Broker Contract Question

S

Sandy K.

Member
exMember
Joined
Mar 15, 2001
RO Number
3775
Messages
406
Met with a broker yesterday to discuss the possibility of listing the Sea Ray with him. He handed me a standard contract - 6 month agreement, 10% fee, no mention of what he'll do to try to sell the boat and a clause that requires payment of the full commission even if I bring in the buyer on my own.

I'm curious to know if it is standard practice regarding my bringing the buyer and having to still pay the full commission?

Also, I'd appreciate any other ideas of other types of clauses the contract should include - that are geared to protect me?

Thanks,
 
Find another broker. With some sort of exclusive listing by this broker you'd expect him spelling out his services in detail. How, where, when he advertises your boat, etc. How showings are contucted, yadda. I'd want it very clear that if I located a potential buyer, by this bbs or whatever other means he doesn't deserve a commission. I don't mind paying people for their services/work but if you don't earn it you're not getting a cent!
 
Actually, while I agree with what you're saying Knotty, I think what Sandy got is all too common. I had the exact situation. They (checked with multiple brokers) receive a commission whether you sell it or they sell it. Now, some have agreed to lower the commission by a small amount if I sell, but not much. Their reasoning is whether you sell or they sell, they've put money and effort into selling your boat (at least they SHOULD have). As for spelling it all out, same thing. Seems you have to ask for all details of advertising, etc. or you won't get them. I even had one broker tell me if I have the boat on their property for them to sell it, I cannot even show it.
 
Broker should get a commission ONLY if they sell the boat. Find another broker.
 
I just read over both of the brokerage contracts I signed when I sold my last boat. Both of them mentioned that the broker has exclusive rights to sale of the vessel during the term of the contract. One of the agreements specified that the broker agrees to 'promote a sale of the vessel by advertising in periodicals, by direct mail, and any other such forms of promotion and advertising it deems advisable'. The other contract just stated that the broker agreed to 'seek prospective purchasers through direct promotion of the yacht'

hope this helps.
 
While you can negotiate just about anything, that language is pretty standard for a broker's contract.

Rather than worry about who brings what client in, I would focus more on specifying EXACTLY what the broker provides - i.e. Captain for sea trail, deposit for sea trial, 24 hours notice for showing, etc.

Besides, with your new Egg your time is better served on your boat rather than showing your old boat.
 
Yes I agree if they've done something to market the boat then they should be entitled to payment for their services. Guess I was in a lil' bit of a pissy mood. I'd definitely want to see some sort of plan for marketing the boat and some tangibles such as the web site(s) used, flyers, ads, etc. I assume larger brokerages have a larger marketing network to find (lure in) potential buyers. I don't think you should feel obligated having to accept their standard contract conditions, why not add a rider with your conditions as the seller. If you want it on XYZboating.com then that's where it goes, if you want a % reduction in the commission if you bring in the buyer then put it in the contract. If you want it shown at a specific place on the lot or marina then put it in there as well. Absolutely everything's negotiable right? I work very hard for what precious little I earn and I expect a broker I employ to do no less. Just call me the "Taskmaster"! ;o)
 
Only problem is that there are tons of used boat inventory with only a few buyers right now. He may take a "take it or leave it" attitude. but you should try to negotiate the specifics.
 
Past performance IS AN INDICATION of future performance. Yes you can negotiate some contract items. However, I think I would give the listing to the broker who has successfully sold your kind of boat in your area marinas. Don't let the 10% bother you. If you fuss over that item prospectively you can turn off the salesman's enthusiasm for selling your boat. Usually when the buyer and seller stall out when a few points apart the good broker will know what to do.
 
this is pretty much the standard contract...

we're talking brokers here, not used boat dealers, right ? if so, Yacht world is the best advertisement so make sure the broker uses them... it's the MLS of of the used boat market... See his listings on YW to check what kind of boat he's experienced with. also, look at his listing to see how detailed there are. some brokers put little or vague information and jsut a couple of quick pictures. Others do a better job with full description and numerous GOOD pics. that makes a difference.

Depending on the local specifics, you may want to request ads in local boat publications, etc...
 
Its hard to figure out who is a good broker and who is not. I guess its just like Real Estate and that's why there are brokers. They all will tell you how they will advertise, but when I've sold my boat the key was that they had people looking. I had a bad broker (didn't get a single offer in 6 months even though I said I wanted to be done) and a good broker (sold in one day to somebody they knew was looking and had one sold out from under them) and got a mechanic to fix the survey items in a week during April when everybody else including that mechanic said two months.

One difference I found in boat brokers is that many were willing to overprice boats. Good real-estate brokers would usually (in my experience) underprice a bit.

I've sold a ton of stuff and I'm a huge believer that you've got one shot at being a new listing. If you can get more than one person putting in an offer within the first week you can hold your price.

If you go too high most of people out there are really looking for a good deal (that's why they'll buy used versus new) and they won't even take a second look. You sit and deal with the tire kickers (I guess in this case free boat ride people), not the people that are ready to buy. Time is money (especially with dock fees, insurance, and the value of the item), and if it sites you'll get somebody that wants a huge discount and isn't really comitted to buying.

You should have an out if they can't get a minimum of interest and frankly if you wanted to screw the broker and I said I'll buy your boat sight unseen, you could drop the broker and do the deal.

Of course if I need to see the boat, etc, etc. I see the brokers point. Even though you told me about the boat, how do we figure out why you bought it??
 
I've got to agree with much but not all that has been said here already;

1) The broker's overhead is his office, phones, advertising fees, etc. He incurs these costs whether he brings the buyer onboard or you do. For that reason he expects his fees to be paid whether he sells the boat to Joe Sixpack or your brother-in-law. If you think there is a chance that you may have a buyer tell that to the broker beforehand and have that buyer named as an exclusion to the contract should that buyer actually buy. The broker will likely want a time limit on the exclusion.

2) The contracts are pretty standard. If you want something changed, added or deleted you'll need to negotiate that before you sign.

3) There are many more boats than buyers out there right now and with fuel prices rising again the picture for sellers and brokers will not get better. If you have a desirable boat to offer the broker will be more likely to negotiate his terms. If you have just another "fill in the blank" boat the broker will put it in his listings but he knows its a slow sell so he won't be excited about taking any cuts on his terms.

4) I don't bother asking brokers how they plan to market the boat. I'd rather do my own research. Does he have ads in the local and appropriate publications? Is he on YW? Does he have a website? Are his ads complete, describe his offerings clearly and include photos? Is his office located near your boat or will he have to drive an hour to show it? Make up reasons to call him on the phone and see if he actually answers or do you always get an answering machine? How quickly does he call back? Get references!!!!

All of the above does not guarentee a good experience with a broker. When we sold the Carver we listed with the guy who had the biggests ads in the local publications. It took 18 months to sell it and all during that time the broker keep claiming he had one then another buyer "real close" to buying. Eventually another broker found a buyer. When we were considering selling the Silverton we spoke with the broker at our marina who seemed like a nice guy but we were told was not very aggressive. He had a showing before we even signed the contract, had a signed agreement within 3 days and stuck by the boat all through sea trial, survey and the adjustments we had to make. Even at that when the buyer wanted late concessions the broker took the extra $1K out of his commission.

So, two boats sold in the same season by 2 different brokers. Was the difference the brokers or the boats? I think it was a combination of both.

BTW, remember, the broker has a family to feed and bills to pay. Pick a good one and you'll be happy to pay him for his services. Pick a bad one and you're in for a long nightmare!
 
you know....I should post a link to the YW ad that my current "broker" as up for my boat except it is too sad of an ad to actually show anyone. I guess that is why I emailed and faxed my listing termination with him today and am talking to some other folks!

Definitely do your homework on the work level and abilities of the broker you are talking to.
 
Amazing what can transpire in a day or two. Just yesterday, I posted a the Sea Ray for sale on craigslist - by last evening I received an email from the same brokerage company, different sales person though. The email provided a whole lot more leeway in the terms - they will even allow me to bring on a buyer without owing them any commission.

Then first thing this morning, I received a call from the broker I had met on Sunday. It seems they received a call from someone looking for a late 90's 290 Sundancer. They were asking my permission to show the boat - even without a contract. I agreed and told him that even without the paperwork, I recognize that if they bring on a buyer, they are entitled to their 10% - no problem. The broker then told me what the boat should sell for - a few $$ more than I had expected.

So now I'm keeping my fingers crossed - I may get lucky and get her sold....

Thanks to all for your great advice - lots of good suggestions here.
 
quote:
Originally posted by Sandy K.

Then first thing this morning, I received a call from the broker I had met on Sunday. It seems they received a call from someone looking for a late 90's 290 Sundancer. They were asking my permission to show the boat - even without a contract. I agreed and told him that even without the paperwork, I recognize that if they bring on a buyer, they are entitled to their 10% - no problem. The broker then told me what the boat should sell for - a few $$ more than I had expected.

Click to expand...


Maybe I am a skeptic, but this sounds like a set up to get you to sign the contract. For all you know the proposed "buyer" may be the brokers BIL/FIL/SIL, etc.

It would not surprise me if this "buyer" did not buy the boat and then the broker started in with you should list with us because as you can see we get calls form these kinds of boats on a regular basis, etc.
 
yes, i agree... sounds like their trying to impress you to get the listing. they might push it a little further and tell you that they have an offer to present but need a signed contract first. sounds fair but then the buyer will mysterously change his mind...
 
brokered boats usually remain with the owner, at his dock, slip, marina, ... most brokers do not have dock spaces, they're not boat dealers.
 
quote:
Originally posted by PascalG

brokered boats usually remain with the owner, at his dock, slip, marina, ... most brokers do not have dock spaces, they're not boat dealers.

Click to expand...


I suppose that varies with location. In the California Delta and the San Francisco Bay it is common for the broker to have their own docks and the boats located there. This is a major advantage because people in the market for a boat will go to such a broker to shop for boats, enjoying the fact that there will be a selection to choose from.

Many of the marina's on the Delta are small, spread out over a large area and it is difficult for a broker to get access to the docks. If a prospective buyer wanted to see several boats it would be quite a task to travel to several marinas, get the harbor master to provide access to the dock, and then look at only one boat at that marina. The next marina could be an hour's drive.

There are some that are sold from the owners's marina. This is common when the seller wants to still use his boat while he is trying to sell it.
 
You must log in or register to reply here.
Back
Top