Buyer pays Broker fees

[BurnitBlue]

I have long believed that the buyer (who supplies the cash) effectively pays for the services of the Yacht Broker.

If proof were needed take a look at a Greek based Vancouver 32 for sale (Apollo and Dickies).

There are four prices advertised for this boat. £48,000 with two Greek based brokers, one in Levkas and another in Nidri (Apollo). Another UK Broker (Dickies) who is asking £45,000 (Yachtworld)). The owner seller in UK who is also advertising his asking price at £43,000 (Apollo). I was also offered this boat for £38,000 by a private "agent" last week who was obviously not an official representative of the seller, but a hustler who recognised that he could get a discount direct from the seller instead of going through a broker. It is obvious that the seller has passed on the Broker fees to the buyer.

This is for the same boat which is easily recognised by the unusual sonic stern gear. I have come across this method a few times in the past year.

What annoys me is the way the broker concentrates his efforts for the seller and treats the buyer with disdain. Who pays the piper?

So what's my problem I hear you cry. The problem is that it is quite rare to identify the owner as in this case, so it is necessary to deal with the broker for an extra 10%.

 

[Tranona]

Rather twisting things here. The seller pays the broker. You (as a buyer) pay whatever you think is the appropriate amount for the boat. If the seller wishes to pay a broker for his services that is his affair.

However, the way you describe this situation the seller does not seem to know what he wants to do. Hardly a good omen for a trouble free deal and a good reason not to pursue! It is the seller that sets the asking price and I guess the different asking prices are because he has instructed people differently.

 

[BurnitBlue]

Rather twisting things here. The seller pays the broker. You (as a buyer) pay whatever you think is the appropriate amount for the boat. If the seller wishes to pay a broker for his services that is his affair.

However, the way you describe this situation the seller does not seem to know what he wants to do. Hardly a good omen for a trouble free deal and a good reason not to pursue! It is the seller that sets the asking price and I guess the different asking prices are because he has instructed people differently.

My take on this is that the seller has declared the sum he wants to receive for his boat. The broker then adds his commission and advertises that price. This price depends on his percentage, hence the different asking prices. Normally I deal with the owner but sometimes a broker stands as middleman.

Make no mistake, the seller gets all the advantage from the deal. Frankly, as a buyer, in this instance, I get no advantage at all, in fact often, the opposite. Yet I pay for his services.

 

[FullCircle]

Make no mistake, the seller gets all the advantage from the deal. Frankly, as a buyer, in this instance, I get no advantage at all, in fact often, the opposite. Yet I pay for his services.

I don't see how you are paying the broker. Just reply to the personal ad, and deal with the owner, then the broker (either of them) is not involved.

 

[maxi77]

I think the real problem is so many brokers are pretty **** to put it bluntly. When we were in the market we found some brokers were worse than useless, very unresponsive even when you told them you were prepared to travell several hundred miles to view. others were very good and the brokers we finally bought through was very good and really helped the deal go through as quickly and smoothly as possible.

At the end of the day the seller chooses how he will sell his property, and that is that. Some I fear waste the money by choosing poor performers, some get value for their money. Yes ultimately the buyer pays, but he has no real choice it is the sellers choice.

 

[BurnitBlue]

I don't see how you are paying the broker. Just reply to the personal ad, and deal with the owner, then the broker (either of them) is not involved.

Yes I have done that. I only use this example to prove my long held point that it is the buyer who pays the Broker but gets sod all in return compared to what the seller gets.

Staying with this example though. If I were to contact the broker I would offer 10% less which appears to be normal these days. The broker would pass this 10% down to the seller who would receive ( in this instance say) £38,700 from his £43,000 original asking price. On the other hand, if I made an offer off £38,700 to the seller direct he would likely point to the other broker prices and state that he has already discounted the price of £48,000 down to £43,000.

Maybe he is being smart.

However, the seller could be a member of YBW forum and if he reads my comments I will have shot myself in the foot.

I should have kept mum until negotiations were complete shouldn't I?

 

[Koeketiene]

Yes ultimately the buyer pays, but he has no real choice it is the sellers choice.

The buyer always pays - for everything.

 

[Pitterpatter]

How so??

Normally I deal with the owner but sometimes a broker stands as middleman.

BlueTwo, intrigued by that comment - if you are dealing direct what is the broker offering 'as' middleman'? Just out of curiosity!

 

[BurnitBlue]

BlueTwo, intrigued by that comment - if you are dealing direct what is the broker offering 'as' middleman'? Just out of curiosity!

Sorry, I am not explaining my point very well. I am using this example only to illustrate a point I have long held. The broker in this instance is not involved. In most instances though, the owners name is a guarded secret and there is no option but to deal with the broker.

I am just sounding off in a minor rant and collecting ammunition from various sources. As one does.

 

[Tranona]

I think you are trying to argue a broker is unecessary and adds nothing. If this were the case they would not exist - and they do.

Not every seller wants the hassle involved with selling a boat direct. Not every buyer wants the hassle of dealing with a seller who has probably never sold a boat in his life. Boat sales involve large sums of money, are rarely easy so it is not surprising that both buyers and sellers see value in using an intermediary.

There are no fixed buying and selling prices, so nobody is "adding on" or "taking off". The price is set by two people negotiating a price acceptable to each party. Usually a broker is more efficient in an economic sense at getting buyer and seller together - after all that is what justifies his fee.

If either party thinks they can achieve the same outcome without the services of a broker then there is nothing to stop them, but you find just as many "complaints" about the difficulties of this process as you do when there is a broker involved.

The process either way is not perfect, but not sure there is a systematic bias against the buyer - there are benefits for both parties in either method - just different.

 

[Ubergeekian]

I think you are trying to argue a broker is unecessary and adds nothing. If this were the case they would not exist - and they do.

For some of my work I have an agent. He takes 20% of what I earn - but he gets me twice what I would have the nerve to ask for on my own.

 

[KellysEye]

>My take on this is that the seller has declared the sum he wants to receive for his boat. The broker then adds his commission and advertises that price.

No they don't. The seller names a price and the broker takes a commission on that price, usually eight per cent. If you negotiate a lower price the broker gets a lower commission.

 

[BurnitBlue]

For some of my work I have an agent. He takes 20% of what I earn - but he gets me twice what I would have the nerve to ask for on my own.

That statement is the same made by Man Utd's manager who reckons that the problem with sport today is the players agents.

You see a person doing his own selling has only one "product" to sell, whether its himself or a single "product" like a boat or house. If he loses in a negotiation for a sale he can be in trouble but an agent or broker has maybe a dozen players or boats on his books so, if he loses a negotiation ... never mind he has eleven more to play with to make up his losses. He has less to lose in total so can take risks that a single owner would not have the nerve for.

It is in the sellers interest alone to engage a broker. To a buyer he is a 10% middleman in the way. Thats how I see it.

A broker is totally unnecessary for an intelligent buyer. He can deal with the seller direct. A seller can engage a broker to ask a high price for his dirty, unprepared heap of rubbish without losing face by being laughed at.

 

[zarathustra]

What annoys me is the way the broker concentrates his efforts for the seller and treats the buyer with disdain.

such is the nature of business, i don't see anything dishonest in it, the broker will obviously chance his arm for what he think he can get. for many purchases in countries in the east like greece and turkey for example local sellers of most produce have a display price that they consider to only be a starting point for negotiation.
I don't think I would ever purchase anything from someone who treats potential customers with disdain (apart from the revenue), such an agent wouldn't sell much

 

[BurnitBlue]

>My take on this is that the seller has declared the sum he wants to receive for his boat. The broker then adds his commission and advertises that price.

No they don't. The seller names a price and the broker takes a commission on that price, usually eight per cent. If you negotiate a lower price the broker gets a lower commission.

For goodness sake, read what I wrote. The proof is there on Apollo. The owner is asking £43,000 the brokers are asking £48,000.

Q bloody E.D.

 

[Skysail]

There is another view. A seller cannot advertise for more than the market will bear. I am currently selling my boat; the broker helps to set a sensible price. If I get that price, I pay the broker. Would I accept a lower price for a private sale? You bet!

 

[Ubergeekian]

It is in the sellers interest alone to engage a broker. To a buyer he is a 10% middleman in the way. Thats how I see it.

Maybe, but you're a buyer, aren't you? To me, my agent is a 20% middleman in the way - but one I am very happy to pay ...

A broker is totally unnecessary for an intelligent buyer. He can deal with the seller direct. A seller can engage a broker to ask a high price for his dirty, unprepared heap of rubbish without losing face by being laughed at.

... because he does plenty for the money. He advertises my services, he suggests me to clients, he prepares briefing stuff for me and he knows, far better than I ever could, what the market can bear.

 

[Seajet]

I think one major point is being overlooked here;

The broker has relatively vast advertising resources, and even more to the point can arrange a viewing of the boat while the owner may be thousands of miles away.

Now for a question so simple you may laugh, but actually getting a plain answer is surprisingly difficult.

A private sale; interested buyer - who pays for a lift - out, for either personal inspection or survey ?

My personal take on this is it's down to the buyer, who may sell the survey to the owner afterwards if the sale doesn't go through and the owner wants a copy of said survey.

I suggest in reality a reasonable owner may pay a part of the lift costs.

In this situation ( I run an owners association ) I always advise owners to take as many photographs as possible, some with a newspaper in shot to verify the date, that way if the sale doesn't go ahead further lifts may possibly be avoided.

Potential Buyer pays being the official if not pragmatic rule ?

 

[Bosun Higgs]

A broker is totally unnecessary for an intelligent buyer. He can deal with the seller direct. A seller can engage a broker to ask a high price for his dirty, unprepared heap of rubbish without losing face by being laughed at.

Not true. I once did a purchase direct from an owner but employed a broker myself to handle the cash through his client account and also to double check the documents. He charged me £50 for that work and I was very happy to pay it.

I've only bought one boat through a broker and thats my current one. The seller paid the broker 2.5% - I saw the contract. Expensive but I think the seller got good service and the broker certainly helped me as the buyer dealing with an owner who was a bit ......... The broker even deducted money from the purchase price to cover a minor problem found after I had taken over the boat and where I had been misled.

 

[Tranona]

for.

It is in the sellers interest alone to engage a broker. To a buyer he is a 10% middleman in the way. Thats how I see it.

A broker is totally unnecessary for an intelligent buyer. He can deal with the seller direct. A seller can engage a broker to ask a high price for his dirty, unprepared heap of rubbish without losing face by being laughed at.

Many sellers don't want to deal with buyers - they want somebody else to do all the work for them. Equally many buyers prefer to deal with a broker because he does all the work for him- no dealing with cranky sellers, trying to make their own viewing arrangements, dealing with the paperwork and so on.

Just because it does not suit you does not make it wrong. Open yourself to all possibilities and you might find the boat you want.

In the case you use as your example, I expect the two different prices are the result of the seller giving different instructions. The broker only advertises at the price his client instructs him to - that is the nature of the relationship. If the buyer subsequently instructs another broker at a different price or offers the boat direct at a lower price - it is him that is in the wrong, not the broker. And BTW where did the 10% middleman idea come from? Doubt any broker would make anywhere near that.