The decision to buy a boat requires just as much contemplation whether it’s your first boat or your tenth. It pays to spend time considering what your requirements are and looking at various boats you think may be suitable. A call to a knowledgeable broker to discuss your requirements can throw up a number of questions you hadn’t considered.
In any sale or purchase the role of the broker is complex. Although the vendor of the vessel ultimately engages the broker to act their behalf there is a duty of care towards both the vendor and purchaser in every transaction. A good broker will make both parties feel comfortable.
With growing demands on people’s precious leisure time it’s becoming more common for buyers to work with their own broker. This type of arrangement sees the broker assist the buyer to identify a number of designs which meets their needs, locate suitable boats and arrange viewings before assisting with the purchasing process.
Based on our experience we have listed the purchase process below along with some useful advice.
What suits your needs ?
When working with purchasers to identify possible boats for their needs we start off with some simple questions which are relevant to anyone:
- What type of boating do you enjoy?
- What’s your own level of experience/competency?
- What time do you have available to use the boat?
- What time do you have available to maintain the boat?
- Are there any boats you have already identified as potentially suitable?
As brokers acting for purchasers we can work up a number of possibilities to start narrowing the search. With the search narrowed, using our technical expertise an in-depth evaluation of a few models can be provided.
Do Your Homework
In this internet age it’s never been easier to research any preferred boats. No matter what type of boat or yacht you set your heart on you should be able to find plenty of information relating to how they perform and what problems occur with older examples long before you embark on the purchase process.
Do your finances stack up ?
This will no doubt have been considered in some detail by anybody contemplating a boat purchase long before the hunting for that perfect boat starts. Its important to make sure that along with the costs of purchase the ongoing costs of owning a boat or yacht have been fully appreciated. The list below is offered as a simple guide.
- Agreed purchase price.
- Survey Costs – Cost of survey, cost of hauling for underwater hull inspection
- Transportation costs.
- Mooring / Winter Storage Fees
- Maintenance Costs – Systems servicing. Sail Servicing. Safety Equipment Servicing, etc.
- Upgrades & Replacements etc.
Look at Some Boats
Always look at a few boats or yachts to give you ideas and something to compare.
When considering a viewing call the broker in advance and make an appointment. Formalising an appointment to view a boat ensures the boat is going to be available, especially if you’re travelling a distance. It will also ensure the broker is available to spend time aboard the boat with you answering questions and demonstrating the systems.
Try avoid viewing alone. Bring along a friend as a sounding board. It is very easy to be overwhelmed and get carried away when looking over a boat and miss important points.
The Purchase Process
Before making any offer it is sensible to have a general understanding of the purchasing process.
Following a viewing we recommend a discussion with the broker before making any offer. It is important to understand the boats current position particularly with regards to berthing or storage.
With an offer accepted the broker will provide a formal purchase agreement to accurately reflect the agreed offer. This forms a legally binding contract between the two parties. It is particular importance to take note of the clauses with a stipulated timeframe, normally relating to the time in which a survey and or sea trial.
Upon signing of the agreement a deposit is payable, this deposit is normally 10% of the agreed purchase price. The deposit is held by the broker for the duration of the purchase process.
Subject to Survey
With the potential for any boat to have issues not visible to the layman it’s advisable to make any offer subject to a pre-purchase condition survey by a qualified marine surveyor. The purchaser is liable for all costs associated with the survey including hauling ashore for inspection of the underwater hull. To avoid a conflict of interest a broker should not recommend a specific surveyor, however they may supply a list of those operating locally.
A report will be provided following survey. The reports are of a technical nature and not always the easiest read. Take time to digest the contents of the full report and if you have questions don’t hesitate to contact the surveyor for further guidance. Reports should be read in context, no surveyor ever lists all the good points about a boat, generally it’s only the defects which are worthy of note. In the case of major defects the buyer normally has the right to either reject the vessel outright, negotiate a reduction on the agreed purchase price to reflect the cost implications of the reported defect or request the vendor put right the defects before the completion of the sale. The broker should provide guidance on the best way to proceed acting in the interests of both parties.
There is always an option to make any offer subject to sea trial as well as survey. With the complex systems aboard many modern vessels often a sea trial is the only method by which all the systems aboard can be fully tested. Having the surveyor accompany you on the trials is a sensible investment. They will be able to give advice on any issues which may become apparent while having a full understanding of the systems aboard, which may be unfamiliar to the buyer. Again sea trials are at the purchasers expense. Any sea trial will be dependent on the weather and a flexible approach should be taken to making arrangements in advance.
Completion & Hand Over
With the technicalities of the survey and sea trial concluded the sale of the vessel and legal transfer of title for the vessel should be completed promptly. The broker should be holding the monies for the purchase of the vessel in cleared funds as well as the ships papers ahead of the agreed transfer date. Completion of the sale is essentially a paperwork exercise however it is sensible to arrange to meet the broker aboard the vessel on the day of completion allowing for a final check of the vessels condition and inventory prior to the transfer of title.
The buyer should satisfy themselves that the ships papers are in order before the sale completes. At the very least the buyer should be provided with the following
- Bill of Sale in favour of the purchaser
- Previous Bill of Sale in favour of the vendor
- Builders Certificate for the vessel
- RCD certificate of conformity (boats built post RCD only)
- Evidence of VAT payment.
It’s the purchaser’s responsibility to insure the vessel from the date of completion.