Should a Broker Disclose A Hurricane Damaged Boat?

[zeta]

Wondering if a broker should let a perspective buyer know the boat the brokerage is representing was hurricane damaged? My reason for asking is I saw my previous boat (total loss--Katrina) listed on Yachtworld. It appears all damage has been repaired, guess my question is "Would you want to know if your perspective boat was totaled?" I'm not sure if this boat would have a salvage title as it was documented.
My reason for concern is I am currently in the market and I think I would like full disclosure, plus I would not sell something that may be suspect or unsafe.

Thanks,
Mike

[Kettlewell]

I think they "should" provide full disclosure, but many won't. I was aboard a boat once I was interested in and the owner happened to pop by and asked if I would like to see the hull repair he had done. It turns out the boat had broken loose, gone up on the rocks, had its hull punctured so bad the owner removed the engine through the hole in the hull. And yes he had done superb job of fixing things so it was undetectable without some sort of tear down of the interior, yet I know that type of incident could mean that wiring is shot in some inaccessible place, or the keel bolts have been overstressed, etc. The broker and the listing made no mention of any of this.

[capngeo]

Originally Posted by Kettlewell

I think they "should" provide full disclosure, but many won't. I was aboard a boat once I was interested in and the owner happened to pop by and asked if I would like to see the hull repair he had done. It turns out the boat had broken loose, gone up on the rocks, had its hull punctured so bad the owner removed the engine through the hole in the hull. And yes he had done superb job of fixing things so it was undetectable without some sort of tear down of the interior, yet I know that type of incident could mean that wiring is shot in some inaccessible place, or the keel bolts have been overstressed, etc. The broker and the listing made no mention of any of this.

Caveat Emptor

[DeepFrz]

Disclaimer

The Company offers the details of this vessel in good faith but cannot guarantee or warrant the accuracy of this information nor warrant the condition of the vessel. A buyer should instruct his agents, or his surveyors, to investigate such details as the buyer desires validated. This vessel is offered subject to prior sale, price change, or withdrawal without notice.

Ever notice this on a boat listing?

[zeta]

I guess the "good faith" is a misnomer. That being said the boat did travel several miles through the Mississippi forest. She lost her mast, rudder post bent and the keel separated several inches aft, but having said that she took on zero water and hull was never breached. Very strong boat (Nonsuch) to bounce off so many trees and stay afloat.

[Kettlewell]

Brokers will say that you need a survey so you can confirm for yourself the condition of the boat, but even the best survey won't be able find everything and many surveys miss a lot of things.

[bobconnie]

Thats for sure Kettlewell, the surveyer on the boat I own now missed a VERY loose rudder post, so loose it almost left the boat on the sea trial !! of course a reduction in price was arrived at but I would rather known from the survey!! and not taken a chance of loseing the boat on the way home !! or on the sea trial LOL needless to say I will use another surveyer on my next boat !! just my 2 cents Bob and Connie

[David_Old_Jersey]

IMO the answer is no.

After all, he's only brokering a deal between 2 parties, not actually part of the deal.

The Vendor on the other hand should (IMO) state anything material at the outset - if only to cover his own backside later. Whether being totalled and beleived to now be all fixed is material is perhaps a matter of opinion.

As already said, Caveat Emptor.

[Kettlewell]

I think if the broker knows something material he should be under a moral obligation to point it out to the potential buyer, but I think a lot of brokers do not want to know these things, if you know what I mean.

[zeehag]

i think would depend on how much damage the hurryame did to the boat and what if anything was repaired. mine did not sustain named storm damage, but was left on a breakwall in santa barbara, kali , for a week.......not a good place to park a boat.

also depends what was removed during the salvaging of said boat.....

[SkiprJohn]

Real Estate Brokers are required to fully disclose anything that might have a bearing on market price. Why shouldn't boat brokers?
kind regards,

[Capt Phil]

Kettlewell, who thinks that boat brokers have morals? They have the ethics level slightly below those of used car sales folks, I'm afraid. One good reason to find your own surveyor and not use one selected by the broker. Capt Phil

[windsaloft]

Hey all - I've been off this forum for a few years, and now recently returned. In addition to a day job, I've started working in boat sales for a long time friend.

I'll be the first to say that I generally don't trust boat salespeople or brokers as far as I can throw them.......unless......they are someone I have known for a long while and can trust them. I'm fortunate to be working for someone like that.

One thing I've already learned -- apparently only California and Florida have licensing requirements for both brokers and sales folks through the State. California Yacht Brokers Association (CYBA) worked with the state to create this system, and most reputable businesses are members and subscribe to their transparency standards. Within that licensing is a code of ethics and rules. My boss constantly emphasizes this one -- that you represent both the buyer and the seller -- and that any material information you have about the boat needs to be disclosed. If the person you work with (in these states) does not do so, then a complaint can (and should) be flied with the state licensing agency. I can check on any sales person or broker in California and see if there have been complaints. There is a system by which I can respond to complaints and allegations and have them removed if unfounded, but if not, they stand.

In this area, a handful of yacht sales folks have done some dastardly things, have gone to jail, or otherwise have slimey reputations. At our little place, we work hard on complete honesty to all parties and mega-transparency. I think the secret to truly being able to do that is that none of the five of us depends on boat sales to make a living. The owner specifically hires that way. It is adjunct to their primary business of fuel sales and marina management, and this work is a hobby I have always wanted to pursue that lets me get out, meet folks, learn more about boats, and help people get done what they want/need. I think in giving advice to anyone looking for a reliable boat sales person, I'd look for someone who doesn't need to make the sale to earn a paycheck. When I go to those shops to show one of my clients their boats, you can feel the desperation.

Long-winded -- but yes, a broker should disclose the damage, the repair, and be as educated as possible about knowing the facts of the history, and then coach the buyer to find a good, independent surveyor to inspect the boat (and coach a novice buyer in methods to find a good independent surveyor). Here in SF, repeat business is the vast majority of our work, so making sure that everyone knows as much as possible and makes good decisions for themselves keeps them coming back, on both sides of the transaction.

Terri

[Capt Phil]

Windsaloft, glad to hear that there some brokers who take the licensing and ethical code seriously. Unfortunately, my experience has been the opposite in CA, alhough not in the Bay area. For example, a close friend of mine made an offer on a boat that I had checked out for him and the broker demanded (not exaggerating) that a 10% down payment was required before he would even present the offer. As the buyer, seller, boat and agent were in different geographical locations, I suggested to the buyer, my friend, that he go slow and try to contact the seller directly and try and work out a deal with him recognizing he had a contract with the agent and that a commission would have to be paid. He dealt directly with the broker who presented the offer which was turned down. It took over 5 months for my friend to get his down payment back and then only after threatening legal action through his attorney. This is a well known and, I thought, a fairly reputable brokerage firm on the west coast... evidently not!
I spent many years delivering boats up and down the west coast and many of my clients were developed through boat brokers so I kinda had a feel for the good and the not so good. I had done business with this particular firm before and knew the broker involved in the deal. I wouldn't trust him to park my car but the company is well known and respected as far as I know.
I realize that in the boat brokerage business, your reputation is critical and you are dead right that repeat business and referrals are your bread and butter.
Good luck with your new venture, Terri... it must be a crazy market out there... Capt Phil

[David_Old_Jersey]

Originally Posted by Capt Phil

For example, a close friend of mine made an offer on a boat that I had checked out for him and the broker demanded (not exaggerating) that a 10% down payment was required before he would even present the offer.

I have heard this a lot (on CF) - "standard practice" in the US (or at least parts of it).

To my mind it's something dreamt up by Brokers, in the sole interest of Brokers (to ensure that they get the sales commission and / or expenses - whether or not the sale proceeds - coupled with simply being lazy - plus wanting prospective buyers jept on the hook from being concerned that backing out will involve a risk of losing substantial cash). He who holds the cash holds the whip - no matter what the agreements say.

IMO it's a business practice that dates from the boom years - when buyers queing around the block.

As far as I am concerned, if a prospective buyer is happy to put $500 down (or only $100!) and then pay for a lift out (and back in) and for a Surveyor - then they are far more of a serious buyer (by spending cash they mostly won't be getting back) than someone who simply slaps down cash they expect to get back.

In my book anyone who gives 10% of the value of a boat (likely to be in the 1,000's if not the tens of) to someone who is little more than a complete stranger, with the "security" of a bit of paper - is a complete idiot and deserves everything they get when things go differently to what the piece of paper says......albeit I can understand why a Broker would want to pre-qualify a Buyer in that category .

As a Vendor I would be going spastic at the Broker who turned away prospective buyers on this basis.

Rant over