Buying a Boat - Disappearing Deposits & Slit Throats

[ctsbillc]

Folks,

I've been trying to buy a boat for over a year now, mostly in the Carribean. One of the U.S. brokers I deal with cautioned against dealing with anyone off-shore generally, and "in the French Islands" specifically. He had colourful tales of folks being unnable to get their deposits back, and (I hope he was exagerating) "Throat cutting tactics" of the brokers.

I would like to ask the panel if this is just a broker trying to slag his competition, or if there are any brokers I should stay away from.

Best Regards,
Bill

[John A]

Anybody that makes their living on commissions, will sometimes use unacceptable tactics to feed the family.
They'd like your business, so yes they're going to dis the competition.

Some boat brokers are former car salesman who are to lazy to stand to do their jobs.

Rather than ask for a list of brokers to stay away from, you should ask which brokers to deal with, the list will be shorter.
The search for a boat is part of the adventure.

[Quickstep]

There are a lot of good boats for sale in Grenada and Trinidad, and a lot of reputable people there selling boats- BUT, make sure you ask where the boat was during Ivan or Emily! Two VERY reputable people there would be Billy Wray (THE surveyor in Trinidad) or Neils Lund (THE rigger at Budget Rigging) and ask who they would recommend you work with.

[ctsbillc]

It is quite an adventure, and quite a learning experience. I've had very bad service from a very large Florida based dealer - bait and switch, showing 6 year old photos of a twelve yeear old boat (taken before the current owners had a chance to neglect the vessel). Definite used car folks trying to go up-market.
There are a number of broker in the U.S., one broker in Guatemala, and one in Antillies, who seem very straightforward folks and generate a good comfortable feeling. Of course I could be wrong in all cases. It would seem wise to hang on to your deposite, and not go sending cash all over the place, until you have had face to face contact.

[Hud3]

Anywhere you go, you'll find good, honest people to deal with, and you'll find the other side of the coin as well. But an additional issue you'll face in buying a boat in a foreign country is that if the broker or seller doesn't live up to the terms of the purchase/sale agreement, it may be a very time-consuming, expensive, and difficult process getting satisfaction.

[barnakiel]

What you hear from a Brit broker about a French broker is a legend. Go to a French island and ask the same sort of question, you will get the same sort of answer.

You do not have to use a broker, you can buy from the owner. You do not need any deposits, you can arrange the agreement and direct payment, you can use a notary public and a bank escrow account (if the boat is expensive enough to justify this).

You can use an offshore branch of your local owner, you can assign your own broker of trust and have him/her deal with a broker you would not like to deal first hand.

b.

[ctsbillc]

All good advice folks, thanks.

Bill

[Randyonr3]

Boat brokers, even if they are a little slimey, are held to standards set by a governing body.. a deposit cannot be taken without a written offer for a boat..
Just had a friend who went through school to work as a salesman at the Yacht Sales Next door.. His oppenion was that its harder to get a licences to sell a boat than it is to sell a house... and you do have to have a licences and work for a legitament broker..

[sailorboy1]

I would think that as long as you only gave your deposit to YOUR US broker (I assume you trust him/her) you are protected as to the deposit if deal falls apart.

[ctsbillc]

The off-shore money bit is the risky bit I think. Getting a U.S. broker in the loop probably reduces risk quite a lot.

Bill

[barnakiel]

Elsewhere I have seen broker's marghin at 6-7%, less on big boats, more on small shooters. But I found when we hire our own broker, the total remains the same, unless one of the brokers is an AH.

In the end, I think, the margin does not count, as I would gladly give 50% to a broker who can get me the boat I want at the price I want.

b.

[Palarran]

Is the broker you talked to in the United States a well known Catamaran broker?

The process of the deposit goes like this: First you make an offer through the broker you have selected. Then, if the offer is accepted, then you pay the deposit. You pay the deposit to YOUR broker. If you choose to use the selling broker as your broker, caveat emptor.

I'm working with a french broker in St. Maarten right now. I think they are reputable having spent some time with them. They are my buyer broker and the seller broker is from the US. When it came time to pay the deposit, my broker suggested that if I felt uncomfortable sending him the deposit, to send it to the other broker, which I did. No problems.

I think you will also find the standard broker fee is 10%.

[ctsbillc]

The U.S. broker who slagged the French is a well know U.S. broker, who will of course remain nameless. Maybe he has'nt forgiven them for Iraq yet....

That's an interesting approach from the St. Maarten broker, He's probably well aware of our fear of moving cash to less well controlled areas (If the U.S. can be considered controlled :-) )

I've heard 10% is a normal broker's commission too.

Bill

[Zednotzee]

Originally Posted by ctsbillc

He had colourful tales of folks being unnable to get their deposits back

That is certainly possible. I'll quote you this, from paragraph 6 of the Purchase & Sale Agreement I signed:

"...Time shall be of the essence. Unless the Total Price is paid on or before the Closing Date, the Seller, at the Seller's option, may cancel this Agreement and in such event any funds paid by the Purchaser shall be absolutely forfeited to the Seller, not as penalty but as liquidated damages without prejudice to any rights that the Purchaser may have."

I presume this would most likely occur in the case of someone failing to secure financing to complete the purchase.

[AquatiCat]

I like the idea of buying from the owner if possible. For example, this boat sounds pretty awesome and cruiserly and has just gone down more than $40,000 in price, which is pretty amazing: Rio Dulce Chisme Vindicator :: View topic - 48' Heritage s/v Vicky for sale

OTOH, we were looking for a catamaran, and the Prout we found was listed with a broker, and we have been dealing with him. We are perfectly satisfied, the owner is a wonderful man and the broker has been communicative and timely (given that this is a used boat and the negotiations cut right across the Miami Boat Show, that in itself is pretty impressive). We are going to have to put a significant fraction of the purchase price again into fixing her up to Coast Guard requirements, but basically she is sound and capable and we LIKE her! We will give her a wonderful adventure and good mechanical and wiring and plumbing updates, and she will, we trust, carry our little family safely over the "so big" sea. I think this is do-able by you, but when it comes time you have to be willing to go there and look at the boat in person, get a CVS with an accredited surveyor and with you present to see what s/he is seeing, and get the feel of the deal at that point. Working remotely is generally less reliable.

Good luck, and may you find a boat at the right price that comforts your heart!

~aCat