Yacht Brokerage Fees: What You Should Know

Buying or selling a yacht is an expensive process. With higher value boats, a broker is almost always part of it. While you can sell a boat without a broker, unless it’s a small boat on a local cash deal, a broker increases your odds of getting a buyer and a better price.

But what does this cost you? And what are you getting for your money?

What does a yacht broker do, exactly?

A full service yacht brokerage offers a wide range of ownership services beyond just selling your boat. Whether you’re buying, chartering, or selling, a professional broker will make the process easier and efficient.

Help owners buy and sell yachts, new and used

The primary business of most yacht brokers is helping people buy and sell boats. The broker is involved in all aspects of a yacht sale, from the first listing of the vessel until the final paperwork and funds are exchanged. Some tasks a yacht broker will do for you in a buy or sell transaction usually include:

Selling a yacht is a complex process with many steps, especially in international transactions. A skilled broker will manage the process from the first steps through transferring ownership.

Yacht management services

Many brokerages also offer management services for yacht owners who are far from their vessels, or who do not want to manage everything themselves. A trusted broker can help with everything from refits and major projects, to ongoing maintenance, moving the boat, and even hiring and managing crew.

Charter booking and management

If you buy a yacht and intend to charter it for some of the year, your broker can help you. With a network of industry contacts and an in-depth knowledge of the charter market, your broker can book and manage charters to defer your cost of ownership and keep your investment busy.

And if you’re looking to charter a yacht, a charter broker can screen hundreds of yachts to find the best one for you. They’ll handle everything from finding the yacht, coordinating an itinerary, and dealing with all the paperwork, insurance, and legal details.

How are yacht broker fees calculated?

You don’t want any surprises in your yacht transaction, so it’s good to have an idea what you’ll pay. All brokerage fees and expenses should be clear to you up front, and specified in writing. The should detail this in the listing, management, or charter agreement.

Yacht brokers take a percentage of the sale

Across the U.S. and much of the world, 10% is common brokerage fee for most transactions. But that is not a hard and fast number and it can vary with the size of your deal and the location of your boat.

You pay the percentage on the final selling price, not the listing price, and price adjustments after the survey may affect this.

Charter management fees

While charter management is often coupled with yacht management, they usually charge bookings as a percentage of the base charter fees.

You can hire a charter broker to find you a charter, as well as use one to sell charter time on your own yacht. But hiring a broker for your charter vacation shouldn’t cost you anything extra.

Yacht management fees

There are many ways management fees may be structured. You may agree to a monthly flat fee, or pay actual time and materials. Some arrangements are made on a value-added structure, where goods and services are marked up a pre-agreed amount to pay the broker, or charged as a percentage.

Who is the Broker Working For? (and who pays the fees?)

With charter and yacht management, the yacht owner employs the broker. But in buy and sell transactions, there’s often confusion over who the broker is responsible to. And there may be multiple brokers involved. It’s crucial to know who the broker has the fiduciary relationship with, so you don’t disclose private information to the wrong party.

Unless there are special circumstances spelled out in listing contracts, the brokerage fees are paid by the seller, out of the proceeds of the sale. This is the most common arrangement, and it ensures that brokers get paid.

Fiduciary Responsibility

Parties with fiduciary duty have legal responsibility to protect the interests of their client, and a duty to disclose all information relevant to the client’s best interest to the client.

Why is this important to you? Imagine you’re looking at a yacht, and you tell the broker, “I can’t pay the asking price, but I’m pre-approved for $100,000 below the ask.” If that broker is working for the yacht owner, not you, that broker is obligated to tell the seller that information. Now, the seller knows the exact maximum price you can pay for the boat, and you’ve given up an enormous advantage in the negotiations.

You must know who you can trust with your confidential information.

Listing/selling broker

The listing or selling broker always works for the seller and is their fiduciary. You can buy a yacht with the selling broker handling both sides of the transaction. This is called a dual agency. Local laws vary about whether the broker must disclose this relationship and any conflicts of interest.

If you’re a buyer dealing directly with the listing broker, ask them about their “fiduciary duty of care” and who they work for. Be direct, it’s an appropriate question with important implications. One agent can not easily work in the best interest of both sides of the deal, so there are potential conflicts if problems arise during the sale.

Similarly, if you’re selling and your listing broker brings in a buyer in a dual agency situation, remind them that their first fiduciary responsibility is to you. It’s a natural expectation for them to want to make the deal, but they must protect your interests first.

Co-Brokerage

Often, a broker from one agency will bring a buyer to a yacht listed by another agency. This creates a co-brokerage situation, and in most deals, the brokers simply split the commission between them. Co-brokerage is common in most places, and it lets any broker find the absolute best yacht for their clients.

Sometimes, a broker may not be willing to co-broker a deal, or refuse to split the commission. A common reason is a broker who works for a smaller percentage, so is unwilling to split it. Co-brokerage isn’t required, and some brokers will avoid showing boats they don’t list.

If the selling broker won’t co-broker the deal with your broker, you have two choices. Either pay your own broker’s fees out of your pocket, or find a different yacht.

Buyer’s Broker

An increasingly common solution to dual agency conflicts is the buyer’s broker. This is a broker who works only for the buyer to help find the perfect yacht. They rarely cost anything, because they’re co-brokering the deal and getting paid from their share of the sales commission.

If you want a buyer’s broker, ask your broker to establish that exact relationship before you look at any boats. They should have a contract for you that spells out their fiduciary responsibilities to you. There will also be language affirming that you pay their commission if you choose a boat without a co-brokerage arrangement, or from a private seller with no listing broker.

Fees for broken deals

Most times, when a deal falls apart, everyone gets their deposits back. Listing agreements protect the broker if the seller intentionally backs out of a deal with a qualified buyer. It’s very rare, but if you have a contract to sell your yacht and you just change your mind and break it, you may still owe the broker a commission.

Charter Brokerage

Charter brokers are working for the boat owner, and their fees are paid out of the charter fees collected for their client. So you can use a charter brokerage to find a charter for you at no cost.

What influences brokerage fees?

The size of the yacht can influence the final fees

Working on a percentage of selling price means that larger yachts have larger fees. While there is room for negotiation, most brokers are reluctant to discount commissions deeply because larger yachts take considerably more time and effort to sell. Brokers will incur more expenses, and it may take quite a while to realize those expenses in a fairly refined yacht market. It’s also harder to attract co-broker interest on discounted commissions.

For lower value boats, most brokers will have a minimum fee. Smaller, older boats still take time and expenses to sell, but much lower sale prices lead to smaller percentage based fees. A minimum ensures the broker doesn’t take a loss on the sale.

Special sales, marketing, and business considerations

The brokerage typically pays selling and marketing expenses, and they recoup those expenses from the brokerage fee. However, certain exceptional third party expenses may be charged to you at closing costs, for example, bank fees, documentation services, and any exceptional legal services from deal complications, such as undisclosed liens.

The listing broker should have a marketing plan, and will spend money to put together a professional sales package and listing. It’s not common, but if an owner makes requests for additional media shoots or special advertising and marketing beyond what the broker normally provides, there may be charges.

Exclusive vs. Open Listings

An exclusive listing gives one broker the right to sell your boat, but an open listing allows any broker to bring a buyer and make a commission. All brokers prefer exclusive listings, and those who take open listings may offer a different commission for an exclusive listing.

Exclusive listings usually work better for both sides, since brokers will spend money marketing and advertising an exclusive listing that they won’t for an open listing. And you may save a little on the commission and get your boat sold more quickly.

Broker Reputation

The best brokers rarely bend on their fees, because they don’t have to. With years of experience in the business, they know how to get deals done in an exclusive market, and they don’t need to induce new listings by discounting price.

Newer brokers or those with less experience or few listings may offer discounted fees to attract business. There’s nothing wrong with their services, and they may sell your yacht with no problem. But a lower commission also affects co-brokers, so other brokers may give your yacht a lower priority if it doesn’t pay as well.

When are brokerage fees paid?

They should outline the payment schedule for brokerage fees in brokerage contracts. Read all terms so you understand the payment schedule.

Buy & Sell transactions

Brokerage fees are deducted from sale proceeds during the closing, before making final disbursements to the seller or to any banks with loans. Funds from the buyer are delivered to the broker, who deducts their fees then pays all the parties as spelled out in the closing documents.

While it’s not common, if they are selling a boat with a lien and the price isn’t high enough to cover the loan and the commission, the seller may have to pay in at the closing to cover the fees.

Buyers with a buyer’s broker they pay directly will do so at the closing.

Yacht charters

Yacht charter brokerage fees and expenses are taken from payments received for the charter before they disburse the balance to the yacht owner.

Yacht management

Yacht management fees are frequently billed on a monthly basis, though the structure of the management contract may specific a different payment schedule.

How can you know if you’re being over-charged?

While there isn’t any universal pricing structure for brokerage services, there are a few normal ranges that you can expect to pay for standard service. So look at all the closing paperwork, statements, and invoices carefully. Most brokers are honest, but like any business transaction, it pays to double check for mistakes or intentional up charges.

A sales commission fee is above 10%

Commissions of 10% are typical in buy/sell transactions and are sometimes lower. But it’s rare to see a sales commission over 10% unless it’s on a small boat with a minimum fee. If there are multiple brokers involved, they should split the commission, not add to it, unless you’re informed in advance.

A charter fee is over 20%

While charter fees typically run 15%, they may go as high as 20% if there are multiple brokers involved in a booking. Amounts over that should draw your concern.

Your bill is significantly more than the management contract specifies

The bottom line is what you have in writing. You should always have a written agreement for any brokerage service, and the fee and payment structure should be spelled out exactly. If you can’t match what you’re being charged with to what they agreed to in writing, then you have a problem.

Ask around

Other sailors and yacht owners have experience with brokers and are usually happy to share the good and the bad. So ask your yachting friends and find out what they’ve been quoted and had to pay.

And don’t be shy about contacting multiple brokers for quotes on any service before you select one. An honest broker will be upfront with you about costs, and won’t try to hide anything or hesitate when pressed for specifics.

Fair fees ranges for yacht brokers

Though there is no global or industry standard for fees, there are normal ranges you can expect to pay. These fees are reasonable and customary, though the exact fee structure is often negotiable.

From 15 to 20% for charters

This is a percentage of the basic charter fee. The broker may charge the charter party for additional services, like menu and itinerary planning, but they should not charge you for this.

From 5 to 10% for buy & sell

Ten percent is the typical maximum for a brokered yacht deal. You might have to pay a buyer broker yourself if the listing broker won’t co-broker, but your contract with the buyer’s broker should spell out that amount.

Yacht management is more variable

Because yacht management services are so variable, it’s difficult to put a percentage on what is a fair fee range. Which makes it extra critical to check your contract, and get multiple quotes for the services.

If any of your management services are commission-based, be careful that you’re getting the best price for the underlying service that’s being marked up.

Finding an Honest Broker

Unfortunately, like many industries, there are some bad players in the field. And some give the industry a poor reputation. It’s natural to be cautious, but there are plenty of hardworking, honest, and ethical brokers for hire.

When you’re looking for a broker, look out for a few things.

With little checking, you can go in with your eyes open and get some great service to make your yachting experience easier and more trouble free.