Buying a Cat with broker vs going it alone

[mohose]

Long time reader first time writing.I live in Toronto , Canada and looking to buy a catamaran in the UK. next year. I.m just not sure if to hire a broker to help with the sale transaction or go it alone.
If I do go it alone this is what I plan to do , a presale survey before flying their or have someone check it for me .
Second negotiate a price with survey and sea trial in the contract, have a marine lawyer look over the contract before signing.
I appericiate your thoughts ,experience and advice in this process.
Thanks In Advance
Mo

[myocean]

This will all be rather simple but you will probably need an escrow account.
Before you can start a complete survey you would typically do a pre-payment. When all is fine the full amount should be put on the escrow account and get released with the boat being handed over.
The question is, who will do this escrow service for you (can be expensive). There are some new ideas around for online solutions involving blockchain. Don't know if this is already in operation and working well.

[mohose]

Thank You Myocean I appreciate your comment.
Yes escrow was something I didn't think about. What is blackchain and how can I find out more about it.
Thanks Mo

[Bean Counter]

If you are going to get a marine lawyer to read the contract, you may as well use his escrow account if the other party is OK with that.

[tatomaceda]

That's "blockchain" not blackchain.
Popularized by Bitcoin, it allows participants to exchange "money" without having to deal with the traditional institutions/regulations. Security is one of its hallmarks and the blockchain technology is now being applied in other ways. While it is growing, it is still quite far from being ubiquitous.

[rabbi]

Originally Posted by tatomaceda

That's "blockchain" not blackchain.
Popularized by Bitcoin, it allows participants to exchange "money" without having to deal with the traditional institutions/regulations. Security is one of its hallmarks and the blockchain technology is now being applied in other ways. While it is growing, it is still quite far from being ubiquitous.

The technology behind blockchain may be mature but the perceived value of these currencies is not.
Bitcoin has a ridiculous volatility. +- 50% in one month is nothing special.
Other crypto currencies are similar.

[surf_sail]

Originally Posted by rabbi

The technology behind blockchain may be mature but the perceived value of these currencies is not.

Bitcoin has a ridiculous volatility. +- 50% in one month is nothing special.

Other crypto currencies are similar.

Good thread.

There are plenty of third party escrow services you can use without resorting to blockchain/crypto. E.g. Escrow.com. (Wouldn't dream of using crypto currency for a transaction of this size)

But how does this normally work when using a buyer and sellers broker? I assume the brokers also use a 3rd party escrow provider (I wouldn't feel comfortable trusting either my broker or the other party's with an unsecured loan). I also assume that escrow fee typically comes out of the brokers commission (split by buyer and seller brokers)?

So if you're buying the boat without a buyers broker the sellers broker would likely suggest a 3rd party escrow. You should do your due diligence that escrow co. is reputable and if not comfortable suggest another. The fee should be paid by the sellers broker. You should also remind the seller (or directly the broker) that the seller's broker should lower their commission because if sold to you the seller's broker doesn't have to split it with another broker. Hopefully part of the commissions savings will be passed on to you in the form of a lower negotiated price.

[Bean Counter]

Buying a yacht in the UK - see link about brokerage from Royal Yachting Association
https://www.rya.org.uk/SiteCollectio...T%20BROKER.pdf

[billknny]

When you say you are planning on buying a catamaran, I assume you are talking about a cruising cat. I think you will find that the VAST majority of boats you might want to buy are already under contract with a broker.

If you decide ahead of time you will not deal with a broker, you are going to severely restrict the choices available to you.

I think you will also find a significant percentage of "unreasonable" sellers listing boats privately. They were told by a broker the price they wanted was too high, so they decided to try on their own.

[Jeannius]

Bean Counter gives good advice by pointing you to the RYA resources. They have sample contracts that are often used for buying and selling in the UK. They are an independent organisation that assists their members in dealing with the 'professionals' in the boating industry.


Interesting that you intend buying in the UK. There aren't that many cats here so I presume you've identified one that is on the market or are planning on buying new.

[Suijin]

I would consider retaining a buyer's broker, although I'm not sure how brokers work in Canada and the UK. Here in the US, the buyer's broker splits the commission with the selling broker so there is no cost to the buyer.

Advantages of using a buyer's broker in your case:

- Has access to past listings and and their final sale values which is valuable information in formulating and rationalizing offers for specific make/model/year boats.

- Brokers tend to be more upfront with other brokers, so your broker will likely get more honest information with respect to condition from the selling broker

- An experienced buyer's broker will be familiar with escrow, tax, title, and registration/documentation issues in an international sale and should handle all the paperwork for you. The buyer's broker will also have an escrow account for your use.

So I would look into it. You get a lot of valuable assistance for free. Of course it all hinges on the quality of the broker you retain. Some concerted asking around usually turns up good candidates.

As for your proposed process, it's highly unlikely that the seller will agree to a survey before you make an offer and make a good faith down payment. It involves the boat being either hauled or launched (an additional cost to you, over and above the cost of the surveyor's service), and it's a hassle that they don't want to go through without some form of commitment. Usually you submit an offer based on the listing description/inventory and inspection of the boat, then adjust that offer based on the results of the survey.

[Anders]

I could be wrong but I have never heard of a buyers broker in Europe and I doubt the selling broker would split the commission the seller pays.
Never heard of any payment before survey in Europe either and I would not pay a penny before survey, the fact that I'm paying for the survey should tell the seller I'm serious.

[danielamartindm]

Originally Posted by mohose

Long time reader first time writing.I live in Toronto , Canada and looking to buy a catamaran in the UK. next year. I.m just not sure if to hire a broker to help with the sale transaction or go it alone.
If I do go it alone this is what I plan to do , a presale survey before flying their or have someone check it for me .
Second negotiate a price with survey and sea trial in the contract, have a marine lawyer look over the contract before signing.
I appericiate your thoughts ,experience and advice in this process.
Thanks In Advance
Mo

A buyer's broker collects his commission from the seller, but contracts to represent the buyer. Being in the business, especially in a niche market like cats, they can have "inside knowledge" of various vessels from past inquiries that can save you lots of time and wasted travel expenses. This advantage is limited to brokers' listings, but remember that the broker's commission may tend to make the seller less amenable to price reductions during negotiations. I think a buyer's broker is a good idea as long as the contract leaves you free to pursue for-sale-by-owner opportunities without owing a commission on them. If you end up purchasing a broker-listed yacht without availing yourself of a buyer's broker's services, all it will really mean is that the seller's broker will keep the entire commission without splitting it with a buyer's broker, and you'll be without whatever services a buyer's broker might have afforded you. That's just MHO.

[akprb]

Originally Posted by billknny

When you say you are planning on buying a catamaran, I assume you are talking about a cruising cat. I think you will find that the VAST majority of boats you might want to buy are already under contract with a broker.

If you decide ahead of time you will not deal with a broker, you are going to severely restrict the choices available to you.

I think you will also find a significant percentage of "unreasonable" sellers listing boats privately. They were told by a broker the price they wanted was too high, so they decided to try on their own.

This about nails it.

[Piscis]

Originally Posted by Anders

Never heard of any payment before survey in Europe either and I would not pay a penny before survey, the fact that I'm paying for the survey should tell the seller I'm serious.

I was thinking the same....

Is that really common practice in many parts of the world to make a down payment before my surveyor had a chance to inspect the boot? What happens if negogiations, after the downpayment and the followed survey, are not successfull? I doubt i will get that payment back...

John