Private sale put you off

[BarryH]

Normally the broker will take his commision from the seller, I just see them as marine estate agents. I have in the past walked away from a sale after reading the small print on the forms the broker wanted me to sign. In short the broker would be liable for nothing and I would have to "satisfy myself" that there were no monies outsanding on the vessel. In short there would be no comeback on the broker if it all went tits up.

 

[jonic]

I am pretty sure that this site only attracts the good guys; and JONIC is undoubtedly one of them.

:encouragement:

Last year I was viewing boats on behalf of an Irish friend. I looked at just three, each with different brokerages. Never accompanied, one of them the broker was not even in the office in spite of me making an appointment. At the third brokerage the secretary (only one in the office and about to knock off at 3.30pm) invited us to scout around the boatyard for a ladder to get on board and post the keys back through the letter box.

Now, JONIC will cry foul. However, I would suggest to him - and the other good guys - that if they can be arsed, just visit a few brokerages incognito and see what they dig up.

I can provide details of the three brokerages if required.

Foul!!!

Not really. I know why it happens.

Unfortunately times have changed.

People will often pose as buyers but have no intention of buying- none at all.

The boat is owned by a private individual and is for sale.

The whole purpose of the boat being listed with the brokerage is because it is for sale.

As it's privately owned, access to it is only for people who wish to inspect it with a view to buying it.

It costs time and money and requires insurance to have someone knowledgeable on hand to do this and someone is picking up the (heavy) cost for it, but as the boat is for sale it's part of the process.

However some people have no intention of buying it. None whatsoever.

But they absolutely want access to it, and preferably someone to spend anything from half an hour to two hours talking through all the systems, at no cost to them. They are not buying but they certainly wouldn't pay for this time.

The fact the costs fall to someone else is of no relevance to them.

Eventually the brokers get so worn down by this, especially the lying that accompanies it, that they try to screen them out. They have to.

Or they leave less qualified people to deal with them.

It's a difficult management process but comes with the territory, unfortunately it can mean that some genuine prospective buyers are caught up in it.

It's a very difficult and means the genuine buyer may find the broker is currently away from the office with a complete and utter timewaster. But he has been deliberately misled into thinking the guy is generally interested and serious, so he has to go.

The boats I have listed are geographically spread so it's less of a problem for me as each viewing involves travel and very definite arrangements.

I also have some sophisticated screening techniques

 

[jonic]

Normally the broker will take his commision from the seller, I just see them as marine estate agents. I have in the past walked away from a sale after reading the small print on the forms the broker wanted me to sign. In short the broker would be liable for nothing and I would have to "satisfy myself" that there were no monies outsanding on the vessel. In short there would be no comeback on the broker if it all went tits up.

The broker is certainly not a marine estate agent.

Estate agents engage in the marketing and nothing else.

Yacht Brokers engage in the marketing and then all of the financial, legal contractual and paperwork process. (it's this that takes the most time and can be anything from two to six weeks on average).

A properly qualified broker will have PI insurance if he is negligent.

He can't be liable if the seller misleads or is fraudulent about finance as he does not own the boat, and would certainly not have been present at, or a party to anything that has been set up in the past.

But he will have had the seller sign documents to confirm there is no outstanding finance, and to indemnify him or the buyer if there is, and he will know what to look for in the paperwork trail.

 

[jonic]

Boats attract loonies though!

You're telling me !!

 

[Skylark]

Boats attract loonies though!

Amen to that. I bought a brand new one. What was I thinking :encouragement:

 

[nimbusgb]

Has anyone got documented evidence of successfully pursuing either **** surveyors or **** brokers?

We hear stories of surveys that didn't turn up expensive faults and lots of stories about 'cover your arse surveys' that don't examine engines or look up a mast and simply say things like 'rigging should be renewed as it's n years old' with no basis in engineering good practice.

Lot's of stories about brokers that are commission driven ( read freakonomics for how commissions distort ethics ) rarely present and about as much use as chocolate teapots.

But we rarely if ever hear how the so called trade bodies or professional organisations that umbrella these 'professionals' have stepped in and supported a dissatisfied transaction participant.

Brokered or private? I'd rather sit across a saloon table with the owner, you'd learn a lot about how hard they treat their boat, their approach to maintenance, risk and expenditure than you ever will from all but perhaps one or two brokers.

I submit that the risks are overblown by people with a vested interest in preying on an increasingly risk averse public battered into fear by the incessant reporting of only bad news.

 

[Tranona]

Yes, it is quite possible to successfully claim against a surveyor if you can prove he is negligent. Whether it is easy or even worth it is another matter. Less likely to claim against a broker because they do not often get into a situation where it can be shown that there is a loss as a result of their negligence.

Of course brokers are commission driven - that is the only way they can make a living. Surely that is a good thing, as the only way of earning commission is to have a satisfied seller and buyer.

Surveyors and brokers are two different animals. The surveyor owes a duty of care to the buyer only. The broker's main duty of care is to the seller, although he has some duty of care to the buyer.

 

[wazza]

Would a private sale put you off buying, as apposed to going through a broker.

Not at all, as others I have bought boats both ways with no difference. My current boat I bought private and was pedantically looked after

 

[chinita]

Has anyone got documented evidence of successfully pursuing either **** surveyors or **** brokers?

Yes, I contacted the YBDSA after I bought a boat from a broker. Four hours after I paid the balance (£110k) in cash he phoned to say that there were three outstanding mortgages.

Took four months to sort it all out.

YBDSA advised me to sue. I did not but felt confident that they were in support of my case.

 

[longjohnsilver]

Yes, I contacted the YBDSA after I bought a boat from a broker. Four hours after I paid the balance (£110k) in cash he phoned to say that there were three outstanding mortgages.

Took four months to sort it all out.

YBDSA advised me to sue. I did not but felt confident that they were in support of my case.

This reads as though

1) it was the brokers own boat you bought
2) you rocked up with £110K in used notes and handed them over.

Presumably it was a broker who was selling the boat on behalf of a client and you paid for it in some other way?

If a broker is selling a boat, how are they supposed to check there are no o/s loans against the boat if the vendor doesn't disclose them? And ultimately all sales result in cash in the vendors account on completion.

These are general points and not directed at you Chinita as I obviously don't know any of the circumstances involved in your sale

 

[[3889]]

In reply to OP, not at all. Buying through a broker would, though.

If a broker is selling a boat, how are they supposed to check there are no o/s loans against the boat if the vendor doesn't disclose them?

No idea, which begs the question, yet again, why use a broker?

 

[Tranona]

This reads as though

1) it was the brokers own boat you bought
2) you rocked up with £110K in used notes and handed them over.

Presumably it was a broker who was selling the boat on behalf of a client and you paid for it in some other way?

If a broker is selling a boat, how are they supposed to check there are no o/s loans against the boat if the vendor doesn't disclose them? And ultimately all sales result in cash in the vendors account on completion.

These are general points and not directed at you Chinita as I obviously don't know any of the circumstances involved in your sale

Without knowing the facts of the case it is not possible to say whether an action would be successful. You would have to show that the broker was negligent and should have found the outstanding loans. However, you might be more successful pursing the vendor if it was he who hid the loans and then signed a Bill of Sale declaring that the vessel was free of any charges. The broker should, however have taken all reasonable steps to ensure there were no outstanding loans.

Just to give an example, there is a case currently running (reported in the press this week) concerning a sale of a horse through an agent where there was a judgement (against the buyer) appeal in his favour, second appeal which reversed that decision and no a retrial has been ordered. The issue is whether the intermediary was acting as agent or trading on her own account and therefore sale of goods applies. Obviously not clearcut, but somebody is going to have to pick up the costs (currently estimated at 10 times the value of the claim) to get a decision.

So, even if the facts are known it may not be possible to say who is right or wrong without going to court.

 

[chinita]

OK, these are the facts.

The boat was advertised on yachtsworld.

Broker (British) was in Mallorca, as was boat.

Contacted broker, sailed over from Barcelona. Viewed boat, agreed price, paid 10% deposit in cash (remember, this is Spain and cash is king), lifted boat in CN Palma, had survey and engine survey. Boat was Part I Registered.

Sailed own boat back to Spanish mainland (Cartagena) and arranged for myself and mate to fly to Palma to collect boat.

Following acceptable surveys returned two weeks later and paid balance in cash. Broker gave me contract (in English and Spanish) and MCA Bill of Sale.

As we were preparing to sail, had call from broker to say that, having contacted Part I Registry, he had discovered that there were three outstanding mortgages.

When I returned to earth I asked WHY THIS WAS NOT DISCOVERED WHEN I PAID DEPOSIT TWO WEEKS AGO???

Long silence then 'It is ok, we will pay the mortgages off with your money'

ME: 'But I do not own the boat'

HIM: 'Yes you do, you have a Bill of Sale'

ME: 'Yes. but it is fraudulent as he should have declared liens - and did not'

HIM 'Erm......'

That was the last contact with him I had. Fortunately I established a good relationship with the lady at Part I who contacted me when it had all been resolve and they were - finally - able to issue me with my Part I Certificate in my name.

And this was an ABYA, YBDSA Broker.

When the dust had settled I e-mailed, then phoned the CE of YBDSA. She told me that I had a case against the broker.

Oh, yes. The broker has now sold the business and retired. But I would love to meet him again.

 

[jonic]

If someone wants to commit fraud and hide a loan on a boat - there is no full proof system for checking.

No-one can guarantee it because no system exits where everything is centralised.

The UK has no requirement for registration, two forms of registration if the boat is registered (with one being virtually meaningless) some loans recorded on the registration and some not, and multiple lenders.

What a broker will do is test against these before marketing the boat, and in many cases follow anti-money laundering procedures, positively ID the owner and his address (and record it), research the paper trail history, obtain a transcript and if necessary contact the main lenders for individual checks. He will also have the owner sign an indemnity so there are written records of any statements of fact.

The sale and purchase agreement will also be signed by the owner with words to the effect of:

By delivery of documents in (i) and (ii) and (iii) of this Clause, be deemed to warrant that he has the power to transfer property in the vessel and that the same is free from encumbrances, duties, taxes, debts and liens except as are the responsibility of the Purchaser under Clauses 3 and 9 hereof.


and the Bill of Sale will also have the owner warrant the boat is free from debt.

Fraud prevention by an owner is impossible to stop but the above makes it a lot harder for them.

 

[jonic]

OK, these are the facts.

The boat was advertised on yachtsworld.

Broker (British) was in Mallorca, as was boat.

Contacted broker, sailed over from Barcelona. Viewed boat, agreed price, paid 10% deposit in cash (remember, this is Spain and cash is king), lifted boat in CN Palma, had survey and engine survey. Boat was Part I Registered.

Sailed own boat back to Spanish mainland (Cartagena) and arranged for myself and mate to fly to Palma to collect boat.

Following acceptable surveys returned two weeks later and paid balance in cash. Broker gave me contract (in English and Spanish) and MCA Bill of Sale.

As we were preparing to sail, had call from broker to say that, having contacted Part I Registry, he had discovered that there were three outstanding mortgages.

When I returned to earth I asked WHY THIS WAS NOT DISCOVERED WHEN I PAID DEPOSIT TWO WEEKS AGO???

Long silence then 'It is ok, we will pay the mortgages off with your money'

ME: 'But I do not own the boat'

HIM: 'Yes you do, you have a Bill of Sale'

ME: 'Yes. but it is fraudulent as he should have declared liens - and did not'

HIM 'Erm......'

That was the last contact with him I had. Fortunately I established a good relationship with the lady at Part I who contacted me when it had all been resolve and they were - finally - able to issue me with my Part I Certificate in my name.

And this was an ABYA, YBDSA Broker.

When the dust had settled I e-mailed, then phoned the CE of YBDSA. She told me that I had a case against the broker.

Oh, yes. The broker has now sold the business and retired. But I would love to meet him again.

Chinita

You are right, part 1 transcript check should happen before the survey.

And the owner should declare the loan.

But the broker would then settle with the mortgage company - so the debt is clear and you have clean title - and the owner can't run off with the funds after saying no problem I'll settle the loan once I am paid.

 

[skipmac]

Long ago I was a broker and from experience I found that boats offered for sale by the owner are not necessarily a better deal. When I had clients that were looking for a particular model or style of boat and I could find nothing appropriate on the brokerage market I would contact private sellers to see if they would allow me to sell their boat to my client. This made sense for many of the clients who were flying in to Florida to boat shop and were not able to personally search the local market.

As I recall, at least half the time the boats for sale by the owner were priced a good deal higher than the boats listed through brokers. After encountering this a number of times I determined a few factors were in play. Often the owner did not really want to sell the boat. Maybe the wife told him to get rid of the d*** boat. The boat wouldn't sell but he could tell the wife he was trying. Another type I encountered was the seller who listed the boat at a really high price figuring if some fool paid that much it would net a nice profit on the sale and he could go buy another for less and bank the balance.

More often the owner just had an overblown idea of what his baby was worth. Some were just very emotionally attached to their boat and thought it was worth more than it was. Some, to set the price, started with what they originally paid for the boat and then tacked on everything they ever spent but the dockage. I even met a few like this who had tried to list them with a broker but walked away when the broker tried to steer them to a more realistic price.

Now don't take me wrong. There are plenty of serious for sale by owners and one can certainly get a good deal that way. I bought my current boat from a private seller. However buying from a broker does not necessarily mean you are paying too much. After all, the buyers can check prices for similar boats on the market and if the price is too high the boat won't sell.

 

[Tranona]

When the dust had settled I e-mailed, then phoned the CE of YBDSA. She told me that I had a case against the broker.

You did, indeed have a case as based on what you say he was clearly negligent and had not taken reasonable steps to ensure there were no charges registered against the boat. Whether it would be worth pursuing him in Spain and with success is another matter. At least it was a registered loan and you eventually got it sorted.

 

[jonic]

You did, indeed have a case as based on what you say he was clearly negligent and had not taken reasonable steps to ensure there were no charges registered against the boat. .

Especially as it was part 1

At least the fail-safe worked and he did not release the funds to the owner, but he definitely should have checked with the registry well before that point.

 

[chinita]

Especially as it was part 1

At least the fail-safe worked and he did not release the funds to the owner, but he definitely should have checked with the registry well before that point.

Thank you; and that is my point. It is not quite 'fail safe'. What if the broker had not bothered to contact me on the day of the sale to advise me of the problem? I would have sailed off in blissful ignorance.

Even the most highly regarded, YBDSA and ABYA of Brokers omitted to carry out the most fundamental of checks with the Part I Registry. The title should have been established at the time deposit was made and confirmed WITH THE PART I REGISTRY.

The fact that I managed to secure the full title of the boat was more chance than good management - why? Because until I was granted Part I Registration, each one of the outstanding creditors could have seized the boat.

Why not just admit it: this guy was a complete ******.

 

[silver-fox]

Has anyone got documented evidence of successfully pursuing either **** surveyors or **** brokers?

We hear stories of surveys that didn't turn up expensive faults and lots of stories about 'cover your arse surveys' that don't examine engines or look up a mast and simply say things like 'rigging should be renewed as it's n years old' with no basis in engineering good practice.

Lot's of stories about brokers that are commission driven ( read freakonomics for how commissions distort ethics ) rarely present and about as much use as chocolate teapots.

But we rarely if ever hear how the so called trade bodies or professional organisations that umbrella these 'professionals' have stepped in and supported a dissatisfied transaction participant.

Brokered or private? I'd rather sit across a saloon table with the owner, you'd learn a lot about how hard they treat their boat, their approach to maintenance, risk and expenditure than you ever will from all but perhaps one or two brokers.

I submit that the risks are overblown by people with a vested interest in preying on an increasingly risk averse public battered into fear by the incessant reporting of only bad news.

Good points well made IMHO