Are all aircraft brokers like this?

[Stan Prevost[_1_]]

I recently sold our airplane using a broker to represent us as sellers.
Things seemed to be OK, a few rough spots, and I would like to have gotten a
little better offer, but we negotiated with a buyer through the broker and
agreed to a sale. Paperwork for the sale then proceeded OK and I flew the
airplane to the buyer for the prepurchase inspection and sale closing.
After the inspection, I overheard the buyer reading his list of squawks to
the broker over the phone, and telling him the estimated cost of correction
per his mechanics. Hearing that one side of the conversation, it became
clear that the broker (my Seller's Representative!) was telling the buyer to
ask for more. In direct conversation with the broker a few minutes later, I
confronted him about and he defended it as his standard practice if he
didn't think the buyer was asking for a realistic amount for correction of a
defect. The buyer was no babe in the woods, he was an experienced
businessman used to doing deals much larger, and he was ably represented by
A&P/IA advisors. The amount of money was minor, and the broker wound up
paying it. But it certainly cast doubt on how zealously he had represented
me during the entire process.

Soon thereafter, I had occasion as a buyer to look at an airplane
represented by that same brokerage, but a different person. Same thing. He
informed me of defects and told me I should have the buyer fix them.

Sure glad the broker was not my lawyer. "Judge, ten years is not enough,
give him fifteen!"

Stan

[Roy Smith]

"Stan Prevost" > wrote:
> The amount of money was minor, and the broker wound up paying it. But
> it certainly cast doubt on how zealously he had represented me during
> the entire process.

What on Earth makes you think a broker (any broker) is representing any
interests other than his own? His only job is to make sure the deal goes
through, so he gets his commission.

[Jonathan Goodish]

In article >,
Roy Smith > wrote:
> "Stan Prevost" > wrote:
> > The amount of money was minor, and the broker wound up paying it. But
> > it certainly cast doubt on how zealously he had represented me during
> > the entire process.
>
> What on Earth makes you think a broker (any broker) is representing any
> interests other than his own? His only job is to make sure the deal goes
> through, so he gets his commission.

If I hire someone to represent me and sell my airplane (or house, etc.)
I expect them to represent MY best interests, because that's what
they're being paid to do. This usually works out fine for everyone,
because the broker gets a percentage of the sale, so he has incentive to
get the highest possible sale price. However, this is tempered by the
broker's desire to get the sale done quickly and move on to the next
deal. In either case, I'm not sure how advising a potential buyer to
extend negotiations and possibly drive down the sale price (or put the
deal at greater risk) accomplishes either goal for the broker.



JKG

[Stan Prevost[_1_]]

Agreeing to a buyer's demand for a certain concession amount to correct a
defect is one thing. Telling the buyer that he should ask for a greater
concession is much different.

It doesn't help the deal go through, it doesn't affect the broker's
commission, it just impacts the seller. If anything, it jeapordizes the
deal.


"Roy Smith" > wrote in message
...
> In article >,
> Jonathan Goodish > wrote:
>
>> In article >,
>> Roy Smith > wrote:
>> > "Stan Prevost" > wrote:
>> > > The amount of money was minor, and the broker wound up paying it.
>> > > But
>> > > it certainly cast doubt on how zealously he had represented me during
>> > > the entire process.
>> >
>> > What on Earth makes you think a broker (any broker) is representing any
>> > interests other than his own? His only job is to make sure the deal
>> > goes
>> > through, so he gets his commission.
>>
>> If I hire someone to represent me and sell my airplane (or house, etc.)
>> I expect them to represent MY best interests, because that's what
>> they're being paid to do. This usually works out fine for everyone,
>> because the broker gets a percentage of the sale, so he has incentive to
>> get the highest possible sale price. However, this is tempered by the
>> broker's desire to get the sale done quickly and move on to the next
>> deal. In either case, I'm not sure how advising a potential buyer to
>> extend negotiations and possibly drive down the sale price (or put the
>> deal at greater risk) accomplishes either goal for the broker.
>
> Well, let's say you agree to sell me your airplane for $X. I have it
> inspected and get presented with a list of squawks. If you get hard-nosed
> about it, I might walk away from the deal. Your broker's best chance of
> getting his commission fast is to convince me to go ahead with the deal.
> And the best chance of doing that is to extract from concessions on the
> price. If that means working both sides of the street, so be it.
>
> The only thing about the broker that makes him *yours* is that *you* get
> to
> write the check for his fee.

[Bob Noel]

In article >,
Roy Smith > wrote:

> > > What on Earth makes you think a broker (any broker) is representing any
> > > interests other than his own?
> >
> > >From http://www.dictionary.com
> > Broker "(1)One that acts as an agent for others, as in negotiating
> > contracts, purchases, or sales in return for a fee or commission. "
>
> You know the difference between theory and reality, don't you?

And do YOU know the diferrence between what people should do
and some actually do?

--
Bob Noel
Looking for a sig the
lawyers will hate

[Robert M. Gary]

> You know the difference between theory and reality, don't you?

I know that an agent that does not represent his client is guilty of
conflict on interest and is wide open for legal action.

-Robert

[jmk]

Roy Smith wrote:
>
> You know the difference between theory and reality, don't you?

Sure. In theory, theory and reality are very much alike, but in
reality, they are very different. <G>

Just a thought: If the deal falls through, who keeps the deposit?
Could it be that the broker WANTS the deal to fall through, repeatedly?

[Maule Driver]

Robert M. Gary wrote:
> Roy Smith wrote:
>
>>What on Earth makes you think a broker (any broker) is representing any
>>interests other than his own?
>
>>From http://www.dictionary.com
> Broker "(1)One that acts as an agent for others, as in negotiating
> contracts, purchases, or sales in return for a fee or commission. "
>
That's what a broker is supposed to do but this same breach of trust
goes on all the time in real estate.

When buying a house in CT, I was surprised when the seller's agent,
over a beer, made it clear that he thought our offer should be some $30K
lower than what we were considering. Obviously a pretty poor player
from the seller's end. Save us some bucks.

How stupid was I in re-hiring him to sell the same house. He ended up
not being able to get our minimum price from anyone in 3months. House
was turned over to a firm hired by my corporate relocation firm. It was
sold in <30days for just less than our asking price.

Lot's of lessons learned there.

[Nathan Young]

On Sat, 12 Aug 2006 22:12:27 -0400, Jonathan Goodish
> wrote:


>If I hire someone to represent me and sell my airplane (or house, etc.)
>I expect them to represent MY best interests, because that's what
>they're being paid to do. This usually works out fine for everyone,
>because the broker gets a percentage of the sale, so he has incentive to
>get the highest possible sale price.

I disagree. The broker's interest is to sell the plane/home so that
they receive their commission.

The broker is making their 3% no matter the sale price, and the
difference between a high and low sales price is not substantial
enough to make a broker hold for a better price.

Example (a 10% price reduction to get the deal done)
3% of $200k = $6k
3% of $180k = $5.4k

Both parties are out 10%, but the seller is out $20k, meanwhile the
broker is only out $600 bucks. When the mortgage is due, most people
would rather have $5400 in their pocket today vs a potential of $6000
in the future.

Also, keep in mind that if the high price is held, and the plane does
not selll in a few months, the seller is likely to blame the broker,
and terminate or not renew the contract with the broker, in which case
the broker's income went from $5400 to $0. So that is a worst case
scenario for the broker.

The only thing offsetting the broker's desire to get the deal done is
the need for future repeat business. They will not be in business for
long if they get a reputation for screwing their clients.

[Stan Prevost]

"jmk" > wrote in message
ps.com...
>
> Just a thought: If the deal falls through, who keeps the deposit?
> Could it be that the broker WANTS the deal to fall through, repeatedly?
>

In this case, the deposit was refundable to buyer less expenses. No
incentive for broker to kill the deal.

Stan

[Stan Prevost]

"Nathan Young" > wrote in message
...
>
> The only thing offsetting the broker's desire to get the deal done is
> the need for future repeat business. They will not be in business for
> long if they get a reputation for screwing their clients.
>

The only I knew I was getting screwed is that I happened to be sitting
within hearing range of the buyer talking to the broker on the telephone,
discussing the prebuy inspection results and what he wanted. That probably
doesn't happen much, so most people would have no way to know of the
broker's behavior. Also, there is no way a seller would know that the
broker told me that the airplane has certain problems and that I should have
the seller fix them.

[john smith]

In article >,
Nathan Young > wrote:

> The broker is making their 3% no matter the sale price, and the
> difference between a high and low sales price is not substantial
> enough to make a broker hold for a better price.

In Ohio, real estate commissions are 7%, except in Hamilton County where
they are 10%.

[Jon Kraus]

Anyone paying 7% in today's market deserves to get ripped off. !0% is
so absurd it doesn't warrant a comment...

Jon Kraus
'79 Mooney 201
4443H @ UMP


john smith wrote:
> In article >,
> Nathan Young > wrote:
>
>
>>The broker is making their 3% no matter the sale price, and the
>>difference between a high and low sales price is not substantial
>>enough to make a broker hold for a better price.
>
>
> In Ohio, real estate commissions are 7%, except in Hamilton County where
> they are 10%.

[[email protected]]

john smith > wrote:
: In Ohio, real estate commissions are 7%, except in Hamilton County where
: they are 10%.

Wow. *another* reason not to live in Ohio? ;-)

-Cory
--

************************************************** ***********************
* Cory Papenfuss, Ph.D., PPSEL-IA *
* Electrical Engineering *
* Virginia Polytechnic Institute and State University *
************************************************** ***********************

[Bob Noel]

In article >,
Nathan Young > wrote:

> The only thing offsetting the broker's desire to get the deal done is
> the need for future repeat business. They will not be in business for
> long if they get a reputation for screwing their clients.

except they can count on the people who don't seem to think that
a seller's broker has any obligation to the seller.

--
Bob Noel
Looking for a sig the
lawyers will hate

[Terry 56W]

Stan:
I always consider the Broker to be an adversary in the transaction, and
would never tell them what I'm really thinking. That's based on prior
experience, regardless if it's home or an airplane. Always be open to
other options, don't feel like you have to take the one presented by
the broker. If you don't like what you hear, wait until the contract
expires, and move on. If you have any proof he took advantage of the
situation, you can take him to court.

[Stan Prevost]

Thanks, Terry. This was my first experience, so had nothing to go on and
didn't expect malrepresentation. I have proof that he acted against my
interests in settling the prepurchase inspection issues, but the amount of
money is small and not worth pursuing. Anyway, I got him to pay most of
that.

Stan


"Terry 56W" > wrote in message
ups.com...
> Stan:
> I always consider the Broker to be an adversary in the transaction, and
> would never tell them what I'm really thinking. That's based on prior
> experience, regardless if it's home or an airplane. Always be open to
> other options, don't feel like you have to take the one presented by
> the broker. If you don't like what you hear, wait until the contract
> expires, and move on. If you have any proof he took advantage of the
> situation, you can take him to court.
>