Tutorial on a Buyer's Broker

[utazo89]

Daddyo,
Also, I expect the seller to tell me what his interest is, if he's firm on price or wants out fast, and that there are not major issues. I've rarely had an issue doing business this way.

Well put.
At my last offer, I was very close to just call the seller directly, since my buyer broker could not get any decent communication from the listing broker.
So a question comes to my mind. Can the seller be contacted directly, if the listing broker is doing a lousy job? Either by me, or by my buyer broker?
I don't know the rules, so I am curious.
I am sure the listing broker would be furious, but if we could cut to the chase and make the seller aware of the difficulties and talking to him directly, maybe there would have been a deal, by now.

 

[Tom.B]

Daddyo,

Boat rides are cheap in the whole scheme of things. If I were selling, everyone gets one who asks, unless they just piss me off. And if they don't buy, I still like showing my boat off. That's cheap. You can do a pretty reasonable assessment of the boat in about 30 minutes on the water, and 30 min in the dock.

I agree with this as well. Sure, as a broker you need to protect yourself from liability and maybe there is some there (or they are just too busy), but the guy we bought from was more than willing to take us out for a spin... twice. There is never a bad excuse to go for a boat ride I even offered to pay for fuel and he declined. And if the time comes to sell again (yea right), we would easily be able to be talked into going for a spin. Unwillingness to do so, CAN (but not always) make it appear the seller is hiding something.

**All this is negated if the seller is remote enough to make getting to the vessel a huge PITA**

 

[CPseudonym]

**All this is negated if the seller is remote enough to make getting to the vessel a huge PITA**

Or the boat is stored on the hard

 

[Seevee]

Well put.
At my last offer, I was very close to just call the seller directly, since my buyer broker could not get any decent communication from the listing broker.
So a question comes to my mind. Can the seller be contacted directly, if the listing broker is doing a lousy job? Either by me, or by my buyer broker?
I don't know the rules, so I am curious.
I am sure the listing broker would be furious, but if we could cut to the chase and make the seller aware of the difficulties and talking to him directly, maybe there would have been a deal, by now.

As a buyer, you are under no contract (unless you sign one) and can do pretty much whatever you want.

I've done that a few times... simply told the broker that I'm going to contact the seller direct as we are not getting the job done. The seller is still obligated to the broker, if the contract provides for that. It doesn't make the broker happy, but sometimes personalities just conflict.

Overall, I have done MUCH better in dealing direct with the owner.

Also, If I hire a broker to sell and I bring the buyer, we split the commission. Only fair.

 

[utazo89]

As a buyer, you are under no contract (unless you sign one) and can do pretty much whatever you want.

Understand.
Can my ' buyer's broker ' contact the seller directly, if the listing broker is not communicating, or trying to be difficult?

 

[BruceK]

If I can test drive a car before deciding to contract to buy it, why not a boat?
DenverdOn pretty much nails the peculiarities of the seller/seller broker/buyer /buyer broker complexities. However you view it, the seller pays the seller broker and the seller broker pays the buyers broker. It`s crystal the seller is paying the buyers broker via the conduit of his sellers broker. No sale no fee can be persuasive.
There is no lack of conflicted interests in this system. For it to work well for the buyer requires overriding integrity of the buyers broker. A seller could even "sweeten the deal" by upping the commission to his broker, thus upping the commission to the buyers broker. It`s an odd system. Here,real estate buyers brokers(we call them agents) exist as the exception not the norm, retained and paid solely by the buyer.
There are plenty of real estate agents/brokers here with little understanding or interest in their duties as an agent, and far more interest in self interest. The boat "buyers broker" does not exist here as such, though there are almost certainly "conjunction sales" which may amount to something similar. Except for FSBO sales, a boat buyer deals direct with the sellers broker and everyone knows where the interests are.
But if your "buyers broker" is a dedicated straight up operator favoring your interests and no one else`s, not even his own, you may have struck gold, I certainly hope that is so, in all cases.
As for a sellers broker refusing to deal with a buyers broker to avoid parting with some of the fee, whose interests are being served? Surely part of the cake is preferable to no cake at all. But, that may be unfair, the seller and his broker might have agreed there should be no sellers brokers and no commission sharing.Unlikely, but possible.
It`s an odd system. I`d label it "the strawberry punnet system", the deeper you go, the worse it gets. Fortunately, broker integrity can save the day, and I hope that`s present all day long.

 

[Ski in NC]

Understand.
Can my ' buyer's broker ' contact the seller directly, if the listing broker is not communicating, or trying to be difficult?

Good question. Maybe D-O can answer. I don't know.

 

[Daddyo]

Good question. Maybe D-O can answer. I don't know.

Technically anything is possible but ethically the only time you would do such a thing would be a case of clear cut unethical behavior by the listing broker.

 

[O C Diver]

Out of curiosity, at what price range are buyers brokers willing to represent a client? It seems that a buyers broker could consume his portion of the commission very quickly on a $100,000 boat if any significant traveling is involved.

Ted

 

[BruceK]

Technically anything is possible but ethically the only time you would do such a thing would be a case of clear cut unethical behavior by the listing broker.

Why would it be unethical? The broker is the sellers agent. Whether the buyer talks to the broker or the seller, he talks to the seller.

 

[Daddyo]

Why would it be unethical? The broker is the sellers agent. Whether the buyer talks to the broker or the seller, he talks to the seller.

Because here the idea is that the listing broker is the seller's representative and as such he is paid to insulate if need be the seller from the rabble.

 

[BruceK]

Because here the idea is that the listing broker is the seller's representative and as such he is paid to insulate if need be the seller from the rabble.

Isn`t the real concern is commercial. If the seller declines direct contact he can say so, and or he refer the enquirer to the broker. Ethics doesn`t come into it.

 

[Seevee]

Here's a question... is there a brokers code of ethics, like in real estate?

 

[Roger Long]

The bottom line is that a good buyer's broker who wants to preserve his very important reputation will actually represent the buyer. Word of crappy brokers is freely spread around the dock.

In this regard, I want to say that we used the OP as a buyer's broker and would again. He's one of the good guys. We got a lot of excellent advice, even for someone who spent a career designing commercial power vessels. We wouldn't have a twin screw vessel today if not for the discussion I had with him and, now, I would never want to go back.

The arrangement works very well when it works. Broker to broker, the buyer's broker may find out more than a seller calling directly. However, that doesn't protect you from the listing broker giving yours bad information. We made a $1500 week long round trip on a wild goose chase and saw another boat the OP had been lied to about on the return.

Where the system breaks down is where it becomes a chain of communication and things can get lost in translation. It can also introduce time delays. We got into a boat purchase from the twilight zone. If I hadn't been there personally on the spot through the weirdness, I doubt that the deal would have happened.

I'm sorry that the OP ended up not getting anything from our deal. We were driving back looking at other listings on a laptop while he was aboard his boat riding out a tropical storm when we discovered the great deal we got on our boat. I doubt thought that he would have wanted to deal with the craziness we did for half of the 5% commission that broker was charging. The broker said they would have dumped the seller if we hadn't already invested so much in travel and hotels. Even doing my own survey, we spent over three grand buying this boat.

 

[tinped]

This whole idea of a test ride without an escrow deposit never made any sense to me.There are many factors that go into deciding whether the boat meets my need, or requirements. Things like noise levels when the engines are under load , or how the boat reacts in a beam sea, etc. Once you get past the eye candy that brought you to that boat in the first place , it is time to get down to the nuts and bolts. The problem I see here is that the brokers/dealers (don't/can't) stock boats like car dealers can, making a test drive impossible. It is just tough to expect a potential buyer to plop down many boat bucks , only to find that the boats performance doesn't meet his expectations.

 

[Bacchus]

Can my ' buyer's broker ' contact the seller directly, if the listing broker is not communicating, or trying to be difficult?

In my case my buyer broker contacted the seller - after some researching - before contacting the selling broker. The boat had been on the market for some tome and had changed brokers during that time. The purpose was to see if the seller was pleased w the selling broker and would prefer dealing direct or through the selling broker.
Bottom line seller was happy w current listing broker and they worked w each other to make the deal and closing smooth. The listing broker wekcomed a buyers broker and was glad to share commission to make the sale.
Highly recommend a buyer broker.

 

[kev_rm]

I still come back to the cost issue. Its nothing personal against brokers, but having spent a couple decades in an industry that does tens of billions in brokered transactions, there is a cost. Entities that sell products through brokers have products that cost more than entities that sell the equivalent product that do not. There is no way around that.

The question becomes, are you as the buyer (because you are ultimately paying) willing to pay the extra ~10% in cost to have an intermediary for both sides?

Many people here will say yes and do pay. I get it. On average, its not for me. Brokers are not, on average in the long run, going to be more educated or savvy than I am to such a degree that I feel its worth it.

Telsa, Geico, E-Trade, Vanguard all have and will continue to disrupt the brokered world. Yacht business won't be left alone forever...

 

[Bacchus]

I still come back to the cost issue. Its nothing personal against brokers, but having spent a couple decades in an industry that does tens of billions in brokered transactions, there is a cost. Entities that sell products through brokers have products that cost more than entities that sell the equivalent product that do not. There is no way around that.

The question becomes, are you as the buyer (because you are ultimately paying) willing to pay the extra ~10% in cost to have an intermediary for both sides?

Many people here will say yes and do pay. I get it. On average, its not for me. Brokers are not, on average in the long run, going to be more educated or savvy than I am to such a degree that I feel its worth it.

Telsa, Geico, E-Trade, Vanguard all have and will continue to disrupt the brokered world. Yacht business won't be left alone forever...

I don't see the problem - the service & cost is voluntary - if you can do the job on your own you are free to DIY sale. I don't see it as more educated I see it as having the exposure / network where buyers go looking.
Having a buyers broker isn't an addn'l 10% - it's sharing the basic 10% brokers commission - I would prefer to have someone on my side vs dealing solely w/ a listing / sellers broker
Craigslist is free but doesn't quite have the exposure that YachtWorld has for boat shopping.
That said I have sold 2 boats on my own or w/ help of Craigslist but they were a much different $ amount and size than the average shopper using YW

 

[BandB]

I still come back to the cost issue. Its nothing personal against brokers, but having spent a couple decades in an industry that does tens of billions in brokered transactions, there is a cost. Entities that sell products through brokers have products that cost more than entities that sell the equivalent product that do not. There is no way around that.

The question becomes, are you as the buyer (because you are ultimately paying) willing to pay the extra ~10% in cost to have an intermediary for both sides?

Many people here will say yes and do pay. I get it. On average, its not for me. Brokers are not, on average in the long run, going to be more educated or savvy than I am to such a degree that I feel its worth it.

Telsa, Geico, E-Trade, Vanguard all have and will continue to disrupt the brokered world. Yacht business won't be left alone forever...

Houses and boats don't sell without brokers. By that I'm saying boats above a certain size and price. Individuals just don't have the access and means of reaching each other. Yes, FSBO saves money. However, it's a minuscule part of the house market.

We drove up one day and saw a for sale sign in the yard of the house next door to us. They owner had been in the hospital and then nursing home but was always assumed to be returning in spite of her age. Her kids were not local. It turned out she went into assisted living and the daughter picked up the phone and called her friend who was a real estate agent. We called and made an offer and bought it that day. It was next door and we had no way of knowing until the sign went up. We had never met the kids until we met the daughter after the sale. We did meet the mother and all seemed normal until the ambulance came to pick her up. We didn't even know how to check on her after that. One of our family members even went to the hospital hoping to see family. Saw none and the mother was on an immediate family only list. Oh, we did use our real estate agent to make the call so at least she got half the commission. She's kind enough to point out what we just bought her. Just humor, as she's a very close friend.

 

[kev_rm]

I don't see the problem

The problem is that it was presented as no or opaque cost to the buyer, that's all.

 

[kev_rm]

Houses and boats don't sell without brokers.

They absolutely can and will. Ergo Redfin and a million other sub $1000 MLS services. Direct is the future, I believe.

 

[BandB]

They absolutely can and will. Ergo Redfin and a million other sub $1000 MLS services. Direct is the future, I believe.

I've heard that a long time and haven't seen it yet. We'll see.

 

[Bacchus]

The problem is that it was presented as no or opaque cost to the buyer, that's all.

Maybe better stated no additional cost.


If a listing broker is in the deal the 10% commission is already included.
If no listing broker and seller is approached by a buyers broker they are free to decline or negotiate...

 

[BruceK]

This whole idea of a test ride without an escrow deposit never made any sense to me.There are many factors that go into deciding whether the boat meets my need, or requirements. Things like noise levels when the engines are under load , or how the boat reacts in a beam sea, etc. Once you get past the eye candy that brought you to that boat in the first place , it is time to get down to the nuts and bolts. The problem I see here is that the brokers/dealers (don't/can't) stock boats like car dealers can, making a test drive impossible. It is just tough to expect a potential buyer to plop down many boat bucks , only to find that the boats performance doesn't meet his expectations.

It is a problem. When I first read your post I thought "a" in the first line was a typo for "no", but the rest clarifies. Even so, you spend a lot of $, unless you know the characteristics of each boat you consider, it is a kind of crap shoot without a test ride.
I think FSBO sellers are more likely to provide a test run, probably because they can and are nearby. A distant broker could delegate that to the owner.
With my boat we had a test run not associated with the survey, broker present, and one engine overheated. The purchase went on hold while the son(executor) of the deceased owner fixed that, before I would go to survey.

 

[Daddyo]

I don't know how this thread got this far from my original post but please indulge me in clarifying this concept of seatrials and deposits.

A deposit is placed on a boat to hold it it from being sold to another buyer as the deposit placer does his due diligence. The deposit is fully refundable and does not force the buyer to purchase the boat. The contract on the boat included with the deposit can include any terms agreed to by the buyer and seller. If the buyer wants to "test ride" the boat prior to the expense of a survey and the seller agrees than that can be done.

 

[Daddyo]

In this regard, I want to say that we used the OP as a buyer's broker and would again. He's one of the good guys. We got a lot of excellent advice, even for someone who spent a career designing commercial power vessels. We wouldn't have a twin screw vessel today if not for the discussion I had with him and, now, I would never want to go back.

The arrangement works very well when it works. Broker to broker, the buyer's broker may find out more than a seller calling directly. However, that doesn't protect you from the listing broker giving yours bad information. We made a $1500 week long round trip on a wild goose chase and saw another boat the OP had been lied to about on the return.

Where the system breaks down is where it becomes a chain of communication and things can get lost in translation. It can also introduce time delays. We got into a boat purchase from the twilight zone. If I hadn't been there personally on the spot through the weirdness, I doubt that the deal would have happened.

I'm sorry that the OP ended up not getting anything from our deal. We were driving back looking at other listings on a laptop while he was aboard his boat riding out a tropical storm when we discovered the great deal we got on our boat. I doubt thought that he would have wanted to deal with the craziness we did for half of the 5% commission that broker was charging. The broker said they would have dumped the seller if we hadn't already invested so much in travel and hotels. Even doing my own survey, we spent over three grand buying this boat.

Roger,
Thank you for your kind words and thoughts. This illustrates in a way part of my thoughts. As our other purchase fell apart and you were driving and I was fighting a storm, we both located your next boat. You contacted them shortly before I sent you the listing. I made nothing in the short term but you got the boat that was right for you and someday it will serve me that I served you. Anybody who lives their life or does their job thinking in the long term and serves their client's best interest will be rewarded in the end. A good buyer's broker will know this and is one of the only times in life when you get something for nothing ie. the seller's commission paid for your partner (buyer's broker).

 

[mramoo]

This whole idea of a test ride without an escrow deposit never made any sense to me.There are many factors that go into deciding whether the boat meets my need, or requirements. Things like noise levels when the engines are under load , or how the boat reacts in a beam sea, etc. Once you get past the eye candy that brought you to that boat in the first place , it is time to get down to the nuts and bolts. The problem I see here is that the brokers/dealers (don't/can't) stock boats like car dealers can, making a test drive impossible. It is just tough to expect a potential buyer to plop down many boat bucks , only to find that the boats performance doesn't meet his expectations.

This summer my wife and I were home (PNW), while there we were trying to check out a vessel that was at that time was #1 on out list. when we finally got a hold of the broker, he said that he did not have time to show us the boat, but that the owner was there and would be glad to show it to us. After the tour of the boat the owner told us that he was taking a friend out for a ride the following Saturday and invited us to go along. When we got home, we got a call from the broker telling us that we could not go for a ride on that boat with out a signed contract. We asked why, because we had been invited by the owner, the broker told us that he would not allow it. We called the owner to get his call the the broker, he said that he was going to go along with the brokers call, I said that was to bad, because he had a nice boat, and an A$$ for a broker. We droped that boat off our list.

 

[Daddyo]

Unfortunately you might never know if the broker was being a PITA or if he was covering for a seller who wasn't honest with you. There is no magic solution other than what many others here have said, deal with someone you trust. Often having your own "guy" is the way if the listing broker doesn't know how to walk the difficult line of representing both parties. This thread wasn't intended to discuss that issue.

 

[BandB]

I don't know how this thread got this far from my original post but please indulge me in clarifying this concept of seatrials and deposits.

A deposit is placed on a boat to hold it it from being sold to another buyer as the deposit placer does his due diligence. The deposit is fully refundable and does not force the buyer to purchase the boat. The contract on the boat included with the deposit can include any terms agreed to by the buyer and seller. If the buyer wants to "test ride" the boat prior to the expense of a survey and the seller agrees than that can be done.

This points again to the topic of this thread which is one we requested as selection of a buyer's broker. It has to be someone who ultimately will hold a deposit and protect you in that regard.

 

[Seevee]

Houses and boats don't sell without brokers. By that I'm saying boats above a certain size and price. Individuals just don't have the access and means of reaching each other. Yes, FSBO saves money. However, it's a minuscule part of the house market.

We drove up one day and saw a for sale sign in the yard of the house next door to us. They owner had been in the hospital and then nursing home but was always assumed to be returning in spite of her age. Her kids were not local. It turned out she went into assisted living and the daughter picked up the phone and called her friend who was a real estate agent. We called and made an offer and bought it that day. It was next door and we had no way of knowing until the sign went up. We had never met the kids until we met the daughter after the sale. We did meet the mother and all seemed normal until the ambulance came to pick her up. We didn't even know how to check on her after that. One of our family members even went to the hospital hoping to see family. Saw none and the mother was on an immediate family only list. Oh, we did use our real estate agent to make the call so at least she got half the commission. She's kind enough to point out what we just bought her. Just humor, as she's a very close friend.

Band,

Tons of boats and houses are sold without brokers, but perhaps not the majority of them. There's a huge advantage in dealing right with the seller (and some advantages not).

I've bought and sold many without a broker, and often did my own closings. Not for everyone, but worth a thought, and often works better. There's a big advantage in developing a relationship with the seller.