We’ve all seen “For Sale By Owner” signs on boats in marinas, alongside the road, across the street from a boat show. You can also buy or sell a boat online using eBay or social media. But are any of these truly safe bets for buyers or sellers?
You’ll have to shell out a percentage of the purchase price for the services of yacht brokers, but they will make the process go much more smoothly. You are being represented by a third party who can negotiate unemotionally on your behalf. Whether you are the seller or the buyer, a broker acts as an adviser — one who knows the market.
A yacht broker “makes sure the deal is a legitimate transaction,” says Bobby Gregory, a certified professional yacht broker (more on this designation below) with Intracoastal Yacht Sales in Charleston, S.C. (www.intracoastalyacht sales.com). “We make sure the buyer is getting a lien-free boat. [Using a broker] is good protection against fraud.”
A yacht broker also knows what should be covered in the survey and can recommend to the seller any servicing the boat might need before a sale. If the customer is a buyer, the broker can suggest what to look for in the survey, such as suspect vibrations, engine alignment issues or problems with particular engines. And the broker will use the survey results in negotiations on the client’s behalf. “We try to make the negotiation process comfortable for all the parties involved,” Gregory says.
Closing on a deal can be complicated, and brokers will help with the process. “Most boat owners are not familiar with the closing process,” says Tim Gredick, a longtime broker for HMY Yacht Sales, which has locations in Florida and South Carolina (www.hmy.com). “They don’t know what to do about documentation or how to get an abstract of title.”
Nor do they understand the intricacies of boat sales and/or property taxes. When someone calls months after the sale and needs help handling those taxes, the broker will have the paperwork on file and can explain what needs to be done. “This happens on a regular basis,” Gredick says. “But if they didn’t use a broker that information won’t be readily available.”
Gregory agrees, noting that he has seen buyers who did not use a broker “get slapped with a big tax lien.”
Another reason to list your boat with a broker, Gredick says, “is that it’s really an international market now. An individual can’t get the same market coverage through multiple listing services and magazine advertising that a broker can,” he says.
“We deal worldwide these days,” Gregory says. “Any broker in the world can take part in a sale. The majority of boats we sell now are co-broker listings.”
In recent sales, Gregory has sent boats to Canada and Russia. “A broker who knows how to handle those types of closings is important” to keep buyer and seller from having legal difficulties, he says.
Gregory says using a broker is especially important for first-time buyers. “They don’t really know what boat will meet their needs, so we provide them with an education on boat types,” he says.
Doug Ford, a certified professional yacht broker and founder of Intracoastal Yacht Sales in Little River, S.C., had a couple who wanted a used twin-engine diesel cruising boat for $50,000 or so. “I had them look at 15 boats before they realized $50,000 wouldn’t buy what they wanted,” he says. They eventually found what they wanted — for $100,000.
Using a yacht broker can give the buyer or seller confidence during a transaction. Most brokers belong to one or more of the seven professional associations that provide opportunities to keep up to date on the laws, regulations and other matters that could affect a sale. The associations require that their members adhere to a high standard of business practices and a strict code of ethics. Those requirements provide a safeguard. If something goes wrong, clients have an avenue to file a grievance or seek redress if they think the broker was at fault.
The Yacht Brokers Association of America has instituted a Certified Professional Yacht Broker program. “The certification program raises the level of professionalism so that brokers are trained and have credibility,” YBAA executive director Vin Petrella says.
Yacht brokers don’t undertake the certification process just for themselves. The ultimate beneficiary is the person buying or selling a boat, who can rest assured that the broker has committed to being accountable not only to his peers but also to the boating public.
For information about the program or to find a certified broker, visit www.cpyb.net.
Suzi DuRant is executive director of the South Carolina Marine Association and managing editor of Professional Yacht Broker Magazine.
This article originally appeared in the July 2012 issue.