Sellers broker refuses to split commission

[slowgoesit]

I find it interesting how generous everyone is! Especially with other people's time and money!

Lou:
You mean like paying the Buyers broker's 5% and the Sellers Broker's 5% out of the purchase price, then paying the Buyer's broker 5% directly because the Seller's broker refused to pay over the 5% already paid by the Buyer when he purchased the boat for 10% more than the Seller would have sold it if he hadn't gone through a broker? Oh, and by paying an additional 5% of the total purchase price directly to the Buyer's broker, you expect the buyer to pay that 5% also on the 10% of the purchase price that went to pay off the broker in the FIRST place? . . . . . . So, just for sake of this discussion, let's assume the purchase price is $150,000.00, the Seller's broker receives $15,000.00 out of that, in reality from the Buyer since that's where the funds came from, and then the Buyer gets the privilege of not only paying $7,500 MORE to HIS broker, but $750.00 of that is commission on the 10% commission the Buyer has already paid so the Seller can pay it to his broker . . .

That money? That's what you are speaking of?

We are in agreement that some people appear to be generous with other people's money, in this case, the buyer's (which is me since I am the original poster).

This type of thinking is why we backed out of the deal, because the Seller's broker came across as really slimy, first agreeing on the phone with our broker that the commission would be split between buyer and seller's broker, then reneging on that when offer was discussed that included, IN WRITING, that the commission would be split as verbally agreed. We just couldn't see ourselves working with the Seller's broker. The boat would have been forever tainted for us.


By the way, could you please share with us what brokerage firm you work for? Thanks.

 

[BandB]

Don’t think the commission was split correctly by this FL broker.
https://www.passagemaker.com/trawler-news/florida-yacht-broker-ponzi-scheme

View attachment 94313

Nope, another broker strikes a Ponzi scheme. Not the first by any means. When you see a small brokerage taking trades and building inventory, it's always time to examine more carefully.

Have seen several boat builders use basic Ponzi schemes as well.

 

[STB]

When I was looking for a boat in California, almost all of the boats were available for "co-brokerage", i.e. shared commission.

When I was looking in Florida, it was common to see that brokerages had rules that only boats above a certain listing price, e.g. somewhere in the $30k - $50k range, were available for "co-brokerage". For boats with a lower sticker, they were unwilling to split commission.

In some cases, on either coast, even when commission would be split, the selling agent showed the boat.

 

[MonarchBeacher]

Your "buying broker" should have figured out for you a "good offer' that would have figured in all of the fees, including his own. Seems like both were trying to "double dip". I have done many of these transactions, on both sides and have yet to lose a transaction due to "commissions". To begin with, if the vessel was listed as "not available for co-op" then your broker was wrong to try to step into the transaction. If the selling broker agreed IN writing to split, then he should have stood by the commitment.
Your comment about the "seller's broker" is very relevant. For that reason there are a few local brokers that I refuse to do business with. See above threads.
As far as disclosing which brokerage firm, I can't. I did that once in the forum and got kicked off for mentioning the firm and it's name.

 

[Brooksie]

I contacted several brokers when selling my boat. Two, never heard of Willard. Two more kept saying "but it's so old". Another said that since he was 40+ miles from it he would charge me mileage and /or travel time each time he showed it... I countered that since it was old and obscure, only people that wanted that particular boat would apply and the showings would be minimal.
I ended up selling it quickly myself, by long distance, got my price, no survey, no seatrial, no lawyers, no brokers.
I'd say this is the last generation of brokers anyway. The internet will soon put them out of business and they are hastening it with these kinds of attitudes. IMHO

 

[MYTraveler]

Submit a written offer, and provide that buyer will pay buyer's broker 5%, that seller's broker keeps full commission, and that buyer gets a 5% credit for commission costs against sale price. That way, the seller's broker will have to show the offer to the owner and the owner will plainly see that his broker is being a pig.

 

[MonarchBeacher]

Brooksie: too bad you are in Cape Cod, otherwise I would have listed and sold your Willard. (they were made locally and are well known here is Southern California). A lot of "corporate firms" limit what they will list and sell due to costs. Here most firms will only list vessels 15 years and newer that have "high demand". While you are far out of my territory, I list any age vessel as long as it's "sellable as determined by priced to condition". As an "owner/Operator, I can pick and choose my listings and even do a good business with boats that are acquired via lien by marinas.
I almost agree with your statement about "last generation of brokers..." I see few "younger folks" willing to put in the effort to do, in my opinion the job properly. I see a lot that can "google" the repair, but can't or won't put down the phone (computer) and pick up the "tool". Note, I video all of my listings for out of area buyers and sell many boats a year to folks either hundreds of miles away or even "sight unseen.

 

[dhays]

As a broker, I deal with this quite often. Here are some circumstances this occurs. Often the selling broker has made special arrangements (lower commission, special concessions, such as repairs, show entry costs, ect) with the seller and has fronted "costs" and wants to "recoup" them. Other times I have spent quite a bit of time with the buyers then I get a "O by the way, I am working with... someone else".Often I have had "buying brokers" try to step into a transaction that is under way... Here in CA we are licensed and bonded. There are too many "brokers" that have no listings, do no advertising, have no costs of doing business, yet want to pick from your listings. Possibly the selling broker does not want to do business with the particular "buying broker" due to their lack of professionalism or trust.
There are a multitude of reasons as to why not. As for buyers, step up: if your "buying broker" is providing valuable services, pay him directly. If you won't pay him, why should someone else?

All very good points.

 

[Judy at JWY]

The MLS for yachts has a box to check whether the vessel is available for co-brokerage or not. If the listing was ticked as not available for split commissions, then your broker walked into a hornet's nest, one he may have cfreated for himself. If it is listed for co-brokerage, then the broker should be reported to licensing authorities if appropriate or at least a discussion with the owner of the brokerage firm.

There are reasons why a yacht might not be available for co-brokage with the major one being a reduced commission. There are a few solutions: I tell the seller that I will reduce the commission if it is my client who is purchasing, but he must offer 10% so as to include other brokers. Reducing commission is not standard protocol for successful brokers, however, I have done it for repeat clients, but on the condition that a full 5% is paid to cooperating brokers.

What is shortsighted is that owners who discourage paying a full commission are cheating themselves out of potential buyers or certainly in a more timely fashion. There are approximately 2500 licensed brokers in Florida alone and the seller's broker can't be the only one to have a broker with appropriate clients. Brokers can negotiate amongst themselves, but brokers are obligated to give their best efforts in procuring a buyer. And if they are playing stingy/selfish/greedy, then they are not fulfilling their ethical obligation to the seller: the seller needs to be told!

A bad broker does not necessarily mean a bad boat or bad seller. But for sellers interviewing brokers, one important question should be to find out if the broker is "broker friendly" and ask him/her to define it.

Judy

 

[Brooksie]

As a manufacturers rep for 30+ years, I was a broker too in that I worked on straight 5% commission. My distributors over 6 states expected me to accompany their salesmen on every "lead" they came up with although many times my dog would have known that my product would not fit in their clients building or budget. But I always went. Accessing the needs, giving the pitch, taking the measurements, making the drawings, making the quote, arranging the installation sometimes 400 miles (not 40 miles) from my home.
I certainly didn't make any money to speak of in my early years. But over the years my distributors salespeople became educated and their numbers increased. With them my brand and my personal brand too.
Like you, I don't see too many young people that want to "pay their dues" driving a 20yo car, patching it together on weekends, eating at diners, and staying at cheap motels; to get a start.

 

[syjos]

What is shortsighted is that owners who discourage paying a full commission are cheating themselves out of potential buyers or certainly in a more timely fashion.

Judy

So true.

When I sold real estate, never showed property with reduced commission. Unless it was exactly what the buyer wanted resulting in a quick sale.

When I sold audio equipment, tried harder to sell the items with higher commission and/or spiffs (sales incentives) and items actually in stock.

Salesmen are salesmen.

 

[friz]

In the real estate world, thats called "going behind the sign" Its not ethical either..

I would be curious how "ethical" was the seller's broker. Do you think he went to the seller and told him "I turned down a buyer because I refuse to split my commission with anyone". "YOU DID WHAT?" Although that issue could be addressed in the seller/broker contract. Maybe it is. Have never dealt with that species.

 

[Rich wilmer]

Walk away there's more outthere!

 

[Juggerknot]

If you like the boat and it suits your needs, I would shoot em an offer commensurate with comps minus 7 or 8 %, pay your broker his 5 and pocket the 2 or 3% for your aggregation. Just my thoughts

 

[refugio]

Well, this is timely - the home real estate commission disclosure is changing tomorrow in Washington State: https://www.seattletimes.com/busine...ands-from-cost-of-buying-a-seattle-area-home/

This article notes that we may be moving towards a system where the buyer and the seller each negotiate and pay their respective brokers.