Broker's listing agreement language; question

The friendliest place on the web for anyone who enjoys boating.
If you have answers, please help by responding to the unanswered posts.
See posts with no answers
I don't see all the uproar. I have gone many times to the listing broker, representing myself, and made offers and bought boats. Technically, in this case the listing broker is representing both buyer and seller, so what? He wants to make the deal as does the seller and me the buyer. I also have used a separate broker who split his commission with me on any boat I looked at. This worked great. I think a mountain is being made from the mole hill here. If you are concerned about the advertising, talk to them and express your desire to provide advertising materiel. No issues there. Almost all Mainship 350/390 ads have a stock picture of the boat that has been copied so many times it's blurry. I would ask my broker not to use that picture. But the brokers are actively advertising boats every day and have a good feel what works and what doesn't work. Talk to them and get a feel. If you don't like the response, chose another broker.
 
I've spoken with the brokerage about the section I quoted in post number one. They're trying to come up with wording that will mitigate my concern. Interestingly, they say they don't want to get into striking offending (to me) language, and they say they can't modify this boiler plate contract. They say they can only add clarifying language. I'm not clear why....maybe it has to do with copyright or some such as regards their use of the document. I'd prefer simply strike the subject section. But I'll take a look at what they propose.

That aside, I perceive that they like this wording because it facilitates an income stream inside their maintenance/repair branch (it's a fairly big marina and maintenance/repair operation). It goes something like this: The brokerage uses the buyers agent aspect of the dual representation language to strongly recommend not only a survey (by one of two well-known surveyors in the area), but also highly recommends a complete mechanical/ electrical/hull inspection (by their in-house operation) prior to purchase. (Income for that side of the business). Then they offer to fix/repair anything they find. This is in addition to things the surveyor has on his/her list. The response by the brokerage is that the seller always has the last word on sell price... Well yes, but the buyer is predisposed to a lower offer because of the influence of the in-house buyers broker.

The prospective buyer in all probability then factors the cost of these items (including the full-blown inspection) into the offer. The inevitable net result is that the offer from the buyer goes down, and the maintenance/repair side of the brokerage has a fair chance of doing the work that started with the urging of the (in-house) buyers broker. In the end, the in-house buyers broker arrangement almost certainly works against the seller. The owner suggested splitting the seller/buyer function between two of his staff brokers, but I don't believe that would change a thing.

Another thing that leaves me uncomfortable is that the assigned staff broker has worked as an independent buyers broker in the past and is a bit defensive about my suggestion that the arrangement within this company could work against the seller.

Different subject: I asked about the language associated with what happens after the 365 day contract period (a one year claim to brokerage fee if the boat was sold to a party that had been contacted by their brokerage). I wondered if the tiime frame might be reduced to six months. The assigned broker said not to worry about that...just give us a call and we'll cancel the contract....hmmm....don't think so...

These are nice people, and it's a good company. They strive for happy buyer seller deals. I think they just purchased this contract off the internet and moved on. The culprit, if any, is the think tank that developed it.
 
Last edited:
Rufus, it is what it is. As a comparison;
Locally, the high cost of condo insurance is being blamed on the 20% +/- commissions the broker gets, add to that the referral fees they pay out to convince those in a position to steer clients their way.
But no one mentions that condo insurance is legislated as mandatory in this province. No way to avoid it, no competition.
 
Rufus, the brokerage can do anything they want to do varying the Contract, they just don`t want to. If they add to it, you may have inconsistent provisions, so which prevails?
The internal "Chinese Walls" arrangement doesn`t make sense, you have no way of being sure it works, or is actually operating, and it`s still a conflict.
Are there alternatives, other brokers with better contracts, more flexible. If not, you`ll have to take the least worst cookie cutter contractor broker.

Unless you go DIY. Why not post it on TF now?
 
The boat is listed here on the forum. I'm just concerned that I'll croak before I can get it done myself, and that would leave my poor spouse with another headache. Depending on what I hear back from this brokerage, I might look around for an operation without the maintenance/repair connection, and one that is more flexible with contract language. But I'm going to give these folks a chance. Thanks
 
Rufus said:
I've spoken with the brokerage about the section I quoted in post number one. They're trying to come up with wording that will mitigate my concern. Interestingly, they say they don't want to get into striking offending (to me) language, and they say they can't modify this boiler plate contract. They say they can only add clarifying language. I'm not clear why....maybe it has to do with copyright or some such as regards their use of the document. I'd prefer simply strike the subject section. But I'll take a look at what they propose.

Different subject: I asked about the language associated with what happens after the 365 day contract period (a one year claim to brokerage fee if the boat was sold to a party that had been contacted by their brokerage). I wondered if the tiime frame might be reduced to six months. The assigned broker said not to worry about that...just give us a call and we'll cancel the contract....hmmm....don't think so...

These are nice people, and it's a good company. They strive for happy buyer seller deals. I think they just purchased this contract off the internet and moved on. The culprit, if any, is the think tank that developed it.
Click to expand...

If it's not written down, it doesn't apply, likewise, if it IS written in the contract, it DOES apply, regardless of what the broker tells you. If it were me, I'd take the contract, cross through the parts you don't like, initial it, and hand it back to the broker. Tell him: "This is the contract I'll sign. Do I need to find another broker?" And be prepared to walk if he says yes.
 
Rufus said:
I've spoken with the brokerage about the section I quoted in post number one. They're trying to come up with wording that will mitigate my concern. Interestingly, they say they don't want to get into striking offending (to me) language, and they say they can't modify this boiler plate contract. They say they can only add clarifying language. I'm not clear why....maybe it has to do with copyright or some such as regards their use of the document. I'd prefer simply strike the subject section. But I'll take a look at what they propose.

That aside, I perceive that they like this wording because it facilitates an income stream inside their maintenance/repair branch (it's a fairly big marina and maintenance/repair operation). It goes something like this: The brokerage uses the buyers agent aspect of the dual representation language to strongly recommend not only a survey (by one of two well-known surveyors in the area), but also highly recommends a complete mechanical/ electrical/hull inspection (by their in-house operation) prior to purchase. (Income for that side of the business). Then they offer to fix/repair anything they find. This is in addition to things the surveyor has on his/her list. The response by the brokerage is that the seller always has the last word on sell price... Well yes, but the buyer is predisposed to a lower offer because of the influence of the in-house buyers broker.

The prospective buyer in all probability then factors the cost of these items (including the full-blown inspection) into the offer. The inevitable net result is that the offer from the buyer goes down, and the maintenance/repair side of the brokerage has a fair chance of doing the work that started with the urging of the (in-house) buyers broker. In the end, the in-house buyers broker arrangement almost certainly works against the seller. The owner suggested splitting the seller/buyer function between two of his staff brokers, but I don't believe that would change a thing.

Another thing that leaves me uncomfortable is that the assigned staff broker has worked as an independent buyers broker in the past and is a bit defensive about my suggestion that the arrangement within this company could work against the seller.

Different subject: I asked about the language associated with what happens after the 365 day contract period (a one year claim to brokerage fee if the boat was sold to a party that had been contacted by their brokerage). I wondered if the tiime frame might be reduced to six months. The assigned broker said not to worry about that...just give us a call and we'll cancel the contract....hmmm....don't think so...

These are nice people, and it's a good company. They strive for happy buyer seller deals. I think they just purchased this contract off the internet and moved on. The culprit, if any, is the think tank that developed it.
Click to expand...

In my experience when people say they cannot modify language, it's because they would be compelled to have a lawyer review the changes and they don't want to do that (or cannot without incurring wrath). Not necessarily untoward - the part of your post at the end that I highlighted is likely true.

These types of boilerplate contracts usually have a bunch of empty space at the end to insert stuff. If the 12-month item with commission overhang is bugging you, then clarify that (i) residual term is 6-months, not 12-months; and (ii) broker shall provide evidence of significant interest of ultimate buyer in the subject vessel. Significant Interest shall mean (i) a bonafide offer of purchase; or (ii) evidence that buyer viewed the vessel under the guidance of broker. Broker shall promptly disclose Signicant Interest events including all supporting documentation such as email correspondence. All disclosures of Significant Interest shall be made prior to end of listing term.

Key is that before you incur an obligation, they must do something unprompted which they are unlikely to do.

Peter
 
Last edited:
My wife and I are looking to purchase our first liveaboard and want to avoid as many mistakes as possible. We are hoping to find a broker to help us through the process, so your comment about how things worked out for you got my attention. I gather you were satisfied with the results and would recommend this broker to newbies like my wife and I. Is your broker able to assist people in the Washington state, BC area?

Thanks in advance.

Nick.
 
I don't see a problem with the same broker representing both the buyer and the seller. Everybody wants to get the deal done. If there are 2 different brokers from different firms, how is the goal of it getting done any different? If you no nothing about the boat you're selling (spouse of departed owner) maybe you need a lawyer involved. Otherwise, learn to say no.

As with real estate, I would shop several brokers to get estimates on value, how many similar boats they've sold and or represented the buyer on in the last 12 months, what the boats were listed, sold for, number of days between listing and closing, and review their contract.

Imo, any fees above the commission (other than the closing) would require prior authorization (not paying $20k for boat detailing). I think it’s reasonable to pay a commission for 6 months after the contract ends if the broker brought the buyer to the boat, provided the broker provides a list of names of all the people who were shown the boat at the end of the listing contract.

Ted
 
"...The brokerage uses the buyers agent aspect of the dual representation language to strongly recommend not only a survey (by one of two well-known surveyors in the area), but also highly recommends a complete mechanical/ electrical/hull inspection (by their in-house operation) prior to purchase. (Income for that side of the business). Then they offer to fix/repair anything they find. This is in addition to things the surveyor has on his/her list. ..."

This raises a big red flag for me. If you need a surveyor, ask other boaters at your marina or post it on forums such as TF. The broker/yard/surveyor relationship that I am reading here sounds like you're going to get a big list of repair items. My paranoia antenna tells me they are not working in your best interest.

As a broker, I frequently have clients ask me to recommend surveyors. My first response is that I would rather they find their own, but if they can't do better than a Google search or yellow pages, then I will make recommendations. Furthermore, I only make recommendations to clients where there has been a relationship of trust already established. Trusting these guys? Sounds like you might be proceeding on emotions rather than smarts.
 
Judy at JWY said:
"...The brokerage uses the buyers agent aspect of the dual representation language to strongly recommend not only a survey (by one of two well-known surveyors in the area), but also highly recommends a complete mechanical/ electrical/hull inspection (by their in-house operation) prior to purchase. (Income for that side of the business). Then they offer to fix/repair anything they find. This is in addition to things the surveyor has on his/her list. ..."

This raises a big red flag for me. If you need a surveyor, ask other boaters at your marina or post it on forums such as TF. The broker/yard/surveyor relationship that I am reading here sounds like you're going to get a big list of repair items. My paranoia antenna tells me they are not working in your best interest.

As a broker, I frequently have clients ask me to recommend surveyors. My first response is that I would rather they find their own, but if they can't do better than a Google search or yellow pages, then I will make recommendations. Furthermore, I only make recommendations to clients where there has been a relationship of trust already established. Trusting these guys? Sounds like you might be proceeding on emotions rather than smarts.
Click to expand...

Of course I'd likely get a long list of repair items, and of course they're not working in my best interest if the brokerage wears two hats. It wouldn't be appreciably different if I officially permit them to work directly with a third-party buyers broker. They're all in bed together. I already told them I don't want buyers brokers in any aspect of the deal. Seems pretty smart to me. Mitigate meddling against my interests. If I need to switch brokers, I will. Unfortunately this is standard language/operating procedure with any brokerage that uses this particular boiler plate contract document. It's designed to favor the buyer. the brokerage, and a buyers broker (whether in-house or third party). Once again, buyers think it's just great. (Someday they will be sellers....) I actually started this string, in part, to enlighten sellers who don't think twice about what can happen to them..
 
Last edited:
Tinman said:
My wife and I are looking to purchase our first liveaboard and want to avoid as many mistakes as possible. We are hoping to find a broker to help us through the process, so your comment about how things worked out for you got my attention. I gather you were satisfied with the results and would recommend this broker to newbies like my wife and I. Is your broker able to assist people in the Washington state, BC area?

Thanks in advance.

Nick.
Click to expand...


Nick, welcome to Trawler Forum!
It might be a good idea to start a new thread giving as much information as you can as to what you and your wife are looking for, what your boating experience is, your mechanical skills, intended are of cruising, price range, likes/dislikes in a boat, etc. You'll get more response from that instead of posting in another thread. I PM'd you as well. Scot
 
I've always found the commission on sale model of paying your representative a bit of a conundrum. The person only gets paid if a sale gets made, so whats the underlying motivation here? get you the best deal or the fastest deal? I know there are good brokers out there who will advise a client to not make a deal when its not in the clients best interests, but there are more than enough bad apples out there who just want to get to the sale above all else who give the profession a bad name. Dual representation is an equal quandary, but if you go with a large brokerage firm you may cut out a lot of potential clients if they have already signed a buyers representation agreement and you decline to let the firm represent both sides of the transaction.
 
All good impute; my guess however, would be that that paragraph is meant to cover the buyer or sellers broker in the event they preform other services beyond the sale itself, and are compensated for that duty by the party.
 
I have always been uncomfortable with this approach, of one person representing two parties at the same time, they can't be an advocate for both.

I recently engaged a realtor to sell a property I own and I was required to read and sign a document explaining this from the sate in which the sale is tasking place, the first time I'd ever seen such a disclosure. What it explained clearly is that the broker or agent, if representing both partiers, can no longer negotiate price, so you are on your own, he or she can and is still expected to do everything else for you to facilitate the sale. Go into the process with your eyes open and ask that broker for his or her take on that language, ask them to explain and justify it, the answer will likely tell you a great deal about their character.

I've written about this and the related 'for sale by owner' subject a few times...

https://stevedmarineconsulting.com/...necessarily-early-death-from-this-phenomenon/

https://stevedmarineconsulting.com/the-importance-of-valve-adjustment/
 
Rufus said:
I'm considering listing our boat with a broker. They sent their standard contract language which has a paragraph:

"AGENCY. Broker may act as an agent for both the seller and the buyer. Owner consents to such and any related additional compensation payable to the broker from the other party..........."

There are some stipulations as to what may not be discussed with either party, but it seems like a built-in conflict of interest. ...a different spin on the buyer's broker routine? Thoughts?
Click to expand...

This is pretty much the same wording as Real Estate listings here in Ontario, called dual agency. The listing Broker is the best one to persuade or explain the facts of life to a seller when an offer comes in.
With respect to crossing clause or changing wording, I tried to discuss that with Curtis Stokes. After they demanded I transfer my ownership from Canada to USA and pay the tax, they refused to list the boat, went with another broker who sold the boat. Would not even talk about the wording.
 
Steve DAntonio said:
I have always been uncomfortable with this approach, of one person representing two parties at the same time, they can't be an advocate for both.

I recently engaged a realtor to sell a property I own and I was required to read and sign a document explaining this from the sate in which the sale is tasking place, the first time I'd ever seen such a disclosure. What it explained clearly is that the broker or agent, if representing both partiers, can no longer negotiate price, so you are on your own, he or she can and is still expected to do everything else for you to facilitate the sale. Go into the process with your eyes open and ask that broker for his or her take on that language, ask them to explain and justify it, the answer will likely tell you a great deal about their character.

I've written about this and the related 'for sale by owner' subject a few times...

https://stevedmarineconsulting.com/...necessarily-early-death-from-this-phenomenon/

https://stevedmarineconsulting.com/the-importance-of-valve-adjustment/
Click to expand...

Interesting idea (the bolded sentence), but I doubt this broker would go for it.

The attached two "For Sale by Owner" articles won't apply in this case....the focus is on the poor buyer....I'm the poor seller...

Thanks for the input.
 
Last edited:
va3mrj said:
This is pretty much the same wording as Real Estate listings here in Ontario, called dual agency. The listing Broker is the best one to persuade or explain the facts of life to a seller when an offer comes in.
With respect to crossing clause or changing wording, I tried to discuss that with Curtis Stokes. After they demanded I transfer my ownership from Canada to USA and pay the tax, they refused to list the boat, went with another broker who sold the boat. Would not even talk about the wording.
Click to expand...

I don't understand why I need a third party to explain the facts of life regarding offers? I've done my homework regarding condition, market prices, etc. I know the boat far better than any sales person (that I'll have to educate in the first place). I seriously like the idea that Steve DAntionio just mentioned. The brokerage does the pushups to list it and show it...I do the negotiation myself.
 
One of the qualities brokers claim is sales expertise. If you have to do your own negotiation because the broker decides, with your consent, to split loyalty between you and the buyer, it`s like he/she`s only doing half the job. Like keeping a guard dog and doing your own barking.
If you have to negotiate the price, which is inevitably contingent on all aspects of the boat and it`s sale,you might be better off going FSBO.
 
Essentially it means if a buyer contacts the broker on the boat, he can act as his broker as well as yours. There is a conflict, but for the broker. He wants to sell the boat at the maximum price for the seller to maximize his commission from the sale, but he also wants to get the lowest price possible for the buyer. Happened to me on our boat. I was the buyer. Got the price I proposed and the broker took the hit to make the sale. There's not danger to you for "additional costs". Contract should identify the commission the broker's going to get and that's all he's going to get from you. If he figures out a way to get more from the other side, more power to him.
 
Steve DAntonio said:
I have always been uncomfortable with this approach, of one person representing two parties at the same time, they can't be an advocate for both.

I recently engaged a realtor to sell a property I own and I was required to read and sign a document explaining this from the sate in which the sale is tasking place, the first time I'd ever seen such a disclosure. What it explained clearly is that the broker or agent, if representing both partiers, can no longer negotiate price, so you are on your own, he or she can and is still expected to do everything else for you to facilitate the sale. Go into the process with your eyes open and ask that broker for his or her take on that language, ask them to explain and justify it, the answer will likely tell you a great deal about their character.

I've written about this and the related 'for sale by owner' subject a few times...

https://stevedmarineconsulting.com/...necessarily-early-death-from-this-phenomenon/

https://stevedmarineconsulting.com/the-importance-of-valve-adjustment/
Click to expand...
Real Estate. Locally they had, maybe still do have a disclosure form for a realtor who wants to personally buy your property.
Imagine you list your property and get an offer from a buyer, who is an active realtor, but before you can see the offer you have to sign this form which is RED background stating the buyer knows more than you do so seller beware.
 
Here’s a thought, sell/buy the boat yourself.

Unless you are very inexperienced, too busy and/or far away from the boat, you don’t really need a broker. I know this won’t be a popular answer but it’s nevertheless true.

We found our boat by placing a want add post on several web sites dedicated to the type of boat we were looking for. Found exactly what we wanted and made a deal directly with the owner. Then had a good prepurchase inspection.

Don’t let anyone scare you about the paperwork. You will need an abstract of title from the National Vessel Documentation center of the USCG to check on ownership/liens, Quick and easy to get. The transfer of ownership with the COD is an easy single page form. Wiring funds from/to reputable banks is very safe and easy. All the Forms/paperwork you will need, bill of sale, etc are available on the Web with the USCG. This is not brain surgery, it’s straightforward and easy to do.

I tried using a broker and it was a waste of my time. No boat was presented to us that wasn’t already listed on one of the web sites. The idea that brokers have buyers/boats waiting to go, but only through them , is a myth in my experience.

To each their own, but 10% is too much for what you get in many cases.

Safe Travels.
 
They really don't have a choice, they still have to act in good faith and do what's required to close the deal. You have to realize the broker "representing" you and the buyer can't negotiate price.

The attached two "For Sale by Owner" articles won't apply in this case....the focus is on the poor buyer....I'm the poor seller...

SDA: Only one article was about FSBO, the other was about dual representation, albeit from the buyer's perspective. But the same sentiment applies, that broker can facilitate the sale, they just can no longer be your advocate, so if you want an advocate who can get the highest price for you, then you should not enter into this agreement.
 
This is still "much a do about nothing". When anyone, a broker, a buyer, a dual broker brings an offer, you are the sole person to determine if you will accept or not. Don't like it, make a counter offer or if so outta line, reject it. Broker is bound to present it. Now if you're inclined to tell a broker working both sides that you really will accept $10k less, than guess what, he gonna tell the buyer that's what will buy the boat. You don't tell the broker what you really will take. This came from a broker who told me they were basically lazy ( not meant to insult an brokers out there) and want to use the least amount of effort to sell the boat. Nothing wrong with that. Just be aware you are your own best advocate. Never give that away to any broker or sale. If you are not interested in actively participating in the sale/negotiation then you need an advocate that is in your corner and only your corner. But realize his/her objectives are not always the same as yours. Boats are complicated sales, not like a car or a house. No 2 boats are the same. Buyer and seller need to be actively involved IMHO.
 
I'm in conversation with a second brokerage that, at least initially, seems more flexible regarding contract language (same boiler plate contract, by the way).
 
Cold Duck said:
This is still "much a do about nothing". When anyone, a broker, a buyer, a dual broker brings an offer, you are the sole person to determine if you will accept or not. Don't like it, make a counter offer or if so outta line, reject it. Broker is bound to present it. Now if you're inclined to tell a broker working both sides that you really will accept $10k less, than guess what, he gonna tell the buyer that's what will buy the boat. You don't tell the broker what you really will take. This came from a broker who told me they were basically lazy ( not meant to insult an brokers out there) and want to use the least amount of effort to sell the boat. Nothing wrong with that. Just be aware you are your own best advocate. Never give that away to any broker or sale. If you are not interested in actively participating in the sale/negotiation then you need an advocate that is in your corner and only your corner. But realize his/her objectives are not always the same as yours. Boats are complicated sales, not like a car or a house. No 2 boats are the same. Buyer and seller need to be actively involved IMHO.
Click to expand...

The fact that so many people don't understand this is what has surprised me so much about this thread. Only a fool lets another person negotiate for them. Sorry folks, but when a broker is representing you (the seller) he is not "trying to get as much money as possible for you". He/she is still trying to close the deal and move on. A $5000 price difference might mean a lot to you, but a broker getting 2.5-4% of that $5000 doesn't care. They are darn sure not going to want to risk blowing up the deal and having to start their work all over again because of a few percent difference in their commission. It's not a broker's job to "play hardball" or advise you what you should or should not take for your boat. It's not a broker's job to tell you what concessions you should make after the survey, and it's not the broker's job to tell you when to walk away from a bad offer.
Whether you're the buyer or seller you are in charge of your own negotiation. The broker is simply an intermediary, that's why it doesn't matter if they represent both sides. The broker is there because 2 people negotiating will often end up hating each other, and the broker in the middle keeps things neutral. The broker facilitates, organizes, and communicates....but don't ever let your broker negotiate for you, or expect them to.
 
Besides the neutral point made about the broker there is one more important point to be made in their favor, exposure. A broker can and should advertise your boat. Like a Real Estate broker putting your home on the MLS, the broker will provide more exposure than if you advertise on Craig's List. I have done both with good results. It depends on the circumstances. If you can, buying/selling without a broker is great. But there are going to be times when you have to buy a boat listed with a broker or need that exposure only a broker can provide. No one perfect answer.
 
Some material posted above is astounding. A broker is your agent. He has authority, real and ostensible, to bind his principal, and that`s you. He has a duty of utmost good faith. He might be in business for himself but he`s your agent, and responsibilities come with that.
He should be giving you advice as a deal works towards agreement. If you can`t trust him to give you honest in your interests advice, and use his sales ability on your behalf to get you as good a deal as is available, you don`t want him. You certainly don`t want him,as Shakespeare put it, operating as "a servant of 2 masters", it`s not possible.
 
You must log in or register to reply here.

Similar threads

Adopo
Lawsuit Rocks the Yacht-Sales World
2
Replies
51
Views
9K
FoxtrotCharlie
FoxtrotCharlie
M
Bad Deal and I need to get out of it!
2 3
Replies
60
Views
9K
MonarchBeacher
M
S
Broker Fees In Excess Of Commission?
Replies
13
Views
1K
Delta Riverat
Delta Riverat
mvweebles
10 Common Buyers’ mistakes during Survey
2 3 4
Replies
114
Views
8K
Don L
D
B
Buying a boat without a broker
2 3
Replies
64
Views
11K
Benjay
B

Latest posts

Back
Top Bottom