Boat broker commissions in the US - are they next after real estate?

[MicHughV]

No matter how you slice it, buying a boat, of any kind, is an expensive proposition.

Many sellers, anticipating the broker's commission, will tack the 10% commission on their asking price, so whether you are the buyer or seller, some of this is bound to come out of your pocket.

Next comes the survey, this one is on you, the buyer, and this can run into several thousand, as the boat is usually hauled for a bottom survey, so you, as the buyer will have to fork over some $$$ for both boatyard and surveyor.

After negotiating the price of the boat, you the buyer, will also have to walk over to the tax dept. and fork over another 6.5% value of the boat for the dreaded " sales tax".

Next, off course, comes the insurance. This is another tricky road to navigate as insurance companies are gunshy of older boats and inexperienced yachties. Were you to be successful, insurance premiums will take a monthly bite out of your paycheck.

By this time, you will have paid out $1,000's of dollars, but have yet to take the boat out for a spin.

Off course, as soon as all the paperwork is signed you'll be on the hook for marina fees, electric hookups and the like.

Once the boat is safely moored at the new dock, there is a 100% chance, you'll be running to nearest Marine store to purchase any number of things you think you'll need.

Again, you have yet to take the boat out for a spin and your bank account is dripping blood by this time.

As time goes by, you'll be a frequent flyer at marina stores, diesel mechanics, and the like, not to mention a bi-yearly haulout to do an antifouling bottom job.

Have I missed anything...maybe...new suit of sails, rigging redone, new dink and outboard, solar panels, etc, etc, the list is endless.

It's a very expensive hobby !!

[fireant]

MicHughV, so blunt yet so true. I'm so happy my hole in the water is only 27ft for now.

[Coltrek]

I think the obvious answer is a floating commission, Lower on the high end boats and higher for say, a $30,000 boat. What you find is they don't put much work into selling these cheaper boats for obvious reasons. However, paying 50 grand on the sale of a 500,000 boat kind of sticks in my craw, especially if going through the listing broker alone. No way he earned that kind of jing.

[letsgetsailing3]

Originally Posted by shimari

YachtWorld is roughly the same thing as the Multiple listing service for real estate in the US.

It's similar, but not exactly, as there is much less accountability on actual sales. Home sales are public record and can be verified.

[leecea]

I think the obvious answer is a floating commission, Lower on the high end boats and higher for say, a $30,000 boat.....paying 50 grand on the sale of a 500,000 boat kind of sticks in my craw, especially if going through the listing broker alone.

The math gets problematic IMO. Unless the brokers are willing to make less money overall, reducing commission on high end boats means a huge increase in commission on low end boats to make up the total.

Sale Price Fixed
$500,000 10% $50,000
$200,000 10% $20,000
$100,000 10% $10,000
$30,000 10% $3,000

TOTAL $83,000

Sale Price Sliding
$500,000 6% $30,000
$200,000 12% $24,000
$100,000 20% $20,000
$30,000 30% $9,000

TOTAL $83,000

[EmeraldCoastSailor]

I am currently in FSBO situation and would like to consider use of a broker. How realistic is it that a broker would travel 2-4 hours by car to show a boat? Seems like I’d be there showing the boat in any case. Maybe my situation is different in that I am retired and live close to the boat. I know of no local brokers.

I like the angle of getting on YachtWorld for a set fee. Kind of like Boattrader.com.

[Coltrek]

Originally Posted by leecea

The math gets problematic IMO. Unless the brokers are willing to make less money overall, reducing commission on high end boats means a huge increase in commission on low end boats to make up the total.

Sale Price Fixed
$500,000 10% $50,000
$200,000 10% $20,000
$100,000 10% $10,000
$30,000 10% $3,000

TOTAL $83,000

Sale Price Sliding
$500,000 6% $30,000
$200,000 12% $24,000
$100,000 20% $20,000
$30,000 30% $9,000

TOTAL $83,000

I see your point, but 30% is obviously not realistic - got to be some where in the middle. The problem is with the current setup, when was selling a boat in that range, the broker did virtually nothing, I did all the pictures, write-up, and even advertising on Craigs List and BoatUS, etc, and showed it - So maybe I just answered the question, at least for the cheaper boats, just keep the current fixed rate, and you get listed on YachtWorld, and sell it virtually yourself. It's just that then I think the 10% is excessive on the pricier boats.

[TXProud]

The big difference is a commission based on a bit of a common practice and on based on a National organization’s mandate where membership is required to post listings.

Will there be some trickle down? Sure, but there won’t be a line forming for the next settlement.

[Tin Tin]

There should be a class action against class action lawyers over the 30% they take. No win no fee, (30%) boat broker no sale no fee (10%)

[wholybee]

Originally Posted by shimari

Boat broker commissions in the US are typically 10%. You can some times negotiate that down if you're giving the broker other business such as selling and buying a boat with them.

The National Association of Realtors in the US just settled such that their commissions will no longer be the 5%-6% as they have been. Sounds like there will be no set commission as in the past (although, you could negotiate a little here too).

https://www.npr.org/2024/03/15/12387...ler-settlement

I have to wonder if boat brokers will be the next targets.

The news media has been misled with misinformation. Real Estate commission amounts are not changing. The cost of buying a home isn't going down. Commissions are and always have been negotiable. What is changing is the structure of the agency relationship, and the forms used and wording of how the commission is paid for. Currently it is/had been paid by the seller, to the seller's broker, and that broker then paid the buyers broker. The amount paid from the seller's broker to the buyer's broker is listed in MLS. That arrangement is what is ending.

But it will still total 5%-6%, split between the buyer's and seller broker's. Just the legal arrangement is changing. But the cost of buying a home isn't going to change, and both brokers will both get paid the same amount of money. Some brokers have already changed to new forms, which satisfy the settlement, but don't lower the commission.
No doubt greedy lawyers will target yacht brokers for some similar nonsense. The lawyers will win and collect a nice fee, but the commission will remain the same.
Expensive as they seem, the commission is determined by the market. If people stopped using brokers, the commissions would drop. As long as the brokers get plenty of business at the current rate, the commission will remain high.

[Island Time O25]

I have an issue with a broker commission being more than surveyor and attorney's fees combined. On a typical $100k boat the commission is $10k while the surveyor fee is probably around $1-2k max and attorney fee of similar amount.

And in today's internet driven world it is much easier to find a potential solid buyer than either a good surveyor or a good attorney. Thus their services must be more valuable to the parties than the services of so so broker.

[wholybee]

Originally Posted by Island Time O25

I have an issue with a broker commission being more than surveyor and attorney's fees combined. On a typical $100k boat the commission is $10k while the surveyor fee is probably around $1-2k max and attorney fee of similar amount.

And in today's internet driven world it is much easier to find a potential solid buyer than either a good surveyor or a good attorney. Thus their services must be more valuable to the parties than the services of so so broker.

It is also now easier to market your boat without the use of a broker at all. If sellers simply do that instead of listing boats with brokers, the cost will come down. Consider the cost of a slip at about $1000 per month. If it takes 10 months to sell a boat, that is 10% the cost of a 100k boat. If a broker can sell the boat in 1 month vs 10 months if you sell it yourself, then the brokers commission is a wash. That fact is probably what drives the commission rate and why sellers are willing to pay a commission. If boats sold quickly without a broker, then sellers wouldn't use brokers.

The cost of a home inspection is also a fraction of the cost of a real estate broker.

[sinnerman]

Real estate agents deal with the closing (via closing attorneys/titel companies) as well as assisting with mortgages, all of which is a "boat load " of documentation.

Boat brokers do little compared to the above. They basically list/ show wthe boat.

Title transfer is a single document.

My two cents.

Cheers

[MicHughV]

The irrefutable fact of the matter is that buying or selling a boats is gonna cost you some money that has nothing to do with the intrinsic value of the boat.

First of all, the sales tax does not garner this type of attention, yet requires...about 6.5% of the value of the boat handed over to your local tax office.
There is simply no arguing this bitter pill to swallow.
The same can be said for haulout and survey. Another chunk of money paid out to people who have little interest in the boat as a whole.
Ditto boat insurance, etc.

Sales commission should be viewed as just another tax to be paid to become a boat owner.
Like them or not, boat brokers are typically an intrinsic part of boat ownership. Once the deal is done, they will go on their way and you are unlikely to ever hear from them again. Their job is done.

[Montanan]

Today's news

South Florida yacht brokers hit with lawsuits that claim 10% commissions violate antitrust laws


https://www.msn.com/en-us/money/comp...bad5df19&ei=68


"Two newly filed federal lawsuits claim that 10% sales commissions required by South Florida’s yacht broker industry are anticompetitive and violate antitrust laws.

The claims follow an October finding by a federal jury in Kansas City, Missouri, that the National Association of Realtors conspired with brokers to artificially inflate commissions paid to real estate brokers. The ruling, and a March 15 settlement by the Realtors, is expected to radically change how homes are sold in the United States."