There is a community of brokers who have been around for years. We respect the industry guidelines and processes that were established to protect buyers and sellers. We realize that taking care of our clients has great financial returns. Over the past few years a new group of younger brokers and brokerage firms have emerged. They seem to have no respect for the established guidelines and standards. They care more about themselves and their commissions than their clients.
Here some red flags that you should watch for:
- All offers should be in writing on a standard purchase and sale agreement. Verbal offers and “would ya takes” are not in anyone’s best interest and can devalue the boat by establishing a lower price with no meat on the bone.
- A 10% deposit is important prior to the agreement being binding. If a buyer proceeds with a survey and fails to pay the surveyors then the lien goes on the boat. The deposit being held in escrow assures that the bills are paid. It also shows the credibility of the buyer. Less than 10% is a risk to the owner. Make sure that the deposit is being held in a legitimate account. If you are concerned about the holding of the deposit it is very acceptable to have the deposit held by an attorney rather than the broker’s account.
- The purchase price in the agreement is the purchase price. If a broker tells you that he can easily have $xxxxx discounted after the survey then be wary. Does he know something that he is not telling you? All offers should be made with all of the information being disclosed. On occasion something comes up at survey that warrants a price concession. Those items should come as a surprise and previously unknown to the buyer and seller. If your broker knew about it before hand and failed to disclose it then run.
- If your broker appears to be slamming the deal together to catch up on his mortgage then run.
- “You should buy this boat because you can make money chartering”. Run. It is very very rare to find a boat that makes money chartering. Chartering can offset some ownership costs. Even the most successful charter yachts do not show a profit over a five year period. On a rare occasion a yacht can be in the black for a year or two. Look at the numbers after five years when the major yard periods are completed.
By using a reputable broker you will find that your yachting adventures are so much better. That reputable broker will always be there to assist long after the closing.