Wednesday, May 30, 2012

13 Things to Consider When Choosing a Yacht Broker

Image courtesy of Denison Yacht Sales
I was originally going to post this article as a "Top 10 Tuesday" piece but then, after consulting with our friend Allen Schiller and his awesome co-wokers over at East Coast Yacht Sales, I realized ten line items was not enough.

As I wrote in my earlier post, boat brokering is a funny business and one that is often rife with misconceptions and shady characters.  There are, however, fantastic brokers who are not only good, ethical people - but excellent at their jobs to boot.  Here are some things to consider when looking for one to either represent your boat, or assist you in your search:

  1. Are they honest?  This one is tough to qualify, because honesty isn't something that you can usually measure.  For this I say: trust your gut.  If you meet a broker and he or she seems like they are hiding something or simply rub you the wrong way, move on and find someone else.  We had one broker in Florida who, after hearing what we were looking for, told us point blank the boat he was showing was not for us.  We still looked at the boat because we liked the model, but really appreciated his honesty about the condition of the boat up front.
  2. Length of time in the business?  You don't have to find a broker with twenty years of experience, but it doesn't hurt.  Does the broker have previous experience at other firms?  How long has he been brokering?  Did he work with boats in some capacity beforehand?  Do your homework, research the brokerage firm and look into the professional history of the broker in question.  While he or she might only have been a broker for a few years, they might have been a delivery captain for fifteen and that kind of experience can certainly count for something!
  3. Specialties of the firm?  Would you go to a hair salon for a root canal?  Heck no!  Some yacht brokerage firms specialize in power boats, others specialize in sail boats and some represent and list both.  Find a brokerage that has ample expertise in the sort of propulsion you are looking for - they will not only understand your needs better, but they might be able to offer you a vessel that you hadn't previously considered and will have a lot more know-how that can assist you along the way.
  4. Product knowledge?  Perhaps your broker has sold sister ships of the one you are looking for, or maybe they've done a delivery on a similar type of boat... For example, Allen Schiller has been sailing his entire life, and there is hardly a boat that we can present to him that he hasn't had some direct experience with.  He's done Newport-Bermuda races on Bristol 45.5's, sailed on many Brewer 44's and worked directly for boat builders before.  He understands nuances like tank issues, cabin layout pros and cons and deck problems more than someone who lacks this kind of hands-on experience.
  5. Reputation?  How the world got by before GOOGLE is beyond me.  As a former recruiter, it's amazing (and kind of scary) what you can learn about a person by doing a quick little Google search.  If you can't find anything on your own, ask for referrals and testimonials, if they don't have them - that might be cause for concern.
  6. Organizations they belong to?  There are seven main branches in North America (including Canada) of the Yacht Broker Associations of America.  Find out which one's your broker is registered with as some might be registered with several and this can be beneficial to you depending on where your search takes you.
  7. Are they accredited?  Are you dealing with a Certified Professional Yacht Broker (CPYB)?  The CYPB test is a three hour exam testing not only product knowledge, but legal and ethical issues as well.  While this does not necessarily mean you will be dealing with an honest and ethical broker - it's a good place to start.
  8. Are they patient?  Does your broker listen to your needs and really understand what you want?  Good brokers are interesting and sometimes might know what you want more than you do.  Allen, for example, is constantly asking us questions as to why we want this or that and reminding us that we might not need "x" but instead would rather have "y".  While he is listening to what we think we want, he is also always looking out for our best interest and making us think hard about what we are looking for and why.  This is the true mark of a good broker.
  9. Do they educate?  Particularly for those of you who are new to boat buying, does your broker explain thoroughly how the process works?  Allen told us that often times a buyer will tell him to find out a seller's bottom line, after which the buyer will decide if he can afford it.  It doesn't always work that way and jumping the gun like this often prohibits a broker from doing his or her job.  A broker does not always know a seller's bottom line and you never really know what a seller will take until negotiations begin.  A seller's ego might be set on "x" price but if they wait a year (or two) to get that price, what have they spent to keep the boat in the meantime?  A good broker will explain nuances like this to you and help you make wise decisions whether you are the buyer or the seller.
  10. Are they responsive?  Having been in sales before this is a big one for me.  A broker who is unresponsive or impossible to get ahold of might be a pain in the butt to deal with over the long run.  I recall one broker we who would not get back to us - we ultimately did not deal with this guy because he was so unprofessional it made us think the boat he was representing was no good.  Boat buying can be a very long, emotional and arduous process and you want someone who can answer your questions and get back to you promptly.
  11. Have you seen the paperwork?  Ask to see the purchase and sale agreements and forms before the deal goes down.  Have your broker walk you through the Acceptance documents.  Have them explain what a "conditional acceptance" is.  What happens after you accept the boat?  How is the title transferred? Is there a mortgage on the boat or any title liens?  It is your broker's job to walk you through all this and smooth out the process.  When we bought Rasmus, it turned out there was a lien on the boat from years and years ago and it was a very big pain in the "A" to get removed.  Had we had a buyers broker, they would have had that headache for us.
  12. How do they get paid?  It is important to understand how yacht brokers get paid.  Numbers vary from jurisdiction to jurisdiction but oftentimes, a broker will get 10% commission out of the selling price.  If there is both a selling broker and a buyer's broker at work the two will often split this commission 50/50.  Many brokers prefer to work as selling agents because it's a safer bet (which is why EVERY broker we saw in Florida was very keen on if, how, when and where we were selling Rasmus).  Brokers can do a lot of work for a buyer, only to have that buyer purchase a boat through a listing agent cutting their buyer broker out of the deal.  Good brokers, however, see value in the buyer because they know the industry is about repeated business and word of mouth referrals.  They are not afraid to act on behalf of the buyer because they know it's about building long-term relationships.  Most people don't own only one boat in their lives and a good broker who is in the industry for the long-haul (and not just the weekend warrior) knows this.
  13. Do you have good chemistry?  As with any relationship, chemistry is important here.  You will deal with your broker a LOT and if you don't like them or the way they do business, you're in for a long and bumpy road.  When I was recruiting sales people I always used the "drink" test to determine if I called someone back for a second interview - if I felt like I wouldn't mind having a beer with the candidate after the interview that was a positive sign.  If I couldn't stand the thought of spending five more minutes with the person, they were a no-go.  Find a broker who you like as a person, someone who you wouldn't mind talking to over a tropical slushy rum drink - hopefully on the deck of your new boat!
A huge THANK YOU to Allen Schiller, Linda Warren and Andrew Sheriff of East Coast Yacht Sales.  They really helped to educate me on their industry and asked for nothing in return.  These are a couple of the good ones folks!!

What factors into your decision when choosing a broker?  Share your thoughts and opinions in our comments, we're learning to and we'd love to know!

Love,
Brittany, Scott and Isla

7 comments:

Carolyn Shearlock - The Boat Galley said...

Both when we bought and sold Que Tal (both in Mexico), the broker we used had actually sailed their own boat from California and then cruised for several years. Made a huge difference in how they handled the transaction and what they knew. In particular, when we were buying, the broker was able to tell us WHY we'd come to treasure certain things . . . and not care a whit about others. It also made him really responsive to our questions with the most detailed gear lists I've ever seen. They both also did a fantastic job on the photos -- and in today's market, online photos are the buyers first introduction to the boat. If you're selling, you want the boat to present well -- and if you're buying, well . . . it's hard to get excited about a boat with four bags of dirty laundry on the berth (yes, we really did see that in one listing on Yachtworld)!

bob said...

When we were on our year-long search for Eolian (only we didn't know that it was to be Eolian at the time), Our broker, Larry Hall, stuck with us for the whole time.

He was good at finding the boats I thought we wanted, and set up visits all over the West Coast for me.

But his greatest strength was in patiently listening to what we said we wanted, and discerning those unspoken cues that said what we really wanted. That's the mark of a great broker.

Thanks Larry!

Bob & Jane
s/v Eolian
Seattle

SailFarLiveFree said...

Great post, as usual! I'd look for a broker that knows "sails" and "sales". If they only know or are passionate about one, then they can't provide me with the service I need. As a buyer shopping for a cruising boat, I'd rather enlist the help of a consulting expert (such as Bob Perry or Ted Brewer)than a buyer's agent, but that's just me. Here's a few more tips: 1) Make brokers compete for your business and let them know they have competition! 2) Never use the surveyor recommended by the selling agent! You want a surveyor working for you and your interests, not the seller's!

Anonymous said...

Brittany,
Been following your blog thru a link from Troubador's. Linda and Chris are good friends of mine. First, let me congratulate you and Scott on the birth of Isla - she such a cutie, she looks like a keeper and the fact that you still have time to keep up your blog - she must be. I had to laugh when I saw your comment above about the "drink" test. I've been in HR 30 years with a lot of recruiting under my belt. When I was hiring entry level factory workers I called it the "couch" test. My theory was if you wouldn't let the person sit on your couch in your living room, then why would you want them working next to you? We also used the "go, no-go" code for who to hire. I am really enjoying your blog - it's my guilty pleasure over my lunch hour. Here's hoping you find the boat of your dreams.

Dawn from Wisconsin

Dave said...

I would say the missing criteria, is how hard are they willing to work. We never used a yacht broker because we did the leg work, but a lazy broker who "waits for the market to sell it" will always lose the seller money.

Get references, and someone who knows little about boats but is willing to make up the difference in work ethic is a must in such economic times.

Someone who works hard and treats every client with the same respect and gives the same 110% effort is the best broker to have.

Lazy smart people don't sell boats.

JMHO

Steve Crompton said...

All of this is excellent advice, points 8, 9 and 10 for me are absolutely critical. They should be hungry for your business and desperate to help, it should not take you 48 hours to get a response (as has happened to me!!)

Johan Vermij said...

In the end it's your heart that buys the boat, not the broker that sells it.

When I started out looking for a boat I pretty much knew what I wanted, but then I was offered something else entirely and fell in love, a classic wooden 1967 Golden Hind 31 which needs a whole lot more work than I initially thought I would do, but in the end she'll be worth it.

J.

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