well he saved us a trip, complete different story with the same questions asked.

It's really your choice but I would use one again.

A sellers broker's first allegiance is to the seller...
A buyer's broker will work for you the buyer and be more willing to negotiate pricing, offer you pricing info, etc.
I've used one and would again... same situation I knew what boat I was interested in.

thanks. another question... Does Buyer broker split commission with Seller broker. And does that have an affect with the Seller broker?

DPTrainor said:

thanks. another question... Does Buyer broker split commission with Seller broker. And does that have an affect with the Seller broker?

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Commissions are much like real estate. They are split between seller's and buyer's broker. Then, unless you're dealing with an independent broker, each of them splits with the brokerage they work for.

Would the seller broker like it all and might some unscrupulous one's try to maneuver a sale where they have both halves ignoring buyer's brokers? Yet, it can happen, but it's not common and if the seller's broker lacks basic ethics and obligation to the seller, then not sure that's the broker you want anyway.

I believe in buyer's brokers to focus on your needs and to screen and qualify boats for you. They can often find out things about boats for sale that you can't without ever going to the boat. Obviously a key factor is the selection of the buyer's broker as there are good and bad.

Now, all this assumes the boat is above a certain price level. Below that level, which varies by broker, there simply isn't enough profit to justify much work by either broker. That's why you won't as often ee the $15,000 boats through brokers but on places like Craigslist and Boat Trader.

I agree with the advice given so far and do recommend that you have your own buyers broker.

But there are cases where splitting the commission will make the listing broker reluctant to work that way. He won't do it overtly but will subtly push your buyers broker away by not returning calls, etc. The case where it can work that way is in a market where 90+% of the sales are done by the listing broker. In that case all he has to do is wait for a buyer to come to him directly. There probably isn't a way to know this for sure, but if you did I would go directly to the listing broker myself. Oriental, NC is one such market. Most others are more open to outside brokers.

David

Greetings,
Mr. DTP. We used a buyer's broker for our current vessel (yachtbrokerguy-a member here on TF). He saved us potentially days, possibly weeks of unnecessary travel and in some cases DID travel to distant locations (on our dime, but cheaper for one with a practiced eye than us two). We, the three of us, found the perfect vessel upon which I am currently sitting and replying to your post....Like ALL brokers, get one you can work with and trust. We'd use Tucker again but we're just too happy with what we've currently got...Sorry Tucker, you're TOO good!

All good inputs above. For what it's worth, here's some personal experiences related to DPTrainor's original question:

a. When selling my last boat (53' Canoe Cove), I listed it with a seller's broker. This broker moored the boat, showed the boat to interested parties, advertised the boat, etc. All normal activities as expected of a listing broker. He did, in fact, show the boat to the final buyer (MULTIPLE times), answered his many, many questions and concerns, and did all expected by me as the seller. Low and behold, when the ultimate buyer decided to submit an offer, it came through a "seller's broker", who had done absolutely NOTHING (other than submit the offer) to earn his commision. I believe he never even SAW the boat, much less went aboard to assist his buyer in his decision making. My broker did the negotiations, performed the sea trial, assisted during survey, etc. Again, all as expected by me. Bottom line-my broker was forced to split his commision with the buyer's broker, with no gain by either my broker nor me. In fact, having to split the commision reduced my financial leverage to a certain degree. I'm sort of cheesed by this sort of (I'm told) very common practice in the industry.

b. When I bought my next boat, I again engaged the same broker (my original seller's broker) to assist me in locating my next purchase. He researched available boats, visited numerous boats to pre-select suitable ones for my perusal, and again, did all the things I would expect from a "buyer's broker", including conducting the sea trial, assisted at survey, handled paperwork, etc. All in all, a most professional and satisfactory experience.

Having said all that, my personal opinion is that in all things related to buying and selling of boats, your mileage may vary, and your PERSONAL relationship with all interested parties is by far your best friend. In other words, choose your broker(s) wisely. Will I use a buyer's broker again? YES, and the same one I've had a personal relationship with for years.

Regards,

Pete

We used a buyer's broker for our first boat. Great experience... and he taught me a lot during the quest. I can't think of any cons.

-Chris

Buyers brokers can be good option if you can find one you trust.
I have seen when they are not trustworthy and the buyer would not / could not know that.

I dunno... I think since you know exactly what you want and know where to look to find it, it seems strange to get a buyer's broker (that I don't really agree with anyway because at the end of the day, their money STILL comes from the seller... but we have argued this ENDLESSLY here already) to help with a simple-ish sale. I don't think they can really negotiate any better than you going direct to the listing agent. Moreover, with the listing agent getting the full rack-rate commission, they will be far more motivated to try and make the sale than one that has to hand over half their paycheck to someone that didn't do much of anything.

But if you don't have one already from previous dealing, no since in trying to pick one out of a pool. A good broker should be a very tight and trusting relationship. Not one you just pick up for a single deal.

Thanks All for your experiences.

Tom.B said:

I dunno... I think since you know exactly what you want and know where to look to find it, it seems strange to get a buyer's broker (that I don't really agree with anyway because at the end of the day, their money STILL comes from the seller... but we have argued this ENDLESSLY here already) to help with a simple-ish sale. I don't think they can really negotiate any better than you going direct to the listing agent. Moreover, with the listing agent getting the full rack-rate commission, they will be far more motivated to try and make the sale than one that has to hand over half their paycheck to someone that didn't do much of anything.

But if you don't have one already from previous dealing, no since in trying to pick one out of a pool. A good broker should be a very tight and trusting relationship. Not one you just pick up for a single deal.

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Tom,

First, your Buyer's broker is paid for by YOU, not the seller. However, the language in the offer usually has the seller's broker accepting half of what commission the listing contract called for and the seller pays for no "selling" side of the brokerage. Quite common.

So your buyer's broker allegiance is to you. He is not obligated to get the seller the best price, he is obligated to get YOU the best price. He can ask questions and negotiate for you where the seller's broker cannot go because of his ethical obligation to the seller.

I've used buyers brokers a lot, but mostly real estate. They can find out how desperate a buyer is and personal stuff about him that a sellers broker can't divulge. Like he can't feed his kids if the boat doesn't sell.... or he's in the middle of a divorce and needs this thing sold NOW, or whatever.

Now, a lot of brokers want a "dual agency" where they represent both parties. I say poppy cock to that. It's unethical to represent both parties, but they have to treat both fair, not the same as being employed by one party for their best interests.

Yes, buyer's brokers are a good thing, but be SURE it's spelled out clearly in the original agreement.

Seevee, I'm not sure you are correct. As in real estate transactions, the buyers broker still is technically working for, and getting paid by, the seller. The seller is still paying the commission, but paying it to two folks. Financially, the buyers broker has an incentive to get the highest price for the boat that is possible.

I used a buyers broker to buy my sailboat. She was excellent. She is also a fellow yacht club member and a friend. She worked hard for me and was paid by the seller. I did not use a buyers broker for my current boat. The reason is that I knew what I wanted to buy and most of the used inventory was being listed by the same broker (builder). Since in this situation a buyers broker would have done very little, I didn't feel it appropriate to deprive the selling broker of his full commission just to split it with a friend of mine.

dhays said:

Seevee, I'm not sure you are correct. As in real estate transactions, the buyers broker still is technically working for, and getting paid by, the seller. The seller is still paying the commission, but paying it to two folks. Financially, the buyers broker has an incentive to get the highest price for the boat that is possible.

I used a buyers broker to buy my sailboat. She was excellent. She is also a fellow yacht club member and a friend. She worked hard for me and was paid by the seller. I did not use a buyers broker for my current boat. The reason is that I knew what I wanted to buy and most of the used inventory was being listed by the same broker (builder). Since in this situation a buyers broker would have done very little, I didn't feel it appropriate to deprive the selling broker of his full commission just to split it with a friend of mine.

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Dave,

The buyers broker is paid but the BUYER, not the seller. The contract reflects this. Often realtors won't make that destinction, but the sharp ones will. Often the numbers come out the same, but the check going to the buyers broker is signed by the buyer. And the agreement between them reflects the fee. Often it's the same as it would be if he had been on the selling side, but can be different. On the selling side the contract points out what the selling agent will get based on the fact that he is not providing a buyer.

So, the buyers broker can legally and ethically do a lot more things for the buyer that a selling agent can't.

"I've used buyers brokers a lot, but mostly real estate. They can find out how desperate a buyer is and personal stuff about him that a sellers broker can't divulge. Like he can't feed his kids if the boat doesn't sell.... or he's in the middle of a divorce and needs this thing sold NOW, or whatever"


Interesting thoughts - on the rare occasion when I became aware of situations like these I ended up selling lower or buying higher than I typically would had if I did not know that information.

Thanks for all the good information / experiences. Seem to be varied experience and I am still not sure whether or not using a buyers broker (for me) yet. But, I have a lot more information to make decision. I take it a lot of dealing with a broker is based upon a trust relationship. I don't know any buyers brokers, so I don't have that relationship. I have a sellers broker, but just met him so I tell him nothing about me, my financial situation or plans. So, it is not possible for him to reveal anything to potential buyer. Anyway, still trying to decide whether a buyers broker is good or not and the information here is helping me. Thank you, Dan

I must be doing something wrong. In 21 years of boat sales I have never been paid by a buyer. I have represented buyers in countless sales but the commission was paid for by the seller.
I represent buyers and learn what boats what will fit their needs rather than try to sell what is at my dock that week. It may take a long time to find the right boat. In Fort Lauderdale we do a lot of co-brokerage so that is normal, I will travel to inspect the boats for my clients before they travel here.
However in the higher price ranges buyers will travel much further to look at boats so many of my clients are from outside of Florida.
For buyers that are looking locally it would still be good to find a local broker who can learn what will be the "right Boat" for you, and help you get that boat. Many buyers I have dealt with have had the boat they buy evolve from their first searches to something that works better for them.

yachtbrokerguy said:

I must be doing something wrong. In 21 years of boat sales I have never been paid by a buyer. I have represented buyers in countless sales but the commission was paid for by the seller.

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I have never heard of an arraignment that is otherwise. Strange things do happen, but I really question the accuracy of those that claim that the buyer is paying a "buyer's broker" directly.

yachtbrokerguy said:

I must be doing something wrong. In 21 years of boat sales I have never been paid by a buyer. I have represented buyers in countless sales but the commission was paid for by the seller.
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Tucker,

You're doing nothing wrong. A buyers broker is just a different way of handling things and puts the fiduciary responsibility of the broker with the buyer, not the seller. It allows the broker the ability to do things that would otherwise be not in the best interest of the seller who is paying the commission, or things that my be in conflict with his code of ethics.

The buyers broker can snoop around and find out things about the seller that may influence the sale, like how desperate he is or something that may create a better deal. An example might be a divorce or a failing business, or a balloon payment that needs to be made, perhaps nothing to do with the boat. If the selling broker disclosed that he would be in violation of the code of ethics, at least in real estate, and suspect it may be the same in boating.

And the sellers broker will emphasize the goods and downplay the bads, which is simply good salesmanship. The buyers broker will emphasize everything, without leaning any direction. The sellers brokers allegiance is to the seller, as the buyers brokers allegiance is to the buyer.

However, it must be said that any broker regardless of who he's representing has to treat the client fairly and speak the truth.

I've used a buyers brokerage many times, mostly in real estate and has worked very well. And it's fast and efficient. Often the broker would find the property and make an offer subject to my acceptance. I spend very little time looking, the broker knows exactly what I want and what will work so he won't be chasing things that won't work.

The buyer's brokerage thing has become less popular over the years, and a lot of folks, including brokers have never heard of it, especially the younger ones. However, still a good relationship. The "dual agency" thing has come up in the past several years where the broker is representing both parties. I say poppycock to that, you can't represent both sides. When a broker pushes that on me, I simply say that I'll be represented by whomever (or myself) and will do my own due diligence. They also will ask me to pay part of their fees, which I won't.

And the award for... oh nevermind.

Seevee said:

I've used a buyers brokerage many times, mostly in real estate and has worked very well. And it's fast and efficient. Often the broker would find the property and make an offer subject to my acceptance. I spend very little time looking, the broker knows exactly what I want and what will work so he won't be chasing things that won't work.

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So with this situation, you sign a contract with a broker to help 0you find and negotiate for a potential purchase? What type of fee do you agree to for this service? Is it a flat fee or is it based on a percentage of the price paid for the final sale? Do you have an exclusive contract or non-exclusive contract, ie what if you find your own listing without the brokers help? Do you normally have a set term for the contract?

dhays said:

So with this situation, you sign a contract with a broker to help 0you find and negotiate for a potential purchase? What type of fee do you agree to for this service? Is it a flat fee or is it based on a percentage of the price paid for the final sale? Do you have an exclusive contract or non-exclusive contract, ie what if you find your own listing without the brokers help? Do you normally have a set term for the contract?

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You can set the terms to whatever works for you and the broker. I've used both a percentage and a flat fee. I like the flat better as often the broker does too. The broker must perform to make the deal so if I find my own purchase, he doesn't get paid, however, I've never done that. Also, it doesn't have to be "listed" ....can be a FSBO, or even someone that didn't even have it for sale.

Thanks Seevee