Automating everything involved in a yacht brokerage transaction seems like an obvious concept, but until recently no one in the business had done it. The idea occurred a few years ago to YachtCloser LLC president Brad Parker.
He was heading into a movie theater with his wife and three children when he got a call from a prospective buyer who wanted to get on a plane the next day to do a sea trial on a yacht he was brokering. Parker panicked. He was nowhere near home, did not have the documentation he needed to get the deal moving and had no scanner or fax machine available even if he had the necessary paperwork.
Needless to say, the night out with the family was a bust. “In order to make that deal happen right there I would have to send a contract to the buyer to sign and put in an initial offer, send that to the seller for the seller to print out, sign and fax back to me,” Parker says.
Such transactions can be further slowed when there are multiple sellers and buyers, which Parker says is common. It’s also typical that all of them are in separate locations, he says. He scrambled to get everything in motion so the buyer could get his plane ticket the next day. Then he decided that there has to be a better way.
After months of development and testing, Parker introduced YachtCloser in January. The website (www.yachtcloser.com) enables brokers to close and execute deals completely online. Traditionally in yacht brokerage, if a seller accepts an offer, a contract is drawn up and, if there are conditions to the sale, an additional contract is drawn up, Parker explains. Then there is state registration, title work, documentation — all of which is done manually. All of those documents must be faxed back and forth and can be barely legible by the time everything is done.
Parker fully automated the process, often accomplishing in a few minutes what in the past would have taken several days. His system relies heavily on the federal Electronic Signatures Act, which took effect in 2000 and gives electronic contracts the same weight as those executed on paper. “We have taken every single one of those contracts and automated them,” he says. “All you have to do is put the information in once and [the software] will automatically fill out every piece of registration.”
The information is stored in one place with reminders of important dates and expiration deadlines for each contract. A broker also can check a few boxes to have e-mails sent to buyers recommending insurance providers or transportation companies. The attached insurance form will already be 85 percent filled out, making it easier for the buyer to put in a few pieces of information and send it off with a click.
Parker hasn’t implemented a subscription service for those companies, but plans to do so soon. For now, he is charging brokerage companies $199 a month for each location, regardless of the number of users. So far, it’s working. Everyone he has pitched the service to has subscribed.
For Jenny Wicker, a broker at Denison Yacht Sales in Fort Lauderdale, Fla., the system has been extremely valuable. “This is the third brokerage firm I’ve been with and the first that doesn’t have someone specifically handling closing,” Wicker says. “This is my secretary for my closers.”
When she was handling everything on her own it was easy to overlook certain steps in the process or miss dates, she says. The first deal she did with YachtCloser was after a sea trial while she and the prospective buyer were in the car. He was driving and telling Wicker what he liked about the yacht and what his conditions would be. “I sat and pulled up YachtCloser on the phone and changed the conditions [of his offer],” Wicker says. When the buyer asked when he would have a copy of the changed terms, Wicker was able to tell him, “It’s already in your e-mail.”
Wicker initially checked with a lawyer to make sure everything about YachtCloser’s contracts was legally sound before she used the software because she was new to e-signature. The lawyer told her it was the best way to do business today.
“I can’t believe nobody’s done this,” Wicker says. “It amazes me that nobody’s come up with this, and I don’t know if there’s anything like this in the real estate industry, but if not [Parker] should go for it.”
This article originally appeared in the June 2012 issue.