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Old 21-03-2022, 07:34   #1
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Broker Commissions

Hi Everyone.

We are thinking about selling our sailboat and are looking for a little guidance on commissions. What are your thoughts on brokers commissions in a sellers market? A commission rate at 10% seems pretty high.

Is this negotiable? This is a high value boat.

Thanks!
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Old 21-03-2022, 08:09   #2
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Re: Broker Commissions

10% is pretty much standard and is rarely negotiable.

You have to remember that if there is only one broker, the house gets half the 10% and the broker that other half, so about 5% each.

If there is a buying and selling broker, that commission gets divided by two again, leaving each broker with about 2.5%

I have seen it happen, where they will be some haggle room on the commission, but it's rare. Usually only happens when a boat remains on the market for a long time.

As an example....say a 300K boat....reasonably high end....10% is 30K.....house takes 15K for advertising, etc, two brokers will walk away with $7.5K each.

A broker may end up showing the boat many times, often a long way from the office, over a period of months or even longer, this is all on his dime, and there is never a guarantee that a prospective buyer will buy the boat, as tire kickers are a dime a dozen..

You, as the seller, would like to get as much as possible, obviously, even though a broker may suggest a lower price. This is the reason many boats sit on the market a long time.

Slip fees, insurance, etc, does not stop during this time, so must be weighed against the sale price.

Brokers generally earn their fees. Besides showing the boat, they have to arrange all the paperwork, sea trial, survey, financing, insurance, documentation, etc, etc.

I am not a broker, but have been thru' this process quite a few times.

While the seller will be on the hook for the sales commission, the new buyer will be on the hook for sales tax, which is not part of the brokered sale price. Uncle Sam want his his 6-7% as well and is not willing to negotiate.
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Old 21-03-2022, 08:38   #3
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Re: Broker Commissions

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Originally Posted by usawiwasu View Post
Hi Everyone.

We are thinking about selling our sailboat and are looking for a little guidance on commissions. What are your thoughts on brokers commissions in a sellers market? A commission rate at 10% seems pretty high.

Is this negotiable? This is a high value boat.
Unless it is a multi-million dollar yacht, it isn't 'high value'. 10% is the standard, and that typically gets cut to 5% when they have to split it with the buying broker.

The broker doesn't see all of that money either as both the buying and selling broker need to pay their respective brokerage company it's fee as well. Also keep in mind how many hours it takes to sell one of these boats. How many boats that broker actually sells in a month.
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Old 21-03-2022, 08:50   #4
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Re: Broker Commissions

The guys I know charge 10% OR a minimum $3000, friend sold a $20,000 boat recently and was pretty pissed that the listing broker forgot the minimum clause.
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Old 21-03-2022, 09:16   #5
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Re: Broker Commissions

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The guys I know charge 10% OR a minimum $3000, friend sold a $20,000 boat recently and was pretty pissed that the listing broker forgot the minimum clause.
That is odd. That is usually written into the brokerage contract which is signed by the buyer when he contracts the broker to sell his boat. These things are not left to word of mouth. Whether the broker mentioned isn't relevant. My guess (strong assumption) is the seller simply didn't read the contract that they signed.
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Old 21-03-2022, 09:23   #6
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Re: Broker Commissions

He didn't give me the details cause he was just venting, apparently listing agent was new and just screwed up contract somehow.
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Old 21-03-2022, 09:29   #7
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Re: Broker Commissions

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Originally Posted by Shrew View Post
Unless it is a multi-million dollar yacht, it isn't 'high value'. 10% is the standard, and that typically gets cut to 5% when they have to split it with the buying broker.

The broker doesn't see all of that money either as both the buying and selling broker need to pay their respective brokerage company it's fee as well. Also keep in mind how many hours it takes to sell one of these boats. How many boats that broker actually sells in a month.
How many hours indeed? Take a $300k boat and assume worst case the selling broker gets 2.5% or $7,500. At $50/hour that equates to 150 hours. That would be about a months worth of work, full time, devoted to nothing but selling my boat. There may be a broker who puts that much work into every boat they sell, but if so I've never encountered them or spoke to anyone who has. More likely they can't be bothered to come down for an hour to show the boat or take 5 minutes to respond to a very directed specific email request. And in this market where boats are selling in record time and there are a bunch of buyers for every seller? Seriously, is anyone going to claim ot takes 150 hours of work to sell a $300,000 boat. Or even more ridiculous, that it takes an additional marginal 50 hours of work to sell a $400,000 boat?

I work in an office building full of yacht brokers, not for nothing the car is full of super high end cars.
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Old 21-03-2022, 09:44   #8
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Re: Broker Commissions

When I bought my most recent boat, the broker had to fly from Miami on his own dime to show it. As a courtesy, I picked him up at the airport, so he didn't have to rent a car as well.
Brokers may show the same boat to several potential buyers, over a period of months, so it all adds up after a while.
I think it's a tough business to be in. You will likely waste a lot of time with tire kickers, that have no intention of buying anything, but just want to take a look.

I keep hearing it's buyers market, but I don't see that at all.
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Old 21-03-2022, 11:06   #9
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Re: Broker Commissions

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When I bought my most recent boat, the broker had to fly from Miami on his own dime to show it. As a courtesy, I picked him up at the airport, so he didn't have to rent a car as well.
Brokers may show the same boat to several potential buyers, over a period of months, so it all adds up after a while.
I think it's a tough business to be in. You will likely waste a lot of time with tire kickers, that have no intention of buying anything, but just want to take a look.

I keep hearing it's buyers market, but I don't see that at all.
Who was that, that's definitely someone I wouldn't begrudge his 2.5%! On the flip side I experienced two brokers in Miami who couldn't be bothered to drive the 20 minutes from their office to show boats I had flown down from Annapolis expressly to see...clearly communicated to them and clearly not a tire kicker. That is the extreme end of laziness on the part of the industry, but if you do a search on "broker" here you'll see that kind of thing is the rule and your experience the exception. I find it very hard to believe the average broker puts a solid month working full time on one boat in for every boat they sell.

Like I said, I have a hard time feeling sorry for the "tough business to be in" when I chat with the brokers in my building heading out at noon on Thursday in their Mercedes AMG for their second home in Ocean City for a long weekend.
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Old 21-03-2022, 13:38   #10
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Re: Broker Commissions

It's a tough gig to be a yacht broker.
Down in south Florida, brokers tend to deal with larger, more expensive boats and well heeled clients.
Some of those boats are your typical 100' plus super yachts, etc, going for millions.

The guy who flew up from Miami was a relatively young kid....kinda new kid on the block so to speak, and willing to go the extra mile. The boat had originally been kept in Miami, but the owner moved it to Brunswick.

Brokers are a dime a dozen down there, you get good one's, not so good one's and terrible one's. The good one's have been in the business for a very long time.

But elsewhere, brokers typically deal with smaller, less expensive boats.

You can always try the " by owner" route, but I've heard mixed reviews about going this route.

It's a hot topic for sure. Many people have very distinct memories when it comes to dealing with brokers and I've heard more than one horror story.

Maybe I've been lucky. Having bought and sold five vessels now, I've always had the good fortune of dealing with very competent, friendly people, that performed above and beyond.
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