Buying a used yacht is an emotional experience and usually the culmination of a long dream. This can be an exciting time and a lot of fun as the vision of cruising off into the sunset is very appealing.
But preparing yourself and planning for the boat search is very important to avoid hastily buying the wrong boat and spending too much money as a result of your excitement.
Buying a boat can be a time consuming and complex exercise with finding the best boat, pre-surveys, offers, counter offers, arranging sea trials, haul outs and surveys let alone lien checks, taxes, documentation, licensing or registering the boat and making sure that everything listed is there when you take possession. Selecting a yacht broker to assist and represent you is critical to a satisfactory outcome, both economically and emotionally.
Its very important that you know the character of the person you are dealing with. Some brokers care more about their commission than you as a customer. They will likely sell you anything that gets your attention, just for the sale.
No Cost Professional Help
You can search for and buy your used yacht on your own but are you going to have every possible advantage on your side to help you buy the best for the least? The answer is absolutely not! You will be at a significant disadvantage when dealing with a yacht Broker on your own.
Pre-qualifying for Marine Financing and Insurance.
There are a few things I urge you to consider before you begin to search for your boat. You may want to pre-qualify for a boat loan before you shop. That will give you some extra leverage and breathing room when you’re shopping. Money is still availablefor marine loans unlike the housing market.
Locating the Perfect Yacht
Buying a boat is compromise and some will suit your intended usage much better than others. A sedan trawler with full 18″ walk around may not look as sleek as a motoryacht but you will be able to reach the dock without being an acrobat. The trunk cabin trawler looks salty but a sundeck model will keep your guests dry when it rains.
The varieties of equipment and layout are endless but the benefits and downfalls of each will quickly become apparent after spending some time evaluating each vessel.
Once we determine which styles will work best, Ill then do some background investigating, making calls to the listing brokers, about the condition of each one. Ill give you feedback to save you frustration and disappointment.
Once we determine which boat(s) is potentially, just the right boat, Ill use a Purchase Prequalification Disclosure to obtain details about her. I’ll then personally visit each boat, speak with the listing broker, and see for myself if the boat will meet your needs. I am going to look at things you will probably not consider and ask questions about things that never occurred to you. I am there to help find the best boat at the best price for you.
When I locate a few boats that might just fit the bill, well schedule a trip to go look at them. You will want to have me at your side when you look at them. You are going to be excited and would not want your emotions to get the best of you causing you to act in haste. I will be your devils advocate, helping you make the best decision and help decide if the boat is just right for you. I’ll tell you if I think a boat is worth considering.
Making the Offer
Weve now found what we think is your boat. You want to make an offer on her. Anyone can look up asking prices on boats on Yachtworld, but I have an intimate knowledge of current market conditions, the values of boats, a familiarity with similar boats, and information on recent sale prices and time on the market through industry resources not available to the public. I’ll also have an idea of the sellers motivation to make the sale.
The Price – If you call any used car dealer or bank in North America and name any production automobile, they will quote a value of within a few dollars of each other. This is due to the multi-billion dollar, organized wholesale car auction system. With over 2,200 boat manufacturers (USCG Listings) in North America there is no such market for boats and there is no official Yacht Blue Book that gives retail and wholesale prices.
Keep in mind that asking prices of yachts generally reflect what the owner feels his boat is worth based upon her condition. I always tell my shoppers that a good boat will cost more than the average one. I tell my sellers of boats that if they have a good boat, they can demand a higher price.
Simply speaking, a boat is only worth what you are willing to pay and a seller is willing to take. I research what the boat you are considering has been selling for in your part of the US. That then becomes our basis for your offer.
The Offer – Once we determine what the boat has been selling for we will arrive at an “Offer to Purchase” price. The price will reflect what your budget will allow, what is fair, what is realistic to buy the yacht based upon her age and condition, and protection for you as conditional.
The offer will be made conditional on a satisfactory marine survey and sea trial. Other conditional items may be added as well.
Ill ask you to make a good-faith 10% deposit on the boat. I am required by law and do use an escrow account for your offer deposit and ensure that at closing, any existing loan or other encumbrances are paid off. This safeguard is of critical importance to the buyer and seller, and can be a potentially serious hazard in a private transaction not involving a broker.
Survey and Sea Trial
Part of our offer will be to have a marine survey completed with the findings to your satisfaction. I know many certified surveyors and Ill recommend several that are top shelf and let you interview and select the one you prefer. You may wish to use an engine surveyor as well as a hull surveyor. They work for you! Of course, you are responsible for the survey cost. The going rate in Florida is from $16-18 per foot. It is customary to pay the surveyor on the day of his work.
On the day of the sea trial, well bring on board the selected surveyor(s) to inspect the vessel in detail. His job is to operate, test, and evaluate everything onboard to make sure it works and is in serviceable condition. He will use up the bulk of a full day going through the entire vessel. Ill be there with you.
You have to be realistic about a marine survey. Surveys are limited by the physical and visual accessibility to the structural elements and systems. No surveyor can find everything thats wrong with a boat in the few hours allotted to a survey and a lot of the issues he does find are subject to his interpretations. For instance, your boat may have balsa cored decks and some surveyors make a big issue of boat decks and consider this a serious issue while I have never seen it hurt anyone or sink a boat…..so if the price is right…. buy it and go cruising. A 100% accurate survey would require complete disassembly of the yacht and we know thats not practical. Oh yes, during the survey its ok to ask your surveyor questions of how hes doing, just dont hover over him. Youll get in his way.
After the survey, the surveyor is going to verbally give you his impression of the boat. Youll know before the day is done if the yacht is a keeper. Hell follow that up a few days later with written copy of the survey for you and your insurance carrier. In virtually every survey, there are issues with the yacht that arise. Some may be minor but some may be significant. If the significant issues are such that we have an inferior vessel and you no longer want the vessel, you still have language in your Offer to Purchase that will allow you to back out of the deal. If the issues are correctable, we again negotiate with the seller and determine if the seller will correct the items before we take delivery or reduce the price accordingly and you correct those things after you take possession. Those issues are resolved by us before we accept the boat.
On the day of the survey, we will also conduct a sea trial. During the sea trial you will get to operate all of the onboard equipment, run the vessel at operating speeds, observe how she behaves and basically operate the vessel and everything aboard to make sure she is what you expected. Ill be there at your side to help you along the way.
Language in the Offer to Purchase we have prepared states that if you dont like the way she handles you can walk away from deal and have your deposit refunded.
Final Acceptance
Once we have completed the survey and sea trial, our Offer to Purchase requires you to sign a formal acceptance document and either accept or reject the boat. We generally include any issues you want corrected as a result of the survey as well. This acceptance document is submitted to the seller for his signature as well.
Once signed by both parties, this document serves to initiate the final legal closing for the yacht.
Documentation, Bills of Sale, Title Abstracts and State Sales Taxes.
Yes, there is legal paperwork that documents the purchase. I facilitate all the paperwork requirements needed to complete the sale, from the initial Offer to Purchase to the Bill of Sale. I take care of documentation, taxes and other fees, as well as certificates of ownership, and title abstracts you will need. I will see to it that all the necessities are completed in a timely manner.
Taxes, yes the government always wants their share. But there are certain circumstances when you do not have to pay state sales taxes. I will review your options when the time comes.
So from the time you made your offer, it will take about 4 weeks to cloe the deal; the yacht is then legaly yours. Happy sailing!