Capt. Sea Fever
Veteran Member
- Joined
- Mar 18, 2017
- Messages
- 40
- Location
- USA
- Vessel Name
- Sea Fever
- Vessel Make
- Grand Banks 49 Classic
I’m considering selling my trawler and my broker is asking 10% commission. Is that the usual rate?
How many boats does a broker sell in a year? 15?
If they cost 150,000 average .. that would be 45,000 commission per boat X 15 = $675,000 per year. That’s more than my SS.
How many boats does a broker sell in a year? 15?
If they cost 150,000 average .. that would be 45,000 commission per boat X 15 = $675,000 per year. That’s more than my SS.
So, using your numbers but not your "modern" math. At 10%, the broker gets 5% for one side of the deal. That's $7,500 and times 15 is $112,500. Sounds fine, but the median income of boat brokers is far less than that. If I had to guess, and this is strictly a guess, the median is likely in the $40-50k range as many brokers make nothing or nearly nothing with one or two sales a year. At the other end you have brokers selling multi-million dollar yachts and making well into six figures. So, the average is likely more in the $80-100k range.
Zip recruiter shows average for yacht brokers of $69k with range from $20k to $157k. Indeed shows income between $120k and $140k. That all ties to numbers from the Yacht Sales Academy which says 10% of the brokers make 87% of the sales. While I think that's a bit high, I would say that I would bet 80% of the income is concentrated in no more than 15% of all brokers.
As to 15 sales per year, I'd think the average broker does much fewer.
I think 10% is reasonable for doing a professional sales job as a boat broker. Wanting one of the brokers to take less than 5% really bothers me. I see a dangerous trend right now in Real Estate designed to circumvent the typical Real Estate Agent. I don't argue with the assertion that some don't need an agent, I just hope it isn't taken to the extreme and eliminates a resource many need. I still remember the full service travel agency, something now eliminated.
I agree with this and would add that perhaps the best place to negotiate a commission reduction is with a trusted buying broker... if and a big if... you have located the boat you want yourself and have NOT contacted the listing/selling broker.In a short post retirement time playing in real estate, I was often told a good broker/salesperson`s first sales job is getting the listing and not having to lower the commission to get it. The broker who immediately butchers his own commission may do the same to the price of your boat.
At the end when there is a buyer, some brokers will reduce commission to help get a deal over the line. Something is better than nothing.
Open houses? its a joke but sellers expect it. Its a way for some realtors to pick up additional biz but not a sales tool for a listed home. Nosy Neighbors come by for snacks
So true!!! I had a friend sell his house recently. He told me that 25% of the people who signed the register for the open house walk through were their neighbors who they weren't friendly with and had never been inside the house.
I was on commission in the insurance industry and of course experienced negativity to commissions. The nice thing about a commission is it is paid on successful completion of the job or product or service.
Remember the broker may have to do foolish things like purchase food for his/her family, pay the mortgage, pay for the car and insurance and all the other expenses related to living and a family. And also realize that in recreational markets economic slumps can hit hard so the broker making lots of money now won't be in the next downturn financially.
Many decades ago I was an orderly at a large Vancouver Hospital earning my way through university. I was dating the daughter of a high placed health care executive during a particularly intense strike which involved me at the low end and him at the high end. He asked me - "Rick, honestly how do you feel about your pay as an orderly?" I said: "For me, it's more than adequate but I don't want to speak for the orderlies who are raising a family and paying a mortgage, for them I don't know."
And I was a bus boy in Madison Wisconsin even further back in time at a Ramada Inn. As you can imagine I and the waiters and waitresses were dependent on tips. So we would feel it if we ran into a herd of cheapskates.
If you don't feel the broker's fee is fair, market the boat yourself.
Good point. I recently sold a house in the hot SW Ontario market. We had multiple offers, five above the asking price. Of those five, one was from a neighbor I didn't know, and one was from friends of my next door neighbor. Every market is different of course, but the open house was a key component of the sales strategy that our broker orchestrated, and in my view it was very effective.Wifey B: Neighbors visiting during open houses are a very good part of it. Neighbors have friends. Some may be looking. Neighbors will let them know if they find the house to be nice. I was told by a successful realtor that she targeted three groups with open houses-potential buyers, other realtors, and neighbors who know potential buyers. She also said that open houses often lead to very quick sales on reasonably priced moderately priced homes. She does not hold them on extremely high priced homes as they attract sightseers and curiosity seekers.
F
An average of $150,000 could well be on the high side. I have tied to limit my search to boats I could purchase out of pocket without financing or making a material shift in investments. I am amazed at how poorly boats are presented; particularly on the cheaper boats. It's hard to make a decent living selling $100,000 houses and I think it would be equally hard to do selling boats for one of the national firms.
Hmm! I spent a short year as a boat broker in Annapolis. I didn't get a draw and don't know of any that did. I made about $25,000 in a bit less than a year. My long term colleagues made $50K or more and it was an average if not slow year, right after 9/11.
David