Two brokers with the same boat.

[andrewfollett]

the norm should be that both brokers are aware that they do not have sole brokerage rights. the seller will pay a higher rate if he has 2 brokers that he has contracted to (a broker will accept a smaller percentage to have sole rights to sell a boat). The normal way forward is that the brokers either liase with each other for the right to the fee or, more commonly they split it to an agreed rate as is the norm with house sales. either way its not your concern or problem. There should only be a problem if the seller has done the dirty by claiming each broker is the sole broker so gain a lower fee. Its then his problem if the brokers come back to bite him. deal with whoever you feel most comfortable because if they havnt sorted out the legal agreements yet you should only feel uncomfortable only because they sound like a dodgy disorganised bunch! Try exploring the web and youll probably find the seller is selling privately as well. If he is you could make contact direct and resolve any isuues quickly and simply without the bother of brokers!
Good luck and do the right thing by you.
The seller and brokers are sure to be thinking of their bottom lines so dont feel you cant do the same.

 

[andrewfollett]

Bossun Higgs is correct if you upset the Greek broker you could find yourself in a very difficult situation, do NOT go there.

If you buy through a british broker, they will presumably guarantee your clear title. Get the broker to earn his money by guaranteeing that there will be no outstanding debts on the boat that will prevent your moving it. If he wont, dont buy the boat through him. If he assure you that all is ok and then subsequently the boat gets seized you could then sue the uk broker for your loss

 

[jonic]

I would contact the British broker and explain the whole story, he probably will be able to work out a deal with the other broker. It's quite usual for two brokers listing the same boat to have a split commission deal especially if there is a geographical separation. One will find the buyer and do the viewings, the other will handle the funds transfer and paperwork.They will then work out a split % between them. In brokerage it is known as co-brokerage and is very common especially if the boat is overseas.

 

[Marmalade]

Have you agreed a price in Euros or in Sterling - ie who is carrying the exchange rate risk? If you can, agree a sterling price and then your risk is limited to the honesty / continued existence of broker a.

 

[Ubergeekian]

According to the sales leaflet, after this deposit is cleared in the Greek bank which can take five days, the boat is taken off the market and a process of collecting the paperwork, previous bills of sale, registration documentation, VAT papers, etc. begins. When the papers have been collected the whole lot must be notorised by a Greek notary at my (the buyers) expense (estimated at £150) This process is to take six weeks to complete when I will be given the sellers bank details. When the seller informs the Broker that the funds are cleared, then the boat is released to me and I can get the boat ready for launch in the Spring.

Mainly because the broker has no idea that the 90% balance has been paid. He only has my word for it. What if the seller gets ill or worse during that six weeks or his estate is claimed for whatever reason while I feed the estate with the balance of his boat?

I'm still not sure that I see a major problem here. As I read it, you give the broker 10% of the price. He then does all the paperwork. When that is complete, you pay the seller the remaining 90% directly, he tells the broker and you take the boat.

Is that very different from the UK system? When I bought Jumblie I paid a 10% deposit, then the broker did all the paperwork. When that was complete, I paid the broker the remaining 90%, he told the seller and I took the boat.

I can see a potential problem if the seller pulls out, or dies, while the paperwork is being done - but that would only affect your 10% deposit and I presume there will be some contractual agreement about what happens in such circumstances.

Are you buying the boat in pounds or euros? Does the seller want to end up with pounds or euros?

 

[BurnitBlue]

I'm still not sure that I see a major problem here. As I read it, you give the broker 10% of the price. He then does all the paperwork. When that is complete, you pay the seller the remaining 90% directly, he tells the broker and you take the boat.

Is that very different from the UK system? When I bought Jumblie I paid a 10% deposit, then the broker did all the paperwork. When that was complete, I paid the broker the remaining 90%, he told the seller and I took the boat.

The difference is that in the UK you paid the broker the 90% balance. The broker now knows you have paid the full amount and can release the boat when the seller satisfies the paperwork in exchange for the broker releasing the funds to the seller. The Broker is in control.

In the Greek case, I pay the seller the balance directly, who receives the money in his bank BEFORE he releases the boat. He may or may not inform the Broker that the funds have cleared because he is incapacitated or worse. He could have skipped with my money or sold the boat twice. OK the broker would impound the boat but that does not help me. I want to go sailing not watch a legal fight over possesion.

Suppose it is a scam. As you know anyone with a temporary address in UK can obtain an SSR on any boat whether he owns it or not. The scammer then insures the boat. Breaks open the hatch without damage and leaves it open to allow the broker to show the boat. He now has two quite important documents in which to instruct a Broker to sell the boat. The Broker finds a buyer and takes 10% then gets a notory to validate the two documents which are actually genuine. For £150 the notary will not chase down the provenance. The broker is in the clear, and tells the buyer to send the balance direct to the sellers bank account who withdraws the amount then flies first class back to Nigeria.

The boats in Greece wintered ashore for six months with absent owners 2000 miles away must make easy pickings for this scam.

Do i think this would happen to me? No, but why should I run the risk when there is a client account system a few blocks away.

 

[Ubergeekian]

The difference is that in the UK you paid the broker the 90% balance. The broker now knows you have paid the full amount and can release the boat when the seller satisfies the paperwork in exchange for the broker releasing the funds to the seller. The Broker is in control.

In the Greek case, I pay the seller the balance directly, who receives the money in his bank BEFORE he releases the boat. He may or may not inform the Broker that the funds have cleared because he is incapacitated or worse. He could have skipped with my money or sold the boat twice. OK the broker would impound the boat but that does not help me. I want to go sailing not watch a legal fight over possesion.

I'm sorry, and I'm really not trying to pick a fight, but I really, really can't see the problem. Perhaps it's because of the number of threads I have read here warning about potential problems with brokers and their client accounts. Who would you rather be giving the money too - the person with the boat or the person who may (or may not) give the money to the person with the boat. The current owner ain't - if he's got any sense - going to hand over the boat till he has the cleared funds anyway, so what's the advantage of sending them through someone else first?

Yes, I suppose there's the possibility that you'll hand over the cash, the seller is so overwhelmed that he instantly cops it with a heart attack and half an hour later his grieving widows has sent the lot by Western Union to Mr Charlie Umbongo in Nigeria, but for every scenario you can imagine when payment from you to the seller goes wrong I can think up the same one for payment from the broker to the seller plus hitches getting money to the broker in the first place.

The only think that strikes me as odd is that you give the broker his commission despite not employing him. Can't really see a problem there, but if there is one could you pay the 10% commission to the seller and let him send it on to the broker?

The really good thing about what Broker A is proposing, it seems to me, is that 90% of your financial dealings are in Britain, in sterling, with someone who is therefore easily accessible through the Uk legal system if there is a hitch.

Once again, sorry if this comes across as fierce. It's not meant that way at all.

 

[jonic]

Speak to the British broker and ask him to organise a co-broker split commission deal with the other broker. Its very common especially in your circumstances. If not, walk away and find another boat.

 

[BurnitBlue]

I'm sorry, and I'm really not trying to pick a fight, but I really, really can't see the problem.

Once again, sorry if this comes across as fierce. It's not meant that way at all.

No problem at all with you stating your case. In fact I welcome all the input if it would stop me worrying about losing the money and the boat. I want to buy this boat but I cannot help feeling that it is a risk and the consensus through all YBW posts is that a client account system has been set up to minimize this risk.

As I wrote earlier, if the boat is part 1 registered I have some protection and I may go for it.

Look at it this way. In the Greek system I have to pay the SELLER direct to his bank account. Just the same way I would have to do the same if it was a private sale but with the difference that in a private sale it would be me negotiating direct with the seller where I could form my own judgement by meeting him in person during the viewing and eventual handover and final payment. Instead the seller is hidden behind the broker who may not have even met the seller who could have set up his instructions by email or telephone from the UK. The broker in this instance does nothing for me except charge me 10% in his own currency..

Now contrast that with a broker with a client account. I meet the broker and form an opinion about him and his company. This is relevant because all monies pass through his protected client account. His brokarage business is registered with an association called ABYA. If the Broker (b) with the client account makes a mistake and is set up in a scam or whatever, and pays out the balance less his commission to the seller and loses the lot, it is the Brokers problem and his insurance should cover him and me. The Greek is totally freelance and unprotected. He cannot accept any money to his bank because he says he must pay VAT on it. This is why I have to take the risk of transferring the price to a seller I have never met, or even communicated with.

I made a mistake and used a broker that did not operate a secure system. Maybe it is OK for a Greek buyer in Greece but not for me. I wish I had used Broker (b) but I think I am locked into the Greek broker or I must walk.

The money, to me, is my new boat, it's not just money, I have my new boat in the bank, thats it. I am a pensioner and I could not recover from the loss of that boat. No matter how much I lust after her, the risk is too much for me. I really need a more secure system. I

 

[BurnitBlue]

Speak to the British broker and ask him to organise a co-broker split commission deal with the other broker. Its very common especially in your circumstances. If not, walk away and find another boat.

I agree. That is what I have tried to do today. Unfortunitely, Broker (b) seems to be on holiday as well as Broker (a) because i have not had a reply from him yet.

So I should just relax and wait for January 3rd when they get back to work.

Thanks for taking an interest.

 

[Ubergeekian]

Now contrast that with a broker with a client account. I meet the broker and form an opinion about him and his company. This is relevant because all monies pass through his protected client account.

Paging Daka. Paging Daka. Mr Daka at the front desk please. (He's the local expert in When Brokers Go Bad)

This is why I have to take the risk of transferring the price to a seller I have never met, or even communicated with.

That does seem a little odd. Why can't you meet and talk to him? At the very least you would need to see very clear evidence that the bank account to which you were being asked to transfer the money belonged to the owner of the boat, I agree.

 

[Tranona]

I can understand your reluctance to deal with broker A. As you rightly say the risk is the separation between paying the balance to the owner before getting title. In some ways paying direct is preferred because there is no risk that the seller does not get his money. Paying through a broker's client account has the advantage that you get title on payment to him and the risk is transferred to the seller.

What you need to investigate is using an escrow type arrangement where you are in the broker's office with the notarised documents, transfer the funds to the seller who immediately authorises release. Or to be extra cautious by using a lawyer as stakeholder. I am a little surprised that you need to have the documents notarised in Greece as I thought this was only a requirement if the boat is on the Greek register - that is what happened with my boat, but that was owned by a Greek company - and yes it did cost and took about 4 weeks.

I am on a bit of shaky ground here, but would have thought if the owner is a UK resident you could use an MCA contract and Bill of Sale - which you will need if it is Part 1 registered anyway.

Lot to be said for going to Broker B as he has been operating there for a long time and will know the best way of handling the transaction. Think both brokers will be happy to split the commission rather than the sale not happen!

Have a good Xmas and start the new year revitalised and committed to finding a solution rather than amplifying the problems!

 

[Ex-SolentBoy]

I have read all the posts with great interest, but following my earlier remarks about "this is not your problem" can I just say THIS IS NOT YOUR PROBLEM.

I personally would never buy an significant asset like a boat, or a house without having talked to the actual owner. There are so many things that you need to ask that you cannot rely on second hand information for. If I could not talk to the seller I would walk away. If I could talk to the seller I would negotiate directly, arrange currency terms with him and let him sort his employees (brokers) out himself.

If he would not do this I would walk away. Not worth the risk.

 

[BurnitBlue]

I must thank everyone for the help they offered in my dilemma between Broker (a) and Broker (b). Last night, on the advice of this forum, I decided to use the internet to search for the seller owner of the boat in case he had a private advertisement out there. Two hours of surfing with no result until I was ready to give up when, in pure movie style, up popped a ghost web page from the past. It was an apology to the companies customers that “Due to circumstances beyond their control they were no longer allowed to trade in Greece”. They stated that all their business along with customer contacts and lists had been transferred to two companies below. The two companies web sites were there in blue ink. Broker (a) and Broker (b). I am working from menory here because I cannot find that ghost web page again.

Anyway I continued surfing on from that ghost page and bingo there was the boat I was trying to buy on another of those ghost broker sites. The boat was offered at the same price as Broker (a) and Broker (b) but as tax unpaid.

It would appear that the boat I was interested in had a tax liability of 23% attached to it. Neither Broker (a) or Broker (b) mentions this in their advertisement. Then I noticed something else. There is a Quest 33 on broker (b) list that for the last year has been offered at 44,000 euros TAX NOT PAID. Today I noticed that the Tax not paid comment has been dropped, and furthermore all other ex charter boats that previously were advertised tax not paid has had this comment removed.

This has opened a bag of worms. Have the Greek government done a deal and waived the tax for other considerations. Both these brokers are honest and have integrity so I cannot believe that they would have been sucked me into handing over a 10% non-returnable deposit then told me I had to pay 23% tax on the boat. I have not checked all boats in Greece but those in Turkey still have the tax not paid alongside the asking price the greek boats don’t so WTF is going on?

I will wait for the Brokers to get back to work and continue my enquiries then. Thanks to all for giving me a direction so that I have avoided a possible nightmare where I can not afford the extra 23% tax but locked into a sale as a condition of the deposit. I still cannot believe that a broker would do this so there must be an honest explanation.

 

[DownWest]

Since this will take a couple of days to resolve..
A little drift story from your scenario of buying a boat not owned by the vendor.
A friend was often traveling to S. India and decided to buy a small house in a popular resort. Returning several months later, and finding her key no longer worked, the door was opened by a German couple who told her the house was theirs. Together they went to the agent. His offices were occupied by a firm of accoutants, who had no idea what going on.
Seems their office was 'borrowed' while they were on holiday. The lawyer was also missing.
The house was owned by people in Delhi and had never been for sale. As she was earning good money and the house had been cheap, my friend just walked off, leaving the German couple fighting over whos idea it was to retire to India....

 

[Tranona]

A little bit of history that might help on the VAT issue - I did a lot of research on this when I bought my boat there.

Prior to 2002 it was policy in Greece to waive VAT on charter boats (to encourage tourism). Having a charter company being able to reclaim VAT was quite normal, but it was extended to privately owned boats as well, provided they had a current charter licence (which in itself has requirements that ensure in theory it is actually used commercially) - and the icing on the cake was that once the licence expired (usually 5 years) the boat could be declared tax paid with a certificate confirming this. Naturally the EU did not liike this and as early as 2000 when I was considering buying the boat there were proposals to remove this concession and replace it with a lower VAT charge based on residual value. This came in with no notice in early 2002 and VAT was based on a written down value of 50% or original contract price - or contract price if less. My original contract was for 48% so in 2007 I paid 19% of that (although a bit more in reality because I bought in DM aand the agreed conversion to Drax to Euros was not in my favour). I understand some tax offices continued issuing VAT paid cerificates for some time after May 2002 - you know how slow Greek post is.

The upshot is that there are many older boats that have never had VAT charged on them but are perfectly legal and the Greek authorities do not pursue as far as I know. There are also many boats that are coming off the charter register which are offered ex VAT, because they could be bought as charter boats with a new licence or be subject to VAT if sold to a private owner. If they are being sold by the charter company then VAT will be based on the agreed sale price.

A used boat could also be subject to VAT if it is a private import or was non EU owned in the EU as a visitor. This is unlikely in Lefkas as it is not a normal port of entry, but is possible, but in both cases VAT is the responsibility of the importer.

If it is an older British built boat that has always been in the EU then it is unlikely to have any VAT issues other than the common one of lack of original receipt. If it is pre 1986 it is "deemed VAT paid". Post 86 should have evidence but often lacking, so unless there is something odd in the history you rely on the Bill of Sale declaration that the boat is free of all charges. Not entirely satisfactory but in practice this is the best you can do.

Hope this helps

 

[duncan99210]

Another thing to bear in mind is that no UK based broker will demand a 'none refundable' deposit. Your deposit is there to demonstrate you good faith and secure the boat whilst you have a survey done, carry out sea trials and agree a final price if any nasties are discovered during the survey or trial. If you can't agree a new price or the old owner won't make good items from the survey, then you walk away from the deal and the broker returns your deposit.
This is why the broker has a 'client account' whichis ring fenced from his business account, so that your money sitting in it for a few weeks can't be used to prop up his failing business.....
If broker a is demanding a none returnable deposit, start running now. Don't ever do business with him and let us all know who he is so we can avoid him too.
As regards time lines and the like, it took me about a month to sort out the final deal when buying Rampage and the broker had my money all that time. I paid him the final sum when we were satisfied with all the tooing and froing. I met the vendor but all the money side of life was through the broker. Don't know what the commission was.
If the boat is UK registered, then there's little in the paperwork angle that'll slow things down but if it's greek flagged, then keep in mind that Greek offcialdom regards manyana as something of a hasty concept.

 

[BurnitBlue]

Thanks Tranona and Duncan for the advice and sharing your knowledge of Greek and UK Brokers. In particular Tranona has given an explanation why two honest brokers have not mentioned the tax situation. As far as I can understand, it may be because it is a mute point and can be ignored in practice.

I am very happy with this and will continue the purchase when they get back to work.

I have downloaded the terms of business of UK Broker (b) and it states that they will work with other brokers if they are also a member of ABYA which would appear to exclude Broker (a) who is operating under Greek rules of business.

Duncan, I have no argument with either Broker (a) or Broker (b). They both operate professionally and honestly under the constraints of their respective system. It is my fault for walking in to the Greek working Broker (a). I must repeat that this has not been a rant against the Brokers but a disapointment that I chose the wrong one for my purposes.

I started the thread to enquire how (or if) I could ethically switch to UK Broker (b) from Broker (a).

I am humbled by the depth of knowledge on this forum. Thanks.

 

[nimbusgb]

Its a small world and there are lots of Preveza owners round here. Name the boat, see if we can track down the owner, put your problem to the owner and show him the colour of your money.

The broker problem should be addressed rapidly.