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Broker Sits On An Offer

Discussion in 'General Yachting Discussion' started by bliss, Sep 6, 2016.

  1. bliss

    bliss Senior Member

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    I have bought and sold many boats. Sometimes buying or selling with broker involvement, sometimes not. On a couple of occasions, where there was a single broker involved, a buyer's sincere written offer accompanied with a good deposit was not presented to the seller. I don't know why the broker sat on these offers but I do have my suspicions. In any event, I think it was unethical and unfair to both parties. My question is have you ever seen an agreement - between buyer and broker - or seller and broker that assures an immediate presentation of all offers to the seller??? Many thanks.
  2. Maxwell

    Maxwell Senior Member

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    If said broker is part of a larger professional organization (YBAA etc), there may be something in their "code of ethics" that was not lived up to. This may also vary by state etc.
  3. bliss

    bliss Senior Member

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    These occurred in IL and WI.
  4. olderboater

    olderboater Senior Member

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    Was this the listing broker?
  5. olderboater

    olderboater Senior Member

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    There are only two states which regulate brokers-Florida and California.

    As to the YBAA, here is the relevant section of their code of ethics:

    Article 4
    In the event that more than one offer on a specific vessel is made before the Seller has accepted an offer, all additional offers presented to the Broker, whether by a prospective purchaser or another Broker, should be
    transmitted to the Seller for his consideration. In the event that a Broker, Brokerage house or central agent has received more than one offer prior to acceptance of any offer, all offers should be presented to the Seller. The Broker shall act
    on the instructions of the Seller as to which offer shall be accepted and/or negotiated. If an offer is made after owner has previously accepted an offer, the owner should
    be made aware of its existence. This outline is a recommendation for a fair procedure for Brokers to follow when several offers are presented at approximately the same time. The procedure for handling any multiple offersituation should be discussed with the boat’s owner. Ultimately, it is a Broker’s obligation to act as the owner desires and by whatever guidelines he decides. Whatever solution is decided by the owner, all those making offers should be apprised of it.
    And if a second broker involved:

    (e) Should you obtain an offer, be sure to have all the buyer’s conditions and to submit complete details of offer to the listing Broker including status of deposit.

    And listing broker to other broker:

    (f) All offers received by listing Broker should be transmitted to owner in a timely fashion and with timely response to the co-Broker. Remember that as a listing Broker, you are obligated to present all information at hand to a seller promptly and without prejudice.
    Here is the link to their code of ethics. Understand it is all voluntary so no laws involved.

    http://www.ybaa.org/aws/YBAA/pt/sp/cpyb_codeofethics
  6. SeaLion

    SeaLion Senior Member

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    Don't miss this critical last sentence: "Understand it is all voluntary so no laws involved."
  7. RER

    RER Senior Member

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    Does the Broker who took your deposit have a written, signed, listing agreement with the Seller? Assuming yes, did you submit your offer in writing via a typical Brokerage contract to purchase subject to Buyer's contingencies? Then yes, both of those documents should address timelines including timely presentation of the offer.

    I would ask the Broker to explain what's going on. If the answer is unsatisfactory, since this is not one of the two states with licensing oversight, I would not hesitate to make direct contact with the Seller to get an answer.
    Last edited: Sep 6, 2016
  8. bliss

    bliss Senior Member

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    olderboater, in both cases I was dealing with the seller's broker.

    RER, re the lL boat I have to assume their was an agreement between the seller and the broker as the broker advertised the listing. My offer was on the broker's form and the deposit was very sincere ($$$). The boat was almost exactly what I was looking for. RER, you bring up the possibility of direct contact with the seller. You hit the nail on the head! After quit some time, about ten days, with no return of my several phone calls, I did contact the seller, suggesting that she contact her broker and check for recent sales activity. Very shortly after that chat all hell broke loose. I was called some short and unattractive names and my deposit was returned. I could have pursued the sale directly but I was uncomfortable with the "karma" so I moved on. Would it be appropriate to ask a broker to provide some verification of a listing?

    As to the WI situation; the broker showed me a boat. Some time passed. About two weeks. I was introduced to the owner by a third party. I told him he had a nice boat. He asked me who showed the boat and when. I told him. He found my answers interesting. The "listing" had expired before I met the broker. He had not re listed with any broker as he was not really sure he wanted to sell. I later bought the boat directly. I found out the owner of the brokerage never knew of the listing as his employee/broker had never let him know about it. No wonder it was never advertised!
  9. Pascal

    Pascal Senior Member

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    One reason for not presenting the offer to the seller could be that the broker already had a contract on the vessel and was keeping your offer as a back up.

    Happened on a purchase I was assisting a client with a few years ago. After a week or so, when following up, the broker finally admitted the boat was under contract pending survey and buyer had just signed acceptance.

    I can understand the process but can not excuse how the broker didn't disclose it in the first place
  10. olderboater

    olderboater Senior Member

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    The acts Bliss describes as well as those Pascal describes would be clearly against the ethics of the YBAA. It might be good to know if the broker is a member. Even the Florida and California laws are very weak on ethics with more emphasis on handling of money.

    I compare boat brokering to real estate and while some shady things do take place in real estate, the acts described above would get a realtor in trouble in most states. It's really simple, every offer must go to the seller, even those received after a sale is pending.
  11. Capt J

    Capt J Senior Member

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    The broker should present ALL offers, no matter how silly they might be or if they have a current offer. It is their job to get offers for the seller. I have no idea why they won't...... an offer is just the "start" for a lot of buyers to feel out the seller......some buyers will come up in price quite a bit once they get a counter offer from the seller that's pretty close to listing (providing listing price is close to market price and not in the clouds)......

    I once had a buyer that was willing pay a certain price for a yacht that I knew the owner was selling. Contacted the owner and said look when the listing expires I have this owner that will pay X amount and a cash offer. He didn't want to sell it directly, ended up renewing his listing and then ended up selling it like 8-12 months later for $30k more than my customers offer and had to pay commission on a yacht selling for over $1 million. So ended up netting much less much later and my customers offer was open ended as to time frame, go figure.
  12. Capt Ralph

    Capt Ralph Senior Member

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    Ex failed used car sales people. I have commented on this before.

    I have been around many in Florida, maybe 3 I trust.

    This may have been an error, dealing with an unknown broker.
  13. Mark I

    Mark I Member

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    No excuse for this.

    I present all offers to the owner and do not ask for a deposit until the amount is agreed upon. Of course I am dealing with smaller and less expensive boats but a written offer and deposit certainly makes it clear that the offer is serious.

    Unfortunately, quite a few in the business giving us a bad name.