Lawsuit Rocks the Yacht-Sales World
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If you have answers, please help by responding to the unanswered posts.
mikehar
Senior Member
I am in the process of potentially buying (in survey) and then selling a boat. It's far from a done deal at this point. I have bought/sold many boats in the past and generally have a super poor opinion of most brokers. The level of dishonesty, ignorance, and self-importance is staggering. I even got a broker's license one year to make a transaction work for me, and the attitudes I encountered made me want to get away from them as quickly as possible.
Now, in the short time into the current purchase, I had one broker, who I vaguely considered to be a friend, try to low-ball me, then try get me to sign a contract that I couldn't legally sign (was previously obligated, which he knew) which didn't say what he claimed it did (I can read) and then implied that he wasn't going to tell his clients about my boat because he doesn't have an exclusive listing, and then tried to get me interested in a different boat that he doesn't represent and is not even for sale (and won't be for at least a few years). This, after I reached out to him to give him a heads-up that my boat might be coming onto the market. Sigh.
On the other hand, the brokers that I'm working with to buy the other boat and then sell mine if needed have been amazingly wonderful to work with, and it makes a huge difference.
It's still in play, I'll write it up when done, but yes, the 10% thing is insane. I employ a marketing team in my work that is less expensive and way more productive than what you typically get in the boat broker world.
Now, in the short time into the current purchase, I had one broker, who I vaguely considered to be a friend, try to low-ball me, then try get me to sign a contract that I couldn't legally sign (was previously obligated, which he knew) which didn't say what he claimed it did (I can read) and then implied that he wasn't going to tell his clients about my boat because he doesn't have an exclusive listing, and then tried to get me interested in a different boat that he doesn't represent and is not even for sale (and won't be for at least a few years). This, after I reached out to him to give him a heads-up that my boat might be coming onto the market. Sigh.
On the other hand, the brokers that I'm working with to buy the other boat and then sell mine if needed have been amazingly wonderful to work with, and it makes a huge difference.
It's still in play, I'll write it up when done, but yes, the 10% thing is insane. I employ a marketing team in my work that is less expensive and way more productive than what you typically get in the boat broker world.
A good broker can be a pleasure to work with, though good brokers are rare. But 10% is hard to justify even for a good broker. That's $50K on a $500K boat. At $100/hr, the broker needs to spend 500 hours selling your boat. 1/4 of a work year. On average I'd be surprised if they spend 50 hours. Doctors and lawyers work for less. If he spends the 500 hours and sells it, and does that four times a year, that is an annual salary of $200K. Not bad pay for an unskilled job.
tiltrider1
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This is a miss understanding of how things work. The Broker doesn’t get the 10%, the Brokerage gets it. Then the Brokerage pays the Broker. The Brokerage must also pay office rent, utilities, insurance, advertising, dock space, trade shows, association fees, and lawyers each and every month. Try putting your boat on Yacht World with out a Brokerage.
Oh, I don't misunderstand. The agent actually isn't getting rich, but the brokerage may be. And you are wrong about one thing, they don't pay for dock space - at least where I'm from - the seller is paying for the dock space.
The issue comes about when you collude to set prices. That is illegal in the USA (Edit, removed). Who knows, now. Not being able to put your boat on Yacht World unless you are a broker who charges 10% is in fact the who gist of the lawsuit, no?
The issue comes about when you collude to set prices. That is illegal in the USA (Edit, removed). Who knows, now. Not being able to put your boat on Yacht World unless you are a broker who charges 10% is in fact the who gist of the lawsuit, no?
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many brokers work for themselves so they get the full cut. also nearly all do not provide dock space in fact those that do have dock space charge for it and its more profit for them. i can start a brokerage with little overhead. i have never been to a brokers office. most businesses have a cost. i think the point is the cost of running a brokerage business is small / controllable and is barely a dent in 5-10% of a $1m yacht. also my understanding is generally a brokerage takes half and broker gets the other half? i can't wait for the industry to be rocked with the law suit. lawyers each and every month? nah. insurance? drop in the bucket. etc
tiltrider1
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If it is so easy why aren’t you doing it?
mikehar
Senior Member
Part of the problem is the barriers existing brokers put up to protect their excessive commissions. You don't have access to YachtWorld unless you're a "qualified" broker with at least three listings. Many brokers won't show or mention listings that aren't in YachtWorld or listed by their brokerage. Many brokers won't show or mention listings that don't guarantee them at least 5% commission. I have seen each of these examples in real life. I'm sure there are more barriers that they throw up (including FUD) that I'm not aware of.
O C Diver
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I've sold 9 boats over 35 years. Never used a broker. Bought 3 boats under brokers. The last two brokerage boats I bought were found on the internet. As the internet market for boats expands, those that don't get bought out by the elephant, will continue to take market share.
Ted
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who says i havent? i have sold all my own boats and even friends boats. $0 overhead except for some ads at most it was a few hundred bucks. 10% would have been $50,000-100,000. my only challenges have been with brokers playing games or colluding. also, a lot of the pricing data they post to soldboats its BS, they try to prop up prices.
only florida or maybe a couple states license boat brokers. anyone can become a boat broker in other states. its super easy and free or close to it. if you do that, you can bet brokers will flip a ****. i actually got access to yacht world and had a hall monitor boat broker call me saying he reviews all new yacht world listings every day and tattles on those he doesnt believe are real brokers, and threatened me. he told me has a contact at YW and will contact them to have me canceled. he wasn't kidding. i had a violation from them and then account termination the same day. they made up whatever they wanted to say. nothing i said mattered. for what its worth, i think every single boat i have sold of my own or for a friend, sale lead came from a facebook group dedicated to the boat make or boat group which costs $0. Even when I was offering co-brokerage of 5% to a broker to bring a buyer, many brokers wouldn't and said i wasn't one of them, and they only support their own, but if i list with a broker they bet my boat would sell immediately. i spoke with many brokers and some said thats how it is. a couple seemed to be good apples and they said 5% is 5% and they would bring a buyer if they have one, a couple actually tried. on my last sale, the buyer contacted me and did everything initially, and then threw a broker in and said he wants a broker to represent him but he (buyer would pay the broker himself). once the broker was involved, he said no no no, i Must pay him not the buyer, so i had to pay 5%, really no choice, broker did very little work, i did most of it. $50k out the window but i wanted to get the last boat sold. i shouldve taken an earlier deal for the same price that had zero broker involvement.
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mikehar
Senior Member
I got a brokers license in WA state but was not able to use YW because of their rules. Also, you can't sign up for the database (forgot the name) that has alot of the data on past sales and such. Sure, you can do it, but for boats >$2m it becomes more challenging to reach your market. I became a broker to flip a >$1m boat. It was a hassle, but it worked.
i had access to soldboats database. until YW canceled my account after that hall monitor broker threatened me and leveraged his contact/weight. its crystal clear whats going on in the industry to me. and i hope it all comes crashing down.
Slowmo
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I’m not a broker so don’t have an axe to grind. For myself I never used a buyers broker, just dealt with the listing broker. At least in my area (PNW) I don’t begrudge the broker their fee assuming they work. Seems like a lot of boats are less than $100k so you have to move bunch of those to live.
SteveK
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YW may be a club of the more noticible brokers. I have a hard time with you must have three listings, are you sure itis not sy 3 solds in a period of time.
Listings are easy to get, sales need work. Walk any dock and ask owners if they are thinking of selline, when you get the maybe next year, offer to list $10K over the next highest price. You just need the listing, right.
Listings are easy to get, sales need work. Walk any dock and ask owners if they are thinking of selline, when you get the maybe next year, offer to list $10K over the next highest price. You just need the listing, right.
three active listings. not hard if you are selling and have a boat with a tender, you can count the tender separately. but they make up their rules as they go. even when called out they don't care.
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