Yacht broker

Last updated May 18, 2023

A yacht broker is a specialist who serves yacht or boat sellers and/or buyers as a representative for the sale or purchase of a yacht or boat. The yacht broker is paid an agreed commission by the seller to market the yacht for sale, field interest and inquiries from buyers, handle negotiations, attend inspection and water trial and ultimately, if successful, to attend delivery. A buyer's broker may assist their client in locating and qualifying a vessel and assisting with purchase negotiations but is typically not paid a commission by buyer and instead shares in the commission paid by the seller to their broker. These two roles are referred to as listing broker (representing the seller and vessel) and selling broker (representing buyer).

Licensing

Yacht brokers are required to be licensed and bonded in only two states (Florida and California) to protect the public; however, the rules differ in each state on what qualifies as a "yacht".

In Florida, licensing is required for any vessel greater than 32 feet in fixed length (often called length overall or LOA) that is not your own. In order to participate in the sale of a vessel of this size in Florida, a person must submit a bond of $10,000 to the state of Florida, go through a criminal background check, including submitting fingerprint cards and hold a valid license with the Florida Department of Business and Professional Regulation (often called DBPR) for 2 years as a sales person, before being eligible to become a broker in their own right. This requires a surety bond of $25,000 and allows someone to set up their own yacht brokerage company or become "broker of record" for someone else's company. There is only one "broker of record" per company; this is the person who is responsible for overseeing all other sales peoples yacht sales activity and is responsible for reporting sales to the State of Florida.

In California, licensing is required for any vessel greater than 16 feet in fixed length (often called length overall or LOA), but under 300 G.R.T. (gross registered tons) that is not your own. In order to participate in the sale of a vessel of this size in California, a person must submit a bond of $10,000 to the state of California and hold a valid license with the California Division of Boating and Waterways (often called DBW). Similar to Florida, you have to hold a sales person license for 2 years before applying to become a broker. California is the only state which actually requires prospective sales people and brokers sit a 2-hour written test, which has a pass rate of 70%.

Qualifications

In the Netherlands, qualified yacht brokers are known as "EMCI Certified Yachtbrokers"

In the U.S. and Canada, qualified yacht brokers may qualify to earn their Certified Professional Yacht Broker (CPYB) credentials, following courses of study and successfully completing a 3-hour written examination. The CPYB program is supported and offered by all seven yacht broker associations in North America; YBAA, FYBA, NYBA, GCYBA, CYBA, OYBA and BCYBA.^[1]

Associations

AYB - Associated Yacht Brokers, EMCI - European Maritime Certification Institute, YBAA - Yacht Brokers Association of America, FYBA - Florida Yacht Brokers Association, MYBA - Worldwide Yacht Brokers Association, BCYBA -British Columbia Yacht Brokers Association, GCYBA- Gulf Coast Yacht Brokers Association, CYBA - California Yacht Brokers Association, OYBA - Ontario Yacht Brokers Association (Boating Ontario), CPYB - Certified Professional Yacht Broker Program.

Locations

Yacht brokers are more common where yachting is more common; along coasts and waterways or within lakes. For instance, yachting is very common in the Mediterranean and Caribbean Seas, along the U.S eastern and western and gulf coasts. These popular waterways for leisure boating are proximate to the large western populations of Europe and all of North America.

Commission

Similar to other industries (i.e. real estate) commission is usually paid by the seller of the vessel to a broker and agreed upon in advance of negotiation, typically as a key term in a marketing agreement, which is often called a Central (or Open) Marketing Agreement. Commission is either based on a fixed bottom line from the seller (Net) or as a percentage of the purchase price (Percentage). When commission is as a Percentage, it is typically 10% of the purchase price. Net agreements are becoming increasingly unpopular and are very rarely offered by Listing Brokers at the present time. While they may seem an attractive option for sellers and do work well for sellers in limited scenarios, they are typically only offered when the broker is planning to make more than the standard 10% as their commission or, if less, it is unlikely another broker will want to bring a buyer to negotiation and share in a commission which is less than the standard and expected amount.

While standard commission rate is typically 10%, there are brokerages that offer to market and sell vessels for less. Reduced commissions however often have the unintended effect of alienating Buyers Brokers who would otherwise alert a potential buyer to the vessel.

While not common in the United States, it is not common in some countries (especially in Europe) for buyers to pay a "buyer's commission" to their chosen broker to find a vessel for the buyer.

Yacht charter broker

The term 'yacht broker' can sometimes be confused with the term 'yacht charter broker'. A yacht broker acts as an agent in the sale of yachts, rather than the "rent", hire or charter time on yachts. A yacht charter broker specializes in the "charter" of fully crewed luxury yachts or smaller bare-boat yachts used by people for holidays/vacations . Occasionally a person will carry out both roles but more commonly a company as a whole will carry out both roles and employ both yacht charter brokers and yacht brokers. The roles are therefore normally specialised and distinguished.

Related Research Articles

Sales are activities related to selling or the number of goods sold in a given targeted time period. The delivery of a service for a cost is also considered a sale.

The Incoterms or International Commercial Terms are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC) relating to international commercial law. Incoterms define the responsibilities of exporters and importers in the arrangement of shipments and the transfer of liability involved at various stages of the transaction. They are widely used in international commercial transactions or procurement processes and their use is encouraged by trade councils, courts and international lawyers. A series of three-letter trade terms related to common contractual sales practices, the Incoterms rules are intended primarily to clearly communicate the tasks, costs, and risks associated with the global or international transportation and delivery of goods. Incoterms inform sales contracts defining respective obligations, costs, and risks involved in the delivery of goods from the seller to the buyer, but they do not themselves conclude a contract, determine the price payable, currency or credit terms, govern contract law or define where title to goods transfers.

A broker is a person or firm who arranges transactions between a buyer and a seller for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Neither role should be confused with that of an agent—one who acts on behalf of a principal party in a deal.

A real estate agent, referred to often as a realtor and/or a real estate broker, is a person who represents sellers or buyers of real estate or real property. While a broker may work independently, an agent usually works under a licensed broker to represent clients. Brokers and agents are licensed by the state to negotiate sales agreements and manage the documentation required for closing real estate transactions. Buyers and sellers are generally advised to consult a licensed real estate professional for a written definition of an individual state's laws of agency. Many states require written disclosures to be signed by all parties outlining the duties and obligations.

A real estate contract is a contract between parties for the purchase and sale, exchange, or other conveyance of real estate. The sale of land is governed by the laws and practices of the jurisdiction in which the land is located. Real estate called leasehold estate is actually a rental of real property such as an apartment, and leases cover such rentals since they typically do not result in recordable deeds. Freehold conveyances of real estate are covered by real estate contracts, including conveying fee simple title, life estates, remainder estates, and freehold easements. Real estate contracts are typically bilateral contracts and should have the legal requirements specified by contract law in general and should also be in writing to be enforceable.

A bareboat charter, or demise charter, is an arrangement for the chartering or hiring of a ship or boat for which no crew or provisions are included as part of the agreement. Instead, the people who rent the vessel from the owner are responsible for taking care of such things. The act is commonly known as bareboating or bareboat charter.

For sale by owner (FSBO) is the process of selling real estate without the representation of a broker or agent. Homeowners may employ the services of marketing, online listing companies, or market their own property. Typically, they represent themselves with the help of a lawyer or solicitor throughout the sale. As in most areas, there are detailed legal requirements pertaining to sellers and disclosures they must make.

Shipbroking is a financial service, which forms part of the global shipping industry. Shipbrokers are specialist intermediaries/negotiators between shipowners and charterers who use ships to transport cargo, or between buyers and sellers of vessels.

Closing costs are fees paid at the closing of a real estate transaction. This point in time called the closing is when the title to the property is conveyed (transferred) to the buyer. Closing costs are incurred by either the buyer or the seller.

A listing contract is a contract between a real estate broker and an owner of real property granting the broker the authority to act as the owner's agent in the sale of the property.

L.E."Ted" Geary was a naval architect who grew up in Seattle, Washington. He designed and raced numerous competitive sailing vessels, and also designed commuter yachts, fishing boats, tug boats, and wooden-hulled freighters.

Business brokers, also called business transfer agents, or intermediaries, assist buyers and sellers of privately held businesses in the buying and selling process. They typically estimate the value of the business; advertise it for sale with or without disclosing its identity; handle the initial potential buyer interviews, discussions, and negotiations with prospective buyers; facilitate the progress of the due diligence investigation and generally assist with the business sale.

An insurance broker is an intermediary who sells, solicits, or negotiates insurance on behalf of a client for compensation. An insurance broker is distinct from an insurance agent in that a broker typically acts on behalf of a client by negotiating with multiple insurers, while an agent represents one or more specific insurers under a contract.

A land contract, often described by other terminology listed below, is a contract between the buyer and seller of real property in which the seller provides the buyer financing in the purchase, and the buyer repays the resulting loan in installments. Under a land contract, the seller retains the legal title to the property but permits the buyer to take possession of it for most purposes other than that of legal ownership. The sale price is typically paid in periodic installments, often with a balloon payment at the end to make the timelength of payments shorter than in the corresponding fully amortized loan. When the full purchase price has been paid including any interest, the seller is obligated to convey legal title to the property. An initial down payment from the buyer to the seller is usually also required.

Flat-fee multiple listing service or flat-fee MLS refers to the practice in the real estate industry of a seller entering into an "à la carte service agreement" with a real estate broker who accepts a flat fee rather than a percentage of the sale price for the listing side of the transaction. A flat-fee MLS brokerage typically unbundles the services a traditional real estate brokerage offers and lists the property for sale in the local multiple listing service (MLS) à la carte without requiring the seller to use all services.

Car brokers specialise in helping car buyers source and buy cars. They typically offer services such as finding a particular used car model to fit a budget, getting the lowest price on a new car, or negotiating with a used car seller on behalf of a client that already located the car by themselves.

In a real estate context, an option fee is money paid by a Buyer to a Seller for the option to terminate a real estate contract.

A real estate transaction is the process whereby rights in a unit of property is transferred between two or more parties, e.g. in case of conveyance one party being the seller(s) and the other being the buyer(s). It can often be quite complicated due to the complexity of the property rights being transferred, the amount of money being exchanged, and government regulations. Conventions and requirements also vary considerably among different countries of the world and among smaller legal entities (jurisdictions).

An exclusive buyer agent (EBA) (also known as an exclusive buyer broker (EBB)) is a U.S. real estate firm (or an agent or broker who works in such a company) that represents only buyers of real estate. EBA firms never take listings and, therefore, never represent the seller in a real estate transaction.

Forsalebyowner.com is the United States largest "by owner" real estate website. It provides a real estate advertising and information service that charges a flat fee to property owners who advertise their property on the company’s Website. It created a business model that competed directly with traditional real estate firms, connecting buyers and sellers without the use of brokers. Property sellers devise and customize the content and format of their advertisement. ForSaleByOwner.com then charged to the owners a listing fee that is directly proportional to the length of the advertisement and the period of time it appears on its Web site. For an additional fee, property owners can have also list their properties on the MLS with a real estate agent affiliated with ForSaleByOwner.com. Interested buyers can use the service to search listed properties for free. However, ForSaleByOwner.com does not represent or negotiate on behalf of either the seller or the buyer. On its Website, a disclaimer clearly states that it is not a real estate agent and is legally prohibited from taking part in the actual sales transaction.

References

↑ "National Yacht Broker Certification Program". cpyb.net. Retrieved Mar 5, 2012.

This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.

[1] "National Yacht Broker Certification Program". cpyb.net. Retrieved Mar 5, 2012.

[1]