Are you thinking of selling your boat? First, decide whether you want to sell the boat yourself or if you want to engage a boat broker. If you choose the latter, or you still cannot decide, then better read on.
A boat broker is a specialist who serves boat sellers and/or buyers as a representative for the sale or purchase of a boat. A boat broker works very much like a real estate agent. Just like selling a house, you have to find an agent that you feel will help you promote your boat to a wider market. Therefore, finding the right agent is vital for a good outcome.
A boat broker is technically a “middle man” who has to ensure that the seller sells for a good price, and that the buyer feels he is buying into the best possible deal. “It’s a balancing act between achieving the best price for the current owner and having the purchaser feel they are getting a good deal,” describes Daniel Williams, owner of Boats’R’Us in Hope Island.
More than being a middle man, a broker is also a negotiator who is constantly learning about boating, boats, relationships, markets, strategies, and everything else relevant to the industry. “They are advocates for the sale of your vessel. They are there for the initial inspection, the second inspection, and the contract and settlement stage. They will be there for any mechanical tests, survey and sea trail required by the buyer. Brokers conclude the deal and assist with the handover,” says Daniel.
As negotiators, brokers often add value to the transaction. “I always negotiate myself into a situation where no negotiating is required. By offering more after-service to the buyer, I can receive a better outcome in price,” explains Tom Bialowas, owner of Bosun’s Locker in Southport.
Keeping the client relationship after a sale is also a significant aspect of a broker’s job. This can ensure that he/she can be engaged again by the same client for a transaction involving the same boat, or a different one, and other future transactions, and will keep him/her motivated to achieve the best outcome for the client.
TECHNICAL KNOWLEDGE
While a good broker should have at least a general boating knowledge, a deeper understanding by the broker of the specific boats he is selling, such as features, specs, abilities, is a substantial advantage.
Daniel says, “Knowledge of boating is key, as each boat specifications and abilities are different. An intelligent broker does his homework on each boat and has an extensive list of features and benefits gained by having good rapport with the current owner, and armed with his experience to use his information as well.”
Tom adds that candor in dealing with the clients is just as important. “The majority of boat brokers in the industry today have a broad knowledge of the vessels they are dealing with, such as power, sailing (monos and catamarans), and are able to offer sound advice to the purchasing client. However, in some cases, the client knows more than the broker about the intended vessel, so transparency and honesty are vital.”
It is therefore best to choose a broker who is an expert in the type of boat you are considering to sell.
KNOWING THE MARKET
Boat brokers are expected to have a database of clients to whom they can connect and communicate. How a broker uses of this valuable resource is essential in marketing a boat for sale. An extensive knowledge of the market place for your boat is a trait to look out for in a smart and professional broker.
“A good quality boat broker will know the market and the best mediums through which to sell your vessel. Most brokers have a client base that they can often draw on to help sell your boat,” points out Daniel. “Your broker should have a customer database of potential buyers. This is very important in the initial promotion of your boat to customers looking for something similar. A quality broker will also recommend a sale price for your boat after taking into account the age, condition and the market situation.”
“This market knowledge, advertising experience and facilitation of transactions between all parties involved will achieve the best results. What is most important is trust and integrity. The brokerage is a legal safeguard to protect everyone’s interests,” confirms Tom.
A broker is also equipped with the marketing experience and skills to help sell the boat. This includes using public relations, advertising, direct mail, and social media, among others, to market your boat. Tom says that one advantage of engaging a broker to sell your boat is that “there are various strategies and platforms for advertising that depend on the type of vessel. These days, electronic mail-outs, print and internet advertising, including social media are the key areas for boat brokers.”
Tom points out further, “Most brokers fees will cover all advertising. If you want to go outside the usual mediums, there would be an added cost depending on the areas you wish it marketed. Your broker will compile information with specifications, an overview of recent maintenance history, and what sets your boat apart from another similar one.”
“While a lot of advertising is done through the internet, it is best to select a broker that has a high traffic location. It is pointless using a home-based broker unless you have a specialized vessel,” advises Daniel. “For those brokerages that have an office, there should be an advert material on the brokerage’s window, like a silent after-hours salesman. The broker should use high quality images of the most impressive aspect of the vessel.”
Many boat brokers, if not all, use various marketing tools depending on the boat being sold. If a broker has clear strategies to use these tools effectively, it will boost the chances of selling your boat for the right price. These tools obviously involve more than promotional tools. For instance, if a broker conducts market surveys, understands his current positioning in the market place, and where the competition is, then you will know that he or she will be effective in marketing your boat.
EXPECTATION FROM SELLER
Daniel believes the most important aspect of selling your boat is presenting your boat at its best. “Presentation. Presentation. Presentation. There is nothing worse than taking a client on to a vessel that is dirty, is untidy, or has dirty bilges. If you know the broker is coming with a client, have the boat opened up and ready. Small things make a huge difference.”
Aside from preparing the boat for inspections, sea trials may be required. “Most purchasers will expect a sea trail,” says Daniel. “There is often a second sea trail when you have a mechanical inspection and survey. The broker will be present during the sea trial, and in certain situations the current owner of the vessel will be in attendance.”
Sea trials should generally only be conducted once a contract has been signed. Both Tom and Daniel will confirm that an agreed price must have been reached first. Tom points out that if sea trials were conducted without a contract, “people will be going for joy rides wasting every one’s time.”
Tom further adds, “You will get the best results when selling your boat by having your vessel presented at its best cosmetically and mechanically. By also obtaining an independent survey before you list the vessel and addressing any problems that need resolving, there is a greater chance to get the best results.”
REVIEW
Boat brokers are not magicians, and will only be effective in selling your boat after considering many factors.
“If your boat doesn’t sell in the first three months, understand why,” suggests Daniel. “Consider these questions: Is the presentation of the vessel lacking? Is it overpriced? Is the marketing campaign wrong? Sit down with your broker and ask what you can do to aid in the sale. Depending on the boat type, boats may sell at certain seasons. Houseboats generally sell all year round. Bowriders sell only when the weather suits. Take a look at your boat type, and think about which time of the year you traditionally used the vessel the most; and then, plan to have it on the market before this period.”
Tom assures, “Don’t panic if it doesn’t initially sell. The market is constantly changing. After three months, the broker should call you to discuss a new game plan that both parties will agree upon.”
RESEARCH
There is no better way to find the best boat broker to help you sell your boat except to conduct your own research. You should be comfortable with the broker and trust his abilities and integrity. Where do you start in this search?
Tom says, “Like selling anything of substantial value, it is recommended that you do your research. Jump on the internet, talk to other boaties, and call as many brokerages as you can to help you make the right choice on which broker to use.”
Daniel expounds on this. “Shop around and you will often find big differences between broker’s fees and services. By asking around and visiting the brokers, you can find one with whom you feel comfortable. Geography also plays an important part in your decision. For example, if you are selling a sail boat, it is best to use a broker located where the majority of sailing boat users are located. Once you meet a potential broker, ask where they advertise vessels, discuss brokerage commissions, and if your vessel is not yet at a marina, discuss the possibility of moving your vessel into one of their high exposure berths.”
FEE INCLUSIONS
A broker’s fee is normally a percentage of the final sale price, although there may be instances where a different fee structure can be arranged depending on the parties involved. Tom says, “Generally, a commission is calculated on a percentage basis, from 5% to 10% of the final agreed sale price.”
Inclusions to the fee may vary depending on the expectations and agreement. But Daniel insists that, “Your all-inclusive brokerage fee should cover advertising and representation that markets your vessel 24 hours a day, such as an advert at the broker’s office window, for instance, and other sales collateral.”
Both Tom and Daniel agree that giving the broker exclusive rights to sell your boat assures the broker that you have commitment and integrity. This gives the incentive and motivation for the broker to sell the vessel and take ownership in achieving the best results for selling your vessel. By ensuring you keep a good relationship with your broker, listening to each other, being open to each other’s suggestions, and working well together, you will succeed in selling your boat.
By Andrew Kancachian
Sep-Dec2017
