How to buy a boat!
The steps of buying a boat for the first time can seem strange but the process is required by the California Yacht broker Association (CYBA) to protect both the buyer and the seller. This yacht buying process has been used for decades. As a licensed Yacht Salesman working for a reputable Brokerage, my job is to walk you through this process to make it simple and easy for you to find and obtain your new yacht.
Before a potential buyer has made a formal offer, the buyer can look at the vessel as much as they want however, they cannot turn on any systems or take the boat out to test how it handles. After making an offer on the vessel, the buyer will be afforded time for sea-trial which affords the buyer to test the boats handling and functioning of all the systems.
Making an Offer
If the boat appears to be what the buyer wants, the buyer makes a formal offer using the CYBA Purchase Agreement. The agreement is signed by both the buyer and seller once a price is negotiated.
There are contingencies within the agreement stating the buyer has the right to a sea trial, a mechanical survey and perform a marine survey. There may also be a financing contingency included in the agreement. Upon the completion of each contingency, the buyer may step out of the deal. If the buyer does decide to step out of the deal he/she will receive their full deposit back.
Once the buyer and seller reach an agreement on the price, to determine whether or not the boat is what the buyer expects, they are entitled to a sea trial. During this sea trial the buyer may test all systems and see how the boat handles underway.
A marine survey and mechanical survey will take place once the buyer decides to move forward. Whoever decides to finance and insure your boat loan will almost certainly require a marine survey. And, it is just the wise thing to do.
The Marine Survey
In the simplest form a marine survey is an appraisal similar to that done on real estate or other items. This survey provides information including: year, make, model, hull identification numbers, engine information and so on. This is a complete report referencing all identification and information regarding the specifics of the boat.
The survey gives detailed review as well regarding the superstructure, fittings, and equipment, electronics and safety equipment, galley (if applicable), engines, electrical system, firefighting equipment and fuel systems.
The boat will be hauled out of the water so the surveyor can survey the bottom of the boat.
Once you receive your marine survey report, you will see the surveyor has given a list of recommendations. This will provide you a good idea of what will need your attention once you own the vessel.
The Mechanical (Engine) Survey
In a separate report called an engine survey the boat’s power is reviewed and general detailed description is analyzed. This report includes but is not limited to: filters (fuel and oil), oil and fuel lines, exhaust systems, cooling systems, fresh and raw-water systems, emergency stop and alarm systems as well as transmission data. Compression testing is also included in the testing.
NAMS and or SAMS have lists of accredited surveyors. I can provide this list to you. An accredited surveyor is usually needed for the insurer and finance company you will be using for your new boat. NAMS or The national Association of Marine Surveyors and the SAMS or Society of Accredited Marine Surveyors are both organizations consisted of professionals who put rigorous and necessary examination programs in place. These examinations enable their membership in both programs. It is recommended using only a surveyor who has received the designations “AMS” from SAMA or “NAMS-CMS” from NAMS
Completing the Purchase of your Yacht
The sea trial has been approved and all surveys have been accepted by you. The financing is complete, the insurance is set and you have a slip in which to house your new boat. The boat purchase is almost complete. You become the owner once the funds are transferred to the seller.
The last and most important step is next. What will you name her?