newbie asking about brokering fees :]

[boat<3]

hello! :]

i'm new to sailnet, and i was hoping to get some help with a few questions. could anyone tell me what a standard brokerage commission is? for example, would 15% of the price be a normal rate? also, i've heard that some brokers charge a success fee, and i wonder whether this is normal since most brokers already ask for a commission?

also, do these charges normally apply to charters of boats too?

thanks! :]

[Peas]

Around here (Southern Ontario, Canada), its 10% when it sells.

[eherlihy]

Same along the east coast of the US.

The seller pays the broker 10% of the final negotiated price. That way the broker is motivated to keep the price up, and move the boat.

I don't know nuthin' about charters though...

[TQA]

Remember it is NEGOTIABLE.

Sure the broker will say no at first; but if you have a popular boat valued at say 200k on offer at price that should allow it to sell in a short space of time and the boat will show well then you should get better terms. maybe even as low as 5%.

But if it is a 30 ft ferro s**t box valued at 20k in Florida and draws 7 feet you may find it hard to get a broker to take it on.

[JimsCAL]

Yes 10% is normal, but some will charge a flat fee for boats under $20,000.

[boat<3]

Thanks so much for your help guys! :] Do you know if the same 10% or so should apply for charters? Also, is a success fee for successful brokerage common?

[sailingfool]

I've seen charter agent fees from 10-20%, depending on market and the scope of the agent's role.

I've never heard of a success fee. As a seller, I thought the 10% fee was intended to produce success - no sale, no income to broker. What would an additional fee do?

[Minnewaska]

10% commission fully contingent upon sale, nothing is paid up front. Understand that the brokerage firm who lists your boat will always get at least half of it, with the other half going to whatever broker actually sells her. Keep that in mind as a buyer, when you are buying from the listing brokerage firm. Practically speaking, they are getting twice the commission they usually receive.

As far as being fully contingent, there is a small exception. I've commonly seen contracts for sale that allow the broker to keep the 10% deposit as their fee, if the buyer fails to close even after the buyer and seller have met all other terms. In practice, however, the buyer usually has enough leeway in their acceptance of the survey to simply change their mind and blame it on the survey, so I've never actually heard of a broker keeping the deposit in this situation. Their reputation would suffer too.

[boat<3]

thanks guys! :]

Hi Minnewaska, just to check about the buyer: why does the buyer have to be aware of this? does the buyer pay a commission? similarly, for charters, does the owner or the person who wants to charter pay the commission? thanks! :]

[Minnewaska]

No, the seller ordinarily pays the commission. There can be a rare exception.

This is what I was trying to convey. When the buyer asks a broker to sell their boat, the broker will charge 10% of the final sale price. If, however, another broker actually sells the boat, because it will be advertised, the broker you originally listed with will evenly split their commission with the selling broker. This is commonly the outcome, therefore, listing brokers are accustom to only being paid 5% for a sale.

Therefore, as a buyer, keep this in mind when you are buying directly from the listing broker. They will now get the full 10%, instead of the split 5%. The broker knows this is a big pay day and will often help in negotiation, by adjusting their fee over the last few dollars.

Don't expect the broker to jump to this idea quickly. I once had a listing broker offer to buy me a used dinghy in the deal. The listing included a specific dinghy. When we got to the boat (out of the country) it had a much larger one and the seller tried to say they asked the broker to remove it from the listing. Broker offered to make good on this, even though he showed me the written listing from the seller which made no mention, and had plenty of room on their fee to do so.

I didn't buy that boat anyway, as it turned out.