Sellers broker refuses to split commission

[slowgoesit]

Is it normal for a listing broker to refuse to split his 10% commission with a buyers broker? We're interested in a boat, working with a buyers broker, but the seller's broker refuses to split commission with buyers broker. Buyer's broker wants 5% to represent us (the buyer) to the seller(understandable). Extra 5% commission to our buyers broker would have to come out of our pocket . . . for a total commission paid to broker(s) of 15%.

Some people will probably say not to be concerned, that we're not paying the seller's broker 10% commission anyway, as the seller is, but we consider that BS as the seller is paying the sellers broker out of the total sale price, which is our $$$ anyway.

Anyway, we told our buyers broker that we weren't interested in making the offer we were considering because we feel that, although the sellers broker is within his rights to set any conditions he wants that are legal, we consider it unethical and have no interest in purchasing a boat with him involved in the sale. It would be difficult to accept anything he says about the boat, especially as we've already noticed glaring discrepancies in what the sellers broker says, and what is obvious in the photo's on the website.

Boat is nice, and we feel that we would be happy with it pending successful survey and sea trial. However the price is on the high side, even considering what were considering offering.

Thoughts?

 

[Comodave]

Most brokers will cooperate with a buyers broker but some are buttheads and want all of nothing instead of half of something. Too bad you can’t tell the seller that his broker is costing him a sale. Is the boat documented? If so you can look up the owners name and maybe contact him that way.

 

[Sailor of Fortune]

Most brokers will cooperate with a buyers broker but some are buttheads and want all of nothing instead of half of something. Too bad you can’t tell the seller that his broker is costing him a sale. Is the boat documented? If so you can look up the owners name and maybe contact him that way.

In the real estate world, thats called "going behind the sign" Its not ethical either..

 

[DavidM]

Follow Comodave's advice.

It happens, but rarely. Sometimes it is a unique boat and the seller believes that only one person should show it and close the sale. Sometimes obstinance, a nicer word for butthead.

Sometimes the trick he speaks of: finding the seller through USCG records, and working with him directly will work if the listing broker doesn't have a valid exclusive sales agreement. There is nothing unethical about contacting an owner and asking if he wants to sell his boat to your buyer.


I saw much worse behavior in my short tenure as a yacht broker. The rules of ethics are very loose in that business.


Otherwise, find another boat.

David

 

[Comodave]

I am not suggesting that he go to the owner to buy the boat but just to let the owner know that his broker is costing him a sale. I don’t see any ethical issues of telling the owner that his broker is refusing to split a commission in order to sell the boat. Now maybe the seller agrees that the selling broker should not split his commission and in that case I would move on. But I would guess that the owner does not know that his broker is costing him the sale of his boat and does not care if the selling broker has to split his commission. I would guess that the seller just wants the boat sold.

 

[Bacchus]

Agree w others here...
I would do some detective work and let the buyer know the broker tactics essentially killing a potential sale.
Worth a try to make sure seller is aware.

 

[Comodave]

I would guess that the seller once he finds out that his broker may cost him a sale of the boat will either put pressure on the broker to cooperate or find another broker. But if the seller does not know what his broker is doing, the seller can’t fix the problem.

 

[Sailor of Fortune]

Why not make the offer with broker having to split commission and have it presented? If Boat sales are like RE (I don't know if they are or not), owner would have to sign off on a refusal of offer?

I think its skeavy of the broker but going to owner is no better in my opinion. Maybe reduce offer to reflect paying buyers broker his 5%?

 

[BruceK]

slowgoesit,you could make an offer reducing what you were prepared to pay by the 5% your buyers broker wants.
That said,a system where the seller pays the buyers broker makes no sense. In that scheme, your buyers broker ONLY gets a commission if you buy. If you don`t buy he gets nothing. I`m sure there are highly principled brokers among the many, but the lure of the $ could encourage some to encourage you to buy when you should not or at a price you should not pay. There is huge potential for a conflict of interest and breach of fiduciary duty.

Surely you are better off with a broker you pay whose sole duty is to you. Revolutionary to your system, but it makes sense.

 

[Jeff F]

I'm not sure there is a 'normal' when it comes to how these things work. Some brokers are very resistant to sharing commissions.

If you're seriously interested in the boat make an offer, and in that offer specify that the seller cover the 5% buyer's agent commission from the purchase price. Then let the seller and the listing broker have a discussion on how they will respond.

 

[Duvie]

Make your offer with the stipulation that the seller pay the 5% to buyer broker. I believe the sellers broker has to present any and all offers to the seller.

The seller either figures out what their broker is up to and corrects it, agrees and pays the 5% to the buyer broker or turns down your offer and you walk away.

 

[menzies]

On the previous broker commission thread over the past couple of days there were a few members who are boat brokers/agents responding.

I would like to hear their take on this?

 

[BruceK]

In the real estate world, thats called "going behind the sign" Its not ethical either..

There is nothing unethical about the parties to a transaction, proposed or actual,talking to each other direct. If they communicate via agents, it`s still them talking to each other,via the conduit of an agent.
What is not permissible is a broker/agent approaching the principal/client of the other party. That`s a no no.

 

[menzies]

In the real estate world, thats called "going behind the sign" Its not ethical either..

If the aim is to cut the agent out of the deal by talking directly to the seller, I agree. But if the aim is to let the seller know how his agent is behaving, and that he may be losing a sale because of the agents position, while still willing to work through the agent, I don't think that is unethical at all. The seller may agree with his agent's position, or look to change it if he was not aware.

 

[dhays]

Most brokers will cooperate with a buyers broker but some are buttheads and want all of nothing instead of half of something. Too bad you can’t tell the seller that his broker is costing him a sale. Is the boat documented? If so you can look up the owners name and maybe contact him that way.

I agree with Dave here. You don't have any relationship with seller nor the seller's broker. So if you wanted to let the seller know that you were not going to make an offer because of the agents refusal to split commission with a buyers broker, I don't see any ethical problems. Now, your broker can't do that, but nothing to stop you from doing it. Likewise, the seller can't make a deal with you cutting out their broker during the term of the listing agreement.

 

[slowgoesit]

I appreciate all the input this has received. Thanks to all who shared their knowledge, however we've already decided not to pursue this particular boat. Some of the issues we had with the sellers agent (not just the issue discussed) just came across as sleazy, and we don't want anything to do with him, or the boat now. I was just wondering if not sharing the commission was typical. Except for our recent experience, as well as another recent thread here on the forum of a member running into a similar situation, I've not run into it before.

 

[syjos]

The selling broker of a boat I was interested in had minimal information on the listing, was hard to get a hold of and took several days with answers to my questions.

I obtained the sellers information from the state licensing dept. and contacted the seller. The seller and I worked out a deal. The seller felt the broker listed the boat at too high of a price and we settled on a price significantly lower than the listed price. We agreed the broker should be paid his commission for locating a buyer - me. The seller and I contacted the broker and directed him to complete the paperwork for our signatures. The broker was livid about the agreed to selling price. He tried to talk the seller out of the sale.

We completed the sale and the broker was paid his commission.

Contact the seller.

 

[syjos]

I believe the sellers broker has to present any and all offers to the seller.

.

That's true in Real Estate but I don't think that boat brokers have similar requirements.

 

[bshillam]

I would write in on the offer your buyers brokers commission and request that the seller sign off on the offer with either an acceptance or rejection. Then if you don't get it back send it direct to the seller.

 

[BruceK]

.... Thanks to all who shared their knowledge, however we've already decided not to pursue this particular boat. Some of the issues we had with the sellers agent (not just the issue discussed) just came across as sleazy, and we don't want anything to do with him, or the boat now....

What an appalling position for a seller,having a broker so sleazy a clearly genuine buyer decides it is too risky to deal with the broker or buy the boat. Worse still, the poor seller won`t even know why the buyer went away, and may be doomed to have it happen again.
The rule in real estate was to choose a broker agent you like. I you like him the buyers probably will too. Though some sellers like a broker "with a bit of mongrel in him".
I`ve just dealt with an interstate boat broker whose representations were almost never consistent and fortunately, in a way, rejected my offer in an instant. Boat still unsold a month later,even with 2 price drops. A difficult scenario arises if he ever comes back.

 

[78puget-trawler]

I suppose it may be convenient for the buyer to have his own broker, but I wouldn't bother with it. That way there is no worry about splitting fees. Seller pays his broker.

 

[tiltrider1]

Take your buyer’s broker’s advice. He is in the business and knows what is ethical and what is not. The selling broker might have a unique boat that he knows will sell for asking or the boat has such a low value that less than full commission won’t pay the bills.

 

[BDofMSP]

The USCG has removed all owner personal information from their website. Not sure if you can still get it from them some other way.
BD

 

[Flatswing]

Is it normal for a listing broker to refuse to split his 10% commission with a buyers broker?

Actually not that uncommon. There are several selling brokers that operate that way on the E. coast. It's usually stated somewhere on the listing and the seller is usually well aware. Not a big deal really since you are using a buyer's broker - he/she will tell you up front about the commission. If you like the boat enough to make an offer, your final purchase price will reflect what you agree to pay your buyer's broker separately.

Good luck, concentrate on the boat, the rest is just business.

 

[MonarchBeacher]

As a broker, I deal with this quite often. Here are some circumstances this occurs. Often the selling broker has made special arrangements (lower commission, special concessions, such as repairs, show entry costs, ect) with the seller and has fronted "costs" and wants to "recoup" them. Other times I have spent quite a bit of time with the buyers then I get a "O by the way, I am working with... someone else".Often I have had "buying brokers" try to step into a transaction that is under way... Here in CA we are licensed and bonded. There are too many "brokers" that have no listings, do no advertising, have no costs of doing business, yet want to pick from your listings. Possibly the selling broker does not want to do business with the particular "buying broker" due to their lack of professionalism or trust.
There are a multitude of reasons as to why not. As for buyers, step up: if your "buying broker" is providing valuable services, pay him directly. If you won't pay him, why should someone else?

 

[Imp]

In the real estate world, thats called "going behind the sign" Its not ethical either..

I've been doing RE deals for 40 years, & heartily disagree with that as a blanket statement. Sometimes the person who put down the sign does not have the seller's best interest at heart. Besides, whose ethics in what universe?

 

[foreverunderway]

I would have nothing to do with that broker or the boat. Chances are that is not a reputable broker and he has something to hide or cover up. Half of a commission is better than nothing, especially in today's market.

 

[BandB]

I appreciate all the input this has received. Thanks to all who shared their knowledge, however we've already decided not to pursue this particular boat. Some of the issues we had with the sellers agent (not just the issue discussed) just came across as sleazy, and we don't want anything to do with him, or the boat now. I was just wondering if not sharing the commission was typical. Except for our recent experience, as well as another recent thread here on the forum of a member running into a similar situation, I've not run into it before.

There is one circumstance where refusing to split would be appropriate and commonplace. That is where you initially contacted the seller's broker rather than having a buyer's broker who initiated contact. Otherwise it would be wrong and often in violation of the listing agreement.

Here's the IYBA's standard listing agreement and most others are similar.

https://iyba.yachts/docs/memberDocs/FYBA_Listing_Agreement.pdf

Note in Paragraph 1. "Brokerage will submit all offers to Owner."

As to commission in paragraph 5. "Brokerage may work with other brokers to sell the Vessel. Any cooperating or sub-listed brokerage (“CoBrokerage”) involved in the sale shall receive its fee from Brokerage."

Note that it says "may" but does not require them to do so.

Now, I also found a Central Listing Agreement from YBAA

http://media.channelblade.com/eprowebsitemedia/3204/fillable_central_listing_agreement.pdf

and it reads: 3. The BROKER agrees:

1. To seek prospective purchasers for the YACHT through direct promotion of the YACHT.
2. To prepare information describing the YACHT and to distribute this information through its multiple listing system to selected yacht brokerage companies, hereafter referred to as “corresponding brokers.”
3. To keep corresponding brokers informed as to the price, location and availability of the YACHT.
4. To pay any corresponding broker who sells the YACHT, a percentage of the commission received from the OWNER.
5. To promptly transmit all offers to the OWNER.

So part of the question of requirement is the initial listing agreement and whether it's a central agreement or exclusive. That said, I've never known a broker who wouldn't split commissions with a buyer's broker if that's who made the initial contact.

 

[Mikala]

Don’t think the commission was split correctly by this FL broker.
https://www.passagemaker.com/trawler-news/florida-yacht-broker-ponzi-scheme

 

[MonarchBeacher]

I find it interesting how generous everyone is! Especially with other people's time and money!