Why Use a Broker Part 2: for Buyers
This blog series was originally published on Howard Boat Works in fall 2012
In Part 1 of this discussion I laid out in general terms why buyers and sellers benefit from the services of a good broker. In Part 2 I’ll go into more detail focusing on the buyer.
Part 2: Focusing on the buyer
Start with the solo search
If you are considering buying a boat there are two ways to go: new or used. I’m going to concentrate on the brokerage (used) market because that’s what I know best. I also believe the brokerage market gives a buyer the best value as opposed to buying new.
So where should you start? Thanks to the internet, as long as you come to the computer armed with a bit of patience, research is easy to do. If you are interested in a particular brand or model, use google or another search engine to generate information. Look for owners groups and forums dedicated to that brand or style of boat and read what they have to say. Look at listings on moreboats.com, yachtworld.com, etc. and save those of interest for further review. Once you narrow the field, your next step should be to contact a good broker and discuss your search with them.
Alternatively, maybe you really don’t know what you want but you feel the lure of the water tugging at your soul and all you really know is you want to get out there. A good broker can be very helpful at this stage to help steer you in the right direction.
The right direction, the right boat
Of singular importance is getting you in the right boat. Many factors are in play to determine that “right” fit. How you intend to use the boat, who will be with you, where you intend to go boating, where you will store or dock it, your experience level and your budget must all be weighed, sifted and prioritized. A good broker will patiently work through all these parameters with you and guide you in the right direction. The broker will help you differentiate between ‘wants’ and ‘needs,’ helping you avoid making this buying decision a purely emotional one.
Once these details are sketched out it’s time to look at boats. You can help yourself out here by walking docks, talking to boating friends, and going to boat shows. Get on as many boats as you can. When you see boats and listings you like, tell your broker about them. Meanwhile the broker will be sending listings to you via email and over time this iterative process will lead to a small handful of potential boats. The broker will arrange showings and either be there in person to show you the boat or have the listing broker or his representative show it to you. Take your time during these showings. Take pictures! Over time you may see dozens of boats and taking pictures will help you remember the good and bad points you discovered about each. This search process may take a week, or it may take a year. It all depends on the situation.
Get the broker's know-how
As you narrow the field with your broker’s help, your broker will be able to give you the data that shows the price point at which similar boats are actually selling vs. the asking price. In the end, any boat, or anything else for that matter, is worth what the market will bear. Put another way, a boat is worth what a buyer is willing to pay, and like real estate comps, those decisions should be based on market data (i.e. what others paid). Adjustments in value will occur from a myriad of factors to include age, condition, installed equipment, and so on.
If financing is required your broker should be able to help with this too, and will encourage you once you’ve narrowed the field to seek pre-approval from a lender. This gives a buyer leverage when entering negotiations.
Once you’ve found ‘the one,’ your broker will lead you through the negotiating process and once a price is agreed upon will help you arrange for survey and trial run of the boat. Post trial run and survey the broker will assist you all the way to closing, and then help you with delivery of the vessel. Your broker should also ensure you have whatever training you may need in the safe operation of your new boat, especially if you are moving up in size. The broker should be there after the sale to help take care of all the details that will set you up for an enjoyable ownership experience.
So what do the broker’s services cost you as a buyer? Your broker’s compensation comes from the commission generated by the sale and comes out of the purchase price of the boat, so there is no ‘up front’ cost to you.
In Part 3 we’ll focus on the seller’s perspective.