How to allay your biggest fears when buying a used yacht
Posted on Sep 22, 2020
Posted on Sep 22, 2020
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So you're ready to buy a yacht, naturally you have fears and concerns. There is a lot of money involved and you want to pick the right yacht for you, so what to do?
1st Fear: How do I avoid buying a lemon?
2nd Fear: Is the yacht I have selected a good value?
3rd Fear: Will the yacht be difficult to sell when I am ready to move on?
4th Fear: Will I be ready and have everything in place when I buy the yacht?
5th Fear: Will I select the right yacht so that my family and friends will also enjoy it as much as I do?
So What To Do?
Unless you select and find the yacht yourself, are confident to prudently navigate all of the technical details, negotiations, and paperwork to consummate the purchase without your own representative; you are best served to avoid a lot of hassles, time and effort to engage the services of a professional yacht broker.
Research everything that you can about the yacht's builder and their history, methods of construction, customer support organization, warrantee record, and replacement parts availability.
Research the major components of the yacht in the same way (engines, generators, sails, propulsion systems, etc.)
Search internet forums and read discussions about the make and model you are interested in, the overall reputation, known issues, and general impressions and experiences of other owners and marine professionals.
Search yachting industry, marine insurance, and government (USCG etc.) internet databases for related product recalls, listed defects, court cases, claims, and negative product liability information.
Obtain the full history of the specific vessel you are interested in.
Review the maintenance records and logs for the vessel.
Talk with your boating friends and acquaintances about their knowledge and experiences with similar vessels.
Talk with your local boat yards about the repair histories, costs, and procedures for the make and model vessel you are interested in and for similar types.
Engage the services of a professional yacht broker to conduct this research for you and utilize their knowledge and experience as well as industry network to do this for you.
Most of all when you have found a vessel that you wish to buy, engage the services of an expert independent marine surveyor. Choose one with knowledge of the type vessel that you are planning to buy and the types of systems and equipment that are on it to conduct a thorough in water and out of water marine survey and sea trial. If the vessel is complex it is wise to have a specialist engine surveyor to conduct a static and underway survey of the engines and generators.
Independent engine surveyors that are not employed by engine dealers usually do a more thorough job than those that work for a dealer. Fluid samples for the machinery should be drawn and analyzed by a competent lab. If the seller has maintained an ongoing fluid sampling program on the equipment then the same lab should do the analysis as they will have a database of past samples which by comparison will give your samples more relative meaning. If the yacht is a sailing yacht a rigging inspection by an independent rigger both on deck and aloft is prudent.
Sometimes a marine electrical survey by a marine electrical specialist is in order. Marine surveyors usually have some form of certification that requires proof of experience, passing an examination, and ongoing continuing education requirements to remain certified. Some of the certifications are CMS, AMS, MIIMS. Many surveyors also have ABYC certifications in specialties. The background, experience, and reputation of the surveyor are more important than their certifications. The fees of surveyors for their services and the cost of hauling the vessel out of the water are to the buyer's account.
Research what similar make and model yachts with the same model year, engines, similar hours, and similar equipment are listed for in the same general region.
Research the sold prices for similar make and model yachts with the same model year engines, similar hours, and similar equipment in the same general region. Sold prices are difficult for private individuals to access. Yacht Brokers have access to soldboats.com.
Study pricing guides like ABOS, BUC, and NADA. These will give you retail or whole sale price estimates. Some of their info you will have to pay for. And remember they are not all the same. They use different methods and algorithms to estimate values.
If you are applying for a loan to purchase the yacht your lender will also check to ensure that the yacht is worth what you plan to pay for it. If not you will not get the loan.
Your marine surveyor should include within his report an appraisal assigning the yacht an approximate fair market value (as is) and replacement value (for a new one).
Investigate the overall cost of operation and maintenance. Some engines, drive trains, equipment, and sails are much more costly to maintain or operate. A vessel may have a relatively low price but be very costly to operate.
Try to determine the seller's motivation, amount of time the yacht has been on the market, competition, seasonal variation in demand, and those factors' impacts on the potential final deal.
Unless you are a skilled craftsman with lots of time on your hands avoid taking on a "project" unless you can create value added through your "sweat equity". Rather, buy a vessel that has most of the features you need and want. When you go to resell the vessel you may not regain much of the costs for changes and upgrades that you make.
Once again engage the services of a professional yacht broker to conduct this analysis for you, explain the pros and cons of the yacht that you are interested in, and justify it's relative value.
Research the time on market it took for similar make and model yachts with the same model year engines, similar hours, and similar equipment in the same general region to sell. Here again this data is not readily accessible other than to brokers.
Know the overall cost of operation and maintenance. Avoid engines, drive trains, equipment, and sails that are much more costly to maintain or operate (due to fuel economy and hull shape efficiency). A vessel may be very difficult to sell because it is very costly to operate, maintain, and repair. For example pod drives have many great features but they are very expensive to repair and easily damaged.
Avoid selecting a yacht that has exotic engines, systems, or equipment that do not have support organizations for parts, maintenance, and repair in the area where you will ultimately wish to offer it for sale.
Avoid yachts that yachting industry, marine insurance, and government (USCG etc.) internet databases show related product recalls, listed defects, court cases, claims, and negative product liability information for.
Avoid yachts with a "clouded history", bad reputation, or low general popularity, no matter how tempting they may be for your own preferences. For instance, classic wooden yachts are beautiful and a joy to some. But to the average buyer they avoid them like the plague due to the perceived or real high costs of ownership and extreme maintenance needs. The same would hold true for fuel guzzling go fast boats or a yacht without air conditioning in Florida or a sailboat with a mast over 65' high (limited to mostly ocean navigation) or a draft of more than 6' in an area where buyers might want to frequently cruise the Bahamas. Know what you are getting into.
Don't plan on reselling your yacht for what you have in it since you bought it (or even what you paid for it). If you are able to break even call me immediately and tell me your secret.
Avoid planning any costly alterations to make the yacht suit you that may not appeal to the mass market.
Discuss with a professional yacht broker your potential choice; how you want to use the boat and where, for how long and when, and where you would want to resell it.
Research and determine your potential costs of ownership beyond the initial outlay to purchase the vessel. Be sure that you can afford ownership of the vessel or you will be very unhappy indeed. You can use our COSTS OF YACHT OWNERSHIP ESTIMATING REPORT.
Determine what kind of a yacht ownership entity that you wish to use (a corporation, trust, personal, etc.) and the domicile where you wish to register the yacht ( a state, USCG documentation, or offshore country).
Understand the skills and experience requirements for you to safely operate the vessel and what the insurance company will require for you to have to operate the vessel yourself. Or select a captain and crew as necessary before you purchase the vessel. A professional yacht broker can help you to locate captains and crew.
Determine how much of the vessel maintenance you will do yourself or hire out.
Obtain the additional training and experience (or begin that process) to operate and maintain your vessel.
Make arrangements for where you will store or moor the vessel. Take in to account alternate locations for winter and/or hurricane season.
Determine how you will get the yacht from where it is purchased to your desired location (trucking, ocean shipment, or water delivery).
Understand the federal, state, local, and marina regulations that are in force for your intended cruising area.
If you plan to live aboard ensure that your mooring location allows live aboard yachts and has the desirable attributes for that.
If your storage location will be far from your home and you will be an absentee owner have, an absentee owner plan in place. We have an ABSENTEE YACHT OWNER PLAN template.
Research marine insurance policy pricing and bind adequate coverage before you take possession.
Create a commissioning list of items you will need to operate and maintain the yacht. We can help you with this.
Network in your area to source maintenance and repair contractors and other resources you will need for ownership.
Carefully and realistically determine what you and your family want out of your yachting experience BEFORE you set about selecting a yacht.
Picture the experiences first not the characteristics of the yacht.
Consider the type of usage you will have (mostly at the dock getaways, day cruising, weekend jaunts, coastal cruises of several days, overnight running, protracted long trips or ocean voyaging to far off ports).
Power, sail, or both?
Do you want to be in marinas at night, at anchor, or both?
How fast do you want to travel? How much time do you have to cruise?
How many people do you want to accommodate overnight?
What kinds of water sports do you want to enjoy?
How many heads (bathrooms) do you want?
Do you like traditional styling or modern?
Do you want to do everything yourself (with the family and friends) or do you want a crew?
Do you want to be active or sit back and press buttons?
If you have done boating before what was your favorite thing to do (place to go, activity)?
Where do you want to cruise? What climate, region?
Today anyone can go on the internet and search through thousands of yacht listings and perhaps find their right yacht. Suffice it to say that the most hassle free way to allay all your fears is to engage the services of a professional yacht broker to handle the search and purchase of the right yacht for you. There is no cost to the yacht buyer for this service. I am here to help!
Craig Starns
1-813-340-0227