Purchase and Sales Agreement - Help

[zstine]

I listed my boat on sailboatlistings.com for private sale. A buyer made an offer via a broker. The broker called me and said the seller pays his 10% commission. I said I was not happy about this and even asked why he is not just taking 5%, but he pushed back. Since the offer was full price, I accepted. Then the buyer's broker sent me a purchase and sales agreement and he listed himself as the listing broker, my broker. I don't need him to represent me, he didn't ask to represent me and I wouldn't pay 5% for his help, though I did agree to pay 10% on the phone call.
- Should I ask to have his name removed as my broker?
- I have nothing in writing saying what the commission actually is. Is this normal?
- Is it typical that a broker take a 10% commission if only 1 broker representing 1 party is involved?

Another issue with the P&S is that there is a date for me to provide the yacht, but no location. When I bought the boat, the delivery location was defined. I asked the broker and he said not to worry, "delivery just means turning it over, not actually moving it to a place". note that I have 14 sails that weigh like 1,000 pounds and other equipment to move/deliver. Should I demand a location?
thanks!

[Chotu]

10% is normal but nothing else is. He’s acting as a buyer’s agent. The buyer pays the fee for a buyer’s agent. 5% is customary for that service.

As to location, demand anything you want. The market is red hot right now. He needs you more than you need him.

I’d start by saying he’s a buyer’s agent, not the listing broker and that he’s not going to strong arm you into listing your boat with him. Further, that the buyer pays for the services of a buyer’s agent, so he should look to his client for his fee.

And stand your ground. He’s bullying you.

With a scammer like this, I have to wonder if he isn’t trying to get a 5% fee from the buyer too!

[zstine]

Originally Posted by Chotu

10% is normal but nothing else is. He’s acting as a buyer’s agent. The buyer pays the fee for a buyer’s agent. 5% is customary for that service. .....

Really! the buyer pays the buyer broker fee!?

That broker told me "It's like selling a house. The agents are payed by the seller's proceeds" which is true for house sales.
If you are right, then he is really is a swindler!

[AKA-None]

Buyers broker, sellers broker. Think about those words as to who is working for who

[zstine]

Ok..
Any yacht brokers out there that can confirm the normal way to do business is that the seller and buyer pay their own broker fees of 5% typically? unlike a house sale where both agents are paid by the seller's proceeds?

[zstine]

Oh, here's another issue. The P&S says the seller pays the brokers commission as soon as the sale is consummated, But the P&S never defines what amount the commission is. Where is this stated? Is there a separate contract?

[Dsanduril]

IME it is like a house (at least in the US) when you have a sales listing. As a buyer I have never paid a commission or fee to a broker. As a seller it has come straight off the sales proceeds. The listing agent typically has a 10% commission. If another broker brings the buyer the listing broker and the buyer’s broker split the 10%. If the listing broker and/or their company brings the buyer then they keep the whole 10%. All of that is pretty much spelled out in the listing agreement.

In the case of a buyer’s broker bringing a buyer to a private sale there is no listing agreement. Everything is then subject to negotiation. It seems reasonable to me for them to request 5% as this would be customary for bringing a buyer. If they are preparing all the paperwork then they are acting more as both a buyer and seller’s agent so some more may be appropriate, but since they didn’t have to do the listing work seems like it should be less than 10%.

As to who pays, well, it is also customary for the commission to come from the sales proceeds, so it would not surprise me to have that request. But, you could turn around and offer the sell the boat for 5% less and leave the commission between the buyer and his broker. In that scenario, however, you will have no business relationship with the broker so you will be responsible for document review, etc.

[Calif.Ted]

Originally Posted by zstine

Ok..
Any yacht brokers out there that can confirm the normal way to do business is that the seller and buyer pay their own broker fees of 5% typically? unlike a house sale where both agents are paid by the seller's proceeds?

Seller always pays the 10% regardless of how many agents or brokers are involved, he's the only one who has signed a contract obligating him to pay.

[Knotical]

If you are going to pay 5% commission anyway why not have your own broker who’d look after your interests? Is it too late to retain a broker? Hope you didn’t sign the P&S.

Also, the commission percentage and hence the amount based on the sales price is clearly listed in the contract, don’t sign anything until you see that in writing.

[zstine]

Originally Posted by Calif.Ted

Seller always pays the 10% regardless of how many agents or brokers are involved, he's the only one who has signed a contract obligating him to pay.

I'm the seller. I haven't signed any contract obligating me to pay anyone anything. The buyer brought his broker to a private-sale listing and expects me to pay a 10% commission. I have some consternation with that.

[SVHarmonie]

This "broker" is scamming YOU and the BUYER.

A broker is legally required to represent ONE party in a deal. He has fiduciary duty to THAT party and NOT the other. You can not be the listing broker AND the buyer's broker. That is a flagrant conflict of interest, and he should lose his license for even suggesting it.

Either this guy is a fool, or a scammer.

In either case, beware of this snake.

[Dsanduril]

Originally Posted by SVHarmonie

This "broker" is scamming YOU and the BUYER.

A broker is legally required to represent ONE party in a deal. He has fiduciary duty to THAT party and NOT the other. You can not be the listing broker AND the buyer's broker. That is a flagrant conflict of interest, and he should lose his license for even suggesting it.

Either this guy is a fool, or a scammer.

In either case, beware of this snake.

Yacht brokers are lightly regulated in comparison to real estate brokers and most states have laws allowing dual-agency in real estate. Most of the standard contracts in the yacht broker business allow dual-agency. There are certain disclosures that must be made and all parties must agree.

The OP’s case is almost perfect for dual-agency; the price has already been agreed between all parties. The only question is the source and size of the broker’s payment. The broker is not in the position of knowing the minimum acceptable offer on the seller’s side nor the maximum acceptable offer on the buyer’s side-they’re already past that so the risk of disclosure and breach of fiduciary duty is low.

[Calif.Ted]

I have some consternation with that

I would also, if you think it's a legit offer and not the guy's BIL pretending to be a buyer offer him whatever you wish and make it good only for that buyer and a limited time.
"I'll give you a listing for 5 working days with 5% commission on closing sale with John Doe"

[Capt Clark]

Originally Posted by zstine

The broker called me and said the seller pays his 10% commission. Since the offer was full price, I accepted.
He listed himself as the listing broker, my broker. I did agree to pay 10% on the phone call.
- Should I ask to have his name removed as my broker?
- I have nothing in writing saying what the commission actually is. Is this normal?
- Is it typical that a broker take a 10% commission if only 1 broker representing 1 party is involved?
Should I demand a location?

Z,

As a broker, I’ll try to shed some light. Never be afraid to ask for a brokers assistance. Seasoned brokers can save or make you money whether buying or selling. It’s not rocket science, it’s just that they have been thru lots of sales and have seen (almost) everything. The Purchase and Sales Agreement is just between you & the buyer; commissions are kind of a side item. The normal commission is 10% if there are 2 brokers (sellers’ & buyers’), otherwise it’s usually around 5%. In your case, as the seller, you should ask the broker what’s your “walkaway money”. I said usually around 5% because this can very depending on sale price. In the past, I have negotiated a higher fee because of a lower sale price but also a lower fee on a higher sale price. It looks like water under the bridge now EXCEPT.... because you have reduced your walk money insist on no adjustments the survey may expose. If you haven’t already established an equipment list of items included and not included, you may consider.
I would ask him to remove him as the listing broker and define the location, especially if you are using YachtCloser or other electronic paperwork.

Capt Clark

[zstine]

Originally Posted by Capt Clark

Z,

As a broker, I’ll try to shed some light...... In the past, I have negotiated a higher fee because of a lower sale price but also a lower fee on a higher sale price. It looks like water under the bridge now EXCEPT.... because you have reduced your walk money insist on no adjustments the survey may expose. If you haven’t already established an equipment list of items included and not included, you may consider.
I would ask him to remove him as the listing broker and define the location, especially if you are using YachtCloser or other electronic paperwork.

Capt Clark

Thanks Capt. I know the buyers broker is expecting the full 10%, even if I take his name off as listing broker. So I know my walk away money. I think the 10% is excessive, but I did agree verbally (before I researched) so I will keep my word and insist on no adjustments.

This is not a big $$ yacht, we are in the $40k's. Like buying a BMW... who brings a broker to a car dealership! haha