There is a standard sequence to buying a yacht that is accepted by the global yachting community. Variations from these steps are possible but fairly rare.
Step 1: Search and selection
Working with a yacht broker from Luxury Yacht Group your requirements are refined and suitable yachts reviewed and inspected. Inspection can be made at regularly scheduled boat shows or by special appointment for a personal inspection subject to the yacht’s availability.
Step 2: Offer
Once a suitable yacht is found a formal offer is made by the buyer. This is presented by your broker on an industry-standard contract to buy the yacht. This sales agreement outlines the timing for the sea trial, survey, acceptance and closing. When you make your offer it is normal to deposit 10% of the offer price into escrow with your attorney or broker. It is essential that your offer includes an accurate inventory of the vessel. At Luxury Yacht Group we always take a photographic inventory of the vessel and include that with the offer to buy.
Step 3: Offer accepted
The seller will accept, reject or counter your offer to buy. It is rare for the first offer to be accepted so it usually takes a week or two to receive an accepted offer.
Step 4: Survey
Depending upon the size of the yacht the survey can take from one to 14 days to complete. During the survey, all mechanical, electrical and electronic equipment is tested. The objective of the survey is to get an accurate understanding of the current vessel condition and precisely how much the yacht will cost to maintain in the next few years. As part of the survey, it is strongly recommended that the vessel be hauled out of the water for inspection. The cost of the survey is paid for by the buyer.
Step 5: Sea Trial
At a convenient time before, during or after the survey the prospective buyer is able to take the yacht out to sea to establish the vessel’s performance underway. This sea trial, usually limited in duration to 4 hours, is normally at the seller’s expense. During the sea trial, the engines are tested to verify cruising and maximum speed and it is a good opportunity for the buyer to verify the motion of the vessel and noise levels throughout the interior whilst underway.
Step 6: Acceptance
Following a successful survey and sea trial, the buyer submits written acceptance of the vessel. From this point onwards the 10% deposit paid is at risk should the buyer not close the sale at the agreed-upon closing date. It is very normal for deficiencies found during the survey to be included in a conditional acceptance that gives the seller time to make repairs or allow a financial allowance for the buyer to make repairs after the closing. For example, a deficiency is found in the air conditioning system that cannot be repaired prior to closing so a conditional acceptance is signed by both buyer and seller giving $20,000 off the previously agreed price in consideration of the non-functional air conditioning.
Step 7: Closing
Just like real estate the act of closing is a fairly straightforward exchange of signatures on important documents. The protocol of delivery and acceptance clearly lists the location and time of the ownership exchange. At closing, the buyer should have new registration and insurance already lined up. The Luxury Yacht Group yacht management team will happily assist any new buyer in establishing the necessary official papers and insurance required.