Do Brokers Add Value?

[ari]

Sorry to ask the obvious here but how many brokers do all of the above?

Surely then, just like buying any goods or service, the onus is on you to find one that does, rather than stick it on with whoever's nearest/cheapest?

Depending on the value of boat, 6 or 8% is a lot of money. Personally, before spending that kind of money, I find out what it's buying me.

[joliette]

Surely then, just like buying any goods or service, the onus is on you to find one that does, rather than stick it on with whoever's nearest/cheapest?

Depending on the value of boat, 6 or 8% is a lot of money. Personally, before spending that kind of money, I find out what it's buying me.

Yes, 8% + vat is a big chunk out of the sale price. However, because it's a commission - only payable as a reward to the broker in the event of a sale taking place - you're not actually buying a menu of specified services ... at least I don't know anyone that operates like that, but please tell me if you do!

So, I think the way the current system works is that you find out what the commission has bought you when a boat is sold, and not before ... I don't think that's great business practice but I guess it takes place with the endorsement of the YBDSA ? ... But then I can recall a time when they set a standard rate (£ per metre) for a survey, which their members applied and was eventually overturned as an anti-competitive practice.

[Tranona]

Yes, 8% + vat is a big chunk out of the sale price. However, because it's a commission - only payable as a reward to the broker in the event of a sale taking place - you're not actually buying a menu of specified services ... at least I don't know anyone that operates like that, but please tell me if you do!

So, I think the way the current system works is that you find out what the commission has bought you when a boat is sold, and not before ... I don't think that's great business practice but I guess it takes place with the endorsement of the YBDSA ? ... But then I can recall a time when they set a standard rate (£ per metre) for a survey, which their members applied and was eventually overturned as an anti-competitive practice.

It is no different from estate agency, or any other commission based trade. It works this way for two reasons.

Firstly because it is difficult in advance to predict the amount of work involved in each individual transaction. If there was fixed fee system it would have to be set at fixed rates which would penalise some sellers as on average the person still has to make a living. Also I doubt many sellers would lay out sufficient fixed fees in advance with no guarantee of a sale.

Secondly there is then no incentive for the broker to make any effort to sell your boat if he is getting the fee anyway.

There have been many attempts in the past to have fixed fee or fixed fee plus success fee structures. They have all failed to catch on in any meaningful way.

Lets face it, yacht broking is not an easy business in the sense that you can put in a lot of work and not get the sale for reasons outside your control, and just the opposite some boats sell very quickly and with little hassle - but the broker only gets his money if there is a sale, so he has every incentive to make it work.

This is not to say that every broker is equally good or that the sale will happen anyway. In many ways the job has become harder with the explosion in information sources that allow people, both buyers and sellers to find eachother more easily.

So, the choice is yours. Do the work yourself - if you get lucky you might get a quick sale, or engage a broker so that he does the work and only gets paid when you get your money.

Both approaches can be equally successful - or not!

BTW you can always ask a broker to do the paperwork for you for a fee.

[beejay190]

I don't know but I do. For 5-6% and no VAT.

(Sorry not power though, only sail)

Slight thread drift if i may.

I am trying to sell my boat privately this year. I am in no hurry to sell. If it does not sell this year i may place it with a broker next year.

The absence of VAT certainly gives you an advantage over some of your competitors.

However i am loathe to let any broker ( large or small ) receive the proceeds from the sale of my boat. [ There are some dodgy brokers about - witness the news today that a Dorset based broker has been jailed for 3 years for pocketing over £200K VAT arising on boats he sold ].

A while back some bright forumite suggested that to safeguard sale proceeds he would require the buyer to make 2 payments. The brokers commission paid direcly to the broker and the net sale proceeds paid directly to the seller. Would that arrangement be acceptable to you and is it common place ? Thanks.

[Tranona]

However i am loathe to let any broker ( large or small ) receive the proceeds from the sale of my boat. [ There are some dodgy brokers about - witness the news today that a Dorset based broker has been jailed for 3 years for pocketing over £200K VAT arising on boats he sold ].

However, he was not acting as a broker even though the press described him as such. He was simply a trader, buying and selling on his own account. This is why he was in a position to commit a VAT fraud. His type of business is nothing to do with acting as a broker on behalf of a client.

Pretty stupid crime - amazed he should think he could get away with it! At least no customer lost out.

[alt]

I know i'm the minority, but I purposely avoid brokers.

When buying a boat, I like to deal with the seller/owner direct. Just a personal thing

[jonic]

It is no different from estate agency, or any other commission based trade. It works this way for two reasons.

Firstly because it is difficult in advance to predict the amount of work involved in each individual transaction. If there was fixed fee system it would have to be set at fixed rates which would penalise some sellers as on average the person still has to make a living. Also I doubt many sellers would lay out sufficient fixed fees in advance with no guarantee of a sale.

Secondly there is then no incentive for the broker to make any effort to sell your boat if he is getting the fee anyway.

There have been many attempts in the past to have fixed fee or fixed fee plus success fee structures. They have all failed to catch on in any meaningful way.

Lets face it, yacht broking is not an easy business in the sense that you can put in a lot of work and not get the sale for reasons outside your control, and just the opposite some boats sell very quickly and with little hassle - but the broker only gets his money if there is a sale, so he has every incentive to make it work.

This is not to say that every broker is equally good or that the sale will happen anyway. In many ways the job has become harder with the explosion in information sources that allow people, both buyers and sellers to find eachother more easily.

So, the choice is yours. Do the work yourself - if you get lucky you might get a quick sale, or engage a broker so that he does the work and only gets paid when you get your money.

Both approaches can be equally successful - or not!

BTW you can always ask a broker to do the paperwork for you for a fee.

+1

But I would add it's a least triple the work of estate agency because of the level of technical knowledge required and the addition of the legal and conveyancing work.

[beejay190]

I know i'm the minority, but I purposely avoid brokers.

When buying a boat, I like to deal with the seller/owner direct. Just a personal thing

A growing minority i would suggest. A number of boats change hands privately here at Cobbs Quay.

[beejay190]

+1

But I would add it's a least triple the work of estate agency because of the level of technical knowledge required and the addition of the legal and conveyancing work.

And triple the price!!

An estate agents fee on sale of a £200K flat - 2% (?) £4,000.

A brokers fee on sale of a £200K boat . ????????????

[Richard10002]

And triple the price!!

An estate agents fee on sale of a £200K flat - 2% (?) £4,000.

A brokers fee on sale of a £200K boat . ????????????

I wish I was an estate agent where you are!!!

Estate Agents fees on a £200k property @ 1% - £2,000 inc VAT

Legal fees for conveyancing of a £200k property, around £600 - £800 inc. VAT

Brokers fee on £200k boat @ say, 5% - £12,000 inc VAT
Brokers fee on a £50k boat - £3,000 inc VAT