Learning the HARD way...
Join Date: Jan 2007
Location: Boston Area
Thanked 64 Times in 63 Posts
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Re: What is the Buying Process?
Here is the process:
- The seller decides that the potential for obtaining currency is greater than the value they are deriving from the boat, so they promote their intention to sell.
- You decide that you have access to some currency, and that you would derive a higher return by owing a boat than you currently are from the currency.
- You look at boats for sale, and the seller waits for you to find their boat. YachtWorld.com is a good starting point.
- You eventually find a boat that is priced near the amount of currency that you have access to, and you make an offer to either directly to the seller, or through a broker to the seller. This is called a Purchase and Sale Agreement. There are several available forms for this. Here is an example. If you work with a broker, they will furnish you with this form. You can also make up one your own.
Your offer MUST include some form of "consideration" (aka a check) with your offer for it to become a contract. The agreement should also stipulate whether a survey will be preformed, and the estimated closing date of the transaction.
- The seller will either accept your offer, counter your offer, or be offended and not reply. If the latter takes place, the seller, or broker must return your consideration. (To avoid the latter scenario when I bought my boat, I did not make any offers on vessels that were less than 80% of asking price. I figured that if we were that far apart, we could not reach an agreement.)
- If you and the seller reach agreement, and the agreement contract stipulates it, you may have the boat surveyed, and/or sea trialed. If the boat is surveyed/sea trialed, and issues are detected with the vessel, you have the option of negotiating a concession, having the seller remedy the issues, or cancelling the contract, you are entitled to the return of your consideration, less any expenses incurred to enable you to preform the survey/sea-trial.
- If the boat passes the survey/sea trial to YOUR satisfaction, you then submit an Acceptance Agreement, along with the remainder of the negotiated purchase price. If there is something that you are still unsure about (for example; the engine over temperature alarm goes off during the sea trial, and it is discovered that the sea strainer is blocked, but you do not have time to re-do the sea trial), you can also submit a Conditional Acceptance Agreement, and have a neutral party hold a portion of the purchase price in escrow until the condition is met.
That's it in a nutshell....
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USCG Licensed OUPV Captain, ASA 101/103/104/105 Certified Instructor - Also certified in Recreational Marine Electrical Systems