Broker or No Broker

[nautical62]

I think much depends on how able (and good) you are at showing the boat yourself. These days it's fairly easy to advertise a boat for sale yourself. If you sell a 40K boat yourself, you are saving 4K in broker's fees. If you sell a 200K boat yourself, you save 20 grand in broker's fee, but it's not 5 times the effort to sell it. For a fraction of the commission price you could hire a broker or lawyer to look the contract over for you.

As others have said, you need to decide what your time and effort is worth and how that compares to potentially saving a commission fee. Also, do you think you will be better, worse, or the same as a broker when it comes to showing the boat and negotiating a price?

The first two boats I owned I sold myself. It was fairly simple and painless. The next two were half a country away, so I decided to go with a broker. Each has it's place.

[myocean]

We have sold our cat in January this year and found the following:
It depends on the type of boat and on the broker but many tend to talk down your pricing idea because they just want a quick deal and do not want too much work for their share of the boat price. Additionally we found a broker with good reputation who wanted to be the exclusive seller. That, we figured, is the worst you can do: He does not to do a lot to promote your boat because with signing the brokerage contract he can be sure to get his share sooner or later.
The biggest task in the selling process is to take really good photos, write a good documentation and put them in the internet. Many brokers are happy to let you do this work and still they want to get 8 or 10%.
We finally got a recommendation for a broker (in Australia) who wanted only 2% and did a great advertising job! (we made photos and documentation on our own) In parallel we advertised our (quite unique) boat on our own and had the boat yard who build it acting as a second broker in parallel (both non-exclusive).
We got a lot of direct requests but the final buyer preferred going via the 2% broker "for security reasons" regarding the financial transactions. So some buyers do appreciate a broker or have a mandatory requirement for this!
See our private sales page here: Sold: Outremer 50 Standard Carefully Maintained Catamaran

[sailpower]

Originally Posted by JusDreaming

We are getting ready to retire from our cruising years, and sell our cat. The big question is rather to use a broker or not. Looking for your distinguished opinion on this subject.

Good luck! You will get more opinions than there are people. There are thousands of brokers who have been in business for years. I suggest that you look through YW and see who is advertising what you have for sale or similar and how long those boats have been on the market.

One thing to keep in mind is that the prime selling season in FL comes to an end after Memorial Day so you don't want to waste a lot of time.

[skipmac]

Hi Myocean,

If I may, for the benefit of the OP I would like to add some comments and suggestions based on your experience.

Originally Posted by myocean

We have sold our cat in January this year and found the following:
It depends on the type of boat and on the broker but many tend to talk down your pricing idea because they just want a quick deal and do not want too much work for their share of the boat price.

This is a very real concern and unless you really know and completely trust the broker you should do your own homework and research on the market in general and pricing for your exact model. If you have doubts about the price suggested by the broker then ask him/her to show you data on sales of similar boats which brokers have available.

Additionally we found a broker with good reputation who wanted to be the exclusive seller. That, we figured, is the worst you can do: He does not to do a lot to promote your boat because with signing the brokerage contract he can be sure to get his share sooner or later.

First, if you consider an exclusive listing you should make it part of the contract what the broker will do to promote and advertise your boat. I have seen contracts that specified how much advertising, what publications, even how large the ad and photos would be for your boat. Any other promises on what the broker will do to sell your boat if given the exclusive... get it in writing.

Regarding the listing broker's share. Yes if he/she has the exclusive listing then there is a guarantee of a share of the commission but that share is only 3%, the selling commission is 7% so it is in the broker's interest to sell the boat as well as list it. Don't forget that the house gets half of the commission so the broker for listing will only pocket 1.5% NOTE: For large or very valuable boats the commission rate is negotiable. Seldom will the sale of a $10,000,000 yacht pay 10%

The biggest task in the selling process is to take really good photos, write a good documentation and put them in the internet.

Absolutely

Many brokers are happy to let you do this work and still they want to get 8 or 10%.

But consider no one knows a boat like the owner. Writing a good description, equipment list, upgrades, repairs, etc almost has to be the owner's job. Photos? Maybe another story but not something that would take a huge amount of time or cost you a lot of money so why not supply a good set of photos?

We finally got a recommendation for a broker (in Australia) who wanted only 2% and did a great advertising job! (we made photos and documentation on our own) In parallel we advertised our (quite unique) boat on our own and had the boat yard who build it acting as a second broker in parallel (both non-exclusive).
We got a lot of direct requests but the final buyer preferred going via the 2% broker "for security reasons" regarding the financial transactions. So some buyers do appreciate a broker or have a mandatory requirement for this!
See our private sales page here: Sold: Outremer 50 Standard Carefully Maintained Catamaran

[YachtBroker]

I agree with Magellan. A good broker is worth his weight in gold, but not every broker is good. Guys, it's the internet age. It's so easy to google people and brokerages. So easy to ask for testimonials, even a resume from a broker. Are they full time, part time or have they been doing this full time making a living at it for 10, 20 years?

Ask them how many boats like mine have you sold? How many last year, in your career? What info can you give me to show me what my boat is worth and how fast will it sell and what marketing plan do you have to get the job done?
What's your success ratio from offer to closing? How do you handle objections etc.

I find most FSBO boats are not worth what the sellers think they are, hence a broker doesn't want to be involved.

Good brokers earn their 10% and generally sell good boats for the proper value in a short amount of time, thus saving the seller money in the long run.

Just my two cents.

[boatpoker]

So you sell a boat privately to save the 10%. Doesn't the buyer buy privately to save the same 10% ?

[Paul L]

Originally Posted by boatpoker

So you sell a boat privately to save the 10%. Doesn't the buyer buy privately to save the same 10% ?

Not really. The buyer pays what they think the boat is worth them. A boat is not all of a sudden worth 10% more because you list it with a broker.

[smj]

Originally Posted by boatpoker

So you sell a boat privately to save the 10%. Doesn't the buyer buy privately to save the same 10% ?

To me selling without a broker is more than extra profit, it's passing on some knowledge of the boat. A boat broker is the same as a real estate agent, usually the broker knows very little to nothing about the boat. I enjoy interacting with prospective buyers, so the process for me is not painful. For others, using a broker would be the way to go if they don't enjoy the process or don't have the time. Also I would expect the 10% saved from not using a broker would hopefully be beneficial financially to both buyer and seller.


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[sailpower]

Originally Posted by smj

To me selling without a broker is more than extra profit, it's passing on some knowledge of the boat. A boat broker is the same as a real estate agent, usually the broker knows very little to nothing about the boat. I enjoy interacting with prospective buyers, so the process for me is not painful. For others, using a broker would be the way to go if they don't enjoy the process or don't have the time. Also I would expect the 10% saved from not using a broker would hopefully be beneficial financially to both buyer and seller.


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If the seller is going to give up the 10% to the buyer he/she might as well use a broker and avoid the hassle.

[smj]

Originally Posted by sailpower

If the seller is going to give up the 10% to the buyer he/she might as well use a broker and avoid the hassle.

As I said, to some the process is enjoyable and the extra 10% hopefully split between buyer and seller. Good luck getting any info on the boat from the broker after the deal has closed. We have actually made some great friends with the ones we have sold to.


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[Pelagic]

I think that the age and type of yacht would influence whether to sell privately or via broker.
If it is a fairly new production boat, then brokerage companies have a reliable data base on market value and potential buyers....so I would list with brokers.

But if it is an older custom live aboard that has undergone a variety of quality refits....no broker can convey to a serious buyer, those technical details and reasons to appreciate the improvements.... so I would favor buying direct via a knowledgeable owner in this case

[smj]

One of the benefits of buying from a broker is it isolates you from the buyer, so if your embarrassed about the way your boat shows then selling by owner may not be a good idea.


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[skipmac]

Originally Posted by YachtBroker

I find most FSBO boats are not worth what the sellers think they are, hence a broker doesn't want to be involved.

That was my experience when I was a yacht broker. I would keep track of FSBO boats for various reasons: checking the market in general, looking for any good deals or unique boats. I would say 75-80% of the time the FSBO prices were higher than the same or similar boats listed with brokers.

Some the owners really didn't want to sell so listed it high. One case I found the wife told him to sell the boat and he listed it high so it wouldn't. Some I found the owner had added what he paid for the boat and every dollar he ever spent on it except the dock rent and the fuel he burned and decided that was the value. Some just thought their pride and joy was worth more. Lots of these boats I saw sit on the market for a year or years. Most were eventually pulled off the market or the owner lowered the price and it sold.

[Paul L]

Skipmac
The FSBOs you've looked at surely might have been overpriced, but how many of the boats listed on YW are also initially overpriced? Pretty common on new listings - just testing the waters.Good brokers can certainly help a lot in setting a price. The trouble is that there are a lot of incompetent brokers and brokers who don't have the seller's best interest at heart.

[skipmac]

Originally Posted by Paul L

Skipmac
The FSBOs you've looked at surely might have been overpriced, but how many of the boats listed on YW are also initially overpriced? Pretty common on new listings - just testing the waters.

The information I was reporting was comparing published list price to published list price which was as thorough as I got. It was not a serious, double blind, control group kind of data, just a casual observation comparing price to price over a few years as a broker.

Of course lots and lots of boats start out at a higher price expecting the buyer to negotiate off the list (no matter how low the price or how good a deal, buyers don't feel like they've done their due diligence unless they bid lower), or hoping to get just a little more for the boat. What I encountered with many FSBO boats is an asking price much higher than comparable boats or sometimes just some higher but non negotiable.

Originally Posted by Paul L

The trouble is that there are a lot of incompetent brokers and brokers who don't have the seller's best interest at heart.

Even though I was a broker I am the first to admit that there are lots of brokers that are lazy, incompetent, dishonest or borderline crooked. I had one boss threaten to fire me because I wasn't willing to tell a customer whatever I could get away with to get him/her to buy a boat. It was common in south Florida for many brokers to use a very will respected surveying company that was known to go easy on the inspections. When I was shopping for my current boat I found a listing that looked interesting and called the broker that advertised the boat.

Determined it wasn't what I wanted but the broker offered to find me other listings that might be better. So I gave him my list: sloop or cutter rig -only, center cockpit - must have, modified fin keel or centerboard, skeg rudder, moderate draft, price range, etc. So a few days later he sends me the listing for an aft cockpit ketch.

Bottom line, I looked for the boat I wanted and didn't care if it was listed by broker or owner.