Buying Without a Broker

[capnorv]

All fees should be negotiable. Our last boat we paid sales tax and doc fee, seller paid everything else. We also purchased for about 70% of last asking price, 60% original asking price.

[Capt Phil]

I've gone both ways on buying and selling, Sand Crab. The last couple of transactions I did not use a broker but after buying and selling a few boats, you get to know the routine, pitfalls and have other resources to call on for escrow, searches, documenting, etc., much of which you can do yourself. However, if you are new to the game, using a broker for these services probably makes sense. ALL commissions, fees and activities that a broker handles are negotiable. They bitch and whine but they are able to deal on most if not all of these costs.
One time I did use a marine title company was on the purchase of a boat for a client who was a non-US citizen, the boat was outside the US but US documented which required removing it from USCG documentation while offshore and re-registering the vessel under an offshore 'flag of convenience'. When you get into these esotric kind of deals, it's a good idea to get help from experts. No broker was involved in that transaction, however. All of the paperwork was handled through a concierge at a Mexico hotel, a title service in San Diego, another in Florida and a Notario Publico in Mexico.
Brokers are hungry to put deals together at the moment so you are in a good bargaining position to get a break on commission charges.
Any title company or even an attorney can act as an escrow agent for a small charge but title companies are expert at searching for title and liens on vessels in my experience. I agree with previous posters who advise to guard against giving a deposit to a private seller. As a matter of fact, a friend of mine recently put a deposit down on a boat for sale through a broker, the deal cratered due to financing problems (boat was too old for the bank to lend) and he is still waiting months later to get his deposit back from the broker. He is about to start legal action to recoup his deposit. So Beware and good luck... Capt Phil

[capnorv]

I walked away from a mobile home in the 70's and lost my deposit. Good luck to your friend in getting his back. In our state I doubt it would be returned...part of business.

[gettinthere]

I bought a private listed boat. Financed part of it. The financing company required a documentation service and they became responsible for any issues. The bank won't let themselves be put in jeopardy. So consider borrowing for part of the cost even if you have the cash. The doc service was a big help in keeping some tax issues straight.

[Sand crab]

Appreciate the advice Gettinthere but when i buy the boat it will be for cash and I will be debt free for the first time in 35 years. And thanks to everyone else for the info. As I stated earlier I will most likely use a broker because FSBO boats are rare. FWIW, I plan on getting an older cat or maybe a tri in the $250k range. A lot of these are in the caribbean so international titles may be an issue best handled by a professional. BOB

[Capt Phil]

Drop down and have a chat with one of the many marine title companies operating in Florida about buying an offsore titled/registered boat. Florida title companies are a wealth of information and will take the mystic out of buying such a vessel either FSBO or through a broker. They can also handle the transaction for a fee that a broker handles as well if you run into a good deal on a private sale. Capt Phil

[simonmd]

Originally Posted by Sand crab

Thanks everyone. Just a few more questions. When you used a broker, were there any hidden fees other than commission, sales tax and documentation costs required by goverment entities? These are the mostly BS type of fees that the mortgage brokers and car dealers like to slip in on the contract. And were there any fees that you thought were justified? Thanks again. BOB

The broker's fees are between him and the seller, the price you agree on for the vessel is the price you pay (in 99% of cases anyway). The only other major cost to bear in mind is the cost of a lift out and survey which I would say is pretty much essential if you're buying a boat of a reasonable value. Quite often, the broker is, ahem, 'happy to arrange this' and ends up getting a cut from the surveyor as well, bumping the cost up, which you end up paying for. Best to get your own surveyor to avoid the middle man costs.

[Capt Phil]

I echo simonmd's comments. Find your own broker who works for you. Brokers know the easy surveyors and the tough ones and depending on whether they represent a buyer or a seller will dictate who they select. I would never take a brokers recommendation on a surveyor because of the hugh opportunity for a conflict of interest to occur. Consider interviewing 2 or 3 surveyors and probe them on licensing, experience surveying the type of vessel you are looking at, cost, timeliness of report and level of detail. If you have gone over the vessel yourself first, identify particular issues of concern like rigging, hull integrity, sail condition, engine hours if available and I would recommend doing an oil analysis as part of the survey. This will give the surveyor some additional areas to concentrate on when he completes his survey. Capt Phil

[Pblais]

A USCG documented boat title trumps a state title. Some boats have both.

Both would be a federal crime. It's also a crime to have more than one state registration but harder to get caught. States may require a state sticker or some tax that has nothing to do with the title but the title registration is in one and only in one place and that goes internationally as well. It keeps people from selling the same boat twice.

On a USCG documented boat you can take the ID number and for a fee get a listing of the title that will list any outstanding liens and the transfer history. It should be possible on a state title too. Consider it title "assurance" though while the boat is being sold is a time when liens may accrue so it is just a check for a moment in time. You might see about doing this near the end of the process after the survey is completed. You'll have time to make the check then.

Your contract to purchase is basically a document to assure title transfer. After the money is secured the title will be signed and filed. It's usually the end of the deal so doing a title check is worth it. It will take some time for the USCG to deliver your new documentation certificate. Most all larger boats are USCG documented. It usually is cheaper over the long run.

You can't get a loan on a state title if the boat is large enough to be document as banks like documentation better and it is more reliable that a state registration. When you purchase a boat and are not a US citizen you should arrange to have the paperwork for how you intend to register the boat. You have a window of time to complete this process but the clock starts ticking and the calendar can place you in a legal problem if you wait to long. Just leaving a boat sitting some place can be a problem.

Last advice is don't forget about the dinghy! It has its own paperwork and even if it's included with the boat - it is a second boat. I've had that problem before.

[Nomad57]

This sounds like a minefield, especially for a Canadian. We've been thinking about buying two boats, one for down south. (Don't try to talk me out of that, the round trip on an annual basis is just too much.) It may behoove us to buy both in Canada, and export the southern one. I may pay a little more, but we'll have fresh-water boats, and I may end up paying less in the long run.

I went down this road with a car once in the early 1970s. I bought a muscle-car, the engine of which promptly blew up. While in the process of rebuilding, the bank showed up. The guy (who had absconded back to Europe) owed some $250, which I had to pay.

Some bargain.

Nomad

[Cheechako]

When you buy the boat you need a method of putting the transaction in escrow. Funds withheld until title changes to you. Isnt there anyone who will do this? I would think some of the big Documentation places (like Atlantic) would know...they have to "get 'er done" in accordance with the banks all the time. Per the above it sounds like it doesnt really matter.... there can be an invisible lien on your boat....? I thought liens had to be filed? If it's not filed, how would they ever collect when you sell it? All of the above scares me too...guess I've been real lucky so far!

[Pblais]

I don't see this to be different in Canada or the US. They both have similar issues laws and rrequirements and with any large purchase the problem of getting stuck is the same all over the world.

Far away from home does make the transaction cost a little more for all the reasons "far away" entails. The cost of moving a boat from Canada south to warm winter sailing adds to the cost of the boat too. Keeping a boat in the US is the same if you buy it in Canada or here. Having one in both coutries is an issue to sort out and maybe the harder (more expensive) issue. There is always a way to handle the money.

The big difference is in the cost of finding and surveying and just checking it out and making it ready to sail the way you want. Doing that near your home is cheaper. You have local people you know and deal with if you need services or supplies and are not forced to make long distance travel. So you trade off one set of known problems for the other set no matter what you do.

FWIW, Two boats really sucks Been there and I didn't enjoy the extra labor. You are forced to make trade offs and they really are about you more than the boat so in that way there isn't a perfect answer.

[Capt Phil]

I have used attorneys, Title and Documentation companies as well as a bank manager in a small coastal town to act as escrow agents in marine transactions. As long as they are bonded, both the buyer and seller agree on them as disinterested parties and have the confidence of the buyer and seller, they can hold escrow funds and disperse them in accordance with the agreement between the active parties in the sale.
They undertake no further responsibilty than holding the funds unless you ask them to. A tilte company may, for example, search titles, secure transfer of title or document the vessel in the new owners name if requested, and for an additional fee usually.
There is no big mystery to setting up an escrow account. The main issue is to have a reliable third party who is trusted by both parties hold and disperse funds in accordance with the contract between the buyer and the seller.
The advantage for the buyer is that they know that their money won't be given to the buyer until certain conditions are satisfied.
The advantage to the seller is that the buyers money is up front and will be given to them as soon as they comply with the contract terms. This may include paying off any liens or incumburances against the vessel.
I'm no attorney but folks that don't know each other and have no way of establishing trust in such a short period of time should feel more comfortable setting up such an account. It isn't difficult and is businesslike IMHO... Capt Phil

[Nomad57]

Originally Posted by Pblais

FWIW, Two boats really sucks Been there and I didn't enjoy the extra labor. You are forced to make trade offs and they really are about you more than the boat so in that way there isn't a perfect answer.

Paul,

Very good information. The only other option is having one boat and trucking it, at least one way. (That is what a broker recommended, truck it south, sail it north in the spring.) The unknown is: how hard is trucking on a boat? Don't wanna damage it bouncing down the interstate. The round trip on its own hull I calculated at 1750 hours (including the Caribbean). That's too much for us. Might as well get a McJob.

The downside to one boat, though, is a lot more wear and tear on one than on two. Then there might be some anti-fouling incompatibility, I dunno. Mast up and down... the list goes on.

One of the fellows on here says two boats works for him.

"It's a lot of boat for the money, assuming you need a lot of boat, and have the money."

Nomad

[Rick R]

Nomad. Is not a good idea to buy a boat in Canada for use mainly in the US.
1. Since you live in Ontario, you will pay 13% sales tax plus registration fees.
2. A Canadian boat cruising in the US needs a cruising permit
3. You could import it into the US, and make it a US boat, but there are costs associated with that too
4. Boats are usually cheaper in the US, especially Fla. and the Chesapeake.
5. If you are not a US citizen, you can not federally Document a boat, but you can state register it.
Instead, buy it in the US and leave it there.

I suggest you look at both brokered and for-sale-by-owner boats. Just remember that brokers usually charge 10%, and the buyer usually ends up paying in the form of a higher selling price. Only you can decide if the brokers fee is worth it. If the boat may have a questionable title (many recent owners, extensive recent repairs etc.) the answer is probably yes. But if the boat is fairly new, has only had one owner, and obviously no expensive repairs, then you and the seller can do everything to transfer registration.

Of course, if you spot the boat of your dreams in a brokers listing, then your decision is made for you.