Yacht Buying Process
24 March 2020
The yacht buying process guide North Star Marine Brokers put together will take you through the necessary steps of a yacht purchase. The guide is firstly intended for people looking to buy or sell a yacht through a professional yacht broker, but it can serve as a general guide for people not looking to involve brokers in the buying/selling process, although we strongly advise against such a decision.
A broker is mandated by the owner (or the lease-holder of a Lease Option agreement) to sell the boat. He arranges sales advertisements, on-board visits, draw up sales documents, and manage paperwork for change of ownership.
Most of the boats that are up for sale are entrusted to the broker by private individuals. In certain cases, the owners are members of the trade such as builders, dealers, leasing companies, financial establishments, etc.
Brokers therefore have a mandate defining the contractual relationship between the authorized agent and the client.
Before deciding to put a boat on sale through his agency, usually the broker arranges a visit with the owner. At the time of this visit, the broker will gather the information needed to build a file on the boat. He tries to find out as much as possible to provide potential buyers with clear, precise, objective and true information.
At times a broker is not able to visit a vessel, if this is the case the broker will rely on the owner to provide accurate description of the vessel and items of information. These will enable the broker to estimate the selling price and build up a sales and technical file on the boat.
When a boat on sale has caught a potential buyers attention, the buyer should contact the agency and request an information pack on the vessel that interests him. This can include precise identification of the boat, service history, inventory description and photographs.
An agent shall not “overvalue” the condition of the vessels on sale and provide a description matching reality. If he finds defects or equipment in poor condition, he has to make sure that the client is informed about them.
Agents should organize visits in such a way that the buyer can have plenty of time to have a look at the boat. We have noticed that buyers prefer to carry out their first visit without the owner’s presence on board. It is easier for a buyer to say what he really thinks about the boat to an agent rather than to its owner, and it is also easier to start discussing price or terms of sale.
We strongly suggest that you have the vessel that interests you inspected by a qualified independent marine surveyor. It would be wise to also ask a marine engineer and electrician to inspect the boat that interests you. The survey will provide you with a complete picture of the vessel you are interested in.
The marine surveyor assigned by the buyer can ask to have a sea trial performed at the time of the survey or at a later date if the boat is on dry dock.
An agent should pursue constructive negotiation in the interests of both the owner and the buyer.
The buyer should present his offer to the broker in writing and in turn he will submit it to the seller who can decide how to proceed.
If the offer is accepted the buyer will need to sign a sales agreement. Normally a down payment of 10% on the agreed price is required at this stage. The deposit is handled by the broker and is usually deposited in an escrow account.
The broker should guarantee the seller and the buyer a secure transaction. The delivery of the boat and handing over of keys can be carried out as soon as the full sum due has been paid to the seller by bank transfer to his account.
The seller and all parties involved (brokers, surveyors, divers etc) must be paid in full when the boat is delivered. The final payment must be made by bank transfer; the transfer must be credited to the account of the seller or to other parties involved.
The delivery of the boat to the new owner takes place in two phases: first a “technical” handover on the pontoon, to learn about the different systems and their operation (navigation equipment, pumps, engines, heating, electronics, etc.) and, if the new owner wishes, a sea trial which enables him to discover all the boat’s specific features.