Buying a boat the "proper" way.

One can make a purchase such as this with much bravado, or by milling through a tedious bunch of red tape.  We choose red tape :)

How to buy a boat … properly, that is.

Well, we have been put through the inevitable bureaucratic wringer so far.  This has been quite a process, and there have been a couple of times where I’ve actually had the chance to sit back and think things like ‘ am I absolutely sure this is what I want?” and ‘oh man, why is this so difficult?”.

All told, when we are done and are out practicing figure ‘8’s and how to back into a slip, it will not seem as though it was such a big deal, but right now it seems that we’re in the middle of a Federal law case or something.

So, here’s how to buy a boat ‘properly’ J

First step, as described in the previous post, is to find a boat … then find THE boat.  We did that.
Now, there are a couple of ways to go from here; one is to have all the cash on hand, throw it on the table and take the entire risk yourself. Trust is a great thing, friendly relations are awesome and rolling the dice is thrilling. BUT, we’re not really willing to go down the ‘rolling the dice’ road at this particular price point (think ‘buying a home’) and we decided that we would proceed with all due diligence and enlist as much support as necessary in order to quell any uneasiness about a transaction of this importance. 


The boat is owned by an individual, held in an LLC and brokered by a different company.  Robin and I were comfortable with the way the vessel was represented, shown and advertised. It met or exceeded our expectations and is in great condition. Yes, we have an emotional attachment as well and yes, there will be some cleaning, sanding, painting and fixing up of the little things that come with a 15 year old boat, but all in all she’s in great shape and has been well cared for.  Everything seems to be in order and nothing raised red flags for us. We’re pretty much set to go.  

So, where to begin?  We don’t have a broker representing our side so we simply made an email offer and received an email counter-offer which we accepted. Then, we had to fill out a contract (gulp).  This is where the discussions and dreams and planning and hopes and future-thinking all turn into a whole new paradigm: a commitment.  Now, I work for the Government and am pretty familiar with contract language. Nothing I saw caused me any concerns so I filled it out and was ready to go. BUT … there’s a 24 hour rule in my book regarding anything major like this (heck, this big of a purchase needs a 72 hour rule!). While I was discussing it all at work, a coworker suggested that I have a lawyer take a look at the contract, just to put my mind at ease. I need to make sure that there aren’t any clauses or loopholes which might cause me to somehow lose my deposit if this all does fall through for any reason.  I shopped the internet for local attorneys versed in maritime law and brokerage transactions and called the office.  A couple of days (and many hundreds of dollars) later, I had a revised contract which did indeed offer me more protections and spell out quite a few of the details I would have overlooked.  It was a good call.

We insured (legally) such things as no liens against the title, and protections from any liens later on, and established who’s going to assume risk on the sea-trial sailing and on the delivery sailing and things right down to who keeps the big picture on the wall.  I’m happy with the knowledge I gained and that the attorney was very expert in the process.  I'll never know if it was necessary or worth it, but minimizing risk is never a bad thing. The seller was completely open to involving the attorney, and that in itself is a good sign.

 OK, we sign the contract and mail it to the brokerage.  The deposit check gets held in escrow until closing when it’ll be applied toward the down payment.  Any expenses that WE order against the boat (like if we ask for it to be moved, hauled out of the water for inspection, painted or the likes) can come out of the deposit. Next, we order a “Survey”.

We’ve hired a gentleman from Florida who is an expert in the brand name and model to come up and thoroughly inspect the boat both in the water and out of the water in a sling. He will go from end to end and top to bottom (even up in the rigging) to inspect every available aspect of the boat. His report will tell us if the boat is ready to sail, what might need to be fixed in order to make it seaworthy (if it’s not), what might need to be fixed to make it perfect if it’s not, satisfy the insurance company that it’s a seaworthy boat and satisfy the finance company that it is worth what they are going to insure it for.  That’s a tall order, and we’ll be happy to pay the fee and travel expenses to hire the best we can find.

Once the survey and sea trial are done comes the big moment … do we, or do we not accept the boat as-is for the price asked.  We can decide to ask the owner to fix anything that isn’t right, make a price adjustment if something needs to be fixed and we are willing to do it ourselves, accept the boat just as it is offered, or reject the boat and walk away. All on the basis if the surveyor’s written report.   I’ll go on record now that unless there is a significant problem discovered, we will likely accept the boat as-is and be happy to move toward closing.

After acceptance, we just have to make ready to go to closing. We’ll need to secure and bring the insurance coverage and the money; whether in cash or from the bank (in our case it will be a combination of both).  The actual closing can be conducted in person, or via scans, emails and overnighted documents.   Once the closing is done, we (actually the bank) will receive title and we’ll be the new owners!   

Next we will register the boat at its home port and document the boat with the Coast Guard.

 

From there, we will move the boat from Rhode Island to our local marina in Deale, MD (about a 36 hour sail) and begin the process of moving out of the RV and onto the boat … downsizing again!!  Just as before, things will be sold, donated or disposed of according to the mandates of the new space and the new lifestyle. 

Finally, we wait for the weather to warm up just a bit.  We’ll be practicing and learning as much as we can before we take to the open water. When the forecast says go … we’re gone!