Our first boat purchase was on Ebay. Yep – we bought a boat on Ebay
After a professional survey and a personal look-over of the boat, we purchased a 35′ Moody. The whole thing took a matter of weeks and everything was organised between us and the seller.
That being noted, the purchase price of the boat was low
When we decided to buy the home that would carry us around the world, our first port of call, however, was a broker. When you’re spending a chunk of your life’s savings you want all the help you can get. Our broker at Oyster UK was brilliant. He really worked hard for us when it came to finding the right boat, negotiating the price and making the deal happen.
Unfortunately, however, the Oyster that we purchased was outside of the UK and we were handed over to another Oyster broker during the survey and sea trials…
The second broker unfortunately did not meet expectations, but that’s another story
Needless to say, I can definitely say that I’ve experienced the good and not-so-good side of boat brokers.
But this article isn’t about my experiences – let’s hear from a professional boat broker!
Over the past year I’ve been in touch with a wonderful person named Matt Howard. He stumbled upon this website and has been very helpful with support, tips and feedback for me and my family.
Matt has been a boat broker at United Yacht Sales, in America, since 2009. He lives just outside of Washington DC and serves the Mid-Atlantic region. Matt’s background includes yacht design, he is a USCG licensed Captain (50 ton Master) and a graduate of the Yacht Broker Institute. Previous to his life in the boating world Matt was a U.S. Marine Corps helicopter pilot.
Many readers of this blog are in the process of looking to buy a boat therefore I thought an article about boat brokers could prove useful.
I sent Matt the following list of questions and he filled in the answers.
So – here’s everything you need to know about boat brokers
1. Can you buy or sell a boat without a boat broker?
The short answer is yes. In some cases ‘selling by owner’ is perfectly fine. However, both buyers and sellers should carefully consider the risks involved and proceed accordingly (see number 3).
2. Is there a certain price threshold where a broker is necessary? For example, if you’re going to buy or sell a $10,000 used boat should you use a broker? What about a $100,000 boat?
There’s no pat answer to this question, because it really comes down to the comfort level of buyer and seller and the nature of the deal. That said, we commonly broker the sale of boats valued anywhere from $10,000 on up.
3. Why use a boat broker? What service do they perform for buyers? What service do they preform for seller? Do brokers help boat owners to trade-up (sell and buy another boat)?
Brokered transactions are more secure than informal proceedings between buyers and sellers. If you want to buy a used canoe or a small skiff you can go eyeball the thing, ask a few questions of the seller, haggle the price, strike a deal and off you go. But if you’re after something bigger, there’s going to be more money involved. Maybe lots more.
If you’re a buyer, you need a way to check things out thoroughly with at least a qualified mechanic but better yet a professional surveyor. You need to arrange financing, insurance, registration/documentation and dockage or storage. Maybe you need some training to refresh your skills especially if you’re moving up.
You need to trial run the boat out on the water and put her through her paces. And after all that you need to be able to walk away before you accept the vessel if you’re not satisfied with any aspect of the deal. A good broker will see that all this and more is accomplished in order to protect your interests.
If you’re a seller, you want to make sure your boat gets seen, and better yet, stands out in a crowded market. You need to know what the fair market value is for your boat. Note that this figure does not equate to what others are asking for similar boats. Fair market value represents what the current market in your geographical area will likely bear. This ‘sold boat’ data is not available to the general public. Brokers have access to it, and good brokers will put together a detailed comparative market analysis on your boat so you know exactly where you stand.
Then, as you get prospective buyers, you don’t want to waste time with tire kickers. You’re not in the business of giving free boat rides. You want some assurance that a potential buyer is serious. You want some type of deposit held in escrow as ‘earnest money’ as an instrument of that buyer’s commitment. To best protect your interests, you need a legal, professional, iterative and documented process to which both buyer and seller agree. A good broker will take care of these details and help ensure the process runs smoothly, keeping you fully informed every step of the way.
(Matt wrote quite a bit on this topic. If you’re interested start with this article and follow on to his others: Selling or buying a boat? Here’s what a good broker will do for you)
4. Do boat brokers work only with the stock they hold or do they work with other boat sales companies/individuals?
Brokers should, and will usually be happy to co-broker deals with any other brokerage. Some will attempt to limit co-brokerage (in other words discourage outside brokers bringing a buyer to the deal) in order to prevent having to split the resulting commission by keeping the sale in house. This does a disservice to both buyers and sellers.
5. How do boat brokers make their money? Is it negotiable?
Brokers earn a commission when they sell a boat. The usual figure is 10% of the selling price, which is split between the listing broker (representing the seller) and the selling broker (representing the buyer). This figure will vary and may be negotiable depending on the circumstances of the deal.
6. Are there ‘good’ and ‘bad’ brokers? Can you describe the difference?
I’d love to say there are only good brokers out there… but this not the case. I think the best way to differentiate the two would be to focus on the positive and infer the rest. Put simply, a good broker is one who is always looking after his clients’ best interests. This means listening to the client, understanding his or her needs and desires, placing that resulting objective front and center, and then delivering on it.
If representing a seller, it means doing your homework and establishing accurate market value for the vessel and pricing it accordingly. In some cases this means a little ‘tough love’ is required for the client who because of emotional attachment or other factors believes the boat is worth more than the market will bear. It means producing a first rate listing complete with numerous, high quality photos, and a detailed vessel summary to match.
It means using all available sources to aggressively market and advertise the boat. It means being intimately familiar with the vessel so that when a prospect calls or emails the broker is able to provide accurate information and answer all the questions the prospect may have. When an offer comes, it means tracking and shepherding the process to closing with a near fanatical attention to detail, communicating constantly and ensuring the client’s fiduciary interests are well represented.
If representing a buyer, it means casting a wide but specific net, globally, if necessary, to capture available vessels that may suit the buyer’s needs. When a buyer isn’t quite sure what he or she is looking for, it means having detailed discussions, asking questions, listening, and providing options and alternatives so that over time, the details are teased out that ultimately describe the ‘perfect ‘ boat for that buyer. It means travelling far and wide, if necessary, with that client (and spouse!) to view as many vessels as possible to help narrow the field.
It means doing the homework that arrives at a fair market value for that vessel and making offers accordingly. Once on contract, just like in the above example, a fanatical attention to detail through survey, trial run, vessel acceptance and closing is necessary. Once the deal is done, it means providing either directly or indirectly whatever additional services the buyer may need, be it delivery services, crew sourcing, training, and dockage.
I think it’s fair to say that if a broker does all of the above, we can call him or her one of the good ones!
7. Once a boat sale is complete does the broker offer any other service?
Absolutely, but let’s back up a step. Brokers can help buyers well before closing with other matters; maybe they need recommendations on marine lenders if they’re financing or help finding insurance providers. Once the deal closes, in the short term buyers may need help arranging dockage, vessel documentation or getting recommended service providers. In the longer term, being there after the sale and staying in touch is one of the most rewarding aspects of being a broker.
8. If your mom, wife or loved family member was going to buy a boat and they couldn’t but it from you, what suggestions or tips would you recommending for finding a good broker?
Ask around. Ask your boat owning friends who they worked with and what they thought of their broker(s). Referrals and testimonials are the coin of the realm in this business, so don’t hesitate to ask candidate brokers for a list of their client testimonials. Take time to meet candidate brokers in person, because let’s face it, chemistry is important.
9. Are there any well-known tricks that brokers perform that can be considered disingenuous? What should new buyers keep an eye out for?
First, ensure your broker is listening to you. If you’re a buyer, be wary if you’re being shown listings above your desired price point. Good brokers are not looking to maximize commission: good brokers are looking to satisfy their clients’ desires. And the truth is, buying the smallest boat that will do the job is always good advice. Don’t allow yourself to be rushed. Brokers should be patient, not pushy.
If you are selling, before you sign a listing agreement with a broker ask to see examples of listings he or she currently has active or sold previously. Those listings should reflect high quality photography and detailed, complete write-ups. Ask that candidate broker where your listing will be advertised. You should expect to be told it will be online with multiple listing services, not just locally or only in local print resources. You should also be shown comparative market data, in writing, that shows what the market will likely bear for your vessel.
10. Do you always recommend a marine survey on a boat prior to purchase?
Yes, absolutely, and without exception!
11. Do you recommend that a buyer brings an independent person skilled in boats (engines, hulls, rigging, steering, etc.) to have a look at the boat in addition to getting a marine survey from a professional surveyor?
A qualified and proficient surveyor should be able to critically evaluate and assess all aspects of a vessel and be able to provide a general overview of installed engine(s)/generators. Additionally, in many cases buyers will elect to obtain the services of a dedicated engine surveyor who will be able to evaluate the installed propulsive and auxiliary machinery in a more in-depth fashion than the hull surveyor.
Good brokers will nearly always recommend a survey, and in many cases will also recommend a dedicated engine survey, but this is solely at the buyer’s discretion. There are valuable resources available to help buyers select a surveyor. Two of these are the Society of Accredited Marine Surveyors (S.A.M.S.) and The National Association of Marine Surveyors (N.A.M.S.). These organizations’ websites allow users to search for surveyors worldwide.
12. Before a boat buyer contacts a boat broker what should they think about? What information will the boat broker want to know?
I mentioned a few suggestions above to find a good broker. In turn, your broker will need a few things from you to help find the right boat to suit your needs. What type of boat you are looking for, desired price point, maximum or minimum size, whether you plan to finance or not; the more details you can provide, the better.
A good broker will also ask you how you intend to use the boat, where it will be used, who will typically be aboard with you, and what activities you like to do while aboard. I like to ask prospective buyers “describe your ideal day on the water”. All these details will help shape the search, and also help the broker think of options you may not have considered that might be a good fit.
13. Is there a governing body for boat brokers or an association that brokers belong to so that potential clients can look them up?
There are multiple regional associations that brokers can join that help keep members up to speed on current issues dealing with the recreational boating market, help provide a uniform voice, and also prescribe a set of ethical guidelines that all members are required to practice. Membership in these organizations demonstrates a broker’s commitment to his profession.
Matt Howard Biography
Matt Howard has been an avid boater since his dad first put him behind the wheel of the family’s classic Chris Craft runabout when he was four years of age. Throughout his lifelong love affair with boating, he has owned, operated, and maintained a broad range of boats both power and sail, running the gamut from Hobie Cats to cabin cruisers to offshore performance powerboats.
After graduating from the Virginia Military Institute with a degree in Civil Engineering, Matt began his career as an active duty U.S. Marine Corps helicopter pilot; a career that took him around the country and around the globe. During his many tours of duty, including a stint flying the President as a Marine One pilot, Matt owned and operated a variety of boats in lakes, rivers, and the coastal waters of Hawaii, San Diego, CA, and Norfolk, VA. Before leaving active duty, he enrolled with the Westlawn Institute of Marine Technology’s Yacht Design course, a rigorous program designed to give students the ability to design, from the ground up, sail and power boats up to 100 feet in length. Matt is also a USCG licensed Captain (50 ton Master) and a graduate of the Yacht Broker Institute.
Since leaving active duty, Matt has used his infectious passion for boating and his comprehensive knowledge of power and sailboat design, construction, and operating characteristics to help friends and colleagues find the right boat to suit their lifestyle. His enthusiasm and innate talent for doing so led him to the next step – becoming a yacht broker. He has been with United Yacht Sales since 2009, lives just outside of Washington, DC and serves the mid-Atlantic region.
“The best thing about this business is the relationships you build along the way. Staying in touch with clients and hearing about their adventures aboard vessels I helped them acquire is tremendously rewarding. I can’t imagine a field of work that I would enjoy more.” Matt Howard