Why Work With A Broker?

For some people the buying and selling may be fun, but for others it is frustrating. Those who find it frustrating might want to consider the services of a yacht broker to handle details of the search, marketing and closing of the transaction. Most yacht brokers are independent businesses but some are affiliated with or employed by new boat dealers.

Both buyers and sellers can benefit from the services of a yacht broker whose job is to arrange transfer of ownership. For their services, brokers charge a commission.

Selling Through a Broker
Brokers maintain files of boat listings placed by individuals wishing to sell their boats. They also have "boat wanted" files for prospective buyers looking for something different.

Sometimes brokers share listings through a nationwide network. This can extend the seller's exposure beyond the local market. A broker may be contacted directly by a buyer looking for a specific boat or from another broker who has a customer waiting.

Yacht brokers are often overlooked by customers who think their needs are too small and brokers only deal with mega yachts. Actually, boats less than 30 feet can be quite expensive and are worth considering the use of a broker's services. The average size boat handled by brokers is 40 feet, with a range from 25 feet to several hundred feet in length.

Selecting the Correct Broker
Selecting the right broker is a matter of choice based upon reputation, reputation, reputation! Honesty, integrity and knowledge are a forgone conclusion, but a comfortable feeling of mutual understanding based upon trust is also vital.

Contracting with a broker is basically agreeing to have a broker arrange the transfer of ownership for an agreed upon fee.

Keep in mind that many new boat dealers also offer services similar to independent brokers. When you hire a broker, he or she is working strictly for commission. If a boat isn't bought or sold by you, your broker doesn't receive any return for his or her efforts. During the initial meeting, not only is the customer selecting a broker, but the broker is also evaluating the seriousness of the customer.

Both parties need to be comfortable to form an agreeable working relationship. The broker needs to know exactly what you want and you need to understand exactly what the broker will do and how much his or her services will cost.

The broker needs to be assured that you are serious and have the financial ability to purchase a boat he or she locates. If you are the seller, the broker needs to feel comfortable that you will sell the boat you list and not back out or change the conditions of the agreement…like trying to sell the boat on your own to avoid the broker's commission.

Buying Through a Broker
If you are trying to locate a specific make, model, year, size and price range but your local search of boat yards and classified ads has not produced the boat you want, a broker can usually help.

However, sometimes a buyer has seen only one sample of the boat that meets his requirements. A knowledgeable and skilled broker may explore with you several questions to help clarify your intended use and specific boating needs. With this information, the broker may be able to suggest other makes and models meeting your needs.

Interview Questions
Before you contact a broker, ask yourself some important questions.

1. What are you looking for - sailboat, powerboat, trawler, fishing boat, house boat?

2. Where will you do most of your boating? Will you use it on inland rivers and lakes, protected bays along the coast, the Great Lakes or for offshore cruising?

3. How many people will be the boat need to accommodate and for what purpose? Will you be taking 50 passengers for an afternoon ride, transporting your family of six on weekends or planning to live aboard?

4. What is your boating experience, knowledge, skill and physical ability to handle a boat of this size? Will you always have enough crew with you? Will you be single handed? Will your age or physical condition limit your use?

5. How much money can you afford to spend on a boat? Have you considered the annual cost of dockage, maintenance, haulouts, repairs and replacements, insurance and operating expenses (fuel)?

6. Where will the boat be berthed while in the water? Do you have a slip available? Does your slip have enough depth for this boat?

When all of these topics have been discussed, both you and the broker will have a clearer picture of your needs. Now the broker can go to work and locate several boats that meet your requirements. Sample boats will be presented to you with information ranging from a printed sheet of specifications to a video of the boat.

If a particular selection catches your fancy, the broker can arrange for a visit to the boat on which he will accompany you. You many decide to make a purchase offer or you may decide to continue looking.

Remember, the broker's job is to negotiate and handle the details leading to an agreement.

Selling Your Boat
If you want to avoid the bickering and the upset that comes with showing your boat to prospective buyers, let a broker do it for you. Doing it yourself allows prospective buyers to degrade your boat in hopes of having you reduce your asking price.

Let a broker handle the details of the sale. He will do his best to match buyers with sellers. The broker wants to arrange the transfer of ownership in order to earn his commission. Brokers will present your boat to prospective buyers in its best light. By knowing good characteristics of your boat, the broker can emphasize and dwell on positive aspects rather than argue over negatives.

The broker is a professional who has built a reputation on honesty and fairness, so don't expect him to misrepresent your boat. It is this reputation of fairness and honesty that brings customers back again to the broker when they are ready for a change.

Broker Finds the Perfect Boat
After several attempts to purchase a large sailboat without the use of a broker, Carol and Jim finally bought the exact boat they wanted. A broker found the treasure and telephoned them from Florida several months after they had given up hope.

On their own, they had traveled from Michigan to Florida three times to search boat yards. They even attended two government auctions, all without success. The goal was to find a large sailboat that was in need of minor repairs which they could perform by themselves. They had also narrowed their search to three specific models: a 46 foot Morgan, a 45 foot Columbia or a 44 foot Gulfstar motor sailer.

When they visited boat yards and inquired about large sailboats in need of repairs, they were often given the run-around. The responses from salesmen ranged from "we've got just what you're looking for" to "take a look around and see if anything interests you." They had only limited time to shop after having flown to Florida on weekends.

Time spent with two other brokers was wasted. One broker spent most of his time telling them the features of a boat that didn't meet their needs while another tried to tell them they wouldn't be satisfied with the boat they had in mind. Finally they located a boat broker who they felt was listening to their needs and interested in finding the boat they wanted, not just interested in selling a boat from his own listings. This broker was the one that they wanted to work with.

Several months had passed without contact from their broker when the phone rang in Upstate Michigan with a call from the broker. His description of a boat he had located sounded correct but the asking price was higher than they were willing to pay. However, the broker had researched the seller well and found that the boat had been unused for three years. The balance owed to the bank and the storage bill totaled just about what Carol and Jim wanted to spend.

Carol and Jim flew again to Northern Florida while the broker also flew from Miami to the location of the boat. The boat appeared to be exactly as the broker described it. They left the broker with instructions to negotiate a purchase. This became more complicated as the boat was represented by a selling broker who was reluctant to share his brokerage fee. The deal was finally arranged and Jim and Carol returned to Florida to sign the purchase agreement and pay for their boat.

This broker earned his commission by working hard for his customer. In addition, he helped arrange the loading of the boat on a flat bed trailer with a semi to haul it to Michigan.

No commissioned broker will put in time if he senses that a sale isn't eminent. A buyer must be totally honest with his broker. He or she must be ready to buy and have the money in hand. When buyers attempt to circumvent paying the commission or are "just looking," a broker is unlikely to waste time providing any service.

Jim and Carol's relationship with their broker was honest and up front from the very beginning. For this, their broker went to work for them. It took several months for the broker to locate the boat they were looking for, but they remained patient, the broker completed the sale and earned his commission.

Jim and Carol also did their homework. They had checked the BUC book and knew the sales history of boats this size and age. They knew what repairs they were capable of making on their own and how much these needed repairs should reduce the selling price of the boat. Their banker supplied them with a letter of credit to present to the broker indicating their available cash for the purchase.

The complex sale was agreeable to all parties. The original owner was able to sell his boat after several months of frustration and pay off all debts. In the end, the brokers were able to resolve their differences regarding the commission split and the purchase was final.

When their 44 foot Gulfstar motor sailer arrived in Michigan by truck, it looked pretty rough. However, with several months of hard work, Jim and Carol turned it into a beautiful sailing yacht. Thanks to the diligent work on the part of their broker, they had their perfect boat.

From National Boat Digest, September 1998
by Jack Klang