Buyers broker

[Heath68]

Hi, does anyone know what happens if the seller isnt using a broker what happens to a buyers broker fee?

[GreenWave]

Many Buyer's Brokers wont go near a "for sale by owner" boat. Sometimes, you can negotiate to pay the broker something... either out of your pocket or the sellers.

[Bycrick]

When I bought my current boat, the PO had a for-sale sign on it in CA. He told me that he had it listed with a broker in FL. Don’t ask me why. I’d been looking for boats for a while through a broker in San Diego. When I told him about this deal, his comment was that, since the FL broker couldn’t act in CA, would I mind if he asked the PO to represent both sides. I said fine as long as the owner paid. Apparently they came to some agreement on the payment. Yes, I understood the potential for conflict-of-interest.

[CassidyNZ]

Seems like a lucky break for CA broker. You find the boat, you almost arrange the sale, the broker scores a fee.

Just for my interest, why would you involve a broker who is initially disconnected from the deal?

[Heath68]

Originally Posted by GreenWave

Many Buyer's Brokers wont go near a "for sale by owner" boat. Sometimes, you can negotiate to pay the broker something... either out of your pocket or the sellers.

Thanks... ok and following on from that do you know or are there threads in here do you think of the risks of not using a buyers broker? I am fairly easy with this but only if i know the red flags.

[mvweebles]

Originally Posted by Heath68

Hi, does anyone know what happens if the seller isnt using a broker what happens to a buyers broker fee?

If the boat is for sale by owner or using a site with minimal costs, seller has made a decision to sell direct and either pocket the typical 10% commission or reduce the price of the boat (or a combination of the two). If you want to introduce a broker into the equation, decent chance the seller will say that's fine but it's on your (buyers) dime.

I find the term "Buyers Broker" confusing as it implies the broker is acting in the buyers interests. They may have developed a personal relationship with the buyer and have a moral reason to guide the buyer but in the end, the transaction takes a willing seller, a willing buyer, and a vessel. Unless a buyer has made an arrangement with a representative outside the ordinary, broker commissions are contractually paid by the seller. There is no contractual relationship or obligation between a buyer and a broker. A buyer may bind them self to conditions of a sale which may describe disbursement of brokerage fees, but unless by separate arrangement, a buyer has no contractual relationship with a broker.

In the US at least, for real estate transactions, brokers are apparently prohibited from accepting payment from buyers. I have a professional relationship with a realtor who helped me purchase a relatively low cost parcel a few years ago. Commission was negligible but she worked hard as this was out 4th or 5th transaction together. I offered her a personal check for her time to which she firmly declined due to professional code of conduct. She was fine with a modest Amazon Gift Card but that was it. Makes sense. Far cry from a crooked attorney I worked with in Mexico one time who felt that not disclosing he was working for two competing buyers on the same transaction was not a conflict of interest, but a different story.

[Mike OReilly]

You often hear the recommendation here for buyers to use a buyer's broker. The argument goes that it "costs you nothing" since the seller pays the brokers. I believe this may be valid advice for the higher end boat market, but not at the mid to lower end.

The broker commission is already small, or in the case of a owner-seller non-existent. So dividing it turns one lousy fee into two really lousy fees, or forces some other less-desirable arrangement. Brokers are businesses where time is money. A broker has to match their time with the expected fee, so will generally have to limit their time spent on these transactions.

For these reasons I question the advice to use a buyer's broker. However, I do think there is excellent reasons for a buyer to hire a buyer's consultant. Here the relationship is clear. The buyer pays the consultant directly. The consultant works directly and clearly for the buyer.

[Chotu]

It works. I've done it more than once.

The brokers like it because it's easy and quick. When your buyer's broker contacts the seller's broker, they each got out of half the work. So they are happy to split the 10% commission (paid by the seller) between themselves.

Buyers broker: doesn't have to find a boat for sale, make sure the listing is correct, advertise it, make sure pics are good, make sure price is right and all the BS that goes along with all these items dealing with the seller.

Sellers broker:. Doesn't have to field calls from tire kickers, wasting many hours of time doing so, doesn't have to walk first time buyers through the process and handle all the speed bumps that come when, say someone thinks they can test sail before the deposit, etc.

Each have half the work to do and because they are both delivering quality people/boats on both ends of the deal, love a cobroke situation. 5% each. Done deal in a day vs struggling individually for weeks.

Getting boats closed is the goal. This closes them faster.

THAT'S why a seller's agent works.

[Bycrick]

CassidyNZ —
It wasn’t quite as simple. I’d been looking at boats for several months. I’d run into the broker because he had a number of boats that were worth looking at. When I stumbled onto my current boat, I told the broker "Thanks, but I think I found one." Just a courtesy.

That was when he told me that the PO’s Florida broker couldn’t do the deal in CA. The broker contacted the seller and worked out a deal. The broker helped schedule the haul-out and presale surveys, the sea trial, final negotiations to cover survey allowances, the offshore delivery and had a lead on an attorney to handle documentation issues.

So the broker didn’t help me find the boat, but did a good job of smoothing the path through the deal. As it turned out, the broker/brokerage was mostly in the business of 7-figure boat sales. My deal was hardly worth the guy's time, but he knew who to call, and a request from him for yard time got more attention than I might have gotten. His knowing all the niggling details of off-shore-delivery and how/where to home port was priceless.

He was worth every penny of his commission. It was even better that he ended up getting paid by the PO.