The owner is the client, not the buyer
Burgess director and sales broker, Rupert Nelson speaks of something he believes gets “lost in translation”.…
“We work for the guy who pays the commission and that’s the owner,” Rupert Nelson warned during the 2017 MYBA Charter Show in Barcelona. He believes the duty of care shown to buyers by brokers would evidence an element of confusion as to who the broker is actually representing.
“Every broker at this show is trying to sell a wonderful boat or holiday for a client,” he continued. “But their client isn’t the charterer or the buyer, it’s the owner of the boat. They’re promoting the boat for him and the commission they’ll receive is how they’re being rewarded by him.”
It’s an interesting avowal of realism put forth by Nelson. Much is said of keeping our current owners happy, thus must our efforts be cut for their benefit.
“If a buyer calls you up and says ‘I want to buy a boat’, he’s your client, of course he is, but he’s not paying you. When you show him a lovely yacht with a navy hull and say it’s a quality piece of merchandise and it’s priced at €9.9 million, but because his mate told him it’s only worth €5 million he wants to do a deal at €5 million, it’s tempting.
“But you say, ‘No sir, it’s worth €9.9 million and let me tell you why: it’s just been painted, it’s of a good pedigree, it’s well maintained and it’s never been chartered’. You need to kill the only point he’s made, which is that it’s worth €5 million. ‘It isn’t priced at €5 million, sir, it’s €9.9 million.’ Talk him up, do your job.”
Failing this, and while being watchful that you don’t lose the buyer, this is when you approach the next, more appropriately priced boat. “Now this boat hasn’t been painted, it’s been chartered and it’s worth €5 million. That’s your budget.’ They might say, ‘Well, I wouldn’t pay €3 million for that’.”
But you must try to sell an owner’s boat, not your buyer’s boat, Nelson says. “You’re an honest man if you can stand up to a buyer and say, ‘I don’t work for you sir, I work for the owner, so I’m trying to talk the boat up, but don’t get me wrong, I have integrity, and I’m not going to sell you a clunker that I know is no good.
“If I sell you a clunker, how am I going to look when you call me in a few weeks’ time asking me to sell it for you? I can’t turn around to you and say, ‘Look, I know you paid €5 million, but now I’m not sure we could sell it for €2 million.”
Serving our current owners is unquestionably for the betterment of the industry. It’s of great harm to the brokerage market if brokers do not at least aim to achieve the best sales price for the yacht.
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