Buy a Boat

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Buying from a Yacht Broker:
Commissions, Escrow Accounts, Taxes, and More

It pays to work with a professional yacht broker when shopping for your next boat, especially if you are financing the purchase.

By Jeanne Craig
(edited)

If you’ve ever purchased a home you know it can be a complex process, one that most of us wouldn’t attempt without the help of a qualified realtor to represent our interests. Buying a yacht is a similar process and best done with the help of a Professional Yacht Broker.

It’s easier to negotiate the multistep procedure with the counsel of a professional, someone who’s trained to help you with everything from finding the right boat and financing the deal to managing escrow accounts and taxes. The difference, however, is that many buyers don’t know they can hire a Professional Yacht Broker at no cost to them.

Too often, buyers make the mistake of finding a boat they’re interested in and then simply calling the listing broker. When this happens the buyer may be venturing into shark-infested waters, since the listing broker’s first priority is to serve his client (the seller). Fortunately, you don’t have to go swimming out there alone. Here are a few tips for the boat buyer on how to save time, headaches and money by working with a broker.

When buying a boat, don’t wander into shark-infested waters without a buyer’s broker.

The process begins when the boat seller lists the yacht with a broker. Generally, the seller agrees to pay a commission (usually 10 percent of the purchase price) to the selling broker at the closing. So even at this early stage the seller has professional representation in the transaction.

Now what about you, the potential buyer? If you pick up the phone and call the listing broker, you’re beginning the transaction on your own, which is not usually the best route to take. A better approach would be to select your own broker, a buyer’s broker, to help guide you through the sales process.

How do you find the right broker for the job? Look for a Licensed Yacht Broker who can assist in all phases of the buying/selling process. Such a Broker should give you the highest level of customer satisfaction (working for you) throughout the process. Look for one who is dedicated to being with you for the long haul, as it may take a while to find just the right boat to meet your needs.

Once you’ve settled on your broker, you can begin the buying process. Your broker will provide a host of free services — free because the fees are paid through a co-broker arrangement that is set up with the Listing Broker; again like a Real Estate Broker.

The first service your broker will provide is a yacht search and recommendations based on the size and type of yacht you’re looking for, along with a value analysis of the asking prices. He then arranges for you to tour any of the boats that have attracted your attention. Once you have located the boat of your dreams, the broker will prepare a written offer called a Purchase and Sale Agreement. This legal document is submitted to the listing broker along with your 10 percent deposit. That deposit will be held in your broker’s dedicated escrow account.

Tip: If your broker doesn’t have a dedicated escrow account for this purpose, that should be a red flag. You might want to find another broker.

Your broker will submit the offer and negotiate with the listing broker on your behalf. The seller can reject it, accept it, or make a counter offer.

Once you and the seller have agreed on the price and terms of the sale, your buyer’s broker will assist in setting up a Yacht Survey and Sea Trial – if you have so requested as part of the purchase agreement.

In the event the survey or sea trial turns up a defect in the boat, three options are open to you.

1. Reject the vessel outright and get a full refund
2. Ask the seller to fix the defect before accepting the boat,
3. Renegotiate the price down and fix the boat after the sale.

Once you and the seller agree on the final selling price after the survey, the buyer’s broker will continue to assist you by offering financing options, determining taxes, and by making sure the yacht has clear title with no outstanding liens or encumbrances, so the ownership will pass smoothly to you at the closing.

Because a buyer’s broker offers so many valuable services, you can see why it makes sense to have a dedicated representative looking out for your interests throughout the process. And what’s not to like about free?

(Jeanne Craig has been covering powerboats since 1988. She spent ten years as a senior editor at Boating magazine and ten more as executive editor at Motor Boating. She’s now an independent writer based in Rowayton, Connecticut, where she’s close to the cruising grounds she most enjoys.)

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If it’s out there, we’ll find it! Not only do we use some of the largest MLS Internet databases to list our boats on, but we also use those same databases to search for boats.

Send us an email describing what you want and we’ll find it for you.

Once we’ve located the boat of your dreams, we’ll help you get it! We have the professional resources available for you to enter into purchase negotiations and acquire your new boat. As highlighted above, being represented as a Buyer by a company such as Ruby Yachts/YachtWorldNet will be to your benefit.

Remember, there is no charge to you for us to act as your Buyer’s Agent!

Check with us for these services:

• BoatCheck™

• Closing Service

• Documentation

• Extended Warranties

• Financing

• Inspections

• Insurance

• Surveys

• Transport

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