Boat Buying Advice

For Sale by Owner: Buyer Beware

boat for sale, for sale by owner, FSBO

With boat sales progressing at a furious pace for the past nine months, it only stands to reason that more of my clients are encountering the for sale by owner (FSBO) scenario. Selling a vessel without using a broker can be attractive for one obvious reason, the seller avoids a potentially hefty commission fee. Who could be disparaged for attempting to save money? However, as is often the case, it’s not as simple as it may seem.

While this approach offers potentially clear financial advantages for sellers (one of my colleagues jokingly refers to FSBO as 'For Seller's Benefit Only'), it’s not entirely without risk, especially if you haven’t done it before. That risk and reward can and should be weighed. More importantly, however, the risk for the buyer is potentially far greater, and once again especially for the uninitiated. In a traditional listing, the commission is included in the asking price. The commission can be considered part of the sale price of the vessel, so the buyer is in fact paying this and the buyer often has no representation in a FSBO deal. Therefore, the buyer is taking a greater risk while receiving none of the reward.

yacht for sale, call a yacht broker

There are some advantages to using a broker when buying and selling a boat.

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In a broker-less sale, the following are aspects worthy of consideration, for both sellers and buyers, but buyers in particular. These are services a buyer’s broker should provide, and in doing so it’s how he or she earns his or her commission.

  • The buyer uses the broker’s vetted and up-to-date legal forms and the broker can explain any nuances or questions.
  • The buyer's deposit is secure in the broker’s bonded trust account.
  • The broker confirms the closing location.
  • The broker tracks the deadlines for all due dates.
  • The broker helps organize (but doesn't necessarily select) the team of essential players including hull and engine surveyors, haul-out location, and a captain for the sea trial.

Hauling a boat, travelift, taking out a boat

A broker will take care of details like setting up the haul-out date and location.
  • The broker acts as a buffer between the buyer/seller and the survey crew, allowing them to do their work, for which they have limited time. In the absence of a broker, the survey crew shoulders a greater burden, and are often distracted as a result.
  • The broker attends the survey and sea trial on the buyer’s behalf, and acts as the master of ceremonies and provides an extra pair of eyes.
  • The broker knows what’s common and acceptable when it comes to managing survey findings and conducting reasonable negotiations for settlement
  • The broker can explain and direct the buyer to seek legal advice on payment of taxes and duty; especially important in the case of an “offshore” closing, if the vessel is foreign flagged, or if the buyer is foreign.

marine survey, marine surveyor, NAMS, ABYC

When a boat is being privately sold by the owner, a survey becomes even more critical.
  • The broker advises the buyer who to engage for documentation of vessel and registration of a tender
  • The broker should help the buyer secure insurance and confirm it’s in place when possession is taken
  • The broker can act as an arbiter in the event of a discrepancy or dispute
  • The broker represents a knowledgeable resource for service providers, marine financing, vessel insurance, documentation, legal advice, etc.

Once again, these are all tasks with which the broker should be familiar, and should be providing as part of his or her services. Could you handle all of these tasks on your own? No doubt some buyers can, and they do so successfully, but many are unable to, or worse believe they can and only find out later they missed an important component, and then find themselves scrambling, after the deal has been closed.

sinking boat at dock, sunken boat, boat sinks in slip

It’s an extreme example, but if a buyer doesn’t cover all the details in a FSBO deal, this could be the outcome.

The value of the ‘buyer’s broker’ scenario is predicated on having a broker who is conscientious, and ideally is a member in good standing (you should confirm) of a regional yacht brokerage association. In Florida, the broker is required by law to have a valid yacht sales license (you should confirm). Select, knowledgeable brokers often obtain the gold standard credential and become a Certified Professional Yacht Broker (CPYB), which requires competency testing and continuing education (again, you should confirm membership, I've encountered imposters). Above all else, the broker should be willing and capable of fulfilling all of the above-mentioned bullet points.

Think carefully before you proceed down the FSBO path, especially as a buyer without representation.

By Steve D’Antonio

Beginning his career in 1988, as a marine mechanic, electrician, manager and partner of a custom boat building shop and two boatyards and technical journalist, as well as through Steve D'Antonio Marine Consulting, Inc, Steve provides personalized and hands-on service to boat buyers, boat owners, boat builders and equipment manufacturers, as well as others in the marine industry around the world. Steve is an American Boat and Yacht Council Certified Diesel, Electrical, Corrosion and Systems Master Technician/Adviser. To learn more or to contact Steve, go to SteveDMarineConsulting.com.