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Role of the Yacht Broker

Christian Williams

E381 - Los Angeles
Senior Moderator
Blogs Author
KloeberEng
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KWKloeber<dl class="userinfo_extra" style="margin: 5px 0px; float: left; width: 180px; height: auto !important;"><dt style="margin: 0px 10px 0px 0px; padding: 0px; float: left; min-width: 60px; width: auto !important;">Join Date</dt><dd style="margin: 0px; padding: 0px 0px 3px;">Oct 2017</dd><dt style="margin: 0px 10px 0px 0px; padding: 0px; float: left; min-width: 60px; width: auto !important;">Location</dt><dd style="margin: 0px; padding: 0px 0px 3px;">NC and WNY</dd><dt style="margin: 0px 10px 0px 0px; padding: 0px; float: left; min-width: 60px; width: auto !important;">Posts</dt><dd style="margin: 0px; padding: 0px 0px 3px;">2</dd></dl>







The legal and fiduciary responsibility of the broker is toward who pays him/her (the seller) unless you have a written agreement w/a "buyer's broker." It's the same as for a real estate broker.

So, NEVER say to a broker, "See if the seller will accept $x, but I'd be willing to go $x+y. His legal responsibility is to tell the seller the max you will go for. A reputable broker will try to make the deal happen, which is in his client's interest also, so will be reasonable in trying to effect a fair and reasonable negotiation. For instance, if the haul reveals its full of blisters, a reputable broker will try to help negotiate a fair value, and not just take the sellers side that "It's his problem, I won't take a dime less."​


 

Christian Williams

E381 - Los Angeles
Senior Moderator
Blogs Author
[FONT=&quot]From Boat US ( [/FONT]http://www.boatus.com/magazine/2013/October/what-a-yacht-broker-can-do-for-you.asp )[FONT=&quot]

It's important to remember that the broker in a typical sale is getting paid by and working only for the seller, not the buyer. A broker will try to get the highest possible price (that's what his commission is paid from) and will try to sell his client's boat even if it's not necessarily the best deal for you. You're on your own with negotiations and paperwork advice.

You can, however, enter into an agreement with a broker through a buyer's broker arrangement. A buyer's broker will represent you, not the seller. Once they know what you're looking for, they can scour their sources and suggest likely boats for you to view, assist in negotiating a price, and help with the paperwork. Typically, a buyer's broker gets a commission split from the seller's broker so there's no cost to you, but read the agreement before signing.[/FONT]
 

bgary

Advanced Beginner
Blogs Author
You can, however, enter into an agreement with a broker through a buyer's broker arrangement.

yes.

When I bought my house, it was for sale by owner. I didn't feel comfortable navigating the morass of real-estate law on a transaction like that, and so I entered into my own agreement with a broker. My goal was to make sure that the appropriate t's were crossed and i's were dotted - the right forms filed correctly, reputable escrow and title firms, etc. I paid out of pocket not so much to "represent" me, but to make sure the process went smoothly. As far as I know the seller was never impacted ("my" broker wasn't involved in the transaction, other than as a behind-the-scenes advisor to me.)

I did the same thing when I bought my boat. Not having any relevant knowledge about boat-buying processes in the 21st century, I wanted someone I could go to with questions that I knew wasn't bound to a fiduciary relationship with any other party. Not involved in the transaction (as far as I know, the seller was never impacted, I paid out of pocket as a separate agreement, not part of the purchase contract so the listing broker's commission wasn't an issue) I wasn't asking the broker to represent me in the sale, just wanted to know that I had someone I could go to in order to get the straight answer on things I didn't understand. IIRC it cost me a couple hundred bucks, plus a nice bottle of aquavit when the deal closed.

ymmv
Bruce
 

Akavishon

Member III
Brokers get paid only if/when a deal closes. Sooner/faster is usually better, for obvious reasons. Hence, unless agreed otherwise, any broker's primary incentive is to close as many deals as possible, in the shortest time frame possible.

In the low-end market (of our boats), the value of each individual deal (= % difference in broker's commission) is a rounding error, and not really worth real consideration, or a broker's extra attention (= time, effort).

Terms like "fiduciary responsibility" are little more than broker-marketing-talk, imho.

One person's opinion ... ymmv, of course.
 
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Christian Williams

E381 - Los Angeles
Senior Moderator
Blogs Author
My observation is a little more positive, although I may be warped by local exposure. Or maybe the brokers I know have white hair, like me.

The big brokers in my area are pillars of the docks community. They take a role in harbor issues and they serve on yacht club committees. Like all salesmen, they're likable and enthusiastic. They know a huge amount about boats, boat owners and the market. Yes, it's all self-interest, but at the same time they have to live with their reputations and they all seem to have been in love with boats a long time. It's a tough market, and moreso than for a business like yacht diesel service, where the competitors are few, there are lots of brokers and rep is everything.

Sounds like an ad for the yacht brokers association of america. Oh well.

I say deal with the owner, or the old guy, or the senior guy or woman. It is certainly true that the kid who answers the phone and shows you the boat may know next to nothing and be behind on his Visa card. So pick a broker with a reputation, rather than just walk in off the street.

Why should it cost 3K to list a $25K boat with a yacht broker? One broker told me: "Look, I know its a lot, but if we don't charge that nobody wants to show the boat. And we show these boats numerous times, and if there's no commission nobody will do it."

Not sayin' it's right, just more grist for the millstone.
 
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