Wanna Buy a Boat?

It is possible that many reading this post are "between boats". Finding the right boat is often a time consuming process involving many fruitless inspections. I encourage buyers to be realistic in determining the purpose of their new purchase. Will the boat be used as a year-round live-aboard? Should it be capable of long range cruising? How much room is actually required? Will the boat be tied up at the dock 80% of the time and then hauled out during the off season?

It is amazing to me to see all the boats tied at the dock during the beautiful weather. It is sad to witness the empty pilothouses, the stained topsides, the algae coated fenders, and the perverbial shore cord. What a waste! Millions of dollars of equipment sitting idle, patiently waiting for its next mission. If only the owners had been realistic in assessing their needs before they went to the boat show.

It has been said that nobody needs a boat. With the advent of production building during the late 1950's and early 60's, boating became affordable to more than just the very rich. During the heyday of the 70's and 80's ownership grew tremendously and buying a boat could simply be put on a payment plan. At boatshows, eager salesmen hawking their wares aboard a landlocked chrome-plater seemed to provide some sort of answer to a yearning or inner need. And before you could say hard-a-lee, a purchase agreement was signed and immediately our egos were overcome with self gratification. No doubt, buying a boat is purely an emotional decision. But buying a boat to suit your needs can be planned and well thought out.

There are some important points to be aware of in the buying or selling process. Obviously, there is no such thing as a perfect boat. But it is fun to imagine one. We have all spent countless hours wandering up and down waterfronts dreaming what someday might be. And during those times we have imagined what that perfect boat might be. However, that boat is usually far more money than we are willing to spend. Now the compromises begin.

Set in your mind a price point and stick to it. Scour the listings to see what is available. Look for value. No boat is forever. There will no doubt be a time when you and yours part ways. One thing I have witnessed over and over: a new or left over model boat is purchased during a boatshow with a small downpayment with the remainder financed; and, for one reason or another, a year or two later, the boat needs to be sold. Because the boat is financed, , the payoff on the boat is far more than what it will fetch on the used boat market. If only the owner had been more realistic and less emotional in the buying process.

Many prefer involving a broker in the buying or selling of a boat. The broker will assist in the paperwork, as well as in the negotiation process between buyer and seller. They will coordinate seatrials, surveys, bank financing, and closing the deal. They will also be able to assist in registering and documenting the vessel. Their job is to build relationships. This is how they acquire customers which often leads to referrals. These people are generally outgoing, hard working, and honest boaters. I have worked with many brokers and I can't remember a bad penny among them. Beware of the people they work for, however!

It should not be a problem to work on your own in the buying process. There are many owners who choose to list their boats on their own. No matter how sweet the deal looks, I strongly advise having the boat surveyed. If making an offer on a boat, it should be contingent on the survey, and if financed, obtaining financing. Be sure to have the seller initial the listing when signing the purchase agreement as this will state what equipment is included in the sale.

If possible, obtain a blank purchase agreement from a broker and study it. This contract will contain important points that should not be overlooked. The purchase agreement will include but not limited to: the name and address of buyer and seller; the particulars of the vessel; the purchase price; the deposit - typically 10% of purchase price; list of contigencies - typically survey, seatrial, mechanical evaluation (all at the expense of the buyer). Generally, the contract stipulates that the buyer will give written acceptance or rejection of the vessel within 5 days of the survey and seatrial. If accepted, a closing date is chosen usually 30 days after acceptance. The deal also is contigent on the buyer receiving adequate financing. The contract will stiipulate other details; for example, that the vessel is free of encumbrances or liens; where the vessel will be located at closing; the funds are to be cash or certified bank funds; that there are no warranties to the boat either expressed or implied. These are the highlights of any purchase agreement and must be understood by both buyer and seller if a smooth transaction is to take place.

Certainly there is room for negotiation once the contract has been signed if the survey or seatrial don't meet the buyer's expectations. I have seen deals fall through at this stage many times. The deposit is returned to the buyer, and everyone goes their own separate ways. Full disclosure by the seller will save everyone a lot of time. Sooner or later, a boats' problems will come to light. For the potential buyer, a thorough survey is an invaluable tool at the negotiating table as well as the peace of mind it gives for the new boat owner.

If you are considering selling a boat, please consider reading my post in the coming days.