How to Buy and What to Expect

How to Buy With a Yacht Broker

Most pre-owned boats are either a “central agency listing” of a yacht broker or a trade-in from a new boat dealer. If you are viewing a broker listing or a trade-in, the listing broker or dealer is likely to know the vessel inside and out. They have been selected by the owner/seller to exclusively represent this vessel (or the dealership may now own the vessel) and all inquiries must go through this yacht broker or boat dealer. If you are not already working with a yacht broker, and if you find a boat on YachtWorld of interest, you may contact the listing broker directly. However, a more rewarding option might be to select a yacht broker of your own, consult with that broker about all of your boats of interest, and let that broker represent you in your inquiries and transactions.

• The Initial Inquiry – A professional broker will listen closely to your wants and needs and will help you determine if the boat you are calling on is the right boat for you at the best value. They can objectively tell you about the condition of the vessel before you decide whether or not to spend your time looking at the boat. They will help you determine if there are similar boats on (and off) the market, the history of the yacht, how long it has been on the market and the motivation of the seller. Anyone can look up asking prices on boats, but it takes a professional broker to have an intimate knowledge of current market conditions, familiarity with similar boats, and information on recent sale prices and time on the market through www.soldboats.com, an industry resource not available to the public.

• Getting a Boat Loan and Marine Insurance – You may want to pre-qualify for a boat loan before you shop. That will give you some extra leverage and breathing room when you’re negotiating prices. YachtWorld offers a variety of specialist marine lenders.

• Making an Offer on a Pre-Owned Boat – A professional broker can help you decide on a realistic offer that increases the chances of buying a pre-owned boat for a fair and reasonable price, and with the necessary elements to protect your interests. Your broker prepares an Offer to Purchase for your signature. It should spell out the terms of the sale including obligations that you and the seller have agreed to, and when these obligations will be fulfilled. You also make a good-faith deposit on the boat, which is usually placed in escrow and subject to sea trial and survey.

• Making an Offer on a New Boat – Dealers taking trade-ins will inform you of tax issues and tax savings associated with the trade-in. Price negotiations may include making your new boat available to show to other dealership clients in the future. Depending on whether the vessel is custom-built, semi-custom, or a production model, there is usually a basic cost, plus transportation expenses from the builder to the dealership, plus optional equipment and installation.

• Paperwork – Professional brokers and dealers are familiar with all the paperwork requirements for each country, state, or province, from the initial Offer to Purchase and Bill of Sale to licensing and registration; or documentation and titling, to paying tax and other fees, as well as certificates of ownership, security agreements, and other documents needed to complete a sale. For example, 23 forms are needed at a closing of a brokerage boat in Florida (27 for foreign-flagged vessels). Professionals will understand maritime and admiralty liens for the type of vessels they represent, as well as agency contracts, listing agreements, closing statements, deposit requirements, and escrowed accounts to safeguard funds.

• Sea Trial and Survey – The buyer of a pre-owned vessel will usually request a sea trial and the services of a marine surveyor. Buyers pay for the surveys and for hauling the boat out of the water for inspection. Your yacht broker will usually attend the sea trial and marine survey with you, and help you determine how to properly address the nearly inevitable yacht survey issues and put the problems in context. They can help estimate time and cost of correcting, and where to obtain accurate quotes for items that are unfamiliar. Your lender and insurance carrier will usually require a copy of the survey.

• The Art of Negotiating The Deal – The broker can use his position as a middleman to keep the negotiations between buyer and seller moving to a successful conclusion.

• Safeguard Funds – A professional broker will use an escrow account for clients’ funds, and ensure that at closing, any existing loan or other encumbrances is paid off. This safeguard is of critical importance to the buyer and seller and can be a potentially serious hazard in a private transaction not involving a broker.

• After the Sale – Your broker and dealer can help you find moorage and yacht maintenance and repair specialists or facilities. They can refer you to classes on sailing, boat handling, and seamanship, and their experience in local waters can help you chart a course for a great day, weekend, or longer trip. They can connect you with boat clubs, races, and rendezvous sponsored by builders and dealerships. Plus, you’ve got a new boating friend for life.

What Will it Cost to Use a Yacht Broker?

Yacht brokers charge a commission when the vessel is sold, and the commission amount will be set in writing when the seller signs a listing agreement with the broker. If another broker brings a buyer to the table through a co-brokerage arrangement, the total commission will normally be shared between the brokers; it should not raise the commission. Many brokers work co-operatively with one another on a co-brokerage basis.