Buying a used yacht is a complex process, but there is a clear process involved in the actual purchase. From selecting a yacht with a clear need, to making an offer, drawing up an agreement, paying a deposit and inspecting the yacht, there are many points to carefully consider at each step. In this article, we have sorted out the various aspects of buying a used yacht to provide you with a step-by-step guide to buying a used yacht.
Define your needs and select a yacht
The first step when buying a used yacht is to figure out which used yacht suits your lifestyle and then select from the many yachts for sale. You can make a list of the yachts to be selected with the help of a yacht broker. When selecting a yacht, consider factors such as the type of engine, the length of time the equipment has been in use, the overall condition of the yacht, the layout of the yacht, the interior and exterior decor, the seaworthiness, and the competitiveness of the market. Of course, the final choice depends on your lifestyle, budget and intended use.
Make a purchase offer
After picking out your favorite used yacht for sale, it's time to prepare to make an offer on a used yacht. Many buyers want to know the exact rules for making an offer, but in fact, every seller is different, and for those who are genuinely interested in selling their yacht and have a quality yacht on hand, the price is usually set at a reasonably high point in the market, with a relatively low profit margin. After all, in the yacht market, there are some sellers who are just hangers-on and don't really want to sell their yachts, while there are others who are genuinely interested in selling their yachts. Over time, sellers will usually be more aggressive in adjusting their prices if they find that their type of yacht needs to smooth out market conditions, while buyers need to be aware that if a seller is selling a yacht through a broker, the cost of finding a broker is out of the seller's pocket, and the buyer doesn't have to pay extra.
Drawing up a sale and purchase agreement
When buying a used yacht, the yacht broker will prepare a sale and purchase agreement, and as a buyer, you need to read the agreement carefully. The agreement will usually include a deposit, time to complete the transaction (usually less than 30 days is recommended), trade-ins will not be accepted, and financing will be secured (or approved). If you are purchasing a large yacht, you may also need to hire a professional maritime attorney, who will usually help with the agreement, deposit escrow and registration related matters.
Paying the deposit
Once the buyer and seller have agreed on all aspects of the used yacht transaction, the seller will need to sign the relevant agreement and the buyer will then have to pay a deposit. The deposit is usually 10% of the purchase price of the yacht. There are two options for the deposit to be held in escrow: when the amount is small, it can be deposited into the buyer's broker's escrow account, and when the deposit is large, it can be given to a solicitor for escrow in order to ensure the safety of the funds. If a dispute arises between the buyer and seller during the transaction, the deposit is usually given to the court for a fair decision on a case-by-case basis.
Conducting Due Diligence
Once the buyer and seller have signed the sale and purchase agreement and paid the deposit, the used yacht for sale cannot be sold to another buyer. At this point, the buyer, with the assistance of a broker, can hire an experienced surveyor, preferably looking for a surveyor who has extensive experience with the type of yacht the buyer is purchasing, who has a better understanding of the problems that tend to occur with that type of yacht, and is able to conduct a thorough inspection around these issues and communicate effectively with the buyer about the deficiencies that have been found.
The inspection includes a hull and engine check, the cost of which depends on the size of the yacht and the items to be inspected. At the end of the inspection, the surveyor will issue a detailed report on which the buyer can decide whether to accept or not. If the used yacht has major problems, a price reduction can be negotiated with the seller.
Completing the transaction
After checking that the yacht does not have any problems, the buyer needs to pay the final payment to officially complete the transaction. In a normal transaction, if the buyer accepts the used yacht, the deposit paid earlier will automatically be converted to the purchase price of the yacht and will not be refunded to the buyer. On the contrary, if the buyer does not accept the used yacht, then according to the rules, the seller needs to return the deposit amount to the buyer in full and the deal is canceled.
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