Interesting Broker Discussion

[Mark P]

I called a broker in middle Florida yesterday to discuss a couple of listings he had of the type of boat we are looking for. The discussion went pretty much like this:


Me: Hello, Mr. Broker, I am Mark P and looking to purchase boats very similar to the two you have listed, weather discuss ensued, and other dock talk....blah, blah, blah. Could you tell me a bit more about them?
Broker: We'll first of all, one of them just sold in 3 days for near asking price, so she's off the market, good boat.
Me: Sounds great, market must be pretty good.
Broker: Hottest market I have ever seen.
Me:, okay so on the other boat, I am still interested in that one, and would like to come look at it. I notice that it is on the "hard", can you tell me why, describe boat a bit more, when can we schedule a look at blah, blah, and blah.
Broker: Okay, so let's get clear on this boat, this boat is going to be inspected on the hard, surveyed on the hard, and closed on the hard. We'll negotiate an escrow for sea trial. We close, conduct sea trial in a couple of months when we can get her in the water (November), and we'll negotiate how much if any of it you may get back of the escrow based on the trial.
Me: That sounds a bit unusual to close before sea trial, isn't it?
Broker: Look, I am from New England, we do that all the time up there - that process is just not well known down here.
Me: Mr. Broker, thank you, we'll be in touch if we are interested.



Okay, gang, so I have no idea whether the Broker is right, or whether, he was blowing smoke. What say you?

 

[menzies]

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.

 

[rgano]

ME: Good bye and good luck finding a sucker who would do that!

 

[Blissboat]

It's actually good to experience your first look at a prospective new boat while she's up on the hard, and if everything looks good, even negotiate price while she's still high and dry. But to close the deal without getting anything wet? Nope.

If you're boat shopping amidst the dark, miserable depths of a New England winter, I get it about deferring the launch 'til the weather breaks. That's why the whole boating industry up north slows down a bit during the winter. Maybe that's why this broker moved to Florida, where he may still have a thing or two to learn about how the industry works "down here," as he unselfconsciously put it.

ME: "Call me when it's ready to splash. If I'm still looking by then, we can talk."

 

[PPandE]

Is this a scenario in which you should have a broker working for you as a buyer’s agent? I’m struggling with that because I’m an out of town buyer and can’t put my own eyes on a boat before making an offer. In no case would I close on a boat before sea trial unless it was so dirt cheap that I couldn’t get hurt in a worst case scenario.

 

[caltexflanc]

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.

 

[JLD]

I called a broker in middle Florida yesterday to discuss a couple of listings he had of the type of boat we are looking for. The discussion went pretty much like this:


Me: Hello, Mr. Broker, I am Mark P and looking to purchase boats very similar to the two you have listed, weather discuss ensued, and other dock talk....blah, blah, blah. Could you tell me a bit more about them?
Broker: We'll first of all, one of them just sold in 3 days for near asking price, so she's off the market, good boat.
Me: Sounds great, market must be pretty good.
Broker: Hottest market I have ever seen.
Me:, okay so on the other boat, I am still interested in that one, and would like to come look at it. I notice that it is on the "hard", can you tell me why, describe boat a bit more, when can we schedule a look at blah, blah, and blah.
Broker: Okay, so let's get clear on this boat, this boat is going to be inspected on the hard, surveyed on the hard, and closed on the hard. We'll negotiate an escrow for sea trial. We close, conduct sea trial in a couple of months when we can get her in the water (November), and we'll negotiate how much if any of it you may get back of the escrow based on the trial.
Me: That sounds a bit unusual to close before sea trial, isn't it?
Broker: Look, I am from New England, we do that all the time up there - that process is just not well known down here.
Me: Mr. Broker, thank you, we'll be in touch if we are interested.



Okay, gang, so I have no idea whether the Broker is right, or whether, he was blowing smoke. What say you?

I don't understand why the boat cannot be sea trialed before November?

I understand that in New England in the Winter and maybe in the early Spring, that a boat might not be able to put into the water until the weather cooperates.

Why would you not be able to put a boat in the water, in Florida, in the Summer?

Jim

 

[menzies]

I don't understand why the boat cannot be sea trialed before November?

I understand that in New England in the Winter and maybe in the early Spring, that a boat might not be able to put into the water until the weather cooperates.

Why would you not be able to put a boat in the water, in Florida, in the Summer?

Jim

Insurance during hurricane season.

 

[Pura Vida]

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.

I did the same and it worked out great.
November 15th end of hurricane season

 

[SoWhat]

Insurance during hurricane season.

One could probably get a 1 day rider but the expense of launching, rehauling, reblocking, could add up.

Most would not buy a boat without a sea trial so it really should be off the market. Good luck trying to get money returned if sea trial heads south with gray smoke billowing out the exhaust.

 

[Arc]

You can’t have a boat in the water in Florida during hurricane season??? Isn’t that July-October

 

[Dougcole]

If you're looking for a really good buyer's broker in that area call Joe Hamilton from Advantage Yachts in Indiantown. He's worked with us on two boats now, and been outstanding.

 

[O C Diver]

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

 

[tpfbdf]

A wise person once told me, "There's always another bus coming down the street."

 

[Comodave]

First, are you willing to wait until November to actually buy the boat? If not then move on. I would be very hesitant to deal with this boat if I couldn’t get a sea trail until way after closing. I would move on.

 

[Jeff F]

I think conventional wisdom isn't very useful right now.

Where I live real estate has been on a sustained tear for years. When I sold a 110 year old house recently the listing agent had it on the market for a week, had me refuse to take offers until the end of the week, and we had six offers over asking price, all unconditional. Like explicitly unconditional. No financing or inspection clauses. Sign here and we're done.

The whole thing struck me as extreme in favour of the seller, but in my case my agent was very explicit and direct in communicating those expectations to potential purchasers and their agents. That's their reality and the reality that purchasers are up against.

It sounds like that's the world mainstream Florida brokers are living in these days. Step up or don't waste our time.

 

[Frosty]

I get stepping up and not dallying. And I also get an "as-is" sale with the boat on the hard. Personally, I don't see "Buy the boat now, close the deal (pay in full), we'll take your money, the boat will be trapped on the hard for months, and then we'll have a sea trial and you can see about adjusting the price." (Hope you weren't planning on using your new boat between now and November.) That just makes no sense.

But if the market is hot enough, then sure anything goes (or at least whatever one buyer will do to get said boat). But pretending it's normal seems weird to me. Maybe it'd be fine for someone else though. They only need to find one.

 

[Mark P]

Thanks for all the great comments. Additional broker comments, this boat had just finished Great Loop (not sure if that is accurate), and owner left town, so yard put the boat on "the hard buried way back in the marina behind other boats" since owner was not coming back till November. He did tell me that "any inspection had to be done at 8:00 AM" because the only power to the boat is a dehumidifier and it gets 130 degrees inside the boat. Not sure what that does to a boat over four of five months. Thanks again for all the comments, I am drinking from a fire hose in terms of learning, so much appreciated!

 

[rslifkin]

In my mind, if the engines could be test run on the hard to know the basics work, everything was checked out thoroughly and seemed good and the price was appropriately good, I'd think about it. Otherwise, no way.

 

[menzies]

I think conventional wisdom isn't very useful right now.

Where I live real estate has been on a sustained tear for years. When I sold a 110 year old house recently the listing agent had it on the market for a week, had me refuse to take offers until the end of the week, and we had six offers over asking price, all unconditional. Like explicitly unconditional. No financing or inspection clauses. Sign here and we're done.

The whole thing struck me as extreme in favour of the seller, but in my case my agent was very explicit and direct in communicating those expectations to potential purchasers and their agents. That's their reality and the reality that purchasers are up against.

It sounds like that's the world mainstream Florida brokers are living in these days. Step up or don't waste our time.

While the purchasing process between boats and houses is nearly identical, in my mind there is one huge difference that make the above perhaps moot.

With a house, especially a 110 year old one, there can be uniqueness, plus it is location location location!

With a boat (and I know there are exceptions with custom builds) there are hundreds if not thousands of the exact same boat out there. Plus once bought, you can move it.

 

[Mark P]

Jeff F - yes, that's the sense I get with this market right now. The conversation with the Broker took me back to the days when I left college and tried to buy a 1978 Honda Accord - dealers sticking at list price, adding sun roofs, Ziebart rust coatings (is that stuff still around?), adding all kinds of pin-stripe options, leather seats, even tacking on a "Wharfage Fee" (which the DOJ found illegal) and people kept buying them like hotcakes.

I will keep shopping and it may take awhile. As Shakespeare aptly stated, "now is the winter of our discontent" with no boat.

 

[rslifkin]

Ziebart rust coatings (is that stuff still around?)

I don't know if it's quite the same stuff it was back then, but yeah, Ziebart is still around and doing undercoating.

 

[Baker]

If I really wanted the boat then I would tell them....OK....we will do exactly that.....as long as the ENTIRE purchase price is held in escrow so I can get my money back if I don't want the boat. I say that jokingly. I don't think I could ever do a deal like this. Holding money in escrow for unknown things(like the condition of aftercoolers) is not uncommon. But closing without sea trial just doesn't seem right to me.

 

[Lollygag1]

When we were first in the market we looked at a boat and the broker said the same thing. Buy it and close w an escrow then we will do a sea trial. It was March in NE so we would have had to wait at least a month. I suggested a deposit and then once sea trial was done we would look to close. Was told that’s not how it works. Did not seem right so we walked. Were then referred to buyers agent. Best advice we got.

 

[Nick14]

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...)

 

[twistedtree]

I'm a little confused. Where is the boat located?


What the broker describes actually does happen over the winter when boats are hauled and winterized. I sold a boat just this way a number of years ago because it wasn't practical to launch and do a sea trial until spring.


But if the boat is hauled now, and they don't want to launch until November, my question would be "why". Maybe there is a good reason?

 

[menzies]

I'm a little confused. Where is the boat located?


What the broker describes actually does happen over the winter when boats are hauled and winterized. I sold a boat just this way a number of years ago because it wasn't practical to launch and do a sea trial until spring.


But if the boat is hauled now, and they don't want to launch until November, my question would be "why". Maybe there is a good reason?

Central Florida.

On the hard at the back of the yard.

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?

 

[Sailor of Fortune]

I'm a little confused. Where is the boat located?


What the broker describes actually does happen over the winter when boats are hauled and winterized. I sold a boat just this way a number of years ago because it wasn't practical to launch and do a sea trial until spring.


But if the boat is hauled now, and they don't want to launch until November, my question would be "why". Maybe there is a good reason?

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

 

[stubones99]

You can’t have a boat in the water in Florida during hurricane season??? Isn’t that July-October

In Florida, it is from 1 June to 30 November

 

[Yachtman]

And yet, marinas in Fl are full of yachts. I know we can survey and sea trial these.
Yes, being an owner of commercial real estate is a bitch right now. A couple are even empty and then others want Covid discounts to stay, which we're sort of forced into because I own the property and don't want them vacant. Ugh.