20 October 2013 ,
Now that the market for pre-owned yachts is showing signs of stabilization, it is time to consider the best strategy to sell your yacht and to address a few popular misconceptions
The Sea Independent Stategy: Central Agent with a Worldwide Network
For mediation contracts between a seller of a yacht and a yachtbroker there are basically two options: a Central Agent agreement, where the yacht broker is the exclusive and sole representative of the owner and an "open" or non-exclusive type of contract.
Having an Central Agent contract usually strengthens the position of the seller of a yacht, while other type of contracts weaken his position and eventually will lead to a lower asking price. This is especially true when a Central Agent cooperates with other brokers.
Does this sound strange or awkward to you? Then read on!
Popular Thinking: Competition is a good thing
Yes, competition is a good thing for buyers. It drives down prices and is therefore beneficial to them. But somehow many yacht owners also think that competition between yacht brokers is good for them, when it comes to selling their yacht. In reality, competition between brokers drives the price of their yacht down. And this is only one of the disadvantages of non-central mediation contracts:
- In a non-central scenario, only the broker that brings the buyer gets the fee. There is a big chance that all of his investments go up in smoke when he is not the one that closes the deal. So, most yacht brokers are not really tempted to go beyond just putting your yacht on a few websites.
- In order to get that one buyer, a yacht broker needs to convince buyers to do business with him, and not with any of the other brokers listing the yacht. One of the ways to do that is to please the buyer by telling him that he, and only he, will be able to persuade the owner to sell at a lower price. Better a lower fee, than no fee at all!
- More often than not, you will see the same yacht advertised on the major websites. Sometimes even at different prices! Imagine the impression that makes on buyers. An impression of a desperate seller!
There is no way an owner can check all these websites and then contact all of “his” brokers to persuade them to withdraw or modify their ads.
Advantages of Central Agent Mediation Agreements
Why would so many sellers in the North of Europe, a huge yacht market, opt for Central Agent contracts? Here are a few of the reasons why:
- As the Central Agent carries all the responsibility to sell the yacht, duplicate advertisements and price differences do not occur. When working with other brokers he will take care that advertisements are properly spread. For the yacht owner communication is simple, swift and transparent. He can easily influence the ways things go by just a single short phone call to his yacht broker.
- Because the yacht broker can be sure of his fee once the yacht is sold, he is willing to invest and spend money on advertisement, travel, and time. It is really in his best interest to represent the yacht and its owner as well as he can. And the higher the price, the higher his fee. That’s for sure!
- Because the Central Agent will always stay involved in the deal, he will gladly offer your yacht to other yacht brokers. He doesn't have to be afraid that he will lose his fee because these other brokers will approach his client separately. (and negotiate a much higher fee!)
For you, as his client, the fee will always remain the same. The partition of it will be agreed between the yacht brokers. At Sea Independent we even have a standard protocol for it. At Sea Independent Co-Brokerage is the norm! So actually, with a Central Agent, you reach many more yacht brokers and their clients than with lots of different non-Central brokers. Or do you want to deal and sign contracts with hundreds of brokers worldwide?
As you have read, Central Agent mediation contracts have many advantages over other types of contracts.
When apointing any of the Sea Independent yacht brokers as your Central Agent you will have over 30 yacht brokers worldwide, working closely together in your best interest. Doesn't that sound a lot better than having several yacht brokers competing in their own best interest?
Why go through all the trouble to reach several different mediation agreements, only to offer the buyer of your yacht a choice of brokers? And thus risk a lower selling price for his yacht? Actually, one wonders why a seller would want to opt for anything else but a Central Agent contract?
I still have to get a good answer to that question……………………….
Central Agent Mediation Contracts are beneficial to yacht sellers
< news overview