Another broker scam, or am I being paranoid?

[jmschmidt]

This is mostly accurate information but it can all be done by you personally. Both countries are English speaking and have similar laws and regulations. USCG documentation is a relatively simple process and USCG National Maritime Center will walk you through it once you have shed the Canadian registration, which should be at the cost of the seller any way.

As for the agent's fees they are about what we paid on a French flagged boat owned by a St. Maritain subsidiary of Moorings. Our agent handled the French deflag and the USCG doc work. Much more work than your deal, The USCG Bill-of-Sale had to be sent to Paris to be notarized for example. Well worth the agent's fee, there are some good ones that earn their keep, check around and find one if you are not comfortable with doing it yourself.

[Capn Jimbo]

"Broker" and "Scam" are synonymous. Or is it "scum"? It's just the way it is. I used to think used car salesmen were the worst, but then I had to and work with real estate brokers. But then I discovered the scum of the earth, boat brokers.

Believe me there is nothing to be done that an average person can't do. At $1600 that represents over 100 hours based on the pay of most Americans, and to DIY seems obvious. Since the market has become so fragmented and simply lousy for sailboats, the good brokers have left for greener pastures, while leaving the part timers and bozos who don't have a clue, don't know the boats they are selling, misrepresent them, ad infinitum.

When you asked your question, I suspect you already knew the answer, and you were right. Such is life.

Carry on.

[Cadence]

Originally Posted by kokajambo

I found a boat I like.

It was built in Canada, finished by the owner, and is registered there with the Canadian Register of Vessels.
Owner is a great guy, but he's selling it thru the shady broker, whom I get to deal with.

So, the agreed price is $22.5K. I want to register it in Washington state. No USCG documentation for now.

Broker has suggested using services of his trusted "Shady Documentation Inc", who sent me a statement settlement that includes:
- 8.7% sales tax,
- $150 Registration fee,
- $250 Canadian Deletion fee,
- $350 Closing fee.

I was not exactly expecting to pay this amount, so started asking questions. Both broker and closing agent claim that it is necessary to remove the boat from Canadian Registry first, to be able to register it with the state (hence 250 extra).
Also, presumably, in order to document it with the USCG, I'd need the proof of the deletion, too.

I was able to find an option to get "Deletion certificate" on Canadian Marine Transportation website (https://www.tc.gc.ca/eng/marinesafet...menu-4427.html) for $50.

However, neither DMV, nor USCG websites mention it as a requirement for registration or documentation. I even called that DMV office that's closest to the Shady Docs Inc address, and asked them if they require any proof of deletion. They said no, only copy of current Canadian registration, and a notarized Bill Of Sale with matching names.
USCG explicitly states that either notarized Bill of Sale or State Title are valid proofs of ownership.

Shared the above with the suspects:
- closing agent got upset and told me DMV knows nothing and I should trust him if I want it to be done the right way.
- selling broker proceeded with telling me that I'm already lucky that I've saved $891 on Import fee that seller has already paid. And that he's going out of town starting tomorrow and he'd like to get that paperwork done.

I also got upset and keep fact-checking on, and it appears that since the boat was built in Canada, it should be subject to NAFTA, and can be imported into US for personal use without having to pay Import Duty.

So far it adds up to $1641 in arbitrary fees between me and the seller, presumably on top of their 10% commission.
I haven't heard sellers side of story yet, I wouldn't be surprised if there are more fees there.

Plus, thousands of dollars for therapy and rehab from the PTSD I'm going to develop in the course of this "adventure".

If somebody cares or is curious, and has relevant knowledge or experience, would you double-check my findings please?

I need to know if I'm being paranoid or not.

I don't know were the 10% payed by the seller enters into it, That was his agreement with the broker and none of your concern? The other fees seem to be paying for the brokers expertise. If you don't like it do it yourself.

[CarinaPDX]

I agree with the OP that this is a little shady, although not quite a scam. It seems to be quite common. When I renewed my US Document online I did a search for USCG document renew, and one of these services was the first entry, before the USCG. It takes a few minutes to do, so why on earth would I pay someone else to do it? They are playing on the fears of those that haven't experience; they do provide a service - just not a necessary one. Clearly the money is an issue for you - as it would be for me - and I would insist to the seller that you pay the agreed price without services added. Doing the paperwork is simply not that big a deal, if you have a little time. (I did my own documentation, from the original Master Carpenters Certificate - it really wasn't that hard, and not worth the price for a "pro").

I think you should reconsider the state registration instead of documentation. First, if you are ever going to do it, now is the time with the PO still around and the boat recently documented, and presumably a good bill-of-sale. Down the road a decade or two it could become much harder. The document will be recognized everywhere in the world - sometimes state registrations run into difficulties, as they did in Guadeloupe a while back. Boatyards and banks in the U.S. like documentation as any liens can be enforced by the USCG anywhere they operate, instead of trying to chase the boat with new lawsuits in each state. You will probably not have any issues with state registration, but the document is bulletproof.

Greg

[john61ct]

These piddly fees are just not worth getting all worked up about.

As long as you have the option to DIY, not a scam, shop around entirely normal.

Doing a purchase with no broker involved at all, I'd still use a documentation processing company to help with paperwork, until I'm totally confident I know what to do and how.

[Bassman3]

I dunno. I SOLD my FL registered, Canada Flagged boat last year and I applied for and paid Canada Transport for the deletion certificate. That, in my mind, should be the responsibility of the seller. The closing fee is probably just the fee to apply for the WA registration and register the title which seems a little steep but ya gotta pay if you are not going to do it all yourself.

[LeeV]

Different boat and circumstance but we bought our Corsair 36 trimaran, trailer and outboard, but had it shipped from British Columbia to Md. of most help was this gentleman; he handles this sort of thing all the time. He may be in your area. Call him!

Todd Nunamaker
Sanders Brokerage Services
todd@sandersbrokerage.us
(360) 332-1778

Good luck

[picklesandjesse]

Originally Posted by Capn Jimbo

"Broker" and "Scam" are synonymous. Or is it "scum"? It's just the way it is. I used to think used car salesmen were the worst, but then I had to and work with real estate brokers. But then I discovered the scum of the earth, boat brokers.

Believe me there is nothing to be done that an average person can't do. At $1600 that represents over 100 hours based on the pay of most Americans, and to DIY seems obvious. Since the market has become so fragmented and simply lousy for sailboats, the good brokers have left for greener pastures, while leaving the part timers and bozos who don't have a clue, don't know the boats they are selling, misrepresent them, ad infinitum.

When you asked your question, I suspect you already knew the answer, and you were right. Such is life.

Carry on.

Not all. Kent Little who posted here earlier is a broker and is a good one. Had dealings with him about 12 years ago when we bought a Farr 43 Snake Oil. I have a lot of good things to say about Texas !!!

[gaucho]

The seller should be responsible for the deletion fee. You should only take care of a registration fee, but deleting the old registration from a previous owner, falls on the seller.

[kokajambo]

Thanks to all who shared their opinions and experience so far.

Quick update: Armed with a bit more knowledge, I've pushed for DIY registration. Will use broker's escrow account (not the closing agent's), sign Bill of Sale from USCG's website, notarize for free at the local bank.
Should come out at $40 ($15 first registration fee + $25 wire transfer charge) instead of $750.
I'll write it all up in more details once done and share here.

[kokajambo]

Also, a side-note.
- Let's try not to transform this thread into a generic "broker vs diy" fight. I only meant to ask for advice on these specific charges.
- Closing agent's shadiness is also just a subjective impression, and "scam" was mainly a reference to my suspicions about broker and closing agent working together to share the fees. I haven't found any definitive evidence of that, so it will remain just that: a subjective suspicion.

[osprey877]

Have you done a bank and/or repairers lien search?? This is usually included in the documentation service, so if you’re doing it yourself you had better know how and where to search. You’d also better have it all sorted and the paperwork prepared and presented for signing to the seller by the agreed closing date or you risk losing the sale, not to mention your deposit, survey costs etc. You can do your own home purchase conveyance if you want, but nobody does. The fees charged by the professionals are minimal and in mho , and apparently that of 99% of other boat buyers, well worth the peace of mind they provide at what is usually a stressful enough process without having to learn international vessel conveyancing.

[33trippindaisy]

Let us all face the truth. Some Brokers are absolutely solid gold and others, well they simply ought to be in jail for the crooks they are. Having bought more than two dozen boats in my life, like my cars and my bikes I really like the older ones. I like their looks, and I am willing to spend the money on one to bring it up to a condition that does not require me to be crazy, and yet good enough to get compliments from everyone who sees them. I have also bought new or newer boats as well, but my preference for big boats is simply late 60's to late 70's vintage. With this being said its really been impossible to get Brokers interested, as I am certain they would rather sell a six figure boat than a low five figure boat......every day, all of the time. Can't blame them for that. BUT, if it is your listing, you owe it to your Seller to act fully in their best interest all of the time or simply don't take the listing. By example in 2004 I found a Broker listed Mainship 34 Mark I, simply a beautiful one owner boat in as perfect a way as is possible .....the listing price was $40,000.00, the Broker showed us the boat, which had a recent in/out of the water survey (how nice), and it was so impressive that I made an offer of $35,000.00 cash, with no financing required. I thought how easy is this going to be (in North Carolina), and yet the other stuff quickly began. We did the whole schmoo, earnest money up front, and the Broker came back two days later with a no, the Seller was sticking at $40. My wife and I were in the same City, as our current boat was in a Marina there and with a buyer/friend waiting on it. So off we go to just walk the docks and look at her one more time, not getting aboard, just dock walking and talking about the $40. As we walked up to the boat the owner came out and asked how he could help us, and we said we are the couple who has placed an offer on your boat. He looked very surprised and said he had not yet received an offer. Maybe I was out of place, but I told him I was offering $35 cash, and he immediately called his Broker, and the Broker was down there in just a short while, and started screaming at my wife and I about breaking protocol etc. He did not try to explain anything, he just continued screaming at us, so we left. And I mean we left and never spoke to them again. Then the fight came when he threatened to keep our earnest money which sent me to his office where thankfully the owner assured us we would be getting a 100% refund. He wanted to get involved but we were so taken back by the Brokers rudeness that we said no thank you. That afternoon the Broker showed up at my Marina and started all over again, screaming at the top of his lungs until the Police got there and he was escorted off the property. Long story short, the Broker was fired a couple of weeks later, the Seller sold his boat about four months later for $29,000 and everybody lost on that deal because the Broker simply failed to be nice. Even if we had somehow talked to the owner without his permission, the guy never submitted our offer and yet he wrote an offer and took my $3500.00 which I believe is/was wrong. I liked the owner of the Brokerage and felt he deserved another chance, and I found another listing of theirs that next month. While it was not a diesel boat, it too was simply a very nice boat. It was a 1983 Trojan 32 listed at 32K, a boat I love the looks of and would still own one to this day. The Broker wanted to hire a Captain to do the Sea Trial at $400.00, so I offered up my good friend and his 100ton masters who was of course willing to do this for me free of charge. They balked for a few days, then conceded. The sea trial revealed the boats props, shafts and bottom were not ready as she had terrible vibration, and would only run about 13 knots before beginning to overheat. I told the Broker to have the seller correct these issues, re-do the Sea Trial, then do the Survey, and then if all was well/acceptable I would pay 29k cash. He stated that the owner/seller had already told him he would not spend any money on the boat at all (maybe he did not have the money, IDK), but of course that did not work for me either, so I asked him to submit an offer anyway, and he said simply a waste of time. Rejected, I simply thought "Ah, two boats I wanted, and two boats I would never own." I ended up buying the "trippindaisy" from an individual for $15,500 with a survey less than a year old, and a sea trial that showed she was a good old boat. I did invest in her as soon as we purchased her, but less than 5k for new risers, new carbs, re-did the plumbing, new curtains etc. We quickly ran out of things to buy. She was that nice of an old boat. You can see her on my link here. What a joy to own she was. The rest of the story? I don't think I want to use a Broker for anything ever again. I am certain there are good ones, but I don't want to look for them. Again, I'll just buy these old boats and spend what they need. Just find one with good bones, make them run perfect first, and then start on any cosmetics they might need and you might want. In the end it has worked very well for me, with zero headaches. My question remains though, why do these bad Brokers feel the need to jack a Buyer around, over the need to serve their Seller.......that part has me and a million others very frustrated!

[Lake-Effect]

I suspect that sailboats in the low 5 figures are usually a pain in the ass to handle - you're mainly dealing with sailors who are cheapskates very frugal , and the sale becomes a lot of hassle for not much profit. I assume that extra services around documentation, title, etc are ways to earn a bit more from the deal. Same as when car dealers offer rustproofing, extended warranties, etc.

Perhaps a lurking broker could confirm my impression?

[kokajambo]

@Lake-Effect you're probably right. In my purchase, broker ends up with a short end of the stick, I don't think his commission justifies the effort (assuming 10% commission, I don't actually know the details of his agreement with the seller).
It might still be worth it to take on small deals, just to keep the business going and employees busy etc., and, perhaps more importantly, avoid letting other brokers in your marina.

However, attempting to recover some of their loss by taking share of additional fees from 3rd-parties involved in transaction is likely to create a conflict of interest. I'm guessing they generally try to avoid it.

Regarding your earlier question:

Is the broker Canadian, US, or operates in both countries? Is the owner Canadian or American? Where would the actual transaction take place?

In our area there are one or two brokers that have offices in, and listings from both countries. I have often wondered how that might work, and if they actually facilitate (for a fee) the customs, transfer and paperwork, including moving the boat into the buyer's jurisdiction. Is the Shady(?) Broker doing something like this?

In my transaction seller is Canadian, broker is American. The transaction is happening in US, and the boat has already been officially imported into US.
I believe there was no import duty to be paid (boat Canadian-build, should be subject to NAFTA).
3rd party importing middle-people (not the selling broker, but suggested by him) charged the seller $841 for passing a few sheets of paper around.
I don't think it included physical delivery of the vessel.
I don't know what part of it had to be paid at the border, if any.

From my research and what others have posted here, US-Canada border and import docs are easy to do yourself once you overcome the people-in-customs-uniform anxiety.

Bottom line is I've seen the receipt from third-party importer helper which looked legit, and I will get a copy of Customs Form 7501 upon signing a Bill Of Sale. Not sure if DMV or USCG are going to ask for it. I'll let you guys know when I get there.