strange broker conduct...
- Thread starter MitchM
- Start date
So, what did you find out about the broker? He is apparently in business in Florida. Was the interest in the boat legit or not?
I confirmed that he is indeed a Florida yacht broker, but has zero sailboats for sale on his website . His original claim was "...he had a buyer VERY interested in your boat .. we'd like to schedule a survey ASAP. My buyer has time constraints and wants to do this deal very quickly. And I have his 10% in escrow..." The buyer suddenly evaporated when I refused to give broker any listing contract. I now doubt that his client was real, since ours is rather an unusual sailboat not very popular in FL. One who wanted this type of boat is likely to visit the manufacturer's or owners' groups for - sale listings, not go to some remote FL power boat broker. Broker's rapid disappearance after I refused to give him an opportunity to earn a 10% commission causes me to suspect he was out to get himself a listing contract by using the ever - popular fake: 'I've got a client right now, ready to buy your boat' . Alas, it's just one of the aggravations of life when one chooses not to use brokers to sell valuables. I'll save the 'bad broker' stories over the last 40 years for another thread.
So far, the broker appears to be behaving like, well, a broker. Of course he wants a listing, how else is he going to get paid? Look at it from this standpoint. Why would a broker from Florida be calling you to simply badger you for a listing? Perhaps he really does have a buyer who is looking for a specific boat. Perhaps the buyer isn't savvy enough to find you on his own (maybe a little implausible) or perhaps the buyer just doesn't want to deal directly with a seller (some people are funny that way or feel more protected by going thru a broker). Of course the buyer isn't going to materialize without you giving the broker the listing.
Look at it this way ... if you were willing to give the buyer a 10% discount during negotiation, what difference would it make if you gave the broker the listing and the broker got the full asking price for you? Sure, that's not likely. The offer would probably come in low and then you would be faced with a discount price and a brokers fee. But you always have the option to refuse. Why not give the broker a very limited listing agreement? It could be written for a very short duration and limited to a specific buyer. You can still refuse all insufficient offers. Of course, if your price is firm, it's a non-starter. I wouldn't be so wary until the broker asked you for something really unusual. It really just sounds like you don't like brokers and won't list with any. That's your choice, of course ... just sayin'
Look at it this way ... if you were willing to give the buyer a 10% discount during negotiation, what difference would it make if you gave the broker the listing and the broker got the full asking price for you? Sure, that's not likely. The offer would probably come in low and then you would be faced with a discount price and a brokers fee. But you always have the option to refuse. Why not give the broker a very limited listing agreement? It could be written for a very short duration and limited to a specific buyer. You can still refuse all insufficient offers. Of course, if your price is firm, it's a non-starter. I wouldn't be so wary until the broker asked you for something really unusual. It really just sounds like you don't like brokers and won't list with any. That's your choice, of course ... just sayin'
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Because he wants a listing? As you said, that's how he gets paid. He puts the rest of the story in (truthfully, or not) to make it seem less "badgering".
Consider it from this perspective: If he really has a buyer in the circumstances he described fairly specifically, and the seller has refused to say "yes" to a listing, why not just request a commission? Ask for a commission agreement, not a listing. If that fails, offer a reduced commission, explaining why he is willing to reduce his commission. "Mr. Boatowner, I have the buyer in hand, so I won't have any of my normal expenses: advertising the boat, administrative time for entering the listing on a bunch of websites, taking pictures, etc. I won't have any travel expenses (the boat is in another state so he won't have to show it), and I won't have to answer a million phone inquiries. Let me pass on my time savings to you, and still help you get rid of the boat."
This guy either didn't have a buyer, or missed an opportunity for a commission because he was focused on a "listing". I'd bet on the former, but if the latter is true, he's not very good at negotiating, and I don't want that kind of broker having my listing anyway.
Yes, that all makes sense. A commission would be far more sensible if he does have a buyer. I was kind of going that direction with my suggestion for a "limited" listing agreement. Of course, it would make sense to offer a lower than normal commission.
My only point is that it appears illogical for a broker in Florida to be calling a seller in Pennsylvania for a listing in this circumstance if he didn't have a buyer. I think it is more plausible that he actually DID have a buyer. The listing would do him absolutely no good otherwise. I suppose he could have been fishing, though. Perhaps he thought that he could find a sucker who would list with him and then do all the work in selling the boat. The broker maybe thought that he could just collect the commission and not have to do any work for it.
My other point is that I don't see why Mitch needs to be so wary based on the info presented. He could easily suggest any of these ideas to the broker.
My only point is that it appears illogical for a broker in Florida to be calling a seller in Pennsylvania for a listing in this circumstance if he didn't have a buyer. I think it is more plausible that he actually DID have a buyer. The listing would do him absolutely no good otherwise. I suppose he could have been fishing, though. Perhaps he thought that he could find a sucker who would list with him and then do all the work in selling the boat. The broker maybe thought that he could just collect the commission and not have to do any work for it.
My other point is that I don't see why Mitch needs to be so wary based on the info presented. He could easily suggest any of these ideas to the broker.
Yes, I see your point, though a listing has value even if you don't have a buyer, and even if you don't sell the boat. It generates calls, and each time you answer the phone, it is a chance to say "How are you going to use the boat" or "I have another similar boat that may meet your needs" or some other starter that brings the potential buyer into your camp. Nothing wrong or nefarious about that - a listing is another way to advertise your name and brand. Any listing has at least some value for that reason.
Also remember what they teach in real estate: If you have no listings, you are working for all the other brokers (so that you can collect your half of "his" total commission). If you have a listing, all the other brokers are working for you, helping you sell this house (boat), so they can collect their half of "your" commission. Listings are valuable in many ways, direct and indirect. You want as many as possible. The more your name is seen, the more you are associated with the notion that you know the market, and are successful.
@MitchM - If this is a broker in FL, he should be licensed. You can verify whether he is through the Department of Business and Professional Regulation:
https://www.myfloridalicense.com/wl11.asp
If this troubles you enough, you could call and make inquiries, or I guess even file a complaint if you thought it was warranted. Also, if he holds a CPYB (Certified Professional Yacht Broker) certification (administered by the Yacht Brokers Association of America), Article 2 of his Code of Ethics should govern his behavior:
http://www.cpyb.net/aws/YBAA/pt/sp/cpyb_codeofethics
Also remember what they teach in real estate: If you have no listings, you are working for all the other brokers (so that you can collect your half of "his" total commission). If you have a listing, all the other brokers are working for you, helping you sell this house (boat), so they can collect their half of "your" commission. Listings are valuable in many ways, direct and indirect. You want as many as possible. The more your name is seen, the more you are associated with the notion that you know the market, and are successful.
@MitchM - If this is a broker in FL, he should be licensed. You can verify whether he is through the Department of Business and Professional Regulation:
https://www.myfloridalicense.com/wl11.asp
If this troubles you enough, you could call and make inquiries, or I guess even file a complaint if you thought it was warranted. Also, if he holds a CPYB (Certified Professional Yacht Broker) certification (administered by the Yacht Brokers Association of America), Article 2 of his Code of Ethics should govern his behavior:
http://www.cpyb.net/aws/YBAA/pt/sp/cpyb_codeofethics
Please follow up with the above listed agency and report the situation. If he did you, he probably has done others. Maybe he will loose his licence, good!
according to my 4 boat owning friends who are FL residents, the broker conduct I described is a very common occurrence in FL. Owner advertises boat for sale (maybe even stating 'Principals only.') Broker calls up, doesn't ID as broker, gets details abut boat, chats up the owner, maybe even wangles a dock side view . then s/he confesses s/he's a broker, with a ' very interested and motivated client who HAS to have (fill in the blank) model ...' if owner will just give a listing contract at 10%... '
The most troublesome part of the aforementioned broker's conduct was the express wish to 'protect his 10% fee which he was holding in escrow' . presumably he'd transfer this escrow to the sale of my boat. this 10% was what the client supposedly had paid broker on deposit for another boat deal which fell through. so is this broker more interested in 'protecting his 10% commission', or in setting up a satisfactory purchase for his supposed client buyer, (which buyer mysteriously disappeared when I declined to list with this broker? )
Brokers such as he give a bad name to the rest of yacht brokers, who provide professional services. The pros are actually willing to 1) see and get to know the seller's boat, and recommend a list price based on BUC, 2) personally get professional photos of the boat, and write ad description, 3) list said boat promptly on Yachtworld, and maybe even take out ads in magazines, 4) field and filter the tire - kicker inquiries , 5) respond promptly to buyer inquiries 6) work to set up a dockside for buyer, then solicit buyer's offer subject to survey, then set up survey and sea trial then (6) pass along any and all offers and 7) do the necessary paperwork to close the deal. Those brokers earn their 10% commission for those interested in using their services. Some other brokers , like Mr. FL, don't.
The most troublesome part of the aforementioned broker's conduct was the express wish to 'protect his 10% fee which he was holding in escrow' . presumably he'd transfer this escrow to the sale of my boat. this 10% was what the client supposedly had paid broker on deposit for another boat deal which fell through. so is this broker more interested in 'protecting his 10% commission', or in setting up a satisfactory purchase for his supposed client buyer, (which buyer mysteriously disappeared when I declined to list with this broker? )
Brokers such as he give a bad name to the rest of yacht brokers, who provide professional services. The pros are actually willing to 1) see and get to know the seller's boat, and recommend a list price based on BUC, 2) personally get professional photos of the boat, and write ad description, 3) list said boat promptly on Yachtworld, and maybe even take out ads in magazines, 4) field and filter the tire - kicker inquiries , 5) respond promptly to buyer inquiries 6) work to set up a dockside for buyer, then solicit buyer's offer subject to survey, then set up survey and sea trial then (6) pass along any and all offers and 7) do the necessary paperwork to close the deal. Those brokers earn their 10% commission for those interested in using their services. Some other brokers , like Mr. FL, don't.
Mitch, this is new information. If the broker actually did this to you - waited a significant amount of time to identify himself as a broker, while representing he had a buyer ready to buy - I would file a complaint. The rest of the details you have enumerated will just assist in the investigation. This sort of behavior potentially violates multiple sections of the YBAA Code of Ethics (the italicized text below):
1.3 It is the duty of the Broker to protect the public, to the best of his/her ability, against fraud, misrepresentation and unethical practices. (I would argue that such behavior is at least misrepresentation.)
1.6 The Broker in his/her advertising will be especially careful to present a true picture of the vessel and/or its condition and will not advertise without disclosing his/her name, nor permit his/her sales people to use the individual's name or telephone numbers, unless the sales person's connection with the Broker is obvious in the advertisement. (I would argue that the call is advertising a buyer rather than a boat, and he has not made clear his connection with a broker, even if the broker is himself. He could be just a salesperson working for a broker, in which case your complaint could invoke the broker as well.)
2.1 In accepting employment as an agent, the Broker pledges him/herself to protect and promote the interests of the clients. The obligation of absolute fidelity to the clients' interest is primary, but does not relieve the Broker from the obligation of dealing fairly with all parties in this transaction. (If he had a buyer, he was acting as the buyer agent, which obligated him to deal fairly with you. If he was lying about having a buyer, we are back at 1.3, and he has committed at least misrepresentation - fraud is more difficult to prove from a legal sense, especially since you suffered no damages. Although an attorney might argue that if he had a legitimate buyer, and refuse to put the two parties together, you have potentially suffered damages - you didn't get the boat sold to his buyer!)
The CPYB code of ethics has very similar language. There, Part I Article 2 mirrors section 1.3 above; Part I Article 6 mirrors section 1.6 above; and Part II, Article 1 mirrors section 2.1 above. Maybe the reason this behavior is repeated by many brokers is that it goes unpunished, and it is at least sometimes succesful. Perhaps complaints would begin stemming the practice.
Mitch, now I'm not buying your story. You opened the thread by indicating that the broker identified himself as a broker in his first sentence to you. Now you're saying it didn't happen that way? Sorry, you are contradicting your own story. So far you haven't revealed anything to indicate the broker has been unethical. What did he do that was unethical?
He said he had an eager buyer. If you look at the listings, there was a boat just like yours for sale in Florida. Perhaps the story is true. The buyer put 10% in escrow but the deal fell through. What the broker does with the money is between him and his client and it's really none of your business. I'd suggest that the broker told his client, "say, there's a fellow in Pennsylvania with the boat you want for sale. Why don't we keep your money in escrow and I'll take a run at him." So he calls you and the story unfolds. Of course he wants you to list because otherwise he doesn't get paid. You, being distrustful, give him a hard time about identifying the buyer. So he says to himself "screw it, this guy isn't willing to make a deal with me." So you both hang up and the broker is unwilling to give you a lead on his client.
I'm sure the broker could have handled the situation a lot better. Perhaps if he was smart, he could have suggested a limited commission as we talked about earlier. In the end, he probably realized that pursuing a deal with you wasn't going to pan out so he just went away. Obviously, you don't know if he has a client interested in your boat or not so you allegations about unethical conduct is just speculation. Exactly what did he do that was unethical? All of your points about what a broker should do are fine and good if you actually were his client. All he did was approach a seller (you) and inquire about your boat. Perhaps he laid it on a little thick about having an interested buyer, but it still doesn't make any sense that a Florida broker would be approaching you if he didn't have a buyer. Why would a Florida broker who deals mainly in power boats be interested in listing a sailboat in Pennsylvania? The only plausible explanation is that he really did have a buyer. But you weren't interested afterall, so he just gave up (without revealing the identity of his client - I wouldn't either in this situation). What other explanation is there?
As a former dealer, American Marine & Sail Supply, Inc., I was never a certified surveyor or member of any organization like so many brokers were in the same position. Some states require brokers to be liscensed while others have no requirements. Most ligitmate brokers will not call out of the blue to begin with and if that happens, before doing anything, check them out. You can call the BBB and if that is a state requiring liscensing, then call the state. You can also call a local yard or even another known broker in that area who most will be glad to give you some insight as someone like that is hurting them. Ask for an address and website. If none then again walk away. The first and most important advice I ever gave to those be wary of a broker calling you as an independent to be very leary.
Dave, how is calling somebody who is listing their boat for sale "out of the blue"? If you list your boat, aren't you expecting calls? Is there an unwritten law that says "no broker calls"? I'm sure some people who list "for sale by owner" might say something in the ad about "no brokers" but Mitch didn't mention that exclusion. I find it very odd that so many people have leapt to the conclusion that this broker is working a scam. All the guy did was inquire about a boat that was listed for sale, ask for pictures and a reference for surveyors. He said he had a buyer ... suddenly he's unethical? Why? Is it unusual that he was calling from Florida for a Pennsylvania boat? Maybe, but why is it unethical? It appears to be a rather unique boat. I thought it wasn't all that unusual for buyers to come from distant locations.
If he really had a buyer, the unethical part was allowing the lack of "X" to prevent the potential sale of the boat, where X is the condition that the seller list the boat with him. This is particularly true if it is a rare or unique boat, as there will not be many possible boats for his client to buy. He was not acting in his client's best interest.
If he didn't really have a buyer, the unethical part was saying that he did, in the hopes it would put additional pressure on the seller to list the boat with him.
If he didn't really have a buyer, the unethical part was saying that he did, in the hopes it would put additional pressure on the seller to list the boat with him.
Q; "...So far you haven't revealed anything to indicate the broker has been unethical. What did he do that was unethical?"
A: (1) broker falsely tells me that he has an eager buyer --which buyer suddenly totally disappears when I won't negotiate a listing contract with broker ? (NB- the '10% commission' broker claims he's escrowed is a 'selling broker' commission. he'd get 10% for selling his customer a boat his own brokerage had listed. if he's serving as a buyer's broker to 'help his eager buyer find the right boat..' his cut would only be 5 %, with the other 5% going to the selling broker who had listed the boat Eager Buyer ends up buying.)
(2) broker is more interested in getting paid a 10% commission out of his escrow account and fails to put his obligation to buyer above his own interest in figuring out a way to keep the 10% he claims he's holding in his escrow account .
(3) did broker even tell buyer that once the 1st deal fell through, buyer is entitled to get his 10% escrowed deposit back ? that the 10% does not auto- 'transfer' to another deal ?
Honest ethical brokers don't behave this way.
A: (1) broker falsely tells me that he has an eager buyer --which buyer suddenly totally disappears when I won't negotiate a listing contract with broker ? (NB- the '10% commission' broker claims he's escrowed is a 'selling broker' commission. he'd get 10% for selling his customer a boat his own brokerage had listed. if he's serving as a buyer's broker to 'help his eager buyer find the right boat..' his cut would only be 5 %, with the other 5% going to the selling broker who had listed the boat Eager Buyer ends up buying.)
(2) broker is more interested in getting paid a 10% commission out of his escrow account and fails to put his obligation to buyer above his own interest in figuring out a way to keep the 10% he claims he's holding in his escrow account .
(3) did broker even tell buyer that once the 1st deal fell through, buyer is entitled to get his 10% escrowed deposit back ? that the 10% does not auto- 'transfer' to another deal ?
Honest ethical brokers don't behave this way.
Scott, your comment 'Now you're saying it didn't happen that way?' is mistaken. Carefully read the comments I forwarded to the list from my FL friends: You'd see their experiences, reciting that some brokers trying to solicit listings via the false ruse of 'I have an interested buyer for your boat,' when they don't. 'You call it Laying it on Thick' . I call it lying.