Yacht’s the Way to Go!
A Basic Guide to Getting Your First or Next Precious Yacht
March 20, 2015
Yacht ownership requires a lot of planning and management. If you are a long-time boater, you already know this and if you’re planning to buy your first yacht, you’ve surely already figured it out through your research. But you also know that a yacht will bring you and your family and friends a lot to cheer about. Open water, wind and sun—yachting is fun.
So whether you’re a first-time buyer or an existing yacht owner stepping up to a larger vessel, here are a few tips to ensure you get the most out of your new yacht.
Do your research. Thorough research is essential, whether you’re buying a brand new yacht or a used one. Yes, it sounds obvious, but it all really starts here. Buying a yacht is not only a big financial investment, it can also be a very emotional purchase. Just deciding exactly what you want can often take months, possibly even years.
You’ll also want to establish what you can get for your budget. Often buyers don’t know how much boat they can really afford until they learn how much of it they can actually get financed. Once you’ve established roughly how much you’re willing to pay, look into the various financing options. Then, having finalized your budget and decided on a specific model, find out where financing is available.
Choose a broker. If you’re buying a brand new boat, look for local brokers or dealers who offer the specific model you’re looking for. Smaller used boats will often be put on sale by their owners directly, but the larger yachts are typically sold through dealers or brokers. This is generally necessary because of the complexity of surveys, sea trials, paperwork and agreements associated with the deal. To help you find local dealers and brokers, there are many good resources available, such as boatworld.com, yachtworld.com and boats.com, where you can search for brokers within your area.
Find a surveyor. Before you go ahead and sign the papers, getting a survey done is critical. Some buyers might think that new boats don’t require a survey, but most yachting professionals would still advise you to get one. You would be surprised how often surveys on new boats reveal just as many issues as you might find on used ones. This is why a surveyor’s role is so important with the potential to save you a small fortune (see A Marine Survey Is Worth Its Cost). Choosing the right surveyor is also key. The best way to find a skilled, reputable professional is to rely on referrals backed by a lot of research.
It’s a good idea to accompany the surveyor to the site and quietly let him do his job while watching closely as he makes his observations. Typically, the surveyor won’t advise you to buy or not to buy a boat, nor would he help you in any price negotiations—that’s not his job. His job is to use his expertise to give you an honest report on any issues with the vessel. Surveyors usually take 2 to 3 days to produce a detailed report, and their tools, resources and expertise will ultimately determine its quality. The report would then serve as a guide in your purchasing decision. Wait for the surveyor’s report and don’t let the broker rush you into a decision.
Take the boat out on a sea trial. Sea trials should ideally be done in open water. This will help you assess the boat’s stability, speed and maneuverability. It will also help you identify any faults, vibrations, noises, smells etc. on the boat, as well as test the various electrical and mechanical systems on board. If you have sufficient boating expertise, ask if you can get behind the wheel, push the throttles forward and put her through her paces. If the current owner isn’t comfortable with you doing this yourself, ask them to do it as you watch. If they aren’t willing to let you stress-test the yacht’s systems, buyer beware.
The broker or seller should cover any expenses associated with the sea trial, unless stated otherwise in the agreement. Make sure that your purchase agreement allows you to either withdraw your offer to purchase or renegotiate the price if the survey and/or sea trials reveal serious flaws or problems. Sometimes the dealer or seller can warrant to repair any defects that may get identified. In such a situation, be sure to have everything in writing. There are also times when buyers would rather arrange to repair any defects themselves after the purchase. For example, since the seller is only getting repairs done in order to sell the boat, he might opt for a cheaper, low-quality repair job. In such situations, price renegotiation works best.
Arrange insurance, financing and final paperwork. Before you can get your boat financed, the financing company would expect you to produce the insurance papers. Often, especially in case of used boats, they may also want to see the surveyor’s report. Your broker can help you find good insurance and finance companies.
With agreements signed, financing and insurance in place, the boat is now yours. Make sure you check that the inventory is complete and all the broker, insurance and mortgage documents are in order. Finally, when you name your new boat, or if you want to rename your newly purchased used boat, make sure you get the title documents updated. Have fun!