Buying Bad Boats

[Chas F]

I'm new to buying boats, but the whole brokerage business seems a funny field. Are there any recognized national standards of conduct, legally or ethically? I know realtors have codified ethics and legal obligations that protect the buyer.

For example, less than a year ago, I turned down a home-built, steel 46-footer. Among other reasons for turning the boat down was that the surveyor said that the hull needed numerous pits in the steel filled and a few small areas of plates replaced as a result of galvanic corrosion. Also, the engine was questionable and the interior needed, in my opinion, a full gut.

The boat was cheap and soon was off the market, sold I assumed. Then, a few months later, I saw the boat for sale again, this time by a foreign broker. But fresh pictures showed the hull with the same ground out areas where the ultrasound was done but the price had gone up over 4 times the original asking price. The hull clearly was not properly repainted and so I'm sure no plates were replaced. When I asked the new broker what, if any repairs to the engine or hull had been done on the boat, he only said that the boat had been sold.

Though there are other ways that this scenario may have gone down, it seems that either someone is flipping the boat or the original owner has decided that the boat was worth far more than the original asking price despite the hull deterioration. I also am aware that some people make their livings by buffing up old boats, often concealing defects, and then selling them for a big profit.

What are the legal protections to the boat buyer other than a survey and caveat emptor? Do yacht bokers need a license by law? And what kind of legal requirements are necessay to get a license?

Chas

[tenknots]

Some states have requirements for broker licensing and some don't. Those that do can really put pressure on dishonest brokers. Many states have consumer protection agencies that can help. BoatUS has a consumer affairs department that can mediate disputes.

The Yacht Brokers of America is a loose group of brokers - not all belong and there is little recourse with them.

Do a google and you can read their code of conduct.

There are probably good honest brokers out there, but I've found the opposite to be true.

The broker works for the seller - only a surveyor is going to work for you.

[Alan Wheeler]

You have to be doubly cautiouse when dealing with an overseas broker. Many places around the world, including NZ do not require licencing of brokers. There are many very good brokers and of course, the odd few that would be happy to slap a thinck coat of paint on their Grandmother and sell her off as a twenty year old. I have heard a couple of stories of people buying from oversea's and finding the boat to be no where near the condition the photo's and listing suggested it was.
AS already stated by tenknots, the broker is working for the current owner and of course, the commision. Make sure you have a Serveyor and a good one, being an expert in the type of vessel construction you are looking at. It's good to see you knew that and didn't get caught.
Wheels

[Pblais]

Boat brokers are like realtors. You'll find most of the boats are sold by a small percentage of brokers. With realtors that number is 10% of the realtors sell 90% of the properties. It's one of those professions where you may not work all that hard and sell just a few a year. Foks that work hard sell more. I want a broker that works hard.

As with realtors you'll generally find the people that sell the most work real had and treat people right. Referals are pretty hard to beat. Talk with people that have bought or sold boats with brokers in your area and you should be able to separate out the good from the bad. You aslo want a broker that will treat your buyer right too. You would not buy a boat from a slim ball so don't hire one to sell your boat.

Meet them talk to them. Don't hire anyone you don't feel comfortable with. Ask them what they know about boats. You shoudl interview them like you would any other professional you might hire. There are enough of them certainly on the Chesapeake that you don't have to settle for anyone you don't like. There are great ones all over the bay.

Read all contracts and clarify how long you are giving them to sell the boat before you can consider dumping them. Ask what happens if you sell the boat. Ask what they will do to advertise your boat and how will they handle prospective buyers.

You can make a list of a lot of questions. A good broker should answer them all and help you set a realistic price expectation. They ought to work hard to help put a deal together that sells your boat and gets you a fair price.

[Jeff H]

Its funny, I think that it is a bit like politicians, every one talks negatively about politicians and brokers in the general sense and yet seems to like the specific ones that they are working with. In my life I have worked with literally dozens of brokers in putting together boats deals. Most have been pretty good and some have been amazingly wonderful, and out of the bunch only comparatively few would appear as the picture next to the definition of 'incompetence'. A few have fallen in a grey zone between incompetent, non-disclosing and just plain disingenuous.

In buying a boat, it is very much a matter of 'let the buyer beware'. A good broker will provide reasoned and well meaning advice, but in the end it is your own judgment and the judgement of your surveyor that is all that you can expect to reasonably be able to count on.

In the circumstances that you are describing the broker may not know about the damage and unless the broker has specific knowledge of the problems (i.e. the broker has actually seen a survey or been told about the problems by the owner) the broker has not obligation or even legal authority to disclose the details of the condition of the boat. I wou hate to speculate on why the boat went up in value, what had been done to repair it or not, whether the boat was undervalued originally and over valued now, or whether the boat has been moved to a portion of the world where steel boats are highly valued, but the selleris free to ask whatever he feels he can get and if he finds a buyer who thinks that is a fair price then more power to him.

I think that one of the worst problems with steel boats is really accessing the condition of an existing boat. I recently looked at a power boat that I had drafted when I worked for Charlie Wittholz in the early 1980's. At first glance the boat looked pretty good. It had previously had a good survey and a bunch of work done to it. When I began to examine the hull plating closely in the engine room, I found comparatively deep rust pockets in the plating that parrelled the frames and occurred primarily under the frames but which were covered by a thick coating intended as a sealant and rust inhibitor. I doubt that the owner, surveyor or broker was aware of this issue, but after examining several frames it was clear that it was a pretty wide spread problem and that the bottom plating needed a lot of work. If the next buyer or broker did not spot the damage they would also assume that the boat was in good condition.

Respectfully,
Jeff

[CSY Man]

Been looking into getting my brokers ticket here in Florida and the requirements are this:

Be of a good moral character with a criminal check and a credit check performed by the state of Florida.
Send a check in with the app for $551.00.

And have 2 years sales experience....That means working for a licensed broker selling boats under supervision for 2 years.

The above should weed out the crooks, hopefully.

I know quite a few brokers around here and they are all hard-working good guys.

Had a small taste of the broker life recently trying to sell that Jouet 42...The deal is done, but I spent every day the last 2 weeks screwing around with the thing, from cleaning and detailing to arraning meetings, surveys, deals, etc, etc...
Full time job it is.

My hat off to brokers.....

[tenknots]

No doubt many brokers work hard and are honest. My latest experience was otherwise.

The broker rarely returned my calls and did little to sell my boat. I did my own website that the broker and myself referred people to, which eventually sold my boat. The contract called for advertising on their part which never happened. I handed over a check for 10% with disgust. If he hadn't handled the closing (I was out of town or could have done it), he would have been worthless.

The only other brokers in the area at the time worked for the same place so changing brokers didn't seem like it would help.

I have a friend who works on consumer complaints for boaters and brokers are always a problem, though admittedly he wouldn't see anything but the problems.


CSY man, maybe you can raise the respectability of the profession!

[CSY Man]

"CSY man, maybe you can raise the respectability of the profession!"

He-he, not so sure about that, but thanks for the thought.

Yes, sure there is bad (or lazy) apples out there, have heard some stories too, but the guys I have dealt with seemed okay.

One broker that I drink beer with from time to time, told me it is easy to tell if a broker is lying: If he is moving his lips he is lying.....

[harryrezz]

Hey, tenknots - you said that perhaps CSY Man could raise the respectability of the broker profession.
Clearly you don't know CSY Man!!
(Sorry, Dag - I couldn't resist that one!!
When we bought La Nostra we hired a surveyor based on the letters and prices which we got back from prospective surveyors in the area whom we had contacted. Turned out that the fellow we hired had actually delivered our boat from the factory in Florida to Tortola, BVI where he worked as the charter fleet manager for CSY! Because of his engineering background he also did some work at the CSY factory on quality control! Talk about hiring someone who knew a bit about these particular boats - wow, did we ever get lucky.
BTW - after pointing out a few defects (most of which the PO fixed for us as part of the deal) he told us that ours was the best example of a CSY 44 he had seen in years. Made us feel really good about the purchase - and it turns out he was right!