Join Date: Jul 2006
Location: Herring Bay, Maryland
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who does the seller work for ?
Before becoming a broker I bought three boats and sold two, all through the same broker. Obviously I was satisfied with the results. Now of course I am left with one boat, which is a good thing.
When approaching a large decision such as selling a boat, I first try to think strategically about it. Here the choice is whether or not to hire a broker to assist. The seller has more work to do if the broker is not hired. While the seller hires the broker on a commission basis, who really pays the broker ? As someone else previously noted, since the buyers tend to pay much less for a non-brokered boat, the difference in price that goes for a brokered boat pays the commission and it tends to be all from the buyer's funding. So without a broker the seller must do more work, which is really a favor to the buyer who returns the favor by paying less for the boat. Does that make sense ? That's pretty sweet for the buyer. The seller ends up working for the buyer for free and the buyer pays less !
Doing the "broker's work" in fact involves a maze of details which are sometimes quite a burden. It also involves scheduling and performing showings which tend to be on the weekend. Sadly some of those showings may even be no-shows on a weekend, so there you are missing a sailing opportunity and a showing at the same time !
So what incentive is there for a seller to not use a broker ? In theory a lower sales price should attract more buyers and offers. Most of the buyers these days come from the on-line multiple listing service (yachtworld.com) and repeat loyal customers to the brokers. Both of those sources are only available to brokers. There are several scattered on-line for sale by owner (FSBO) websites but their search engines and inventory pale in comparison to yachtworld.com. To confuse things even more, some of the non-yachtworld.com websites include brokered listings and not always explicity. The multiple listing service broadcasts to over 1500 brokerages as well as untold numbers of web surfing buyers. Brokers as well as FSBO sellers can both advertise in the local publications. Overall the FSBO exposure will be much less than the brokered traffic. Other problems I've found in calling FSBO listings is that the boat is already sold but still listed, return calls take a long time, there is only an email address which discourages some buyers, or the boat location is not included in the listing.
On the plus side the buyers for a FSBO listing may be more motivated by the lower price and that would be an advantage in the scattered on-line listings and local publications. If you study the FSBO listings you will see that the asking prices are often just as much as or even much more than the brokered asking prices for the comparable vessels. Unfortunately, over priced FSBO listings will suppress traffic and offers, and market value based offers that do come in will seem to be "low-ball" to these over priced sellers and likely to be rejected.
What the FSBO seller needs to leverage the situation is business intelligence. Without a broker's sold pricing info, the best the seller can do is lower his asking price 10% under the going rate on yachtworld.com. There is more to it than that though since comparable listings sometimes need to be adjusted based on other factors such as relevant upgrades. Those factors are more the business of a professional broker than a seller. Even some brokered sellers will insist on an unrealistic asking price, so the listing will sit idle until reality sinks in and the price is reduced.
Summing up, for a FSBO seller to make best advantage of not using a broker, the asking price must be realistic and lower than the brokered comparables, the seller must be concientious about advertising in the disadvantaged ways available, and the seller must be willing to work free for the buyer to complete the deal. All this must happen while competing for buyers with the efforts and resources of professional yacht brokers.
Last edited by captnnero; 08-15-2006 at 06:13 PM.