BROKERS: PROFESSIONAL CAPTAINS AND CREW ARE VITAL TO CLOSING A DEAL

Despite the flack some megayacht captains give brokers, brokers acknowledge that they couldn't do their jobs without the crew.

Attendees of The Triton's Broker Seminar were from left, John Kropf of Camper & Nicholsons and Steve Reoch of Fraser Yachts Worldwide.

"We're not just selling steel or fiberglass, we're selling the lifestyle," said John Kropf, a broker with Camper & Nicholson. "Crew is a part of that, a big part of that."

"In charter, you can have a junk boat, but if you have a great crew, you'll have a great charter," Reoch said. "But you can't have a great boat and a junk crew and have a great charter. The crew is an integral part of the equation."

Inevitably, that fateful (and glorious) day comes when an owner wants to sell the boat. It could be that there is another one being built or purchased, or it could be that the owner is getting out.

Whatever the reason, the captain and crew are faced with a good chance of not having a job when the boat sells, yet they are expected to put on a happy face and "sell her." (Yes, there may be bonuses involved, but there's still the possibility that the job ends.) Still, Reoch and Kropf said they and most brokers expect captains to act professionally.

"You gotta feel for a captain when you come on with a client and he parks his Maserati on the dock and brings his captain along," Reoch said. Whether an owner comes with his captain or the broker knows a captain is in the picture, they understood that it's also important for a broker to respect the current captain's interaction with the client.

"It's also an opportunity," Kropf said. "We're concerned about them. Both our companies have the ability to help them find another job."

For the most part, captains have two main complaints about brokers. First, brokers have a habit of bringing clients to the boat with 20 minutes notice. But when a client is in town for just a few hours on their way somewhere else, they often don't have a choice.

"It's not good for us either," Reoch said. "The smallest things can turn them off, a smell, a messy crew quarters."

"I definitely tell the client that this was the crew's day off, they just got off charter or whatever," Kropf said. "I think the captains think we do this for fun," Reoch said. "But just because the guy's in shorts doesn't mean he didn't just sell his company for $120 million."

The other big complaint from captains is that brokers will often tell a prospective buyer that they can operate the boat with fewer crew and at a smaller budget than is practical, just to make the deal.

"That's a fair comment," Reoch said. "It happens from time to time." "We owe it to the captain and owner to find out what that real number is," Kropf said. "We can get it. The problem is that most brokers are lazy. On a preowned yacht, there's a track record.

Ask the captain. And find out from the owner what level of service they want." "Another easy way it so count the crew beds," Reoch said.

So aside from annoying crew with last-minute visits and short-changing the annual operating budget, what is it that brokers do?

According to Reoch and Kropf, they begin by sorting through the less-thanqualified "buyers" who call. While the Internet has helped brokerage houses with listings and leads, it has opened the door to more "flakes," as Reoch called them.

Once a serious buyer has been identified, they'll do an initial assessment.

"They don't know what they want, but they know what they don't want," Kropf said. When asked if they have assistants to do some of the research and preliminary assessment work, he said, "The client trusts our ability to translate what they want into a boat. No one can do that but us."

Most of what they do is follow-up.

"You've got to have a primary tier of clients," Reoch said. "I have several tiers of prospects. They all have to be paid attention to, with phone calls, e-mails, coffee, meals, meetings on boats, whatever. Deals will take, at a minimum, months."

One of his clients bought a boat in 1985 and says he wants another one. Reoch calls him every month, and has for 20 years, but he's never bought one.

"Ask any broker's significant other and they'll tell you it's a 24/7 job," Reoch said. "I don't turn my phone off; that's going to be the time the $10 million deal goes to someone else.

"When there's a contract on the table, that's all I do," he said. "All I want to do is get to the finish line. There's a mountain of paperwork with attorneys and surveyors, the list goes on. Any one of them can screw up the deal."

"The last thing we need is a captain with a bad attitude," Kropf said. "We have to be professional throughout. We go through all this without the assurance that we'll get paid. We're not here to stab a captain in the back. We're here to help them. If we displace someone on a boat, they are a priority to get another job, as long as they're doing the job."

"Both captains and brokers have to understand we're in this for the enjoyment of owners," Reoch said. "If they stop enjoying their boats, we all lose."

April 2006 www.the-triton.com The Triton
By Lucy Chabot Reed

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