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Old 09-12-2022, 09:45 PM   #1
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Buying a boat without a broker

I am aware of the basic evolution of a yacht transaction but wanted to see if anyone had any useful tips from experience after having bought a boat without a broker, whether or not the seller used a broker.

I am planning to find a boat, do an initial viewing, and make an offer, conditional on survey. I will expect to use a Purchase & Sales Agreement of some sort. If no broker at all, then I expect we would find a closing agent to hold the deposit in escrow.

Is it reasonable to ďtake off 5-6%Ē from the listing price due to the absence of the buyerís broker and associated commission?

I am aware I need to pay for the haulout, hull surveyor and engine surveyor. Does the buyer pay for fuel too?

If the boat has pods, Iíd like to get drive unit (gear) oil samples which would need to be done when out of the water. Is this normally done and expected?

With the engine oil samples, what if they have just changed the oil? Will it appear in good condition and mask a problem?

Anything else? Thanks so much.
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Old 09-12-2022, 10:43 PM   #2
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Quote:
Originally Posted by Benjay View Post
I am aware of the basic evolution of a yacht transaction but wanted to see if anyone had any useful tips from experience after having bought a boat without a broker, whether or not the seller used a broker.

I am planning to find a boat, do an initial viewing, and make an offer, conditional on survey. I will expect to use a Purchase & Sales Agreement of some sort. If no broker at all, then I expect we would find a closing agent to hold the deposit in escrow.

Is it reasonable to ďtake off 5-6%Ē from the listing price due to the absence of the buyerís broker and associated commission?

I am aware I need to pay for the haulout, hull surveyor and engine surveyor. Does the buyer pay for fuel too?

If the boat has pods, Iíd like to get drive unit (gear) oil samples which would need to be done when out of the water. Is this normally done and expected?

With the engine oil samples, what if they have just changed the oil? Will it appear in good condition and mask a problem?

Anything else? Thanks so much.
Welcome aboard. It depends on how badly you want the boat as to what offer you make.

The seller has always had fuel in the boat when we did a sea trial.

I personally wouldnít buy a boat with pods, too much maintenance and complexity.

An oli sample with new oil is a waste of time.
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Old 09-13-2022, 05:26 AM   #3
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Spoiler alert: I'm a broker.

By some of your questions it sounds like you need a broker. I agree with the answer on recent oil change not being worth the test. However, are you willing to perhaps sacrifice useful information because some guy on the internet says not to do it? Or are you going to consider the advice and opinions of a broker who has presumably attended hundreds if not dozens of surveys and whose livelihood depends on those opinions

The Listing Broker usually gets the full 10% whether or not s/he sells through a Selling Broker or sells to his own client. If an individual broker cuts his commission because there isn't another broker, then consider yourself either lucky or you are dealing with a desperate broker. Most brokerage houses do not allow for cut commissions. So to save a point or two and eliminate a large selection of potential vessels seems penny-wise but dollar foolish.
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Old 09-13-2022, 06:50 AM   #4
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In my opinion, during sea trial, seller is responsible for all boat operational costs and responsibilities. That includes fuel, but frankly, I want them to provide a captain - if the engines overheat during 5-10 min run at WOT, I don't want any question on liability.

As far as saving a few points on a FSBO sale, I have seen the opposite. I have moderated the Willard Boat Owners group for 25 years. I've seen quite a few boats get informally offered with the inducement that saved commission will be shared. Many go to open market and are listed at or below the 'special offer' price meaning the FSBO price was too high. That said, best i can tell, many of the FSBO boats offered on the TF classifieds appear to be fairly priced. One recent example was offered at $125k, went to market at $135k and sold immediately. If I were in the market, I'd certainly consider a FSBO from a knowledgeable member despite my general aversion to FSBO transactions.

There are many people who will argue forcefully that brokers do nothing except list on yachtworld and wait for a buyer - not a lot of work for the money. My best friend from high school and I argue this on real estate - he's a diehard FSBO guy, I'm a diehard broker guy, partially because watching him sell stuff makes me cringe. But we do agree on one thing: if a broker doesn't show value, they have no place in the transaction. I just believe a good broker provides knowledge, leadership, and experience that results in a better result in more ways than just highest profit.

In short, in my opinion, FSBO sellers are sometimes greedy and overprice their asset. 5%-10% savings on an overpriced item is no bargain. I also hate viewing a boat (or home) when the owner is around and therefore avoid FSBO listings. No idea if I'm an outlier or this is common. Yet another way a FSBO seller inadvertently misses the market.

Assuming you are looking at a larger boat 35 foot or larger, more or less), you will need a team to successfully complete the transaction. Surveyor, mechanic, maybe a lawyer and an accountant, and a broker to at least assist with the transaction details (though they can do much more).

There are good and bad actors in any profession.

Peter
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Old 09-13-2022, 08:04 AM   #5
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I recently (2020) sold my Albin without a broker and the buyer didnít use one either. I kind of came on quickly via the Albin owners group.
This guy said he couldnít find a 40 Albin and a friend of mine saw the thread and said ď I know a guy who might be ready to sellĒ.
We emailed several times, during the winter I sent a lot of pictures and the oil sample results I took just before winter layup in Ct.
I was in Florida, he was upstate NY so I told him when we would be there in May to get it ready and launch so he made plans to come to the boatyard in Ct when we were there. I had just finished bottom painting so he and his wife got to inspect the hull and running gear., etc.
I told him what I would sell it for and I offered a 6 hour sea trial the next day as we ran the boat to our summer slip if he was still interested
Next day we launched but the trip was a no go due to weather. So since we were tied up I showed him everything, ran every system we could to show all functioned properly including the genset.
Next day we ran to Mystic with them aboard. Used all the electronics, ran up to wot, watched gages etc.
Once in the slip I wrote a very simple contract, we shook hands, he wrote a check and it was a done deal except for the in slip survey he wanted which went well 2 weeks later.
We were both happy with the deal.
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Old 09-13-2022, 08:15 AM   #6
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This doesn't make a ton of sense. The seller lists the boat with a broker. The buyer calls the broker and works out a deal. The appropriate question would be around SELLING a boat without a broker.

What you're describing is buying a boat without a Buyer's Broker, which is amazingly common. I've never bought a house or a boat with a 'Buyers' Broker'. You don't have any control over whether the seller has a broker. Honestly, a boat being listed without a broker isn't all that common.

If the boat is listed with a broker, the brokers commission is between the seller and the broker. The broker takes their fees from the sellers end, not your end.

You will never, ever, ever get a listing broker to agree to split his commission with a buyer in the absence of a buying broker. That is a courtesy amongst brokers which will not be extended to you.
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Old 09-13-2022, 08:23 AM   #7
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Originally Posted by jleonard View Post
I recently (2020) sold my Albin without a broker and the buyer didnít use one either. I kind of came on quickly via the Albin owners group.
This guy said he couldnít find a 40 Albin and a friend of mine saw the thread and said ď I know a guy who might be ready to sellĒ.
We emailed several times, during the winter I sent a lot of pictures and the oil sample results I took just before winter layup in Ct.
I was in Florida, he was upstate NY so I told him when we would be there in May to get it ready and launch so he made plans to come to the boatyard in Ct when we were there. I had just finished bottom painting so he and his wife got to inspect the hull and running gear., etc.
I told him what I would sell it for and I offered a 6 hour sea trial the next day as we ran the boat to our summer slip if he was still interested
Next day we launched but the trip was a no go due to weather. So since we were tied up I showed him everything, ran every system we could to show all functioned properly including the genset.
Next day we ran to Mystic with them aboard. Used all the electronics, ran up to wot, watched gages etc.
Once in the slip I wrote a very simple contract, we shook hands, he wrote a check and it was a done deal except for the in slip survey he wanted which went well 2 weeks later.
We were both happy with the deal.
That sounds like a really great transaction for all.
Similarly, we have bought and sold boats without brokers and with brokers with no significant differences between the two.
There were some problems with brokers and without depending upon the exact parties involved at the time.
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Old 09-13-2022, 08:23 AM   #8
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As for the process without a broker on either the buyer's or seller's side......

Both parties would be wise to hire someone to escrow the deposit, pay-off funds and the title.

It protects both sides.

As a seller I would never take a personal check, cashiers check or certified check. I would take cash or a wire transfer only.

As a buyer I would not hand over cash, wire transfer, bank check/cashiers, or certified check without the title in hand.

In this we have a stand-off. This is where an Title and Escrow company come in. They hold the deposit under the conditions of the P&S. They hold the title under the conditions of the P&S. They take the wire money and confirm it cleared into their escrow account. They deliver the title to the buyer and release the funds to the seller.

I once had a house purchase fall through. The seller failed to meet the Time and Date terms of the closing on the P&S. A few hours later, they wanted to close, however I already had an accepted offer on a different house. The selling broker insisted that we would forfeit our deposit (10%). The Title and Escrow company laughed at this and assured me I was getting my deposit back. I got my money back in my account via wire the next morning.
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Old 09-13-2022, 09:14 AM   #9
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Having gone through this process recently, if you do not plan on hiring a buyer's broker then be very suspicious of what the sellers broker tells you. The seller provides the boat, and it is up to you to find its faults if any. Price reductions would be appropriate after surveys and sea trials if issues are found. Look and test everything possible, including bilges. Good luck!
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Old 09-13-2022, 09:45 AM   #10
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The advantage of a non broker sale in Louisiana that the buyers pays no sales tax which in our fine state can be 10% !
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Old 09-13-2022, 10:32 AM   #11
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Having gone through this process recently, if you do not plan on hiring a buyer's broker then be very suspicious of what the sellers broker tells you. The seller provides the boat, and it is up to you to find its faults if any. Price reductions would be appropriate after surveys and sea trials if issues are found. Look and test everything possible, including bilges. Good luck!
Agreed. The listing broker has the fiduciary responsibility to the seller, not the buyer. The listing broker is the Sellers agent, not yours. That being said, the listing broker is typically bound by ethics and in many cases state laws.

However, I would take anything said by the listing broker as nothing more than a 'sales pitch'.
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Old 09-13-2022, 10:55 AM   #12
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Originally Posted by Benjay View Post
I am aware of the basic evolution of a yacht transaction but wanted to see if anyone had any useful tips from experience after having bought a boat without a broker, whether or not the seller used a broker.

I am planning to find a boat, do an initial viewing, and make an offer, conditional on survey. I will expect to use a Purchase & Sales Agreement of some sort. If no broker at all, then I expect we would find a closing agent to hold the deposit in escrow. You're on the right track so far!

Is it reasonable to “take off 5-6%” from the listing price due to the absence of the buyer’s broker and associated commission? The is worth what you are willing to pay for it. If the FSBO boat is priced to sell, in a seller's market, consider a full price offer. If you feel it is priced too high for the market, make a commiserate offer, lower than asking price.

I am aware I need to pay for the haulout, hull surveyor and engine surveyor. Does the buyer pay for fuel too? The seller provides the fuel for sea trial. If the tanks are much more than 1/4 full, I would make a note in the P&S agreement that the offer is for the boat with XXX gallons of fuel in it. Especially with today's fuel prices, it can make a significant difference. For instance our boat holds 2000 gallons, which is over $10k. It is not unheard of for someone to remove much of the fuel from the seller's boat prior to turning it over to the buyer. (yes, I'm speaking from personal experience).

Additionally, unless specifically listed as going with the boat in the ad, in the P&S agreement, under description of the boat, I would also list any specific items that the broker or seller verbally stated was included in the sale, specifically, dingy and engine. Items bolted to the boat at time of viewing are generally considered to be included in the sale, but it doesn't hurt to list them anyway. Some other items you may want to clarify whether they are included or not may be dehumidifiers, portable heaters, spare anchors, fenders/mooring lines, tools and/or spares present on the boat, bedding, dishes, scuba or fishing equipment, etc. It all adds up, and you'd be surprised what this stuff costs/adds to the price of you new boat, especially if you don't already have it from another boat . . . Sometimes they convey, sometimes not, but it's best to clarify prior to making an offer. If they say it conveys, LIST IT!

If the boat has pods, I’d like to get drive unit (gear) oil samples which would need to be done when out of the water. Is this normally done and expected? Yes, and recommended.

With the engine oil samples, what if they have just changed the oil? Will it appear in good condition and mask a problem? Definitely won't show a "true" representation of the engine/transmission, but I'd sample anyway, AFTER the sea trial, and if the samples come back with ANY DISCREPANCIES WHATSOEVER, then further investigation is needed.

Anything else? Thanks so much.
If you someone who has/had a similar boat, consider asking them to go with you for a thorough inspection of the boat, either before or after the initial showing, and possibly after accepted P&S, but DEFINITELY prior to official survey. Very possibly that walk thru will save you the cost of a professional survey/haulout. If the seller/broker doesn't want to give you the time for a thorough, personal inspection prior to survey, find another boat, and another broker. JMHO
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Old 09-13-2022, 12:45 PM   #13
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Itís a big mistake painting all brokers with the same brush regardless of which party they represent. It doesnít take a lot of sleuthing or research to ID the really good brokers. Nobody has mentioned that good knowledgeable brokers depend a lot on return clients and if they misrepresent or screw a boat seller or buyer they are burning several bridges, ie, return business and reputation on the talkative waterfront. Good long standing brokerage houses that have a number of brokers normally only take onboard quality people as the business is only as good as their staff. Harbors, YCís and various boating associations are never shy about trying to keep brokers aboveboard. The sleazy operators usually donít last long and rarely work in the better brokerages. There are always exceptions of course but your surveyor is the best medicine. If you have known the boat or owner for some time and are assured the vessel meets your needs, is sound and your emotions are in check and you can cover the contractural and legal hurdles it may be okay to proceed by yourself but personally I donít think itís smart.
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Old 09-13-2022, 01:06 PM   #14
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Itís a big mistake painting all brokers with the same brush ...... Nobody has mentioned that good knowledgeable brokers depend a lot on return clients.
Good point. I would not be surprised if longtime brokers often sell the same boat several times over a 20-year career, especially those who specialize in some niche. Further, I wouldn't be surprised to learn that those types of brokers know more about the boat than any of the folks who owned the boat.

There are several places a boat deal can fall apart and both buyer and seller can get pretty dang jittery. A good broker has the experience to keep a deal moving in a knowledgeable and professional manner. Like everything else in life, some are better than others, and you have to be reasonable and realistic in expectations. A good broker performs a valuable service.

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Old 09-13-2022, 01:18 PM   #15
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I bought my trawler with no broker involved on either side. There was no escrow - I handed a cashiers check over and the seller handed the notarized title to me at the same time. It depends a great deal on the trust you have, or have developed, with the seller.

I'd heartily agree that you must remember that the seller's broker owes you nothing, including the truth.

As far as not having the owner on board during inspection and/or trial - I don't understand any objection to that. The owner will know much more about the boat than the average - or even good - broker. Furthermore, there is a LOT that can be learned from the owner's attitude, care, and knowledge of the boat even without him saying a word.
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Old 09-13-2022, 02:01 PM   #16
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As far as not having the owner on board during inspection and/or trial - I don't understand any objection to that. The owner will know much more about the boat than the average - or even good - broker. Furthermore, there is a LOT that can be learned from the owner's attitude, care, and knowledge of the boat even without him saying a word.
Great observation having the owner in attendance is a great aid and source of intuitive knowledge through his or her mannerisms and history. Defensive sellers are quite often hiding something be it actual known condition or real lack of how things work or donít. For a surveyor it starts by boarding a vessel crammed full of gear and whatever requiring lost time and physical effort emptying lockers, batteries removed when layed up, hot engines starting sea trails, etc.. Understand a surveyor can never inspect or test everything not in the given time and interference limitations. Surveying is non-destructive so system components and parts concealed by ceiling or panels is just not doable.

Iíve had a survey where the owner proclaimed his motorsailer was cared for by Lido Isle Yacht Yard yearly ( high quality expensive work ) which was quite impressive. I called the yard foreman next day to find he only hauled twice both for a clean and bottom paint ? Another New Zealand built offshore cruiser where I tested the pressure water system and it ran fine through two or three test ops. The owner stepped up to say if you run it longer it will shut down and not start for a while. Iíd have never caught it. And a 65í Swan offshore cruising racing sloop with nothing more than a spreader light problem and a halyard sheave pin at the masthead. Everybody sets down to sign papers on a 1.3 million dollar sale when the buyer wants to open a bottle of champagne he found in the liquor locker to celebrate. The owner immediately tells the buyer no way Iím not letting you have my special bottle. The two gentleman got into a pissing match and the seller walked away from the deal. I though the broker was going to have a heart attack

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Old 09-13-2022, 03:00 PM   #17
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I bought my trawler with no broker involved on either side. There was no escrow - I handed a cashiers check over and the seller handed the notarized title to me at the same time. It depends a great deal on the trust you have, or have developed, with the seller.
That would be fine if I knew the seller or buyer well enough to trust their cashiers check or title. In most cases you don't have enough time to establish the level of trust, with a strangers, that is necessary to risk 10's or hundreds of thousands of dollars.

The best grifters make you feel the most comfortable.

While someone can post that they've had an example of a positive experience with no third party escrow, that shouldn't make it the rule.
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Old 09-13-2022, 03:36 PM   #18
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As I said, "It depends a great deal on the trust you have, or have developed, with the seller. " I did not know the seller to begin with in this case, and it was on the other side of the country. However in two visits - once to inspect, once to buy - we developed enough trust in each other that is was not in the least stressful. As a documented vessel, I paid the $25 for a title search with the CG, he accompanied me to the bank to see the cashiers check drawn, we both then went to a UPS store counter (closest place with a notary) and the deal was done standing there. Several hundred thousand. I would not recommend this, but it is an example proving that it can work.

I've had much more stressful transactions with brokers involved, now you have three opportunities for shadiness: the seller, and two brokers. If you think having a broker will guarantee a clean deal, you haven't done many.
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Old 09-13-2022, 04:40 PM   #19
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When we began our search about 5 years ago I enlisted the assistance of an experienced captain who offered services including boater education, training, delivery services, etc. I paid him (hourly basis) as an advisor to help us with everything during the process including selecting the best boat for us (this took a long time), walking us through everything needed for the contract, surveys, 3rd party escrow/documentation services and transportation. We ended up purchasing from a private party with no brokers involved on either side. The seller agreed to split the cost of the 3rd party escrow services as it protected both of us. This worked well for us and I would do it this way again. The ultimate cost of the "advisor" was less than 1% of the purchase price and we stayed very involved with the process which we liked. It was certainly a learning experience!
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Old 09-13-2022, 05:57 PM   #20
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That would be fine if I knew the seller or buyer well enough to trust their cashiers check or title. In most cases you don't have enough time to establish the level of trust, with a strangers, that is necessary to risk 10's or hundreds of thousands of dollars.

The best grifters make you feel the most comfortable.

While someone can post that they've had an example of a positive experience with no third party escrow, that shouldn't make it the rule.
You can go to the bank together when the cashier's check is drawn up so you know its authentic. You could alternately do a wire transfer.

What exactly does an escrow agent do to authenticate a title?
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