Purchasing without brokers

[TomAnderson20619]

We have found our next boat and want to start the purchase process (put an offer, survey, etc.). We don't have a broker and neither does the seller - basically a FSBO deal. Are there checklists/documents/etc. available for DIY transactions (similar to FSBO in the real estate world)? If we avoid brokers fees, we can save some $$ on the selling price. I am well aware that there may be pitfalls by not using a broker - hoping we're not setting ourselves up for heartache.

 

[DavidM]

I can't really say if there are pitfalls. If you use an accepted contract (BoatUS has one I think) hold any deposit by a third party (BoatUS again) and get a good survey done, the end result can be as good or better than if a broker were involved.

Some warnings to look out for with or without a broker: If it is USCG documented, get an abstract of title from the CG and check for liens. If it is state titled then look at the title document for a lien. Sometimes it may be worth paying a title service like Atlantic Coast Title to do a search for titles in surrounding states. But doing the whole US is kind of crazy but who knows, there might be a valid state title lurking somewhere. Caveat emptor.

David

 

[Island Cessna]

I used Marine Documentation Service, http://marinedocservice.com twice, and they took all the worry out of brokerless transactions for a modest fee.

Look for a similar service in your area.

 

[GregBrannon]

There are no automatic or expected pitfalls to the exchange without brokers. However, there can be advantages, as you've already noted. My FSBO experience was much less scary and stressful than the attempts I'd made with brokers involved.

Enjoy the process and keep us posted!

Greg.

 

[TomAnderson20619]

Greg - as I recall you’re also in SoMD. Did you handle the taxes via DNR during registration?

 

[Airstream345]

Tom, we sold our previous boat without a broker. We used a downloadable purchase and sale agreement from Boat US with the buyer and agreed on a local escrow/title company for the money management, tilting, registration/documentation, taxes and fees (paid for by the buyer). I think they charged $750 or so for everything.

Went well for all involved and saved both of us some money.

 

[Retriever]

I recently purchased my current boat from friends who were selling it, and sold my previous boat to friends of friends at the same time, no brokers involved.

The only significant difference compared to my previous experience purchasing through a broker was the negotiation, which was informal by phone/email. Once we arrived at a price, we formalized everything by modifying contracts that the title company had. The contract spelled out the timeline for surveys/sea trials/acceptance, the price, and the usual contingencies. The title company held the earnest money.

Once each party signed the contract, we commenced the usual survey and sea trial process, made a few price adjustments, and wired money to the title company. The title company took care of all the paperwork, documentation, sales tax payment, disbursing funds etc. I think the fee was under $1000 per boat, which seemed perfectly fair.

Overall the process went pretty smoothly and quickly and no friendships were ruined.

 

[Portage_Bay]

Use a marine documentation service for escrow and change of documentation, registration etc. i paid $800, money well spent to make sure it's handled correctly.

 

[bligh]

I did it. And I did run into pitfalls which were mostly of my own doing and eagerness to buy a boat. If I were to do it again, I would not put a deposit on the boat down at all. The boat would have to pass all surveys before I gave a cent to the seller.

 

[jleonard]

I just recently sold my boat without broker. Buyer visited boat on the hard afternoon before launch. Looked at and liked the bottom.
Next day he was around for launch. Inspected ins de of the boat along with the admiral. They liked what they saw.
Next day they accompanied us on the 6 1/2 hour trip to our summer marina. we ran everything on the boat. All electronics, ran the engine at WOT for a few minutes as well. Boat worked perfectly as did all electronics, etc. They liked what they saw.
We agreed on a price.
I wrote up a very simple "contract" on a steno page, stipulating "as is where is". We both signed and dated and buyer wrote a small deposit check.
We both took a phone pic of the contract.
Survey followed in a week, all was perfect, buyer transferred $$, I filled out the back of the CT state registration form which is a bill of sale, sent them a picture of it, and left it on the boat for them.
Done. Nice and easy and clean.

 

[Portage_Bay]

I did it. And I did run into pitfalls which were mostly of my own doing and eagerness to buy a boat. If I were to do it again, I would not put a deposit on the boat down at all. The boat would have to pass all surveys before I gave a cent to the seller.

That's a strong argument for using an escrow service. Some marine documentation services will also act as escrow. They hold the deposit, not you, not the seller. That keeps it all very clean.

 

[bligh]

That's a strong argument for using an escrow service. Some marine documentation services will also act as escrow. They hold the deposit, not you, not the seller. That keeps it all very clean.

I respectfully disagree. I cannot think of any reason to use an escrow service at all if you are the buyer. If you, as a buyer, hold all your money, it is not needed. If a seller wants an escrow service, then he can hire a broker.

 

[GregBrannon]

Greg - as I recall you’re also in SoMD. Did you handle the taxes via DNR during registration?

I paid MD sales tax and registration fees at the DNR office for both the USCG documented 'yacht' and MD titled/registered dinghy prior to the 6-month deadline at which point penalties are collected. There was a minor challenge getting all of the paperwork in order before the 6-month deadline. Part of that challenge was due to the USCG processing delays at the time due to funding shortfalls - nothing I could do anything about or that MD was willing to forgive - but MD accepted the USCG notification that they'd received my application and were working on it.

Greg.

 

[Portage_Bay]

Escrow is part of doing it the right way. It is a low risk process for both the buyer and the seller to mange the deposit. When I've purchased a home I had to use escrow. When I've purchased a boat I used escrow because it's the best way to go.

As a seller, I'm not going to take the asset off the market without the buyer putting some skin in the game. If you want to buy my boat and you don't want to make a deposit I will without any regret sell it out from under you to a buyer who will make the deposit. No matter your expenses to date for anything.

As a buyer I want the asset off the market while I arrange surveys, financing and insurance. If I want to buy your boat I won't trust you to hold the deposit. It would be too easy for you the seller to find reasons not to return the deposit. Without a broker to hold the funds escrow is a good way to go.

We are each, buyer and seller, dealing with strangers. Escrow keeps it safe.

I respectfully disagree. I cannot think of any reason to use an escrow service at all if you are the buyer. If you, as a buyer, hold all your money, it is not needed. If a seller wants an escrow service, then he can hire a broker.

 

[Jeff F]

[...]
We are each, buyer and seller, dealing with strangers. Escrow keeps it safe.

Good points. One thing I wonder is how the escrow is released in cases where there is a dispute. A broker is likely able to resolve that situation better than a true third party. Do the independent services just hold the money until both parties sign off or the lawyers take over?

 

[AusCan]

I prefer to buy without using a broker or escrow service. I bought my current boat and house direct from the owners.
Sure, there is a risk, but I don't think it is worth thousands to negate that risk. I can reduce it considerably by just using some common sense.

 

[Portage_Bay]

The boat purchase contracts I signed were quite clear. I had x number of days from the time of the deposit to satisfy myself the boat is worth the purchase, up to that point I could walk away for any reaons and get the full deposit back. Past that point the seller had the right to keep the full deposit.

For past purchases I was not been able to meet the deadline due to arranging haulout and surveys. The seller granted me the wiggle room. I did make sure to get that extension in writing.

I think if the contract is not clear and the dispute gets ugly then the lawyers will rule the day. At that point I'd take a cold hard calculated look at the situation. How much was the deposit? What's the hourly rate for the attorney? What's the break even point in deposit $$ vs attorney's fees $$?

The escrow service I last used was owned and operated by a maritime / admiralty attorney. Try to find one like that and use their standard purchase contract.

Good points. One thing I wonder is how the escrow is released in cases where there is a dispute. A broker is likely able to resolve that situation better than a true third party. Do the independent services just hold the money until both parties sign off or the lawyers take over?

 

[Taras]

3 biggest things I would be concerned about:
1). Making sure the boat has no liens or encumbrances.
2). Get a really good survey so you know what you’re getting
3). Make sure you don’t overpay.

 

[slowgoesit]

Except for one more recommendation to use a competent Escrow service, if the boat includes a dingy, make DARN sure that the Seller has the title paperwork squared away, not just for the boat, but for the DINGY as well!
Once the Seller meets the Buyer, and Buyer likes the boat, sign the contract and use an Escrow . . . . not sure there is any advantage to using a broker at that point . . .

 

[Seevee]

Escrow is part of doing it the right way. It is a low risk process for both the buyer and the seller to mange the deposit. When I've purchased a home I had to use escrow. When I've purchased a boat I used escrow because it's the best way to go.

As a seller, I'm not going to take the asset off the market without the buyer putting some skin in the game. If you want to buy my boat and you don't want to make a deposit I will without any regret sell it out from under you to a buyer who will make the deposit. No matter your expenses to date for anything.

As a buyer I want the asset off the market while I arrange surveys, financing and insurance. If I want to buy your boat I won't trust you to hold the deposit. It would be too easy for you the seller to find reasons not to return the deposit. Without a broker to hold the funds escrow is a good way to go.

We are each, buyer and seller, dealing with strangers. Escrow keeps it safe.

I might respectfully disagree. In MOST contracts the deposit is fully refundable if the buyer changes his mind. Any broker will tell you that (with their contracts). And, any seller can change his mind for whatever reason, regardless of a deposit.



Safe, what safety does either seller or buyer get when a third party holds the deposit? And, who releases the deposit.... I know, it's suppose to be determined by the contract. I've seen that fail, and I've seen some dishonest escrow agents. Yes, they are suppose to be licensed, perhaps. Have you ever asked for the agents credentials?


As a seller, I could argue to show the boat to anyone, just tell them that it's a first come, first served deal. I could also argue to give the buyer time for his due diligence. That's just being a decent guy. Nothing wrong with asking for a deposit, but don't be surprised if none comes.



As a buyer, I like the above, and could argue NOT to use a deposit. Absolutely no reason, other to give the seller a warm fuzzy feeling.... unless it's non refundable one, which is rare (but I've done that a few times). Now, if a seller asks me so they can get that warm fuzzy feeling, I'll put a deposit with MY trustee with a statement that it will be returned for any reason that I don't buy the boat. Never had an issue.


A buyer or seller can do whatever they want during the selling process. I could argue more to just get to know the seller (or buyer) and if you don't like them, don't do business.

 

[JohnS]

May not be a problem in MD, but Florida treats brokered sales much better than by owner boat sales.
Brokered sales have 180 days (with extension) to get out of state before sales tax is due to Florida.
By owner sales are taxed the day of the sale.
JohnS

 

[Mark P]

We are not working with a buyer's broker, but we took a look at a boat listed by a broker a few days ago. After we finished looking at the boat, he mentioned that "an offer had already been made" and the buyer and seller were a "few dollars apart". Using some numbers to put this into context in terms of percentages, the seller wanted $100, the buyer offered $88. In my review of the boat (I am fairly new to this used boat buying thing), the boat looked tired, need some cosmetic work (broker stated it would need hull & bottom paint, new canvases, etc.), but otherwise is a very well regarded brand of boat on this Forum. I thought to myself, it seemed a bit high for someone to offer $88 when this boat needed some work and wasn't really "show ready" - owner's dirty close in hamper, and rather strange for an owner not to accept 12% off his asking price for a 13 year old boat that needed some love. We chit chatted a bit with the broker, and then he mentioned that "this boat will survey really well, and he is hoping to close the $2 gap" between what the owner wants and buyer offered. He then stated that he was "confident the owner will take $89 and that the owner understands the issues with the boat." I told him I was not ready to make offer as I still had to sell my boat, and we thanked him for the time to look at the boat. The boat is still for sale on YW (no sale pending sign on it), so not sure if it didn't survey well, the deal never got done, or all of this was smoke and mirrors. Any thoughts from those who have done this a bunch?

 

[Seevee]

One thing that bothers me.... very often the buyer expects a discount for whatever he finds on a survey, or looking over the boat if it has ANY flaws.



It makes people want to overprice it a bit from the start to expect to come down on the price.



Almost ALL boats will have flaws. Bottom line, it depends on the price and what the market bears. I could be a killer deal even with the flaws, or overprice as a cream puff.

 

[slowgoesit]

The boat is still for sale on YW (no sale pending sign on it), so not sure if it didn't survey well, the deal never got done, or all of this was smoke and mirrors. Any thoughts from those who have done this a bunch?

Whether the "buyer" who made an offer really existed or not doesn't really matter. Personally, whether or not the buyer existed, I think the broker overstepped his authority in suggesting a price that the Seller might agree to.
But all of that if pretty much immaterial in my book. What matters is whether or not you are interested in this particular boat, and what you are willing to pay for the boat (not necessarily the same as what you feel the boat might be worth). If I liked the boat, and thought that (using your example) $70.00 or $80.00 might be a more reasonable purchase price, I would make an offer for that price, with typical contingencies and see where it went.

I've been told before that "Seller has already turned down an offer of *****, " only to offer less than that amount, and have it accepted.
Sometimes the "offer" never existed except in the sellers/brokers mind, and sometimes it really did exist, but was a year ago, just after the boat was listed, no new offers have come their way, and Seller is just ready to get rid of the boat.

Note: Any offer I make is accompanied with a deposit to show that I'm serious. Talking $$$ without a deposit is just dock talk.

 

[Seevee]

Whether the "buyer" who made an offer really existed or not doesn't really matter. Personally, whether or not the buyer existed, I think the broker overstepped his authority in suggesting a price that the Seller might agree to.
But all of that if pretty much immaterial in my book. What matters is whether or not you are interested in this particular boat, and what you are willing to pay for the boat (not necessarily the same as what you feel the boat might be worth). If I liked the boat, and thought that (using your example) $70.00 or $80.00 might be a more reasonable purchase price, I would make an offer for that price, with typical contingencies and see where it went.

I've been told before that "Seller has already turned down an offer of *****, " only to offer less than that amount, and have it accepted.
Sometimes the "offer" never existed except in the sellers/brokers mind, and sometimes it really did exist, but was a year ago, just after the boat was listed, no new offers have come their way, and Seller is just ready to get rid of the boat.

Note: Any offer I make is accompanied with a deposit to show that I'm serious. Talking $$$ without a deposit is just dock talk.

Agree with you for the most part. The broker is obligated to whomever he has the agreement with and who is paying his commission. The broker may advise the seller (or buyer, if that's who he's being paid by), but the seller calls the shots as to price, how much he will give or if the broker should suggest to the buyer a lower price.


Yes, pay what you think it's worth to you... regardless of other offers or the sales price. Occasionally, the price is so good, that it would be prudent to buy it sight unseen or without inspection, and I've done that a few times.



And, yes, some of the best deals are when the deal ahead of you falls through.... or the broker does a lousy job of selling it, and it sits for months.


As for the deposit... I don't ever like to put down a deposit. I prefer the philosophy of just working for a fast cash closing without contingencies. As a seller, I will ask for a deposit. As a buyer I will only give a deposit to MY attorney or trustee. But, on occasion, I've put down a 100% deposit as an incentive to make the deal. I NEVER give a deposit to a broker or seller that I can't afford to walk from.



Deposits are overrated.... especially if they have an escape clause, which they usually have. And, they can cause HUGE legal issues. What do you do, if the seller just says, I will not give you your deposit back? Generally, the agent needs approval of both parties to give back a deposit. Yes, I've had to call a few unscrupulous brokers keep my deposit and I had to pursue legal action to get them to behave. Never again.

 

[GCM52]

I have bought and sold four sailboats, six airplanes and two houses all without a broker and with no problems at all. I tried to buy a powerboat once through a broker and it was a total nightmare. That was the only time I attempted to buy something with a broker. Just my experience.

 

[Capn James Brett]

Just sold my Defever 53POC in June doing this and worked great. Good luck!

 

[ben2go]

We have found our next boat and want to start the purchase process (put an offer, survey, etc.). We don't have a broker and neither does the seller - basically a FSBO deal. Are there checklists/documents/etc. available for DIY transactions (similar to FSBO in the real estate world)? If we avoid brokers fees, we can save some $$ on the selling price. I am well aware that there may be pitfalls by not using a broker - hoping we're not setting ourselves up for heartache.

This is how I work it in my state. I can't say how it would work for other states or documented vessels. Here in SC, I go to the licensing agency for boats, DNR. I ask for a bill of sell. I take that, I go with the owner and his paper work for the boat(s) to a local bank, usually the bank one of us does business with. There we fill out the paper work. We make sure everything is in order and the bank notary and witnesses do their thing. The money is transferred over from the buyer to the seller's account, or a check is cut. I understand it's not always that easy. I defer to other's comments.

 

[Salish Nomad]

I used Marine Documentation Service, Marine Documentation Service, Inc. twice, and they took all the worry out of brokerless transactions for a modest fee.

Look for a similar service in your area.

I used them as well on my last two transactions. Good people, reasonable $$

 

[smith6]

I sold my last boat on craigslist. Buyer and I negotiated price, he gave me a small deposit. He had a survey and alll haul out done, then we went to Bank and aid off boat and they sent him title. went pretty darn well. Good luck.