What is Co-Brokerage?
Understanding how yacht brokers collaborate when selling your boat
What is Co-Brokerage
Co-brokerage is a listing broker's collaboration with a buyer-side broker with the agreement to split sales commissions according to terms of their choosing. The arrangement is usually an even split of the 10% traditional sales commission, although it is negotiable.
Listing Agreements
Typically, a seller who chooses a listing broker to help them sell their boat will sign a listing agreement spelling out total sales commissions and if the boat is open to co-brokerage. In principle, the seller should be consulted on co-brokerage. In practice, however, the listing broker usually does not discuss co-brokerage with their seller and will open the boat up to co-brokerage by default (to entice other brokers to bring a buyer to the table) and set the split of their choosing.
Commission Structure
The seller bears the expense of the entire commissions out of their sale proceeds at settlement, regardless of who procures the buyer.
- If a listing broker procures the buyer, they earn the entire commission, which they split with their brokerage firm.
- If a buyer comes "represented" by a buyer-side broker, this is based on an informal agreement between the two parties, as no buyer representation agreement is ever signed between the buyer and 'their' broker.
Broker Negotiations
When a buyer expresses interest in a boat, their buyer-side broker contacts the listing broker to confirm the co-brokerage terms (i.e. the proposed split on the sales commission).
When an offer is presented, the co-brokerage terms are documented in a co-brokerage agreement signed between both brokers. The seller and buyer are rarely involved in discussions surrounding commissions splits.
The Current Yachts Difference
At Current Yachts, we make sure co-brokerage is well understood by all parties. Our sellers are at the helm when making the decision for co-brokerage, including the percentage of commission allocated to the buyer-side broker. In the traditional commission model, sellers pay the entire commission to their broker regardless of broker representation for a buyer. In the Current Yachts model, the buyer-side broker compensation is only due when a buyer-side broker is present in the transaction.