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Everything you need to know about yacht brokers

Wednesday, 04 October 2017

Everything you need to know about yacht brokers

No matter whether you’re choosing a yacht broker for the first time, or you’ve used one before, you can learn more about the process involved

Superyachtonline.com – the yacht industry directory, answers some of the key questions;

  • What is a yacht broker?
  • Why choose a yacht broker?
  • What do they charge?
  • What should I consider before choosing a yacht broker?
  • What activities do they carry out on the behalf of buyers and sellers?
  • How do I find a yacht broker?

What is a yacht broker?

A yacht broker is an individual or company who works for those looking to buy or sell yachts.

Why choose a yacht broker?

Working with an experienced broker has many advantages. Yacht brokers draw on their knowledge and experience of the process of buying and selling yachts and provide advice. Yacht brokers will handle the required legal documentation, including: certificates of ownership, security and listing agreements, registration and transfer papers, and escrow arrangements. With so many important legal responsibilities, it’s critical to work with someone who has experience in this area.

What do yacht brokers charge?

Most yacht brokers tend to work on a commission basis, though every broker is different. The industry standard is around the 10% mark, which is paid by the seller. When dealing with larger vessels, such as superyachts, this figure is likely to change.

What do I need to know before buying a yacht?

You should have a good idea of the below before you approach a broker. A good broker will help to refine these ideas to understand what you truly want.

  • What size of yacht are you looking for?
  • Where will it be used (climate and types of sea)?
  • What activities will the yacht be used for?
  • What facilities do you need?
  • What is your budget (including necessary repairs, sea trials, survey and commission)?

What activities do yacht brokers carry out on the behalf of buyers and sellers?

The activities that your yacht broker will carry out will depend on whether you are looking to buy or to sell. We’ll look first at buying, and then move on to selling.

Buying a yacht

When looking to buy a yacht, this is what you may expect from your yacht broker:

  • A preliminary brief

They will ask about your requirements, including size, facilities and price. We cover this in the section above, called ‘What do I need to know before buying a yacht?’ Some brokers may choose to show you vessels that are different to what you’ve asked for. This may be because they believe that something else may better suit your needs. Brokers will also use their judgement to ensure that you can afford the yacht. If the yacht doesn’t need a crew, they may also ask questions to understand whether you are capable of operating it safely.

  • Find and highlight suitable yachts

Your broker will conduct research, and reach out to their network to find a vessel that meets your needs. This is where experience is important. Knowledge of wider market conditions and recent sale prices can be very useful.

  • Represent you throughout the process

Once they find a yacht that meets your requirements, the broker will organise and conduct discussions and viewings. They will carry out the necessary due diligence, and make you aware of any issues the yacht has. You should expect a service history and full disclosure about both major and minor problems. Your broker will confirm whether the vessel has ‘liens’. Liens are where yachts act as security against an outstanding debt. This is crucial, as buying a yacht with liens also means that you are likely to inherit the debt attached to it

Recommend a suitable and realistic offer price

Your broker will give you advice on what to offer to secure the yacht at a fair price. They will prepare an ‘Offer to Purchase’, which may include the terms of the sale, and details of the buyer’s and seller’s obligations

  • Organise the required legal documentation

There is often a lot of legal documentation required in the purchase and sale of a yacht. Your broker should organise everything from the initial ‘Offer to Purchase’ and ‘Bill of Sale’, to titling, licensing and registration documents, tax, fees certificates of ownership and security agreements

  • Place your deposit in an escrow account

The contract should also include placing your deposit in an escrow account, and include stipulations to allow enough time to locate a surveyor and arrange financing for purchase. The deposit will usually be subject to sea trial, surveys and inventory exclusions. Your deposit should be returned if the survey indicates a large issue, or if you fail to secure financing in time

  • Organise the Sea Trial and Survey

Most buyers will request a sea trial and marine survey to ensure their purchase is as they expect. If the survey uncovers issues, brokers can offer advice and help to find quotes for any necessary repairs 

  • Complete the sale

Once everything is satisfactory to all parties and all legal documentation has been signed, your broker may help you to find moorage, yacht maintenance and repair facilities

Selling a yacht

We’ve covered lots of the broker’s duties in the paragraphs above, but listing brokers can also carry out the below. This is what you may expect from your broker if you are selling your yacht:

  • Inspect and create a feature specification document

Your broker will ask questions and request documents from you to put together a complete history of the yacht, including where and how it was used, the number of previous owners, repairs, and any major incidents that it has been involved in, including sinkings and groundings. High-quality photos of the yacht should be taken. Your broker will detail any improvements needed to increase the price or chance it will sell

  • Setting a fair asking price

A broker will use their expertise and knowledge of the marker to set a fair and realistic asking price. They may use a multiple listing service to gauge the range of asking prices for your type of yacht. Many brokers also have access to private data which includes actual sales prices. The goal is to make your yacht attractive to buyers, while achieving as high a price as possible

  • List and advertise your yacht

A listing will be published with the intention of reaching the most interested and qualified audience. This brings home the importance of finding the best broker for your particular type of vessel. Just because a broker has great experience in one domain, doesn’t necessarily make them the most suitable for another. Advertising may include print media such as marine publications, email and social media campaigns

  • Show your yacht

The broker will screen prospective buyers, to ensure only those with sincere interest and capability are shown the yacht. The broker may locate moorings or storage for the duration of the listing, in order to make it easier to view

  • Complete the process 

As we’ve covered in the ‘buying a yacht’ section above, the broker will arrange for the drawing-up, completion and submission of the relevant legal documents, the scheduling of the necessary surveys and sea trials.

How do I find a yacht broker?

There are several ways to find a broker that will increase your chance of a positive outcome:

  • Seek a recommendation from someone you trust who has been through the process of buying or selling a yacht
  • Make an enquiry with the yacht brokerage association that operate in your part of the world. There are several regional, national and international associations that will be able to share a list of their members with you. These associations tend to place significant importance on the ethical behaviour of their members, with many prepared to terminate membership for unethical actions. The threat of expulsion provides added incentive for them to conduct themselves properly during the process
  • Search for the right yacht broker in our extensive directory

Please note that a yacht broker listed on Superyacht Online is not a recommendation of their business or services. Superyacht Online take no responsibility for any consequences that arise as a result of listings or information found on this website.

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