You can find many exceptional values in pre-owned boats, they can be affordable, seaworthy, well built, well maintained. To make sure you get years of pleasure and adventure out of your used boat, buy trough your broker.
Why Use a Broker to Help You Buy a Boat
Highly knowledgeable on both yachts and the current market, we are a useful source of information. We also have instant access to statewide, national and even international networks of boat owners and brokers with boats to sell. Purchasing a superyacht present rights and responsibilities to be considered. Along with detailing the appropriate design and equipment features of your ideal yacht, there are also strict payment and registration rules which must be adhered to as well as important after-purchase considerations.
Choosing your yacht
After you decide on the boat you want to buy, we prepare an Offer to Purchase for your signature. You also make a good-faith deposit on the boat, usually 10 percent of the purchase price. Your deposit goes into a bank trust fund that a licensed broker administers. By law, your money can’t be spent without your written authorization, and your Offer to Purchase should always depend on your satisfaction of a Sea Trial and Survey.
Financing a superyacht
If required, several banks will finance the purchase of either new or existing yachts. Terms vary, although usually a proportion of the loan and interest repayments can be delayed until the end of the loan term when it can be paid by refinancing or by using sale proceeds. If choosing this method of financing, lenders may also want a say in which country the superyacht is kept and registered and may also require direct payment of charter monies to the bank itself.
Memorandum of Agreement (MOA)
If you choose to buy an existing yacht, typically a detailed agreement known as a Memorandum of Agreement (MOA) is drawn up and signed by both parties after your selection is made and finalised. You should ensure the MOA describes the parties’ rights and duties when issues are raised, including rights to cancel all together. The MOA should also list all the equipment to be included in the sale, from navigation and safety equipment to all interior items, and cover other matters such as the documentation needed to enable a smooth transfer of legal title. Importantly, the MOA must state the yacht will be transferred completely debt-free. It is also recommended prospective buyers have any yacht surveyed before making a purchase. This includes having the vessel checked out of the water by a qualified and insured surveyor. If satisfactory, a sea trial is also recommended.
Getting a Sea Trial and Survey
The seller has accepted your offer on a boat. You’ve lined up your financing. Now it’s time for a sea trial to see how this boat handles and performs in the water. The seller usually provides the sea trial. We will usually go with you on the sea trial to answer your questions. A survey is your opportunity to find out any problems, see if everything works properly and determine the boat’s condition. Buyers pay for the surveys and for hauling the boat out of the water for inspection. If an unforeseen problem shows up during the survey, you might be able to negotiate it into the final price.
Use a marine surveyor
Don’t necessarily use a surveyor the seller has recommended-and don’t rely on a survey report from the seller. The report might have been written before certain problems turned up in the boat. Always use an independent surveyor and always survey the boat in and out of the water. Marine surveyors inspect the boat in your interest and the interests of your lender and insurance company. Often your lender will designate a marine surveyor, and brokers have lists of marine surveyors approved by lenders and marine insurance companies.
What to do with your sea trial and survey results
One big reason for the survey is to find out the current condition and market value of the boat you want to buy. If the results reveal flaws and problems, the sea trial and survey may give you the opportunity to back out of a contract without penalty-or to negotiate repairs on the boat.
But be advised: If you’re buying boat at rock-bottom price, or if the seller is in distress and is selling for below his market price, the sea trial and survey will not give you leverage to negotiate. The seller might not have funds for repairs and is selling as is, where is. The seller may insist that you pay any repair costs. We usually gives copies of the survey report to your lender and insurance carrier for their review. They’ll want to know the boat’s condition, its replacement value and the surveyor’s determination of the boat’s market value. Keep in mind, though-surveys are no guarantee against hidden or undetected defects.
If purchasing an existing yacht, 10% of the purchase price is typically paid up front while the balance is usually paid once the yacht and all documentation has formally changed hands. In terms of custom and semi-custom yachts, an overall amount for yacht construction will have been agreed upon in contract, and the most beneficial option is often to agree for payments to be made following the completion of individual stages to accommodate for delays in material delivery or unexpected interruptions.
Before this crucial and exciting step can take place, it is important that all legal documents relating to title are presented prior to the final payment being made. If this step is not completed, the yacht cannot be registered and therefore can not legally sail. The tax implications relating to the place of delivery must also be agreed upon. This is also the time when the yacht will be officially tested at sea by an expert representative you appoint to ensure its performance matches its specification.
It is a legal obligation that all yachts be registered with one particular country and wear the appropriate maritime flag, known as an ensign.
As in any major purchase, insuring against accidents is vital when purchasing your own yacht. It is important to ensure you have the appropriate insurance to spread risk and bring certainty, which can be increased by disclosing any and all information to the underwriter in determining risk and premium. Always consider where the underwriter is based, as some countries are not rigorous in regulating their finances, meaning unforseen insolvencies can be possible.
Choosing where to moor
No matter where you base your yacht around the world, prices for where you moor vary from port to port, although it always tends to be a major expense, particularly in the more exclusive of Mediterranean harbours. Often it can be most beneficial to purchase a mooring although it is recommended that before making any purchase, the exact nature of the sale is thoroughly evaluated to check which extra charges may still be levied by marina managers and what tax implications are attached.
This process varies depending on if you have chosen to purchase a new or existing yacht. Often, when investing in an existing superyacht, it is practical to keep the current crew onboard as they will already be appropriately trained and familiar with the vessel’s facilities and cruising areas. It is often advisable to include the crew as a condition of purchase of your superyacht.
If you want to keep your yacht in European Union waters, you may have to pay Value Added Tax (VAT), depending on the country. Generally, VAT is normally payable in the EU country through which the yacht is first brought into the EU. Once VAT has been paid in one EU country, this should (in theory) be good enough for all the other tax authorities. So it’s possible to bring the vessel into the EU through the country with the lowest rate. Removal of the yacht from the EU for a particular period of time resets the clock and VAT must be paid again.
Having the correct paperwork on board to prove the yacht’s VAT status is vital.
Thankfully, there are ways of avoiding VAT. For a start, yachts built by a certain date, and moored in the EU on a certain date, are relieved, as are vessels registered outside the EU, owned by a non-EU resident and only used temporarily in the EU. Temporarily means for 18 months in any 24 month period. An individual is resident in the EU having spent more than 185 days a year there.