The facts about so-called boat “escrow”?

[sailpower]

Originally Posted by Biomed

After my experiences I will not pay a penny to any broker, until I am satisfied that I am making a true_ not a provisional_ offer to purchase. This means, that my Marine Engineering Consultant has been through the boat and the systems and recommends it to me for further attention. I trust him, his expertise and ethics implicitly. He comes at a price, which is in the scope of things a bargain with the peace of mind he provides. And he works for me.

Is he someone that you would have to fly to the states?

Keep in mind that while you are buying those tickets, etc and waiting for his inspection and report that the seller has no obligation to hold the boat if another buyer decides to go forward before you have made up your mind to come see it.

I am not trying to talk you out of it. Just pointing out a possible result.

[Fiveslide]

Originally Posted by sailpower

I give up. What's the number?

Hey, that's not fair, you started the rhetorical question thing.

Originally Posted by sailpower

These nonsensical broker threads show up all the time. Many started and/or populated by people who have never bought or sold through a broker.

Should buyers/sellers beware? Always and no matter what the purchase or sale.

Is there an industry wide broker problem in the yacht industry? Of course not.

It is silly to suggest otherwise. Are there buyers/sellers who were or "feel" cheated? Of course there are. Show me a sales or professional industry where that is not the case? Statistically it appears to be insignificant here. Of course that doesn't matter to the one who might be cheated but overall? Please.

If it were a huge problem in the yacht industry who would use brokers? They would be out of business.

The money in brokering is at the upper end. High net worth buyers and sellers are not fools. They sure as heck don't want to waste their time dealing directly with non professionals so they use a middleman whom they trust. Would they do that if the industry was corrupt? Of course not.

Anyway, always entertaining to read a good rant.

For even more fun perhaps the OP would care to share what he does for a living? I'm sure the brokers here will have their own stories to tell about that.

Corrupt? I don't think they are, but if we're comparing them to real estate brokers, they are far behind. I'll be using brokers as long as people who have the boats I want to buy use a broker. I've only ever sold mine privately, without much effort, but I'm not what many consider "high net worth."

[sailpower]

Originally Posted by Fiveslide

Hey, that's not fair, you started the rhetorical question thing.



Corrupt? I don't think they are, but if we're comparing them to real estate brokers, they are far behind. I'll be using brokers as long as people who have the boats I want to buy use a broker. I've only ever sold mine privately, without much effort, but I'm not what many consider "high net worth."

My point is that if one reads these types of threads one would assume that the Yacht Broker Industry is dominated by criminal salesmen. That is just not so. Now, are there brokers who misrepresent boats and are generally incompetent? ? Sure. Same with every profession. Don't use them.

The reality is that, as someone else pointed out, a successful career broker is one who cultivates repeat and referral business. That is really the only way in these internet days to have a lengthy, successful career. There are lots of them contrary to what one might assume after reading threads like these.

FWIW I know lots of brokers and they have their own stories of disingenuous buyers and sellers. Maybe they should post them?

As for private parties, we know that they will never misrepresent their boats or price them unfairly. Also you can be sure that they will always immediately disclose anything that could possibly be wrong or need repair. Often you will learn why the brand new $300 VHF has increased their boats value by $3,000. This is valuable information to be sure. LOL.

Anyway, like the OP, I don't have a dog in this hunt so back to the amusement.

[Biomed]

Thank you for the Heads Up! He is in Florida, but is quite in demand and travels a lot. His opinion is my first and possibly most important marker. Either the boat is open to inspection and available when he is, or the matter stops there. He is not a surveyor. His knowledge of standards and best practices is encyclopedic and based on real world experience. If he gives it a clean bill of health, that's as good as it gets. Checks all and then some. With respect, you sound a tad like a few brokers I dealt with. " Decide now, or the boat may be gone" kind of statement. Later, boat still for sale, at a much reduced price, and still no takers. My wife saw ads going back years of the same boat on offer. Not a fast moving item, it would seem. Yet when we make an inquiry, the suggestion is that a deal is about to be signed! When that rubbish starts, we walk away at once. We may have missed the boat we are looking for, but we will not put with that rubbish, sales blabber usually follows post hoc, ergo propter hoc. Rather tell us that the boat is not popular, but has what we need, and know that it does. We have a busy theatre schedule, which is set up well in advance, so moving procedures is complicated and time away must be planned carefully. We can fly to see boats on days off, but only do this when we know that we have a very serious contender. Hence, lots of questions and boxes to be ticked, and the preliminary inspection. Money is not at a premium, but time is.
Nearly all boats we thought were suitable, did not make it to first inspection, due to lack or non existent service covering our questions. Our Engineer must have a full and comprehensive set of paperwork, to base his decision on. Knowing this, the brokers seemingly prefer to deal with easier prospects, we hear no more about our questions, but they keep emailing other boat profiles to us. When we have a boat that is demonstrably fit for purpose, we will fly our Engineer to wherever she is, provided he tells us he has seen what he needs to see in the documents . He will not inspect the physical boat unless he is comfortable that the specs are what is said they are. There are a lot of boats for sale. Fair winds to you all

[sailpower]

As I said, I wasn't trying to change your mind. My post was to inform not persuade.

Good luck.

[gRider]

I am in the "middle" of my first big boat purchase. I am in Florida and using a mutual broker with the seller (originally the seller's listing broker). I went to great lengths to research and negotiate what I think is a fair price. I have 10% in escrow with the brokerage (a nationwide firm). That's all water under the bridge.

However, had I used a documentation service I don't see how I'd be in any much better position with the escrow. If there were any foul play possibilities, I don't see how the documentation service would be more trustable than the brokerage. At least with the broker, I have met him, checked his license, talked to those who know him, looked him in the eye, and shook his hand. Maybe, I'm old fashioned? Not sure I could do all that with a documentation service.

As for the documentation service title search, what can they possibly do that you can't on your own for $25 (honest question, not rhetorical)? I just got an abstract of title for the USCG for this purchase that shows the whole history of liens and ownership since the original owner. Took less than 48 hours and the Coast Guard (pretty reputable Id say) emailed it to me.

Only thing left of concern to me is the lien currently on this vessel. I will in no circumstance pay for this boat without clear title. Seller is contractually required to provide a free and clear title at closing. Assuming he doesn't have the cash to pay it off before closing, how's he gonna do that? How is this typically handled with brokered sales?

[sailpower]

Originally Posted by gRider

I am in the "middle" of my first big boat purchase. I am in Florida and using a mutual broker with the seller (originally the seller's listing broker). I went to great lengths to research and negotiate what I think is a fair price. I have 10% in escrow with the brokerage (a nationwide firm). That's all water under the bridge.

However, had I used a documentation service I don't see how I'd be in any much better position with the escrow. If there were any foul play possibilities, I don't see how the documentation service would be more trustable than the brokerage. At least with the broker, I have met him, checked his license, talked to those who know him, looked him in the eye, and shook his hand. Maybe, I'm old fashioned? Not sure I could do all that with a documentation service.

As for the documentation service title search, what can they possibly do that you can't on your own for $25 (honest question, not rhetorical)? I just got an abstract of title for the USCG for this purchase that shows the whole history of liens and ownership since the original owner. Took less than 48 hours and the Coast Guard (pretty reputable Id say) emailed it to me.

Only thing left of concern to me is the lien currently on this vessel. I will in no circumstance pay for this boat without clear title. Seller is contractually required to provide a free and clear title at closing. Assuming he doesn't have the cash to pay it off before closing, how's he gonna do that? How is this typically handled with brokered sales?

The broker will normally use settlement fund to pay the lien directly.

[hellosailor]

If you want to use an escrow account at a bank, they'll be glad to open one. For a fee. Whereas your broker's own "trust" account is already existing and part of his cost of doing business. Since he won't want to pay the escrow fee, and the seller won't want to pay the fee, and the buyer's gonna complain "I don't pay no stinkin fees!"...ergh, how do you get the Escrow Fairy to come pay the fee?
So back it goes to the broker's account instead of escrow.

if there's a lien on a vessel, I'd expect a NOTARIZED "Satisfaction of Lien" to be presented as part of the closing. If that's supposed to be done after the sale or simultaneously using the sale funds? Yeah, the lien holder or their counsel is going to have to be there to sign off, or there's no guaranty it is happening. Sometimes, folks just have to get their ducks in a row.

[BandB]

Originally Posted by gRider

I am in the "middle" of my first big boat purchase. I am in Florida and using a mutual broker with the seller (originally the seller's listing broker).

As for the documentation service title search, what can they possibly do that you can't on your own for $25 (honest question, not rhetorical)? I just got an abstract of title for the USCG for this purchase that shows the whole history of liens and ownership since the original owner. Took less than 48 hours and the Coast Guard (pretty reputable Id say) emailed it to me.

Did you do a search through the state for liens?

Let's be clear on one thing. He is not a "mutual broker." He represents the seller and only the seller. You can't legally represent both parties. He's the broker you contacted and have a relationship with but his obligation and his contract is with the seller. As a good broker he should treat you fairly and honestly, but you are not his client.

[gRider]

Thanks, sailpower ... broker just told me the same thing.

Originally Posted by sailpower

The broker will normally use settlement fund to pay the lien directly.

[gRider]

Not sure on how I would search through the state of Florida for liens. How would I do that. I would assume any lien at that level would be annotated on the title, right? If so that would be readily apparent at closing.

As far as him being a mutual broker, I agree somewhat with your sentiment on a functional level, except that Id take it one step further and say the broker really doesn't represent anyone but himself and his interests intersect in significantly more with the seller than the buyer. But contractually, in black and white, he is indeed a mutual broker in my case. Whether or not that's legal, I'm not qualified to say . . . but it would surprise me to learn that the clauses referring to mutual brokerage in this contract, on stock paper from a established, respected, nationwide brokerage, are indeed illegal.

To be clear though, I am 100% in line with your sentiment and very much aware that the only person looking out for me is me.

Thanks for the thoughts!

Originally Posted by BandB

Did you do a search through the state for liens?

Let's be clear on one thing. He is not a "mutual broker." He represents the seller and only the seller. You can't legally represent both parties. He's the broker you contacted and have a relationship with but his obligation and his contract is with the seller. As a good broker he should treat you fairly and honestly, but you are not his client.

[BandB]

Originally Posted by gRider

Not sure on how I would search through the state of Florida for liens. How would I do that. I would assume any lien at that level would be annotated on the title, right? If so that would be readily apparent at closing.

!

Sure be on the title. However, there are judgment liens and federal liens that could possibly not be. Now if not properly on the title, they probably can't affect you. Regardless, you can search for both from here.

Search Records - Division of Corporations - Florida Department of State

[GordMay]

Greetings and welcome aboard the CF, gRider.

Congrat's on your, soon to be, "new" boat!

[valhalla360]

Originally Posted by sailpower

Yacht Brokerage is an industry particularly in FL. Where are all the complaints from those who have suffered as a result of dealing with them?

Search the forum for "broker" there are tons of complaints.

How many brokers are in criminal or even civil court at any given time?

The problem with criminal or civil action is most of the transactions are small enough that the brokers are largely judgement proof.

If the broker makes a mistake that costs you $500, it will cost you $1000 to have a lawyer even look the situation over, so most lick their wounds and move on.

Not having a ton of criminal charges doesn't prove there isn't a problem.

Only reason the industry survives is because they've largely locked it down similar to the realestate industry. Once you get above $30-40k which is the low end of cruising boats, they control the market if you want to buy or sell, there is not good way to avoid them.