MISLEADING LISTINGS

Sometimes, however, these other brokers have no one within their networks looking to buy. They simply advertise the yacht in the hope of reaching a previously unknown potential buyer before that buyer reaches your broker. The impression given to the world that these other brokers are acting under your instructions, as seller, when they’re only acting with your broker’s permission.

Indeed, with so much at stake, unscrupulous brokers might list your yacht for sale without even your broker’s permission – copying photos and plans regardless of copyright infringement. But a sales lead is a sales lead (assuming he or her has has been qualified as being a bone fide UHNWI which doesn’t always happen), and such unethical business practices are often overlooked.

One might have thought that having your yacht advertised far and wide is a good thing. It isn’t. For a start, it can smack of desperation leading to buyers holding back in the hope of a price drop. There will also be a lack of coordination if the asking price is amended. Further, involve too many parties – all expecting their share of the commission – and an otherwise viable deal can collapse, as chains of communications are stretched and rewards spread thinly and in an uncertain manner.

CENTRAL AGENCIES

When instructing your broker to sell your yacht, a Central Agency (CA) agreement is a must. Standard form agreements are available, but many of these are poorly drafted, so [contact us] to have this checked and amended.

The CA agreement makes it clear that your broker is in charge of the sale, and will be rewarded no matter who actually sells the vessel (including you – so make sure you have explored your own network first). Your CA can provide a valuation and a marketing plan, with which any brokers working with them must adhere to. They can also produce (at their or your expense depending on what you negotiate) marketing materials and arrange for a photoshoot and models.

If you see your yacht advertised with other brokerages, check to see that your CA has authorised them to list your yacht for sale. Unauthorised listings must be removed as soon as possible – before the content is indexed by search engines.

IDEAL SCENARIO

The signing of CAs are widely (and proudly) publicised within the large yacht sector, with press releases circulated on LinkedIn and some specialist media outlets. Ideally, buyers would check through these to make sure that they’re dealing with the CA, and negotiate directly with them.

REALITY CHECK

In reality, this rarely happens. Many buyers won’t even know what a CA is or does. They will see a yacht advertised and (not unreasonably) make inquires. As soon as they have done so, the advertiser will often have become what the law calls an “effective cause” and will be entitled to some of the commission. The added step causes delays (often there’s a mix of time zones and first languages) and, sharing the limited commission, the CA can be less incentivised to close the sale.

THE SOLUTION

The solution is surely to list as many CAs as possible, on the Club’s site. The CA agreements will need to be checked, prior to listing, by a lawyer. The key information contained in the agreements (i.e. the name of the vessel and its registered owner) is only that which is freely available to the public anyway. Contact details provided with each CA will be those of the individual broker, rather than simply the brokerage house.