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post #6 of Old 05-28-2010
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Buyer's Brokers

Buyer's brokers perform three main functions: 1. identifying suitable boats for a purchaser; 2. assisting with the review of specific boats to see if they are a good match for a buyer; and 3. assisting with the buy/sell transaction to be sure that the buyer gets a good price, gets title free and clear of liens or other nasty surprises, and makes sure that taxes and other obligations are either paid or planned for.

As a licensed broker and a maritime lawyer, I have found that most people that are buying a larger boat already have a very good handle on what kind of boat they are looking for and what boats are available on the market. There are always some boats out there that are not on Yachtworld or a similar site, but many, many boats can be vetted that way. We therefore focus on the last two items -- making sure that a particular boat is right and making sure that the transaction is right. Buying a good boat isn't so good if you do not get good title, and good title to a bad boat is no picnic either. Even if you get good title, it can be very frustrating to find out that you didn't receive what you paid for and that you have no recourse under the contract that was used. It's easy to whip through the papers at closing, and most times things work out fine, but in that 1 in 100 situation in which they don't, the papers take on a life of their own and someone with your interests in mind better have read them. It goes without saying that there better be a good plan in place to either pay sales/use tax or to maintain the boat in a manner in which it does not come due.

My advice for those looking at brokers is to evaluate them on how they plan to help you with the specific boat -- do they think you should save a few hundred bucks by avoiding a survey? Surveyors perform an important function and they have no interest in making a quick sale. Secondly, evaluate them on their thoroughness in the transaction. Does their brokerage contract protect you or does it protect them? Can you rely on what they tell you about tax planning? Do they understand what is required to have a boat that is to be used for charter or professional entertaining? These are important issues and it can be tough to keep a clear mind when you fall in love with a boat.

Dirk Schwenk
Baylaw, LLC
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