The decision to get rid of your old pride-and-joy may be either the happiest or saddest day of your life. It all depends on how she treated you and how well you took care of her. We are talking about the boat, of course.
Whether due to changes in health, wealth or plans, a final resolution to part with the old girl immediately forces you to choose one of two courses: sell the boat yourself or hire a broker. Since emotions can run rampant at the thought of selling, it's a good time to review the functions of a broker from a cool, dispassionate point of view.
The largest obstacle to this clear-headed view is the broker's traditional 10% fee. On a sale of a $100,000 yacht, this amounts to a mind-numbing $10,000. Being notoriously thrifty, most sailors have a difficult time swallowing at just the thought of forfeiting such an amount. If the boat were to sell in a matter of a few days, they would feel as if they had funded an annuity for some lucky broker.
Like any other profession, there are trainees and old pros, energetic workaholics and lazy souls, good salespeople and bad among the ranks of brokers. Many specialize in certain types of boats and know little about others. The average broker who has been in business any length of time, however, works long, hard hours including weekends and holidays. Calendars are full of phone calls to be made, surveys to attend, docks to walk looking for new listings, and appointments to show boats to probable buyers. They have a great deal of time and money invested in their education and reputation, and the good ones can sort qualified buyers from lookers in a few moments. Above all, most brokers do this because they love boats and the people who sail them.
Even with all this work, though, a broker's life is usually financially precarious. In most areas, his business is seasonal, being lucrative some months and near the poverty level in others. His fortunes also rise and fall in larger cycles with the economy; hopefully he saves some easy cash from the boom periods to feed his family during more recessionary times.
So what does a broker do for his 10%? First, few brokers receive the full fee. A brokerage house must split the fee with the actual salesperson who puts the deal together. The listing broker, the person whom the seller deals with, may be different from the selling broker, or the person who works with the buyer. In fact, where listing and selling brokers are different, the 10% fee may be split four ways among the two salespeople and two brokerage houses.
Both listing and selling brokers have office expenses including rent, utilities and stationery. Their fax, Internet, telephone and cell phone expenses are usually exorbitant. Add thousands of dollars of automobile operating costs to drive prospective clients around the docks. By far, however, a broker's major expenditure is for advertising. Magazines, newspapers, boat show displays and printing costs for a single boat that stays on the market for any length of time can add up to more than the 10% fee. While these expenses are tax deductible, the broker only has income to deduct from when the boat sells.
So, for all of this entrepreneurial spirit and hard work, a local broker deserves your business when it's time to sell, right? Not necessarily. Here are some thoughts on whether a broker is the right way for you to find a buyer:
Personality: If you like getting lots of phone calls from strangers, enjoy showing lubbers around your boat and don't get excited when a prospective buyer doesn't show up for an appointment, then selling your own boat is a possibility. If you growl at telemarketers, perhaps you should hire a broker. Likewise, those easily discouraged when their boat doesn't sell in the first few months may be well served by the broker's practiced patience.
Time: Retired people have lots of time to create sales leaflets, answer the phone and show the boat. A busy executive or frequent flyer will miss more calls than he receives and should consider using the broker's time.
Training: Some sailors also have excellent sales skills. They can build an excellent brochure about the boat, develop attractive ads, give an adequate presentation on the dock and draw up contracts or sales agreements. If you fall into this group, then selling your own boat should be fun. If not, a broker provides these crucial services for his fee.
The Boat: A normally equipped boat from a well-known builder, one that is popular in your area, should be fairly easy to sell on your own. A custom one-off, on the other hand, may need to be advertised far and wide to attract a buyer. If your vessel is of uncommon design or construction, or has unusual equipment, finding a broker who specializes in your type of boat may be your best course. Even if you have to sail a long distance to his docks, he may be able to fetch a higher price since he attracts buyers looking for your kind of craft, and that higher price might just pay the broker's 10% commission.
Whether your final experience with your boat is pleasant or a real fiasco may ultimately hinge on who sells her. Those who have sold their own boats and enjoyed the experience may reserve the right to gloat over their 10% savings. For those who struggled on for years, finally accepting a low-ball offer on their beloved yacht, 20% would have been a fair and honest fee towards the end of the process. Before you make the decision to sell the boat yourself, it is wise to make an honest assessment as to how much effort 10% is worth.