Make an Offer
Follow the guide below
Once you’ve decided to purchase a yacht with 123 Hulls, follow our guide to making an offer.
Once you have decided on your yacht the next step is making an offer. It is best to do this formally with a Purchase & Sale Agreement. Sellers are inclined to take offers more serious when they are in writing. This also assures that you are taking the boat off the market while you are making travel arrangements to see the boat. Of course this assumes that “agreement on terms” with the Seller is reached.
Below is a “general” outline of how the process of making an offer works.
Obviously each deal is unique but a guideline when filling out dates on the Purchase and Sale Agreement is the 3-2-2 rule:
3 days for Acceptance of offer,
2 weeks for Acceptance of Vessel following Sea Trial and Survey,
2 weeks from Acceptance of Vessel for the Closing.
Normally, a deposit of 10% of the offer price is needed to present the offer but some brokers are willing to come to an agreement on price before taking the deposit during the making an offer process.
The “Acceptance of Offer Date” which is generally 2 or 3 days from the date of offer depending on communications and world time zones, for buyer and seller to come to an agreement.
The “Subject To’s” usually involve marine survey and sea trial contingencies as well as the personal inspection and/or financing contingencies.
The “Acceptance Date” is a very important date as this is when the buyer makes their decision on if they want to Accept or Reject the boat and it is normally done in writing. The deposit will not be forfeited unless buyer accepts the yacht and doesn’t complete the sale. You need to be real careful on this as some brokers will take it as “Acceptance” if you don’t give them your “Rejection” in writing.
The “Closing Date” is day all funds must be cleared in the brokers trust account ready to be dispersed. Wire transfers normally work best for this. If for any reason there has been a hold up the buyer and seller will need to come to an agreement and an extension of closing is drawn up and signed by both parties.
When the preparation of the Purchase & Sale Agreement is completed the broker presents it to the seller.
Survey and Sea Trial
The marine survey is an extremely important part of the boat purchasing process and while a survey and sea trial are not mandatory they are worth doing and if you are requiring finance and/or insurance a survey report will be needed. So once you have the contract in place the next step is scheduling the marine survey and sea trial, or trial run which is normally done on the same day. While most brokers are willing to give you the names of a couple of surveyors to talk to, this is really your expert and you need to feel comfortable and confident in them. You can also ask your marine insurance agent whom they would recommend as a survey is normally required when securing insurance coverage and they may have worked with a couple in the area.A sea trial is normally only a couple of hours to give you an opportunity to make sure the boat’s parts are all working and to see the condition of the sails. Sometimes surveyors charge extra to go on the sea trial.
The buyer pays for the surveyor and haul-out/bottom cleaning so the surveyor is able to inspect the bottom of the boat.
The seller pays for someone to drive the boat for this if the seller is not available to do so himself.
When you have reviewed the results of the survey and sea trial, it is time to make your acceptance decision.
The next step from here is to go to closing and the documentation process is generally best handled by a professional documentation agent. They will check the title, prepare the necessary transfer of ownership and register and/or federally document the vessel for you. They usually don’t guarantee title but simply do their best to verify the title situation for you. They can also help with advice on the best options of how and where to register your vessel.
The bureaucracies and origins of vessels become more complicated all the time and we have found that when Buyers attempt to do this process themselves they rarely get everything right the first time.
We can’t emphasize the importance of using a documenter enough.
The “Closing” is when the payment will be transferred to the Seller and the documents will be transferred to the Buyers. In our modern age of technology closings are seldom “sit-down” affairs. The documenter or selling broker will gather all the necessary executed documents and proof of ownership. Once the buyer’s funds are cleared in the Agents Escrow/Trust Account they will be transferred to the Seller by wire transfer and the documents couriered to the Buyer.
At this stage the new owner will proceed with the registration the boat in his or her name.