Negotiating boat price without a broker

[Sailor Sailor]

Originally Posted by 66replica

Hi,

I'm currently in negotiations on a boat. I have enough cash to make a good offer on the boat (within 5%) but the seller wants full price.

What's your gut?

Walk away. You are too eager. Find another boat and try not to show so much enthusiasm at the outset.

[goboatingnow]

I dont think here in Europe a “ contracted buyers “ broker is used at all , what you do get is “ referral “ brokers. But they do not act any further in the sale

For high end vessels , 1 million and up , it’s common that the buyer will have commercial legal advice on tap and these will get involved. There’s also third party custom agents , boat registration agents etc etc. wealthy buyers tend to have this access anyway

These are not “ buyers brokers. “

Example I have a friend who just bought a 600k yacht. He contacted 8 brokers all over Europe. He did not use any form of buyers broker , as such a system is rare here. He did have custom agent and a commercial lawyer involved once the sale was agreed.

This advice “ get a buyers broker” is rather nonsense, why pay someone to simply search internet listings for you , if you need contract advice hire a lawyer

[goboatingnow]

Originally Posted by Mike OReilly

Interesting... Yes, in the end it all depends on the contract in place between the owner, seller's broker, and potentially any other brokers involved. I didn't realize (although not surprised) that the buyer's broker is mostly an American thing. I've not encountered it up here -- remember, I'm Canadian.

My questions spring from the fact that buyers are often given the advice here: "get a buyer's broker." I think this makes sense for high-end boats. But at the lower end of the market, the fee paid to brokers is already low. Dividing this fee in 1/2 seems like a clear disincentive from the seller's broker standpoint.


letsgetsailing3: Thanks for this... I didn't know the 'minimum fee thing' had become normal. I haven't been in the market (buying or selling) for over a decade now. It wasn't a thing back then, but I'm clearly out of date.

My understanding though, is that 10% is still the standard commission paid by the seller to their seller's broker. Everything is negotiable, so a seller could certainly try for a different arrangement, but at the lower end of the market I doubt if they would be successful. Seems to me at this end the fee paid to the broker is already quite low.

Broker commission rates are very flexible at times. Even if contracted scope exists to negotiate, however recently given the frenzy of boat buying , brokers have cleaned up.

But here 5-10% is common. I know two cases where the fee was waived entirely !!

[Tupaia]

This is all irrelevant. The price is the price and the commission is the fee agreed by the seller. YOU can't decide what each party gets.

If you offer $100k and the commission is 10% the seller gets $90k and the broker $10k, If you offer $95k the seller gets $85500 and the broker gets $9500.

Offer a price you are wanting to pay and if they don't accept it then offer the maximum price you are willing to pay if they still don't accept it then walk.

It is not difficult.

[Phyrcooler]

Originally Posted by Tupaia

This is all irrelevant. The price is the price and the commission is the fee agreed by the seller. YOU can't decide what each party gets.

If you offer $100k and the commission is 10% the seller gets $90k and the broker $10k, If you offer $95k the seller gets $85500 and the broker gets $9500.

Offer a price you are wanting to pay and if they don't accept it then offer the maximum price you are willing to pay if they still don't accept it then walk.

It is not difficult.

This ^^^^

Sure - you can ask for concessions such as the broker giving up half their commission. But I wouldn’t hold my breath. The market, while possibly weakening, is still strong enough that I doubt the broker will give up anything. He’s under contract with the seller. Bottom line - if it’s a desirable boat and priced appropriately, it’ll be solely up to the seller to meet you or not. I could MAYBE see a broker offering up a percentage or two if he was hungry and needed a sale. I think we’re a long way from the market being in that condition.

The issue of buyers brokers is interesting. I used to be an advocate for them. But realized that they may be more of a handicap, then a benefit. I lost a boat I was trying to purchase due to a sellers broker obviously not happy about splitting the commission, and seller suddenly accepting a lower offer from another party. Not sure if they ever saw my offer. And I was never contacted with a counter offer, or offer to negotiate. On my current boat, my buyers broker had to really fight with the selling brokerage to agree to a split. I think a buyers broker may be helpful for a first time buyer. Maybe in the future a buyer may directly pay some sort of service fee for the hand holding and advice.

[Bill O]

Originally Posted by Tupaia

This is all irrelevant. The price is the price and the commission is the fee agreed by the seller. YOU can't decide what each party gets.

Offer a price you are wanting to pay and if they don't accept it then offer the maximum price you are willing to pay if they still don't accept it then walk.

66replica,
Above is good advice, just work out the numbers in your head w/o revealing why or justifying your offer.

If you feel this deal in now tainted, maybe walk away and chalk this one up as a learning experience.

[Knotical]

Originally Posted by Tupaia

This is all irrelevant. The price is the price and the commission is the fee agreed by the seller. YOU can't decide what each party gets.

If you offer $100k and the commission is 10% the seller gets $90k and the broker $10k, If you offer $95k the seller gets $85500 and the broker gets $9500.

Offer a price you are wanting to pay and if they don't accept it then offer the maximum price you are willing to pay if they still don't accept it then walk.

It is not difficult.

This is the best response, just offer your best price based on the boat, it’s condition, location etc. and see if they’ll take it. Leave the broker’s commission out of it as it’s not yours to negotiate.

Honestly though, every boat sale is different; yes, they do start at a certain price point but more often than not they’ll deviate from their standard procedure just to get rid of the boat. I know of brokers who work both on a percent commission or a fixed fee; most sales are negotiable, every person involved in a sale just has to agree on the terms.

As the above poster said, it is not difficult.

[clamshack]

5% of the brokers commission is 50% of the brokers take. If you ask the seller to come down 5%. That's around 0.5% to the broker.

You want the buyers broker on your side. I'm sure he would be happy to sell you the boat at 5% less than asking price. You just need to give him a reasonable reason to get there with the seller. It doesn't sound like that is what you have done.

Now you know. If this is really the perfect boat just pay full price.

[flyingfin]

You are the buyer with the gold, so you get to run the show.
If Seller wont move, then you need to move on to the next vessel.
Or come back to this one next year when you see it is still on the market.
I see that happen on a regular basis when the Seller is not motivated to sell, and the vessel stays on the market year after year.

[goboatingnow]

Firstly buyers brokers in Europe for example are almost unheard of , hence advice to consider one is rather ridiculous.

Of course you can get a broker to “ refer “ you on to a selling broker and sometimes the selling broker will pay a small commission. This however is not a buyers broker.

It’s certainly not uncommon in the negotiations for a seller under pressure to discount to request a drop in the selling brokers commission. I’ve seen it happen twice in recent weeks.

It’s not the buyer that’s asks it’s the seller.

That’s a persistence trend here on CF to present sellers brokers as untrustworthy parasites.

Nothing could be further from the truth. During the sale process a selling broker is a actually “ contracted “ to both seller and purchaser.

Most brokers simply want a sale to complete and will typically guide both seller and buyer as best as possible.

Buyers brokers largely bring nothing to the deal. This is especially true where you might be dealing with selling brokers in several countries. So unless you contract multiple national buyers brokers, all you’d be doing is getting a buyers brokers who is unlikely to understand the specific formalities.

Stay away from buyers brokers. If the sale warrants specify expertise then engage legal , technical and customs specialists from the national area

Buying is easy. You offers your money and it’s accepted or not.

[Mike OReilly]

Originally Posted by Phyrcooler

The issue of buyers brokers is interesting. I used to be an advocate for them. But realized that they may be more of a handicap, then a benefit. I lost a boat I was trying to purchase due to a sellers broker obviously not happy about splitting the commission, and seller suddenly accepting a lower offer from another party. Not sure if they ever saw my offer. And I was never contacted with a counter offer, or offer to negotiate. On my current boat, my buyers broker had to really fight with the selling brokerage to agree to a split. I think a buyers broker may be helpful for a first time buyer. Maybe in the future a buyer may directly pay some sort of service fee for the hand holding and advice.

This illustrates well the concern I have over the constant recommendation here to get a buyer's broker. Unless we're talking very high-end deals, which more likely would involve lawyers and accountants rather than brokers, I really don't see how it's not going to be a potential negative.

Buying a boat is not all that difficult. As others have said, offer what you think the boat is worth. If you can't reach a deal with the seller, move on. There are lots of boats out there. If this one truly is so special, and the seller won't move, then you either have to go up 5%, or move on.

[goboatingnow]

Originally Posted by Mike OReilly

This illustrates well the concern I have over the constant recommendation here to get a buyer's broker. Unless we're talking very high-end deals, which more likely would involve lawyers and accountants rather than brokers, I really don't see how it's not going to be a potential negative.

Buying a boat is not all that difficult. As others have said, offer what you think the boat is worth. If you can't reach a deal with the seller, move on. There are lots of boats out there. If this one truly is so special, and the seller won't move, then you either have to go up 5%, or move on.

Buyers brokers seem to be an occasional US peccadillo , elsewhere they don’t really exist. ( ie a contracted broker to the buyer ) they add nothing to the buyers armoury and in fact may make it worse.

Use the sellers brokers to your advantage. After all he’s got the boat for sale , he’s a useful aid to completing the sale.

[Stewie12]

It is not unusual for a broker to cut his commission to close a deal, if he does not have another buyer. Don't talk about % just make an offer 5% below the asking price or whatever price you have reached and say it is valid for 7 days. Two can play at brokers games.

[goboatingnow]

Originally Posted by Stewie12

It is not unusual for a broker to cut his commission to close a deal, if he does not have another buyer. Don't talk about % just make an offer 5% below the asking price or whatever price you have reached and say it is valid for 7 days. Two can play at brokers games.

Correct. Brokers do cut commission I’ve seen it myself in my own boat purchase

As you say make your pitch. The rest is between the selling broker and the seller

[mike mck]

Originally Posted by 66replica

Hi,

I'm currently in negotiations on a boat. I have enough cash to make a good offer on the boat (within 5%) but the seller wants full price.

I do not have a buyer's broker and the seller's broker is on another continent and largely checked out. Most communications have occurred directly with the seller with their broker CC'ed.

To get the sellers their full price, I suggested my cash offer + the traditional 5% a buyer's broker would receive from the seller's broker commission. Everyone wins. I pay using the cash I have allocated, the seller gets their number, and the seller's broker still gets 5%.

However, the seller's broker insists that there is no buyer's broker commission.

What's your gut? Is the seller's broker full of it? I'm guessing the seller wouldn't know the terms of any potential buyer broker split, just that they are getting charged x% by the their broker.

I applaud your looking at alternative to reaching a win win situation between you and the seller. Now having said that there are a few flaws in your position.
Full disclosure I spent 30 years in the aerospace industry toiling in the logistics arena mostly in Procurement negotiating contracts. I think suggesting the selling broker reduce his 10% comission to 5% to close the deal is a good way to try to close the deal. A win for everyone. Seller nets the amount he wanted, You come in at what you are willing to pay and seller broker walks away with a 5% commission. The issue I see is how you presented it. Seller and Broker have a contract and he is entightled to a 10% commission. Suggesting the broker split his commission with you left him the opening which he took stating you are not a broker so he does not owe you a co broker fee.
My next comment has to do with your offer. Do you know why the seller will not come off his asking price? Is that number what he needs to pay off his loan? Information is king. If in fact your offer of 5% under asking price is the maximum your budget will allow and seller will not accept walk away.
If the broker put the boat up at an asking price that left no room for negotiations so both parties felt the got a reasonable deal he is not a professional.
I have a couple other questions.
How long has the boat been on the market?
Where is it slipped and what is the monthly cost?
Where does your offer fall in relation to the market value of the vessel?
Lots of other questions I could have asked but this rant is long enough.
Did I mention Information is king?
Best of luck