Buying a yacht: Brokers, owners, help

[PeterC]

Please indulge me for a moment.

Now I am prepared as much as the next man to take a chance on buying a yacht when the amount of money involved is not vast.

However when buying a yacht that costs the same as a reasonable house that is a significant purchase to me.

Brokers seem to want deposits that represent signifcant amounts of money and yet could disappear or go bust with your deposit, owners often seem to want to be anonymous and leave everything to the broker, and on top of all that I gather when you come to the purchase there is really no way of establishing whether the owner actually owns the vessel or whether there are charges on the vessel.

It is all a bit different when it come to buying a house and not many people would do so without engaging a solictor, conducting the requisite searches etc.

So is buying a yacht a leap of faith?

Realistically can you end up in an all mighty mess with a broker that goes bust, or an owner who turns out not too have been the owner, or a bank around your neck claiming they always had an interest in the vessel. What, if anything, can you do to protect yourself and what reasonable precautions should you take?

 

[Boat44]

You have kind of answered your own question.

If you are spending a "large" amount of money on a boat, you should, as a minimum employ the same approach as buying a house or business; i.e good surveyor and a good solicitor.

The surveyor will a) tell you if anything major is wrong with the boat, and b) should help guide your price (they have access to some interesting databases of prices paid for yachts)

The solicitor will a) ensure the money side is handle so you are not exposed, and b) ensure the paper work on the boat is legitimate.

The key to the surveyor and the solicitor is for you to employ them, they are then representing your interests, nobody else's. And always go on good recommendations etc. Don't skimp on costs here as good ones are worth their weight in gold.

Whilst there are some damn good brokers out there, you must remember they are representing themselves, not you. And I would never give money direct to a broker for the reasons you stated.

 

[Tranona]

You are taking a very gloomy view.

This subject has been done to death on these fora and there is little evidence that the problems you envisage are really there - mostly in peoples' minds because they think of things that MIGHT happen rather than things that actually do. If it was all so fraught why would literally thousands of boat transactions occur every year without any on these problems?

Suggest you buy the little booklets from the RYA so that you understand the process. Find out about client accounts - the ABYA site has a good explanation. If you are buying through a broker, make sure your deposit goes directly into a client account where it is "safe" except from a thief. The same process for your final payment, making sure you get all the documents and title at the same time. You could as an alternative transfer the final amount direct to the seller - again in exchange for the documents and title - the seller may insist on this as it is his money at risk then in the client account.

As to clear title on the boat. If it is Part 1 registered as it is likely to be for a high value boat, or one that has been bought with finance any outstanding mortgage will be registered and when cleared you will get title free of any encumberance. In the unlikely event of an unregistered mortgage it is considered unlikely that the charge could be enforced against your boat if you bought in good faith. Last time there was a long thread on this subject (over 200 posts) the only example of a case concerning an unregistered charge that went to court was nearly 20 years ago.

So, if you are a serious buyer (rather than a forum troll!), do your homework, understand the process - not difficult if you have been able to accumulate sufficient wealth to buy an expensive toy - and if you still feel uneasy seek professional advice.

 

[Channel Ribs]

So is buying a yacht a leap of faith?

A bit, but then so is any major purchase. Whether new or pre-loved.

All you can do is manage the risk. Some ideas...

Use a lawyer to hold your deposit and final payment in an Escrow account.

Use another broker to counter negotiate, get the background info.

Neither will be hugely expensive, the second might even save you a few hundred.

 

[Twister_Ken]

If buying new direct from the builder, you can get a bank guarantee. If you can't it means the builder's bankers have no real confidence in their client, and neither should you.

 

[Garold]

I was anxious too!

As a recent seller of a fairly expensive yacht I felt a similar level of anxiety. This was exacerbated by the current financial meltdown because it seems like most casualties occur in all of the leisure based industries at these times. And no RYA booklet would overcome my anxieties!

However, a good broker does a lot of background work to check and assemble the history and ownership details of anything that they are selling. I would say that if you sense that the broker that you are dealing with hasn't done his homework then probably walk away from the purchase (or sale if you are selling).

Our buyer was rightly anxious about protecting his lifetime savings and did actually employ a solicitor and surveyor to oversee his purchase. Whatsmore, our broker was sympathetic to his concerns and worked with him to address his concerns and facilitate his purchase and our sale. From years of experience, our broker actually persuaded me to moderate my no compromise attitude.

As for the money passing from the buyer, through the broker to me..... we had ours within 3 hours.

So, I guess my contribution to this thread is ......... never take boat buying or selling lightly. If you feel anxious, it's normal. But a professional well established broker is a comfort. And against my northern penny-pinching upbringing, my personal conclusion is that you probably get what you pay for with brokers.

Just by the by, we used Ancasta to sell our yacht. And my only relationship with them is as a customer.

Cheers

 

[jonic]

It is normal, and prudent, to be anxious. Some good advice already offered here, and as I am a broker here is some more.

A good, accredited broker will be doing similar work that a solicitor does in a house conveyance.

He should have checked as far as possible, the ownership of the boat, loans outstanding, vat status and RCD compliance.

You should query these and he should respond accordingly.

Deposits are there to protect both parties. The broker will have drawn up a contract stating how they will be handled. It may be possible to negotiate down the size of deposit.

Monies for deposit should be held in the brokers client account. Any money you pay must be to the client account. Ask to see the bank letter stating how the client account is set up. It is to hold clients monies in trust and does not form part of the brokers assets should he go bust. It is always your money.

Use an accredited surveyor. He will advise not only on the condition of the boat, but also help with any price re-negotiation after the survey.

If all is well, tell the broker that no money is to be released until you have seen all the relevant (original) documents.

When both parties are happy, you transfer the money to the broker, he transfers it to the owner and exchanges documents and the bill of sale with you and the owner.

The process is then complete.

Owners are equally concerned that prospective buyers are genuine and that the money and transfer of title documents are handled correctly.