Brokers, Fee's, needs?

So lets say I have a boat that worth between 25-35k. I found the next boat I want and a deal has been made pending I sell mine. What's the cost for a broker? Is one needed for a boat of 25-35k and the deal has been made for the new one? Are there tax advantages in Washington State for using a broker for the sell/buy? How do you pick a broker?

You don't have to use a broker. You can try selling yourself.

He will be able to put it into the boat MLS system, though you can put it on BoatTrader and Craigslist.

You pay him 10% to take care of the hassle of dealing with people, and the hassel of the paperwork.

Your call.

Re the tax question.are you talking about sales tax? That is paid by your buyer on the selling price of the boat. Not you as a seller. That doesn't change whether you use a broker or not.

Ask for broker recommendations from other boaters and on here.

I've bought both a boat and motor home in that price range without a broker. Both times the seller and I used the same bank. We did an electronic funds transfer sitting in the bank with a banker. As soon as the funds cleared from my account to the sellers he signed the boat over to me. We went together to the licensing agency to record the sale and for me to register in my name.

I don't think the broker brings much to the table in that price range other than a Yachtworld listing. There just isn't enough commission in it for them to work very hard. A Buddy sold a $25K boat through a broker. Broker charged a flat fee of $5K on any sales under $50K and 10% above $50K. He didn't do much other than the Yachtworld listing.

I'd advise on Craigslist, in Boat Trader and on marina bulletin boards

For some reason I remember someone saying if I had X boat that was worth 25k and was buying Y boat that was 50k and used the same broker I would only pay tax on the difference so the broker fee would pay for itself? Could have had one to many drinks that night..

I gave handled boat and motor home purchases & sales and used electronic $ transfers on most. Agree with DIY in that $ range and as long as you are OK WITH and able to do the showings, sea trial, etc.
Have and use a written offer agreement with contingencies. Responsibilities and time frames clearly spelled out. You will then need to provide a bill of sale snd clear title transfer
If needed I can email the forms I have used if you PM me.

RonR said:

For some reason I remember someone saying if I had X boat that was worth 25k and was buying Y boat that was 50k and used the same broker I would only pay tax on the difference so the broker fee would pay for itself? Could have had one to many drinks that night..

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That is generally true if going through a dealer with a trade. I have not heard that a broker satisfies it but could be wrong.
Will be anxious to hear from others re buy/ sell broker deals.

RonR said:

For some reason I remember someone saying if I had X boat that was worth 25k and was buying Y boat that was 50k and used the same broker I would only pay tax on the difference so the broker fee would pay for itself? Could have had one to many drinks that night..

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I believe, here in Florida anyway, that would be a trade-in allowance. If the transaction includes a trade in the value of the trade in can be taken off the purchase price of the boat and tax is only due on the net price. This is only through a broker/dealer and has to be the same transaction.

Some Brokers have a minimum commission. I just sold my boat a couple of weeks ago. 10% or $3,000 dollars whichever is greater. This covers the broker if a sell the boat to a charity for $10.00. However, in my contract, I made it quite clear that a buyer that is "ready willing and able" is not enough to earn a commission - the commission is earned only when it actually closes. If you are using a buyer's broker, not enough to find you a boat you like, it must close. Hope this helps.

When I bought our last boat here in Washington State the title changed from the seller to the brokerage house to me. I was told that the seller used his boat as a trade in on a different boat and only had to pay sales tax on the difference. I'd like to learn more on this process as Washington State sales tax runs anywhere from 8.5% to 9% depending on the location of the brokerage house.

NWSeadog said:

When I bought our last boat here in Washington State the title changed from the seller to the brokerage house to me. I was told that the seller used his boat as a trade in on a different boat and only had to pay sales tax on the difference. I'd like to learn more on this process as Washington State sales tax runs anywhere from 8.5% to 9% depending on the location of the brokerage house.

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Here you go.

https://dor.wa.gov/education/industry-guides/vessel-brokers-and-dealers/trade-ins

Menzies,

Thanks. The trade in advantage on the sales tax, if the brokerage house is willing to do it, can offset the broker's fees.

Now to find a broker with the right boat willing to do a trade.....

I sold the last 2 boats through Boattrader.com. Had good success. But you need to clean out the boat of all personal items and misc junk. Make the boat shine. Take good quality well lit photos of everything and every angle. Don’t try to hide things, give an honest perspective of the boat and price it properly. Put more photos rather than less photos. Boat/US has sales agreements on their website.

Comodave said:

I sold the last 2 boats through Boattrader.com. Had good success. But you need to clean out the boat of all personal items and misc junk. Make the boat shine. Take good quality well lit photos of everything and every angle. Don’t try to hide things, give an honest perspective of the boat and price it properly. Put more photos rather than less photos. Boat/US has sales agreements on their website.

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Agreed on the boattrader.com. I paid for the more expensive listing and the boat sold in 4 days.

I also paid a broker a $300 document fee to help me with the paperwork and to act as a third party for the transaction. Looking back I probably didn’t need to do this, but it was the same broker that sold me the boat and she had all the information and dealt with the buyers bank and a temporary permit, etc.

I put a lot of effort into the pictures, as I’ve been a victim of so many listings with poor pictures. I think I had 78 pictures...I can’t remember if the ad had a limit or not but I got a lot of them up there. And great tip, get all your junk out of the boat!

I also spent a good amount of time writing my ad and detailing all the maintenance I had done since I owned the boat over 5 years.

The 3rd or 4th couple that looked at the boat couldn’t give me their money fast enough, they wanted no survey or inspection or haul out. I thought it was a little careless myself, the boat was a 2006 with 500 hours on twin 5.0’s also with “satan’s outdrive” twin Bravo III’s.....I did have copies of all my parts and service so that may have helped.

I’m having fun with the outdrive comment, but after watching the mechanics tear one down I’m surprised they even work!

menzies said:

Here you go.

https://dor.wa.gov/education/industry-guides/vessel-brokers-and-dealers/trade-ins

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Yep, this is what I thought I was hearing the other night on the dock.

Thank you for the tips on selling, I have 99% of the stuff cleaned out, the things that will be on the boat, will sell with the boat. The boat is polished up nice, just laying down the last coat of varnish this coming weekend. Installing the 3 new hatches, and putting all the paperwork in one pile.


The hard part will be putting a price on her, I knew getting into this boat it would cost a fair bit to bring her back to the condition she is in. I have spent about 15k in materials/ parts and probably about 1000 hours in the last year of my time.

And do I sell the dink with her? Its really nice, and fits the lift on the boat. But does it really add much to the total price of the boat? Or am I better off selling it on the side? I do not want this one on my next boat, its just to big for me.

2006 Gray Marine, 10-6' center council double fiberglass floor, Honda 15hp electric start power tilt, fish finder, gps… Galv trailer.

No dinghy can be a big block to a prospective buyer and they will knock down the offer based on what it is going to take to buy themselves another.

RonR said:

For some reason I remember someone saying if I had X boat that was worth 25k and was buying Y boat that was 50k and used the same broker I would only pay tax on the difference so the broker fee would pay for itself? Could have had one to many drinks that night..

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It’s been a few years since we lived in Washington but I think you’re right. Give a call to Marine Documentation Services in Anacortes. I’ve used them on a private sale (no broker) and they were more than helpful.

Marine Documentation Service, Inc.

Larry M said:

It’s been a few years since we lived in Washington but I think you’re right. Give a call to Marine Documentation Services in Anacortes. I’ve used them on a private sale (no broker) and they were more than helpful.

Marine Documentation Service, Inc.

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As noted above, only when they accept the 25K boat as trade in on the new boat.

menzies said:

No dinghy can be a big block to a prospective buyer and they will knock down the offer based on what it is going to take to buy themselves another.

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Agreed. Having a dinghy that already has a storage solution was a big bonus when I was looking (assuming it was in good condition and worth owning). I was making that same calculation as Menzies mentions with most boats I looked at. So even if it doesn't add a lot to the price, it adds a lot of people who are more interested in your boat than might otherwise be.

BD

BDofMSP said:

Agreed. Having a dinghy that already has a storage solution was a big bonus when I was looking (assuming it was in good condition and worth owning). I was making that same calculation as Menzies mentions with most boats I looked at. So even if it doesn't add a lot to the price, it adds a lot of people who are more interested in your boat than might otherwise be.

BD

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Thank you, It will be listed with the boat, if they want to cut price, I will keep it!
And I am going to list with a Broker, the tax adjustment between the two will cover his fees. And he is a hell of a nice guy!

It's called simultaneous closings. You get all parties to agree to the same date and the closing company (i.e. Like a Pacific Maritime) does both transactions, your boat sale becomes a trade-in and thus reduced sales tax owed on your boat purchase.


Broker fees are still due on the contract price of each boat, simultaneous closing doesn't affect the broker amounts paid.


The other thing to look at is the sales taxing jurisdiction. Typically, the buying brokers address dictates the sales tax rate. As example, if you're using a buyers broker located in Seattle, but buying a boat from a broker in Anacortes, you'll pay Seattle tax rate (10.1%) instead of the Anacortes rate (8.8%). Depending on the price of the boat, if the sales tax difference is a large amount, you can do some negotiating to get an offset.

Forgot to include this: if you're not using a buyers broker, then location of moorage is then the sales taxing jurisdiction (so Everett moorage = Everett sales tax rate).

Patemey,

For clarification are you saying that it is possible for sales tax purposes to use a boat as a trade in as long as you do a simultaneous closing thru the same closing company? Even if no brokers are involved?

NWSeadog said:

Patemey,

For clarification are you saying that it is possible for sales tax purposes to use a boat as a trade in as long as you do a simultaneous closing thru the same closing company? Even if no brokers are involved?

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Who would be taking/paying for the trade in?

The buyer of the trade in would be a 3RD party

NWSeadog said:

Patemey,

For clarification are you saying that it is possible for sales tax purposes to use a boat as a trade in as long as you do a simultaneous closing thru the same closing company? Even if no brokers are involved?

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Yes, a simultaneous closing for sales tax purposes can be done with a closing company regardless of any brokers involved.


Typically with 3 parties, if you are buying a boat then the seller takes yours in on trade and immediately sells it to the 3rd party. Any contract should make sure that seller is held harmless for the pass-thru of the buyers boat to the 3rd party.

Interesting.

Thanks for the info.

Patemey said:

The other thing to look at is the sales taxing jurisdiction. Typically, the buying brokers address dictates the sales tax rate. As example, if you're using a buyers broker located in Seattle, but buying a boat from a broker in Anacortes, you'll pay Seattle tax rate (10.1%) instead of the Anacortes rate (8.8%). Depending on the price of the boat, if the sales tax difference is a large amount, you can do some negotiating to get an offset.

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I have never heard that the buying broker address dictates sales tax.

The correct is: the closing location and/or where the boat is used will impact sales/use tax on a used boat in nearly all cases.

There are plenty of ways to be smart about tax, its called tax avoidance. Evasion is bad though.

Closing location is negotiable. Many buyers ask sellers to work with them to have the boat delivered in different locations. A hired captain or transporter can get involved if the seller doesn't want to be hands-on. Not bringing a boat into certain state for certain time periods can also alleviate taxes. That is why some people buy new boats in winter, leave them out of state, bring them in spring when the period has elapsed but note requirements. Some say the boat must have been registered and owned in another state (i.e. you can't just bring in an unregistered boat and expect that is fine).

mystery said:

I have never heard that the buying broker address dictates sales tax.

The correct is: the closing location and/or where the boat is used will impact sales/use tax.

There are plenty of ways to be smart about tax, its called tax avoidance. Evasion is bad though.

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Might be different in different locations, but the OP question was about Washington State and what I mentioned is their law.



I was into a $1M boat purchase, so had researched this extensively and talked with many brokers, closing agents, and WA state officials from the tax office to understand what options/avenues were available.

Originally Posted by NWSeadog
When I bought our last boat here in Washington State the title changed from the seller to the brokerage house to me. I was told that the seller used his boat as a trade in on a different boat and only had to pay sales tax on the difference. I'd like to learn more on this process as Washington State sales tax runs anywhere from 8.5% to 9% depending on the location of the brokerage house.

Click to expand...

menzies said:

Here you go.

https://dor.wa.gov/education/industry-guides/vessel-brokers-and-dealers/trade-ins

Click to expand...

Good info, especially for Washington....


Any good info for Florida?


And, question for you experts, how is this done without a broker? I'm sure it's possible (done in real estate all the time).

And, as for needing a broker....


Well, if you've NEVER bought or sold anything and have no clue, there's an argument to hire a broker, at least for the paperwork.



However, it's not hard, but one needs to know some things and how property is transferred. You can usually get the legal way to sell a boat pretty easy from the state or CG if documented. Buying a boat and registering it is a tad harder, but also can get info from the state or CG.


The issues come up when there's a problem, disagreement, misrepresentation (real or not). So, there's an argument to have a sales agreement with the buyer/seller to protect one's interest. There is no standard and you can make up your own.



Also, you need a way to handle deposits (if needed), and that can be a hornets mess. Personally, I ALWAYS control my dollars or I just won't do the deal, and never had a problem. As a buyer, I'll only make a deposit with MY guy and if for any reason I don't buy, I get 100% back. As a seller, I rarely ask for a deposit, but if the buyer wants it off the market for more than a few days, I'll want something so I don't miss another sale should he back out.