La Mer Germaine
La Mer Germaine - Paul Barclay, Dartmouth
On the Water
As I write, the snow has begun to melt and a switch has been turned on with the sun peaking through the clouds and the major uptake in enquiry levels has begun!
In this issue, we focus on the world of used boat sales. For most, a boat is a significant financial investment, second usually to your home. Despite lobbying, our industry remains unregulated. The process of brokering the buying & selling of used vessels, anywhere from £5,000 to over £5m can be conducted by any individual, professional or not.
When you have found the boat of your dreams, check who is selling it! If the vessel is being offered by ‘Anonymous Boat Sales’, check if they have an office, are they operating as a registered company? With indemnity insurance, do they operate stand-alone client accounts, keeping your funds safe through the sale and purchase process? Do they undertake due diligence on the seller, ensuring they own the vessel being sold, without any outstanding mortgages, debt or liens?
Ask the broker who else the seller has instructed to sell the vessel; the broker maybe appointed a central agent, or a non-central agent with another company.
Too often you can find a ‘phantom’ boat for sale where the broker may have changed the year, or the location. When enquiring about this boat it will have ‘just sold’ - but they ‘know of another’!
These instances occur when companies operate outside of industry guidelines and not according to best practices; they do not have the seller’s permission to market or sell the vessel and, as buyer you could be taking unnecessary financial risks on your hard earned savings! Trust in this broker has diminished immediately.
Once the ideal boat has been found and both the seller and buyer agree on a purchase price, the broker will raise a Sale & Purchase agreement to protect both parties through the transaction.
The broker will next request a deposit, usually 10%. This deposit should be placed in a dedicated client account – an account wholly separate to the daily trading account.
It is in the interest of the buyer to then instruct a survey to check the pre-purchase condition of the vessel. The broker must remain impartial in the surveyor selection, but the buyer will usually be offered a choice of surveyor as recommended by the Yacht Brokers, Designers & Surveyors Association.
If the buyer wishes to have a sea trial in addition to the survey, this is easily arranged with prior notice and a suitable weather window.
Once the decision has been made, ideally before survey, ensure the broker has the correct documentation. This article is too short to discuss those stories of incorrect documentation and the headache a buyer can face when trying to prove Clear Title & Ownership.
Again when buying the vessel from the ‘rogue broker’, you can be sure these checks have not been implemented before the sale takes place! The buyers could find themselves with a 20% VAT bill if prior payment cannot be proved.
Once ready for completion, the broker will request balance funds be placed in the same client account. Only when the broker is in receipt of these funds and in receipt of the correct documentation from the seller, will Clear Title pass in the proper manner.
Whilst the process of buying and selling boats can be a minefield to many, choosing the correct professional brokerage with trained brokers will guarantee the process is smooth, fair and importantly monies are protected at all times.
One Brokerage is a unique Brokerage offering Power Boat and Sailing Yacht owners & buyers a unique experience in the complex world of buying and selling boats.
With over 20 years of experience Tom Wills and Jamie Coombes have unparalleled in depth knowledge of power boat sales - new and used, sailing yacht sales - new and used, chartering, skippering, and all forms of boat maintenance from cleaning to fibreglass and gel coat repairs, epoxies and osmosis.
Both Tom & Jamie have been trained by the Yacht Brokers, Designers and Surveyors Association and are specialists in brokerage for the modern marketplace
Tel 01803 292239 email: firstname.lastname@example.org
First Published March/April 2013 By The Dart