Question on Boat Brokers

[boatymcboatface]

I am in the process of selling a boat through a US broker. The buyer and I signed a contract, but then later we agreed to a reduced price due to some findings on the survey. The broker expected his commission to be based on the original seller offer price and not the final selling price. He claims this is the industry standard. This seems shady to me. Can anyone clarify as to whether this is industry standard?

Thanks.

[MarkSF]

My knee-jerk response was that his position is ridiculous, but then I considered that the reduction in price is to cover the cost of repairs. The intent is that the total cost to you should be the final selling price PLUS the repair costs, equaling the original price agreed to. Thus the commission should be either based on the original price, OR the final price plus the repair costs.

[TurninTurtle]

simple... cancel the sale.

Cancel the contract with the broker.

Sell it through someone else (or on your own without any commission) in 30 days.

And tell the broker where he can go.

When a real estate sale gets renegotiated, the commission is based on the final price.

[MarkSF]

Originally Posted by boatymcboatface

I am in the process of selling a boat through a US broker. The buyer and I signed a contract, but then later we agreed to a reduced price due to some findings on the survey. The broker expected his commission to be based on the original seller offer price and not the final selling price. He claims this is the industry standard. This seems shady to me. Can anyone clarify as to whether this is industry standard?

Thanks.

What does it say in the contract with the broker?

[boatymcboatface]

The contract says "10% of selling price", and the broker did back down eventually. I just want to determine how shady this guy is. Now they want the buyer's finance company to pay me ~90% and the broker will send me the balance. It is in writing, but if they just decide to not send the money, I'd have to take it to arbitration.

Bizarre.

[MarkSF]

Have you got it in writing that they backed down?

[GoingWalkabout]

Originally Posted by TurninTurtle

simple... cancel the sale.

Cancel the contract with the broker.

Sell it through someone else (or on your own without any commission) in 30 days.

And tell the broker where he can go.

When a real estate sale gets renegotiated, the commission is based on the final price.

Can't agree more. Casts a cloud of doubt on the honesty of the whole unregulated boat broker industry. Even a used car salesman wouldn't try to pull this shtick.

In a normal world a broker would be happy that a sale has been made and then move onto the next sale. But we aren't dealing with a normal world in the boating industry. And definitely not normal people.

Goes to also confirm my suspicion that popular boat selling internet sites are being fixed by the brokers with them artificially trying to hold up the used prices by not registering properly real sales data. Dishonest market manipulation and Dishonest unethical behaviour ultimately hurts everyone.

Blame the low lives for a market that can't be trusted and consequently causing delays in being able sell your boat when that time comes around. If the used car industry behaved like the used boat industry you would have far less used cars sold. And by the way. The new boat market needs a strong and effective used boat market. Just as the new car market does.

[boatymcboatface]

Originally Posted by MarkSF

Have you got it in writing that they backed down?

Yes, it was redrafted with the correct commission.

I think GoingWalkabout is on to something. The brokers want to make the boat look like it sold for more than it did. It over-inflates the used boat market as well as giving them a better commission.

Also, ending the contract and then selling the boat in 30 days is not an option. The contract stipulates that if you sell within 1 year, you have to inform the broker, and if you sell to someone who he showed the boat to, you pay commission. That seems reasonable to me. Otherwise, lots of people would just make an arrangement on the side to save 10%.

[Cheechako]

Read your brokerage agreement. But from everything I've experienced his commission is on the final sale price. Hopefully he didn't slip something else in the contract . You are obligated to pay him if he showed the boat etc whether you cancel the agreement or not.
Also, just do a new sales agreement. Don't amend the old one. The old one will be void then and his commission will be based on the new one.

[boatymcboatface]

Originally Posted by Cheechako

Read your brokerage agreement. But from everything I've experienced his commission is on the final sale price. Hopefully he didn't slip something else in the contract . You are obligated to pay him if he showed the boat etc whether you cancel the agreement or not.
Also, just do a new sales agreement. Don't amend the old one. The old one will be void then and his commission will be based on the new one.

The listing agreement says "10% of selling price."

The closing statement was phrased as (numbers changed):

Contract sales Price: 100,000
Sales Commission: 10,000
Survey Allowance: 10,000
Balance due seller: 80,000

It still feels shady to me.

A lesson to be learned: If the terms of the contract change, insist on a new contract. Don't amend the current one. I also don't think he'd have a leg to stand on in court. I think he was counting on the fact that the amount is small enough not to go to battle over.

[Training Wheels]

I don't know. I seem to recall the "selling price" being the agreed price, before anything Is taken off for "repairs". Seems like the tax is based on the "selling price", not the final purchase price.


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[oldsalt_1942]

Back in 1990 I was running a boat over in France that had been designed by a noted and much lauded naval architect. His design of the keel was a disaster, along with the fact that the French builder shorted the keel SEVEN TONS of lead making the 85-foot boat dangerously unstable.

The owner hired Sparkman & Stevens to design a new keel and it was being done. S&S's chief architect came over to check on the progress. He was actually there the day the first Gulf War started. In a conversation during his stay he said, "Sparkman and Stevens has a brokerage department, but let me tell you...THEY'RE ALL WHORES!!!"

In my nearly 40 years of professional boating experience I hardly ever found evidence to the contrary for that statement.

[mramoo]

IMHO paying $10,000. for a survey is outrageous, total survey cost for our last boat was just over $1800.

[tdoster]

Originally Posted by mramoo

IMHO paying $10,000. for a survey is outrageous, total survey cost for our last boat was just over $1800.

Survey allowance is what the broker is stating the sales price reduction based upon the repairs negotiated from the survey, not the survey itself.

[reed1v]

Originally Posted by boatymcboatface

I am in the process of selling a boat through a US broker. The buyer and I signed a contract, but then later we agreed to a reduced price due to some findings on the survey. The broker expected his commission to be based on the original seller offer price and not the final selling price. He claims this is the industry standard. This seems shady to me. Can anyone clarify as to whether this is industry standard?

Thanks.

Unless you have a contract to the contrary, the broker is paid based on selling price; and paid by the seller. Somethings smells real bad here.