Interesting Broker Discussion

[catalinajack]

I walked away from two boats after sea trials. This is something I would never do unless the entire purchase price was placed in escrow pending the sea trial. Not going happen.

Clearly it had to be hauled during hurricane season.

My issue with their approach is after sea trial you usually have the option of walking away from the deal completely. I did after a disastrous Seahorse 52 sea trial down in Fort Myers. With this arrangement if seems you will have bought it regardless of a major sea trial failure.

 

[bligh]

Clearly it had to be hauled during hurricane season.

I did after a disastrous Seahorse 52 sea trial down in Fort Myers..

Could you elaborate on that experience for us?

 

[Shrew]

The broker is not wrong. That is how SOME of them do it when you buy a boat in New England during the winter. They don't want to sell the boat in December, then finally get to sea trial it in April, then have the boat in the water with no seasonal slip and a buyer who walks away.

When they do this, they estimate the cost of a re-power and put that much money into escrow for negotiation purposes. Honestly, by the time the hull and systems survey is done, the seatrail is really only surveying the engine and any systems that can't be testing on the hard (A/C, raw water washdowns, engine/transmission, auto-pilot).

Alternatively, others will stipulate that if the buyer walks after sea trial, the buyer is responsible to have the boat re-hauled, re-winterized and shrinkwrapped.

 

[twistedtree]

I believe the Broker wanted the entire purchase price and closing done prior to seatrial... I have never heard of that in New England. Deposit and delayed seatrial, yes but that isn't what is happening here

So I went back and checked because the sale was almost 10 years ago, and my memory is... well, I forget.


Anyway, the deal was an inspection and survey while the boat was in winter storage (January), then closing the sale with a holdback in escrow until the boat could be launched and sea trialed in the spring. The buyer did that, and I received the full holdback.


This was new to me, but was proposed by the brokers who work in New England. Also keep in mind that it was a 2 year old boat with 160 hrs on it, so much less risk than an older boat.


If I were a buyer, I probably wouldn't close on the boat until there was a sea trial. But in this case as the seller, I was fine with it.


Anyway, I'm not recommending this approach, but it does happen, even if rare. And it doesn't seem at all applicable in this situation. I don't know why the seller doesn't want to launch the boat for a sea trial, other than convenience.

 

[twistedtree]

Are you saying you had a buyer who committed to buying before a sea trial without the option to walk away completely after sea trial?

Not only committed to buying, he bought it. Ownership transferred. And this wasn't my proposal either, it came from one or both brokers. But worth noting that this was a 2 year old boat with 160 hrs on it, so a very different risk profile. As a buyer I would never do it with an older boat.

 

[JLD]

I gotta think that the owner's are not seriously trying to sell the boat, at least not at this time!

Otherwise, why would you take a boat, and put in on the hard with no chance for someone to sea trial, in Florida were there are thousands of boats currently in the water?

If they were serious sellers they would have either made a change to their insurance or moved the boat elsewhere.

I'm thinking they finished the loop and really don't know if they want to sell their boat. I have heard that sometimes boat sales get stale after a while and it takes a reduction in price to move boats that have been on the market a while.

Jim

 

[PPandE]

We lived in Texas when shopping for our boat. We found that engaging a buyers broker in each territory was invaluable. I made it very clear to them what territory that comprised over a nice one on one lunch with each, that I bought. You also have to be very clear about what what your looking for.

George,
How did you find those broker candidates? I’ve got my eye on another boat in Beaufort, NC and would like representation. Anybody know a good broker there?

 

[O C Diver]

Honestly, by the time the hull and systems survey is done, the seatrail is really only surveying the engine and any systems that can't be testing on the hard (A/C, raw water washdowns, engine/transmission, auto-pilot).

No, a seatrial is a lot more than that. That's why they call it a Seatrial. This is the perspective owners chance to see how the boat handles seas and following seas. Whether it's responsive to the helm or a pig. How noisey it is at cruise; how bad does it vibrate on plane; how responsive is it in docking; how badly does it roll. While some of these characteristics can be surmised by a boater with years of experience in similar size vessels, for boaters moving up from small boats or crossing over from sailboats, this can also be the test drive.

Ted

 

[Blissboat]

If you don't believe anything interesting can happen during a sea trial, just ask my buddy who sold his 53' Hatteras Sportfish, subject to survey and sea trial. The survey went okay, turning up a list of fairly routine gripes. During the sea trial, soon after beginning a run at WOT, one of those sweet-sounding 12V71s decided to throw a piston.

 

[Baker]

No, a seatrial is a lot more than that. That's why they call it a Seatrial. This is the perspective owners chance to see how the boat handles seas and following seas. Whether it's responsive to the helm or a pig. How noisey it is at cruise; how bad does it vibrate on plane; how responsive is it in docking; how badly does it roll. While some of these characteristics can be surmised by a boater with years of experience in similar size vessels, for boaters moving up from small boats or crossing over from sailboats, this can also be the test drive.

Ted

Agreed. And sometimes if you want a planing boat, just how well does it plane and does it strain to stay on plane. I sometimes see very unrealistic performance numbers in listings. I'd like to see it in person to see how it performs. Also if the boat is overpropped...things like that.

 

[menzies]

Also very hard to test the auto pilot on the hard!

 

[mvweebles]

An acquaintance who was new to boats but desperate to buy a Bayliner 3288 asked me to accompany him on a sea trial. The boat had a pair of small Hino Diesels instead of the much more common gassers. Boat would not get up on plane. Owner had the bottom cleaned and everything of weight removed and we re-did the sea trial. It still barely got on plane but only with everyone blowing on the windshield (when I was a kid, my grandfather convinced me that would work). Buyer was so desperate for a diesel he bought it anyway. After getting his gear onboard, I suspect the second sea trial was the last time that boat did more than 8 kts

 

[Mystic Blue]

Jeff,
I'm looking for a 34 Mainship in Canada on the Great Lakes, if you see one for sale. Preferably hardtop. I am in Windsor. The 34' Mainship Trawler (14' beam) would also be considered. Sold my 2006 30' Mainship Rum Runner last fall.

 

[hollywood8118]

It's crap like this, hemorrhoids of the 'seller's market' we're experiencing, that have me rethinking buying another boat at all. I'm at the point (60-something), having owned 13 boats over the past 50 years, I thought I had one more boat left in me, and time left to use one more boat. But I'm not willing (nor can afford) to be ripped off. The bitterness of being screwed would leave a bad taste in my mouth and cloud the enjoyment of having a boat. I might just be hanging up boating a few years early.

The gravity-defying stock market and seller's market in boats is mind-boggling, given the slow-moving and burgeoning global recession we're in. Unfortunately, the pandemic will be with us for a few more years. Sadly, it will not 'all be over' with the first vaccine, for many reasons. I think the market *might* begin to cool down next year when the impacts on real estate start to ripple through. All the restaurants, bars, stores, and other small business closures will cause rental incomes to drop, which will hit the wallets of property owners. Likewise, all the companies that have discovered they don't need to keep all their employees in large offices in major cities will reduce commercial rents, impacting REITs. The decline in cash flow there *might* trickle through to boat owners and buyers, to the extent they're into real estate, all of which *might* cool the market a bit and bring it back down to reality, where you don't have brokers arrogantly telling buyers to 'take it or leave it' and 'buy a boat without a sea trial'.

But no one really knows. In the meantime, as much as I want a boat and might joke about needing a boat, the harsh reality is that it's a want and not a need.

I think I'll start looking for a kayak (but wait... they're hard to find these days too...)

So what your saying is you would rather sit on the beach and watch all the boats go by and not take a little risk?
Risk is what makes life worth living, I would rather take a risk of loosing a few bucks than not get to experience something I love.
Also, if people that are selling boats finally have a bit more leverage that is a pretty good thing if your selling.. normally sellers loose a lot on boats so a more even playing field is ok too.
HOLLYWOOD

 

[Moon]

Here is some free advice from a Florida Board Certified Admiralty and Maritime Law attorney. Never, ever purchase a vessel without a sea trial unless you are prepared to live with all of the problems a proper survey from a surveyor you select based on recommendations from people other than the selling broker. I wish I had a dollar for each time someone with serious buyer's remorse and huge yard bills contacted me for advice. I usually give them a brief free consult and tell them to put the money they might pay me towards the repairs that need to get done. Unless there is fraud you are going to be stuck with the purchase. Have I ever bought a boat without a survey or sea trial? Yes. The boat was either new or I knew the boat. These have been small boats with outboards like my skiff or a center console I bought as is where is because I was going to buy new outboards and rebuild the boat from the keel up. When I bought my Californian I had an engine survey and survey before I made an as is where is offer without a sea trial. I had already made arrangements to purchase new engines and transmissions for the boat. If my offer was accepted done deal. If not I was going to walk away and buy something else. My offer was accepted and I have owned that boat since 2002. Would I buy another large yacht without a sea trial... No. I have seen too many unhappy endings since I bought Moonstruck. A sea trial must be accomplished before you accept the vessel. I agree with my esteemed colleague that another bus will come down the road. The market is about to start cooling off again. It does that every fall. Other factors like the pandemic and slow economy will continue to pressure it downward. Use your head not your heart!

 

[PNK]

Mark, we had a similar experience 2 years ago, also in New England - South Dartmouth - with a boat on the hard. We signed a contract that included an escrow for the sea trial, but we had a 'buyer's broker', and he was the one who held the escrow, so we felt comfortable about it. We wound up not buying the boat because of some survey issues, prior to a sea trial, and we did get all our money back. Both our broker, and the surveyor we hired, also said we had the option to pay for putting the boat in the water for an immediate sea trial, if we didn't like the escrow idea, but of course that would have also made us responsible for taking it out again, which we weren't too keen about.
Since we were dealing with a lot of different selling brokers along the Northeast, having our own broker gave us a certain comfort level, but I know it's not for everyone, and we found some selling brokers who didn't want to work with us because they would have had to split their commission with our guy.
Good luck, as someone else said, there are a lot of boats out there.....

 

[HiDHo]

That's what the broker said.

If you like the boat, go look at it, and if it's the one, make an offer with closing after seatrial. Maybe offer a larger deposit. He's a broker not an owner. Write the offer and tell him to take it to the owner. Remind him it's his job to sell it to the owner if he wants the seller's and the buyer's commission.

Ted

The listing contract I have seen pay the broker an agreed commission, the broker works for the seller who is paying the commission. The broker is only required to deal ethical with buyers presenting all offers to the seller. Ideally all facts divulged, willing buyer and seller. I guess the broker could agree to split the commission with a buyers broker. Buyer brokers usually are paid by the buyer and work only for the buyer.
Sea trials, surveys, financing and deposits usually under time is of the essence and stipulated in the offer. That being a given nothing written into the purchase is off the table if the seller agrees to it.

 

[thataway]

The listing contract I have seen pay the broker an agreed commission, the broker works for the seller who is paying the commission. The broker is only required to deal ethical with buyers presenting all offers to the seller. Ideally all facts divulged, willing buyer and seller. I guess the broker could agree to split the commission with a buyers broker. Buyer brokers usually are paid by the buyer and work only for the buyer.
Sea trials, surveys, financing and deposits usually under time is of the essence and stipulated in the offer. That being a given nothing written into the purchase is off the table if the seller agrees to it.

I am not sure about the buyer's border paid by the buyer. I have utilized a buyer's broker on several occasions, and he was paid by the selling broker.

Here is a quote from Curtis Stokes' web site:

With our buyer brokerage service, you save money because Curtis Stokes & Associates are compensated for our work on your behalf by the seller or listing broker and we don’t charge any travel or inspection expenses. You save time because we research, preview and provide feedback and photos on all yachts you consider before you travel extensively to visit each yacht for a personal inspection.

A few years ago Curtis spent a week with us looking at Defever 49's all thru the South. He knew I had a moisture meter, a bore scope and a phenolic hammer in my "bag of tricks", and was a very discerning buyer. We did not find a single boat which I would have purchased. The understanding he would be paid if we bought a boat. As it was we bought him and his wife, several lunches etc...but no fee. I did refer others to him where there were sales. This was when Curtis was just starting his brokerage.

 

[AlaskaProf]

Jeff F - yes, that's the sense I get with this market right now.
I will keep shopping and it may take awhile. As Shakespeare aptly stated, "now is the winter of our discontent" with no boat.

Damn! Great boat name: " Sun of York. "

Come to think, "Glorious Summer" ain't bad either.

 

[Bobby Lex]

Would a lender even consider financing this type of a deal? They would want to be certain that their collateral (the vessel) is worth the amount they are lending. But they are expected to hand over a check before that could be conclusively determined (by a sea trial). What loan officer would put his job on the line by signing off on a loan that risky? Seems to me that the pool of prospective buyers shrinks substantially when it is limited to cash-only buyers.

 

[smitty477]

Would a lender even consider financing this type of a deal? They would want to be certain that their collateral (the vessel) is worth the amount they are lending. But they are expected to hand over a check before that could be conclusively determined (by a sea trial). What loan officer would put his job on the line by signing off on a loan that risky? Seems to me that the pool of prospective buyers shrinks substantially when it is limited to cash-only buyers.

They could get a survey on the hard without a sea trail that will satisfy the loan requirements if they wanted.

 

[exmaggiedrum]

Hot markets

It's funny how some brokers can become pure a-holes with the market is tight and things are selling fast. The attitude is "I've got other buyers lined up so take it or leave it". We were half packed up and planned to actually sell our house in WA and then go to NM to buy a house while renting temporarily. Not everyone would want to do that.


It was a semi-hot market but we had been looking online for over a year and had made a long trip down there to personally check out the area and houses on the market. Prices were going up but new ones going on the market every week and some deals were to be had if you were ready with cash and a loan approval and ready to make an offer in one week. We thought this was very doable. We got a broker who was very easy to work with and patient knowing our situation.


Then Covid hit. Houses are going sight unseen but people trying to escape the cities (with money evidently no object). Prices are sky-rocketing. And guess what - brokers have become very unpleasant. Not all but the one we were "working" with. This will all change when the market cools off (and it always will at some point).


We called off the move. This is not an option for anyone wanting a boat now but you have to understand what you might be getting into. Also, not allowing a seatrial in Florida until November seems like a very smart decision, not only for insurance. Planning to go see a boat becomes a roll of the dice. A rider on insurance can not only be monstrous expensive, if available at all, and there will be some hefty deductibles. Many insurance companies will not cover any boat at all during hurricane season, at least on the water. Some will of course or boating in Florida would be pretty hard.



In any case, someone will have to pay for the insurance and someone will be liable for the deductibles and lawyers and hassles of making a claim. Trust me, you don't want to do that if you don't have to.



If it were me, I would wait until November (at least with this boat), and, like other commenters would never close before a sea trial. The whole escrow thing is stupid. How much would the escrow be - the entire value of the offer?


In hot markets some will go ahead and go for it. You'll have to decide if you want a boat that you can't take out until November to use anyway.

 

[Nick14]

So what your saying is you would rather sit on the beach and watch all the boats go by and not take a little risk?
Risk is what makes life worth living, I would rather take a risk of loosing a few bucks than not get to experience something I love.
Also, if people that are selling boats finally have a bit more leverage that is a pretty good thing if your selling.. normally sellers loose a lot on boats so a more even playing field is ok too.
HOLLYWOOD

It's not 'taking a little risk' that bothers me. It's the combination of dealing with arrogant 'take it or leave it' attitudes in a hot market, plus inflated prices (sometimes grossly so), plus having wasted a hell of a lot of time traveling long distances to see boats that were described as 'perfect', 'better than new', or 'absolutely flawless' only to discover within minutes of getting there that it's a project that needs well into six figures of work, plus yards that never bother to respond to my calls about work a particular boat will need that I'm willing to do if I could find someone to do it, plus spending entire days driving hundreds of miles to see a boat only to be told when I arrive that 'there's an accepted offer but you're welcome to look at it anyway', etc.

After 13 boats over 50 years, I know all too well that every boat entails risk. Even brand new ones. But at this point in my life, after having put up with a lot of headaches, hassles, and general nuisances and pains in my career, I'd like to minimize them in the limited time I have left in my retirement. If it was only a matter of paying 10% more than a boat would otherwise be worth that's a no-brainer to me and I'm happy to do it. But my limited remaining time is more valuable to me than anything else.

 

[Bryant]

Broker discussion

Thank the Broker kindly for his time, hang up the phone and run. Find another boat and a different broker. Never buy a boat that can't be sea trialed first.

 

[caltexflanc]

George,
How did you find those broker candidates? I’ve got my eye on another boat in Beaufort, NC and would like representation. Anybody know a good broker there?

I used Clark Snead of Bluewater Yacht Sales out of Beaufort/Wrightsville Beach when I bought my old Hatteras and he did a great job. The boat I bought was actually in Baltimore. He now usually deals in very high end boats, but is a good guy, if he can't take the job will likely be able to recommend someone. These are the last numbers I have for him,

252-728-2645 • Work
919-669-1304 • Mobile

Avoid United Yacht Sales around here.

 

[Hippocampus]

So I’ve been sailing for over 30 years. Bought/sold 8 boats in the 30-50’ range. Last 5 blue water boats. All grp but very varied including one offs, converted race boats, hi tech, and traditional designs. Through friends have done time on trawlers but otherwise clueless. Wife says she’s done with passage making and wants to be just one flight from home. She done with prolonged off grid living. Done with sails. So we’re actively looking.
Friendly with a broker who helped us when spec’d our last build. Known him 7 years now and he helped sell our last boat at just about ask on the first showing. But most of his business is sail aimed at international voyaging. He also sells Zeelanders and picnic boats but he’s not a trawler expert.
Need advice.
Am I better off using him as a buyer’s broker or pay the $5k to Steve to walk us through the selection and the deal or someone out of Jeff Merrill, Denison or Curtis Stokes ? Feel I know boats as been doing it for 35+ years including being a silent partner in LLC which built them. But also know it’s important to know what you don’t know and I’m a newbie to power. Please help me clarify my thinking as you guys know trawlers.

 

[O C Diver]

While I haven't used a buyer's broker, I would assume that if you need help with determining the differences between brands and models, you would want someone familiar with trawlers. If you only need a negotiator, then maybe familiarity with trawlers isn't that important. If paying for service, I would want someone that could tell me the differences between makes and models to help me choose and justify the price.

Ted

 

[mvweebles]

So I’ve been sailing for over 30 years. Bought/sold 8 boats in the 30-50’ range. Last 5 blue water boats. All grp but very varied including one offs, converted race boats, hi tech, and traditional designs. Through friends have done time on trawlers but otherwise clueless. Wife says she’s done with passage making and wants to be just one flight from home. She done with prolonged off grid living. Done with sails. So we’re actively looking.
Friendly with a broker who helped us when spec’d our last build. Known him 7 years now and he helped sell our last boat at just about ask on the first showing. But most of his business is sail aimed at international voyaging. He also sells Zeelanders and picnic boats but he’s not a trawler expert.
Need advice.
Am I better off using him as a buyer’s broker or pay the $5k to Steve to walk us through the selection and the deal or someone out of Jeff Merrill, Denison or Curtis Stokes ? Feel I know boats as been doing it for 35+ years including being a silent partner in LLC which built them. But also know it’s important to know what you don’t know and I’m a newbie to power. Please help me clarify my thinking as you guys know trawlers.

I am a skeptic of "Buyers Broker." I just don't understand how someone can make a living and still stay abreast of the market. I totally get developing a relationship with a broker who is patient with what can be a lengthy sales cycle.

Hippo: I suspect that until you narrow your criteria a bit, there is no one who can help you except to get you on more boats, which is obviously difficult right now. You were recently enamored with a Gerr design shoal draft boat, and also a N40. While not exactly opposite ends of the spectrum, they are not close either.

My sense is that if you have a specific model or two in mind, someone like Jeff Merrill can help you find the right example and help set your expectations on price and equipment. Someone like Jeff can listen to you and perhaps suggest alternatives to what you've suggested, but it might be frustrating if you're still widely considering many boats. From there, my sense is someone like Steve D can help you survey the boat, but mostly advise on how to equip and upgrade to your specific needs and requirements. He's obviously also extremely knowledgeable on validating in stations, a legacy of his years as yard manager at Zimmerman Marine.

It could be a stretch, but I think you might be a bit early in your process to actually hire an adviser.

Regardless of what path you chose, thanks for being so candid on the forum. I've enjoyed your posts and the benefit of your past offshore sailing experience.

Peter

 

[menzies]

I am a skeptic of "Buyers Broker." I just don't understand how someone can make a living and still stay abreast of the market. I totally get developing a relationship with a broker who is patient with what can be a lengthy sales cycle.

Peter

Peter, a buyer's broker is not just a full time buyer's broker. He/she is a full service broker that you employ to represent you as a buyer.

The only difference is that they cannot (should not) represent a seller.

It can get tricky if the broker gets a boat to sell that you are interested in. Then he becomes the selling broker and needs to represent the seller not you. You can still work through him and he gets both ends, but he is not working as a buyer's broker.

 

[mvweebles]

Peter, a buyer's broker is not just a full time buyer's broker. He/she is a full service broker that you employ to represent you as a buyer.

The only difference is that they cannot (should not) represent a seller.

It can get tricky if the broker gets a boat to sell that you are interested in. Then he becomes the selling broker and needs to represent the seller not you. You can still work through him and he gets both ends, but he is not working as a buyer's broker.

So the Buyers Broker gets paid direct, and does not collect on the normal 10% fee? The fee goes 100% to the listing broker?

I dunno. I don't buy or sell a lot of property - certainly not boats (I've owned mine for 22+ years). My sense is there are brokers who lean more towards listing and those who lean more towards buyers. But they are both brokers, just with a slightly different way of making money. Maybe I just don't understand, but whenever the term "Buyers Broker" gets used, I conjure a paid advocate who has a fiduciary obligation to the buyers interest. While I'm not suggesting vast majority of brokers are anything other than legit, I suspect they adhere to a professional code of ethics that does not differentiate between a buyer and a seller.

To be clear, I have no bone to pick with Brokers - I find they are overwhelmingly honest and provide a good service for their fee. If I were to sell my boat, I would definitely use a broker and pay the fee.

So the reason I'm skeptical is I think a so-called Buyers Broker really boils down to a broker who is willing to spend time with a buyer vs just shown them whatever inventory they happen to have. Especially in the Trawler world, this is fairly common.

Peter