From buying to selling boats and enjoying life on the high seas, the exciting life of a yacht broker seems like a dream to many.
What exactly is involved in their job?
This article will highlight some of the key responsibilities of a yacht broker.
The 8 Main Functions Of Yacht Brokers
A yacht broker helps to make sure that everything goes smoothly behind the scenes of buying and selling a yacht.
They do a lot to help to make sure the stress of buying or selling a yacht is less stressful and can help to speed the process up.
1) Looking at the Boat
Whether the client is purchasing a boat or selling one, the yacht broker will first need to view the vessel.
This is in order to get a good idea of the condition of the yacht. He or she will need to appraise the condition of the boat.
Another responsibility is to talk to the crew about the maintenance schedule. The yacht broker will also need to look at the ship’s papers. Having all of the right certificates in order and documents is crucial to sealing the deal.
2) Appraising the Boat
The yacht broker will also want to talk to his industry contacts to get an idea for how much the yacht is sold for.
The yacht broker has the important job of saving the seller or buyer time and pain when it comes to selling a boat.
A yacht broker can help with assessing the boat and surveying it to make sure it is in premium condition. They will attend the survey with you, or for you, if you are not able to. The broker will act as the intermediary during the process of the sale.
3) Filling Out The Paperwork
The yacht broker’s job is to make sure that the paperwork gets done. This includes collating the documents for the actual closing of the sale, preparing technical specifications, to making sure the yacht has all of the appropriate certificates.
They will also guide the yacht owner through aspects such as loan payoffs, corporate ownership, bills of sale, and similar documents.
4) Briefing The Parties Involved
A yacht broker will need to direct clients to the best possible marine lawyer for their specific yacht.
The yacht broker may need to help encourage the deal to keep pushing through.
Marketing is an essential part of the yacht broker profession, especially when they are representing the seller of a yacht.
In the past, a yacht broker operated out of a big office building, and people would walk by and visit because they were considering purchasing a yacht.
Now, in the era of the internet, people from all over the world have access to a yacht broker and their services.
The yacht broker may make use of advertising such as banner ads or videos. Marketing yachts effectively makes use of the internet, so a yacht broker may make posts on social media, classifieds, or their personal website to sell a yacht or find one.
Some yacht brokers might make a video walk-through of the yacht and explain the features to potential clients. Others will have a professional website that acts as a point of contact.
6) Duties While Selling
As stated above, the broker will list the yacht on Yachtworld and other appropriate outlets. They also have the responsibility of pricing the yacht reasonably. Brokers will have access to recent sales, and they know how much they should go for based on recent sales prices.
When they receive responses to the yacht adds, they will prescreen responses so as to find those that are most likely to lead to a sale.
A yacht broker will also have the duty of showing the boat to people who are interested in buying it. They’ll give them the tour, and be sure that the boat is in pristine condition.
The yacht broker will also answer any questions that the buyers have.
Another responsibility they have is to communicate negotiations with the yacht owner. They will also handle the pricing of the yacht, which is where they might get their earnings from.
Finding the right price is a big part of getting the boat sold.
Part of their job would be to take pictures of the boat and to write a description of it that entices buyers.
7) Securing the Sale
When a price is agreed upon, the yacht broker will draw up the sales agreements and will also accept deposits.
Modern technology allows them to do this electronically with smartphones, tablets, and computers.
A yacht broker will secure sea trials where the potential buyer will take it for a test drive on the water as well as schedule surveys.
After the sale is made, they will transfer the funds to the yacht owner.
A yacht broker can assist a buyer in getting financing for the yacht.
8) Duties After the Sale
The broker’s job doesn’t stop after the boat is sold.
They can also assist in docking, boat detailing, and refining it to meet the buyer’s needs.
Their industry connections can help a lot in this process after the boat is sold, and helps to make boat ownership a rewarding experience.
Types of Agreements With Yacht Brokers
Some yacht brokers take a 10% commission on the sale of the boat and might bring it down in order to secure a sale on a boat. There are different types of agreements.
A central agency agreement, or an exclusive listing, means that a seller has hired a specific broker to sell their boat.
The broker may then list it on Yachtworld or a similar site. They then enter a co-brokerage agreement. Co-brokerage is when another broker finds a buyer for the yacht, and the original broker splits the commission with them.
Almost 70% of all yacht sales are done in this way because of this incentive. In this agreement, even if an owner brings in a buyer or donates the boat, they are still liable to pay the broker commission.
Most of the yacht sales are completed with a central agency agreement.
Another type of sale is the open listing agreement. In this setup, the owner can bring in more than one broker for the sale.
The owner also retains the right to sell the yacht on their own.
A disadvantage to this type is because they are not guaranteed commission, they might not spend money that is necessary to advertise the boat. It also might result in communication errors among more than one broker and prospective buyers.
However, on the other hand, a motivated broker might be more likely to bring in a sale because then they would be guaranteed the entire commission. The typical length of the agreement is around six months.
Yacht Broker Duties If You Are Buying
Brokers help to ease buyer’s anxiety when putting down large amounts of cash for a luxury yacht.
They might set up a separate bank account for the transaction and the necessary deposits.
The contract will specify what the contingencies of the sale are, and also how much or how the money will be returned if the sale does not go through.
For the buyer, the yacht broker will have the advice they need to find the right boat at the right price. They’ll be able to open doors and find opportunities that benefit both parties and create a win-win situation.
They work as an advocate on behalf of the buyer and will be priceless when it comes to negotiating and securing a sale.
Know The Role Of The Broker
In most sales, the broker is a worker for the seller and not the buyer.
This is an important part to remember. Their job is to get the highest price possible to satisfy the buyer and to make money. It is possible for a buyer to enter into an agreement with a broker with a buyer’s broker agreement.
A buyer’s broker represents the buyer, not the person selling the boat.
When they know what type of yacht the buyer is looking for, they will search for it through their contacts and resources available to them. They will assist in finding the right boat for the buyer’s needs and budget as well as assist in the necessary paperwork.
A buyer’s broker will typically get a split in commission from the seller’s broker.
There may be no cost to the buyer for using a buyer’s broker, but be sure to read the details of the agreement before signing.
A yacht broker has priceless industry knowledge that will assist in the buying and selling of yachts. A trustworthy broker will help save buyers and sellers time and money when they are making the purchase. They’ll pool the talents and resources of a team of brokers to support the transaction go quickly and smoothly.
Finding the right yacht broker with experience and integrity will make a big difference in the process. A yacht purchase is a significant investment, and teaming with the right people helps to ensure that the investment is the right one.
They understand the market and all of the nuances involved in buying and selling.
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Morten is the founder of GoDownsize. He has filmed and interviewed people living in tiny houses and RVs since 2011. He grew up on the coast where his dad took him boating from a young age. He has completely rebuilt two RVs in which he travels with his family for months at the time. Read more about Morten here.