Anatomy of a lost sale

This is just an FYI so that others can see how a broker can lose a sale.
I made an offer using my buyers broker through a listing agent on a boat on Oct. 7. The feedback we received was that the price was ok but some of the terms needed changing but they didn’t send a signed counter offer but let my offer expire. I made another offer at same price but with the terms changed to what they wanted. We got the same feedback with a couple more changes needed but no counter. I made a third offer and got a verbal that everything including price was agreed on. But the listing broker did not produce a signed acceptance to my offer. The listing broker also requested that my 10% deposit which was being held by my buyers broker be sent to his brokerage. After discussing this with my broker I agreed to have the listing broker hold the deposit. I made my 4th and final offer after having my broker make it clear to the listing broker that this was my final offer and if I did not receive a signed accepted offer that I was moving on and expected my deposit to be returned ASAP. This offer also expired but the listing broker emailed my broker complaining that the verbiage still wasn’t right on a couple items and I didn’t exclude a couple other items that he disclosed were not working. He then said that if I would agree they would change and initial my offer and sign and send to me on Monday.
And here again there is no signed counter offer. I just told my buyers broker to have them return my deposit. After 24 days I’m done with them. It’s just a shame but this boat would have worked out for us. So now I really understand why some people are so down on brokers.
I don't fault my buyers broker, actually I think he acted professionally in the negotiations. I feel the listing broker is the one who lost the sale for the seller. Whether he was lying to me about the seller agreeing verbally to the price or he was trying to play my offer to get a higher offer doesn't matter to me. I made a legitimate offer with the requisite 10% deposit and this guy lost the sale.
So I tried to do the right thing. I found a buyers broker who worked out for me. Unfortunately I couldn't choose the listing brokerage. The seller chose that. My broker even spoke with the seller and got the feeling that the price was acceptable.

You never know what goes on between a seller and his broker. The broker could have been lying to you because he knew that the seller wouldn't accept the deal so he strung it along, hoping that he could work it out somehow. I have seen that happen in real estate, even when the broker was representing both parties and of course I was paying the commission.

The other side of the equation is perhaps the seller was arbitrary and intransigent and the broker hoped he could work it out but in the end he couldn't.

David

I think the seller should look for a new broker to represent him. Obviously this broker lacks communication skills.

You were a lot more patient, and went further than I would have. In fact, had a similar thing happen when buying a house quite some years ago. Made an offer, they came back with a verbal response. I told my broker, "That's my offer. If they want to make a counter-offer then they need to do it, not just talk about it."

Meantime we kept on looking at other homes, and eventually found one that my wife and I bought. Funny thing about it is that the same day we made an offer on the other house--almost a month after our offer on the first house had expired--the broker from the first house finally came across with a written counter-offer. I couldn't help but, quite literally, laugh out loud at him.

I've bought and sold quite a few houses over the years and every transaction has begun with an offer then counter then either an accepted agreement or no deal. Even buying cars work this way. This one was just unbelievable. It was a cash offer, no financing to get in the way. Just needed a signed acceptance, then survey, then wire the money to the seller. I made it clear at the offered (and supposedly verbally accepted) price a few items that were disclosed I would accept as is such as an air conditioner not working, strut bearings need replacing and a couple other smaller items.
What I believe happened is the listing broker was using my low offer (which was agreeable to the seller) to get a higher offer and have me either come up or sell it to another buyer. Or maybe he was not happy he had to split his commission?

I had the same problem when we bought LUNSEA. Selling broker became a real ASS when he found out I had my own broker and surveyor.

Crusty Chief said:

I think the seller should look for a new broker to represent him. Obviously this broker lacks communication skills.

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I question whether the seller's broker correctly (assuming OP's version is correct, which I do not doubt) communicated the sequence of events to the seller. In those circumstances, I would not have been above contacting the seller directly. No legal or ethical reason not to.

An unwritten counter off is the same as no counter offer. The seller has reserved the right to change the terms at anytime. If you don't get a written counter offer walk away. You have put your deposit up with the offer, and are bound by the terms if seller accepts before your withdrawal. What a cheesy way of handling by a broker. In my opinion the buyer's broker should have advised the buyer of this.

I had a similar experience many years ago when trying to buy a SeaRay Sundancer. My broker kept getting a run around from the selling broker and we weren't even sure if the selling broker was telling the seller that we had made a offer.


I found the boat on the USCG Documentation Center and had the owner's name. I found his address and mailed him a letter detailing our experience with his broker and also the terms of my offer. I asked him to call me.


Two days later he called me and we consummated the deal over the phone. He then called his broker and told him to go ahead with the deal. The selling broker was not happy but was forced to proceed.


After that experience I've done all my negotiations myself. When we bought Beachcomber I hired a broker to advise me and answer any questions that might come up but I did my own negotiation with the seller (a brokerage who owned the boat).

The reality is we don't know what went on between the listing broker and the seller. I've seen it where it was the fault of the listing broker and I've seen it when the broker did nothing wrong, but the seller is the one who kept changing the rules. Then shortly after, I've seen it listed by a new broker and most assuming the broker was terminated when actually it was the broker who "fired" the seller.

I've seen some awful behavior by brokers but I've seen some by buyers and sellers too. I know one very nice person, respectable business owner, who just loves negotiations. If he doesn't feel he's "winning the deal" then he won't make it, even if it's a reasonable price.

One mistake I see is not insisting on a written counter-offer.

Someone I knew in real estate refers to analyzing a failed deal as "pissing on the ashes".
If you put a time limit on the offer you can control it, and put some pressure on the seller. Don`t forget a counter offer, written or not, destroys the offer it responds to.
Tough to tell the author of an odd response,or lack of, broker or seller. If a broker impedes a sale because he has to split commission that`s wrong imo, he could be preferring his own interests to his principal the seller. For an agent, that can`t be right, unless the seller agrees or authorizes it.

Just curious,what did your broker say that would make you release the down payment to the listing broker,without a signed agreement.I don't think I would ever do that.

It's also possible that the listing broker didn't like the buyer's broker taking 1/2 the commission and was trying to shop the offer around to get an offer from an unrepresented buyer.

poach said:

it's also possible that the listing broker didn't like the buyer's broker taking 1/2 the commission and was trying to shop the offer around to get an offer from an unrepresented buyer.

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***bingo***

That's too bad, better luck with the next one!

Poach, in post #14 may be right.

I was working on my Grand Banks when I heard foot steps on deck. He introduced himself as a yacht broker. Wanted to know who I was listed with. I am doing a lot of retire both AC an DC. He starts telling me to hide all the wires and cover every thing up. But I am not done yet. I should put a strong mixture of bleach on my teak decks. Wipe the deck house with Amourall to make it shine. He will sell the boat for two points less then my broker. Now I ask him to leave my boat and I am not interested. I think he would sell his mother on Saturday and deliver her. Where are the Boy Scouts?

Ron T said:

Where are the Boy Scouts?

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Definitely they aren't dock walking trying to steal listings.

Under the "follow the money" concept you will learn to deal only with the listing broker when buying a boat...then trust no one.

In yacht sales as in real estate, a transaction happens when a buyer's interests and a seller's interests align. Brokers exist mainly to communicate and facilitate. Unfortunately, brokerage-dependent industries seem to attract a disproportionate number of people who are long on ego and short on communications skill.

In this case, folivier may never know just where this deal went of the rails, unless he speaks directly to the seller. Maybe there wasn't a good alignment, for whatever reason, but it does sound as though one or more of these brokers managed to fumble the ball.

Agree with those who suggest that the seller's broker should have inserted the desired language in the contract and then had it signed by the seller. To keep sending an offer back with no written counteroffer seems decidedly unprofessional. To carry on that way while demanding that the earnest money be handed over to the listing broker is just bizarre. Big red flag.

Folivier, everyone associated with that boat knows you tried, and presumably they know how to contact you. If the seller wants to make a deal, they'll find a way to reach out. If someone else buys the boat, maybe your offer was just being "played" all along anyway. You did what you could.

seasalt007 said:

Under the "follow the money" concept you will learn to deal only with the listing broker when buying a boat...then trust no one.

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Like everything else, it's hard to know the real motives.

In the current boat market, it's hard to believe a broker would pass up half of something and be left with nothing.

Just as there are vast numbers of boats that never leave the marina, there are probably a significant number that are fir sale, but really aren't.

And, it's also likely the broker wad trying to get the seller to see reason.

Both these latter possibilities seem the most likely to me.

I hate to say it, but I think most brokers are parasites. Little value add, and often an obstruction sucking the life out of a deal.

Now let me apologize to the few who actually do add value. You are a unique group and we all appreciate your help and participation in buying boats.

twistedtree said:

I hate to say it, but I think most brokers are parasites. Little value add, and often an obstruction sucking the life out of a deal.

Now let me apologize to the few who actually do add value. You are a unique group and we all appreciate your help and participation in buying boats.

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Let me toss the other side out too. Most buyers and sellers are very poor at selecting brokers. That's how the bad ones not only persist but make money in the profession.

The fact that boat brokers are completely unregulated in 48 states is staggering. We wouldn't think of not regulating real estate brokers. Nor would we not regulate car dealers even. Small boats are comparable to cars in price and large ones comparable to houses.

Not only is it possible for those previously convicted of criminal activity including fraudulent business activity to become boat brokers, unregulated sales positions are targeted jobs for those who would have difficulty entering other fields.

One of the problems of unregulated jobs of any sort is that they become victims of adverse selection. It's like the one manufacturing facility that doesn't drug test will attract a disproportionate percentage of the users. No bonding required, no insurance required, no office even required.

I see people giving checks to brokers to be put in their escrow accounts. You don't know where it's going, but you know it's out of your control the moment you hand it over. I'd only give one to a third party escrow/title company.

At least make sure brokers have some assets as in physical facility and that they are a member of a national association and I'd ask to see their insurance and bonding.

There are many great brokers out there. But many bad ones. There are ways to choose the good and avoid the bad. Would I trust an unknown to me seller's broker? No. But I'm not trusting anyone I don't know and who isn't regulated in a transaction the size of a boat transaction.

If in your experience, most brokers are parasites, then you need to find a better way to select the ones you deal with and to not deal with the parasites. The majority of boats are sold through brokers so it's necessary for most of us.

With all the web site we have access to why do we need 10% middle men? How many brokers do you believe? It is really insulting to be lied to by a broker. He's calling you stupid. Believe me, I am a Yacht Broker! I know so few who have morals. No, I am not a broker and never want to be. I would rather lay on my back under a wooden Egg Harbor and reef seams. Do your research and use the web to sell your own boat. I want to purchase a 36' Grand Banks Europa or Sedan, single screw. I will use this site and Grand Banks Owners Club.

Ron T said:

With all the web site we have access to why do we need 10% middle men? How many brokers do you believe? It is really insulting to be lied to by a broker. He's calling you stupid. Believe me, I am a Yacht Broker! I know so few who have morals. No, I am not a broker and never want to be. I would rather lay on my back under a wooden Egg Harbor and reef seams. Do your research and use the web to sell your own boat. I want to purchase a 36' Grand Banks Europa or Sedan, single screw. I will use this site and Grand Banks Owners Club.

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So you will not consider the 84 GB's 36' currently on Yachtworld? That's your choice.

I believe many brokers. I find it equally insulting for an entire profession to be attacked. You know so few who have morals? You don't have to know but one and use them. I happen to know many very fine and moral brokers. I know others I wouldn't trust at all. I would avoid those.