Broker related question
- Thread starter xavpil
- Start date
Both parties can have a Broker. You have the sellers Broker and a Buyers Broker, they generally split the commission. You can possibly lose a little flexibility in negotiating though. I had both when I bought my boat. Our Broker was a friend, so I really just wanted them to look over the contract. In hindsight, a lawyer would have been a better option for the money. Never use the Brokers recommendation for a surveyor. Hire one from out of the area so they only have you in mind and not the potential of another survey from the Broker. That is where I went wrong and things got overlooked and brushed aside. Once the paperwork is signed, you own it along with any issues that come up that should have come out in the survey.
I like that... What type of lawyer?....
such a great idea!
Thx!!!
really?....
I don't just give my money to someone I found on Yachtworld and who sends me contract with words and clauses that only a lawyer can understand.
Yes. Of course. It would be at your expense, of course. That cost could be recovered from the seller's broker in the contract, much the way it's done in real estate. But in the long run, the buyer pays.... no matter who writes the check to the broker.
So, for instance, you hire a broker to negotiate a purchase agreement for X dollars and in that contract you state 5% X is to be paid directly to your broker. Or you can offer the seller X - 5%x for purchase, and pay the broker out of your pocket. The first way is preferable where there is financing involved... just as in real estate. Closing costs are also included for financing convenience.
The real question is this: What do YOU get for hiring a buyer's agent (broker). Low priced boats are not attractive to brokers because the commission is often not enough to justify the work involved. Any broker that accepts a small compensation agreement may not intend on doing much work, so get it in writing. What he will and will not do. And the extent of his liability should be make a mistake.
So, for instance, you hire a broker to negotiate a purchase agreement for X dollars and in that contract you state 5% X is to be paid directly to your broker. Or you can offer the seller X - 5%x for purchase, and pay the broker out of your pocket. The first way is preferable where there is financing involved... just as in real estate. Closing costs are also included for financing convenience.
The real question is this: What do YOU get for hiring a buyer's agent (broker). Low priced boats are not attractive to brokers because the commission is often not enough to justify the work involved. Any broker that accepts a small compensation agreement may not intend on doing much work, so get it in writing. What he will and will not do. And the extent of his liability should be make a mistake.
I found the boat own Yachtworld.
Obviously I don't know anything about the boat, the owner, the broker and the company representing the seller. For all I know it could be a scam: people showing me a boat they don't own. Or a boat that has a lien.
The contract I received doesn't show the contingencies I specifically requested: in simple terms, I'll pay only if I can get financing, find insurance and like the survey report. Super common contingencies.
The contract doesn't even list the Hull number or any info. Just "2011 Jeanneau sun odyssey 409. No mention of anything, sails, engine, Bimini, etc...
The company who takes care of the contract, keeps telling me "don't worry, it'll be fine"!!!! yep.... that makes me feel super good.
So I do need, if not a broker, a lawyer,. Or just walk away
It would seem obvious that the seller should want to satisfy your requests (simple and typical) to include more specifics. This is usually done by including a copy of the listing, which describes details like those you suggest, as part of the sales contract. Your offer is made subject to your contingencies (passing survey, financing, and insurance, etc. ), but is not the same thing as the sales contract.
Unless you find a lawyer who is familiar with yacht sales, you will be wasting your money. However, since English is not your first language finding a lawyer to review and interpret the contract might be helpful.
You can have a Buyer's Broker. Interview a few and find one you can work with. They will get half the commission, which is generally 10%.
Typically the deposit is placed in escrow so the money is safe. The purchase offer is usually contingent upon a satisfactory survey and obtaining suitable financing. You can add other contingencies, however the more contingencies the less likely the seller will be willing to accept your offer.
Do not use a surveyor recommended by the broker.
If the surveyor finds significant problems, the deal is off or you can negotiate a new price. Likewise, if you are unable to find suitable financing and you have made good faith efforts then the deal is off and your deposit should be returned.
The equipment listed in the listing should be attached to the purchase offer.
If you are borrowing money to buy the boat, the bank will have a lot to say about how the deal goes down. Even if you have the cash to buy the boat outright, financing might be a good option to have the bank on your side. Once the deal is closed you can pay off the loan.
You can have a Buyer's Broker. Interview a few and find one you can work with. They will get half the commission, which is generally 10%.
Typically the deposit is placed in escrow so the money is safe. The purchase offer is usually contingent upon a satisfactory survey and obtaining suitable financing. You can add other contingencies, however the more contingencies the less likely the seller will be willing to accept your offer.
Do not use a surveyor recommended by the broker.
If the surveyor finds significant problems, the deal is off or you can negotiate a new price. Likewise, if you are unable to find suitable financing and you have made good faith efforts then the deal is off and your deposit should be returned.
The equipment listed in the listing should be attached to the purchase offer.
If you are borrowing money to buy the boat, the bank will have a lot to say about how the deal goes down. Even if you have the cash to buy the boat outright, financing might be a good option to have the bank on your side. Once the deal is closed you can pay off the loan.
right now there is only the seller's broker. So I guess he is pocketing the whole 10% and adding a Buyer's broker will mean he has to split the commission right?
I am not paying extra right?
what / where is "safe"?
The broker gave me his company's bank account info which I don't find "safe". I don't know the guy or the company. Isn't he supposed to use an official Escrow company that holds the fund?
. The purchase offer is usually contingent upon a satisfactory survey and obtaining suitable financing. You can add other contingencies, however the more contingencies the less likely the seller will be willing to accept your offer.
The offer didn't list anything, not even the Hull #.... just the type of boat...
Thx a lot!!
Try an internet search of Maritime Lawyers for your area. There are plenty here in Florida. Now a days, all the paperwork is handled electronically so you don't have to go to their office, just ask if they are licensed to practice in your state and get a reputable lawyer.
It was a valid question. What is it that YOU want your broker to do for you on this sale?
@Joe asked the same question in a less opaque manner
If we knew what issues you want help with, then we could….
Can’t see how a buyer’s broker could be a negative for you to help you negotiate the contract language & terms, escrow, survey, sea trial, act of sale, transfer of funds etc. The purchase agreement & sales contract should be prepared on standard yacht broker’s forms detailing the manufacturer, model, Hull ID number, and registration / documentation number, name of the vessel, any ships mortgage, name & address of the owner. . If the boat needs to be US Coast Guard re-documented or if you want it to have the initial
Documentation,, have the brokers prepare a US Coast Guard bill of sale on the proper Coast Guard form in addition to a yacht brokers bill of sale. Also list all of the inventory that is to be included in the sale, as an addendum to the bill of sale. Insist on all details that will enable you to be comfortable with the deal & paperwork.. If you have already negotiated a price, having a buyers broker isn’t going to cost you more; the two brokerage companies will split the 10% commission. If you hire an attorney, that 10% brokerage fee will be included in the sale price; however, the attorney’s additional fee will be paid directly by you.
Documentation,, have the brokers prepare a US Coast Guard bill of sale on the proper Coast Guard form in addition to a yacht brokers bill of sale. Also list all of the inventory that is to be included in the sale, as an addendum to the bill of sale. Insist on all details that will enable you to be comfortable with the deal & paperwork.. If you have already negotiated a price, having a buyers broker isn’t going to cost you more; the two brokerage companies will split the 10% commission. If you hire an attorney, that 10% brokerage fee will be included in the sale price; however, the attorney’s additional fee will be paid directly by you.
What’s the going hourly rate for maritime attorneys? Got to be at least $400-per hour & probably more. You’re going to incur a hefty legal bill for contract reviews, etc. I have never used an attorney on any of my boat purchases.
Folks........ brokers don't automatically split their fees with cooperating brokers unless there it is stipulated in the listing agreement. That is entirely negotiable. A legit buyer's agent will explain all that to the buyer when they sign their agreement. There can be other restrictions, even if there is an offer to cooperating brokers.... such as how the buyer found the property and who showed it to him. ... things like that. This keeps the buyer from bringing in someone for the purpose of collecting the buyer's agent side of the commission.
If a buyer wants his own broker, then he can write it into the offer and adjust his offer price accordingly. The purpose is to fold the commissions and other expenses into the price for financing purposes.
If a buyer wants his own broker, then he can write it into the offer and adjust his offer price accordingly. The purpose is to fold the commissions and other expenses into the price for financing purposes.
Just to go over the contract to
1) make sure the boat is “real” meaning the owner actually owns the boat and has no lean on it
2) that i can get out of it if i don’t like the survey results.
since none of these points are addressed in the current contract, and since it has been written in a super complicated way with endless sentences with super technical wording in the middle so you think you understand, but you’re not 100% sure…
The broker will not do this. A bank will require this and they know how to get a search done. If the boat is titled by the state, any lien on it will be printed on the title. If the boat is documented by the USCG, then there will be a record of it in the documentation records. If a lien is listed on the title and the lien has been satisfied the seller should have a letter from the bank indicating the lien has been satisfied and he should be able to produce that prior to closing.
At closing the check will be written to the brokerage who will pay off the lien and pay the buyer the balance less any commission or other fees the seller owes. At least in NY the broker must be the one handling the registration to insure the proper sales tax is paid. You will then get all the documents to prove your ownership of the boat.
Banks typically provide escrow account services for their customers.
Any contract lawyer will suffice. Boat purchases are far from complicated and boat purchase contracts are among the most simple documents there are and contain very uncomplicated language . Which is why most are left to a broker to implement.