Curious, can anyone explain to me the process for actual settlement on a used boat. In real estate of course there is a title search, checking for liens and other things that might come back to haunt the new owner later in life, and there is title insurance in case something is wrong the owner won't lose in the end. But what about for a boat ? Is there some similar process for insuring that there are no liens against the boat, that the seller actually has legal title to the boat, etc ? How is settlement done ? Is there some equivalent to title insurance, is it even necessary ?
If the boat is documented with the Coast guard you can obtain an absract of title, which lists all prior owners, and whether there are currently any lien holders on the boat registered with the Coast GUard. rest assured that any outfit making marine loans will register the lien with the coast guard. if the boat is only registered in a state, you can contact that state for how it handles liens on boats. all I am aware of treat a boat like a car and record liens on the boat's state title. If there is a lien, the seller must show proof the lien has been satisfied before the state will title the boat in the buyer's name.
ASSuming this is aivate sale and not through a broker, be sure the sales contract has clear language that the seller must transmit to you a clear title. I'm not aware of any insurance for this, so it does pay to do due diligence in researching the current title.