Step By Step Guide to Buying Previously Owned Catamarans
The Catamaran Company
First of all, let’s define what a Buyer’s Guide should provide. In this document, a Buyer’s Guide is defining that process of stepping you through the technical aspects of making a purchase. It is understood that there has been much due diligence that both you and your Broker (Myself) has taken to narrow down the field of choices given makes and models, size, intended application and itinerary along with budgets, timeframe and comps allowing us to know what is a fair price and what is a good deal.
This guide is not intended to provide those steps in defining that due diligence to get to the point of making an offer. If you are not there yet, still in the process of defining the right Catamaran to meet your needs and interest, please do let me know so that we can take a look at the marketplace so that you are making the correct choice in proceeding to make a purchase where then this guide does provide those steps.
We also should address, before making an offer, those general costs associated to a purchase, anticipated costs after purchase, as well as how the vessel should be flagged relative to ownership. Those “bullets” are:
- · Dockage Costs
- · Insurance Costs
- · Transfer of Ownership Fees (Documentation)
- · Anticipated maintenance Costs
- · Survey and Sea Trial Costs
- · State Tax Implications
- · Potential US Duty implications
- · Financing?
Alert! Please be aware that if you have considered New, I and The Catamaran Company are Dealers for both Lagoon and Gemini Catamarans. The marketplace is constantly changing. Due to the reduction of New Catamaran Sales during the mid to late 2000’s you will find that is becoming more and more difficult to find clean previously owned Catamarans. Designs have continued to improve, currencies have adjusted where pricing has become more competitive. Customer Service and Warranties remove the steps of having to follow the process to purchase previously owned. If you would like to discuss the comparison of New vs. Previously Owned, very happy to do so.
Already been there, done that? Once we know what we plan to buy and how we plan to buy it, below is a general step-by-step guide to the process of buying a vessel so that you are familiar with what to expect. As always, I am here to help you with your specific needs and help you negotiate the best value. Feel free to contact me any time to work through your questions 954-821-6450.
Steps to Buying a Catamaran:
We use our standard Purchase and Sale Agreement (best to have a copy in advance so that you understand the terminology). Fill out your information, the vessel information (we usually do this part) and your buying terms. Remember, this is YOUR offer so you can change any of the terms to your offer.
I always suggest the terms of sale to include:
1- Personal Inspection (Here you require that you view the vessel prior to accepting the vessel. This grants you the right to call off the contract if you don’t like what you see, already inspected? Not necessary. Makes for a stronger offer)
2- Survey (Hire a 3rd party professional marine surveyor to inspect the vessel and ensure seaworthiness. A surveyor will provide you with a complete report of the vessel’s deficiencies within 1-2 days of inspection.)
3- Sea Trial (Usually done the day of surveyor inspection, a quick run of the vessel with the surveyor onboard will give you and the surveyor an actual indication of how she will run, and IF she can run!)
You can exclude any of the above terms or include additional terms, such as “subject to financing”.
Other important terms to the agreement are your Acceptance of Vessel date (the day you decide whether to accept or reject the vessel) and the Closing date. Remember, there is more to negotiation than just the price. (Example- a quick closing to a seller in need of a quick sale is more valuable than a long closing with a higher offer amount.) An average sale from offer to closing takes place in one month.
Once you are ready to submit your offer, be sure to have your correct name or corporation name if buying as a corporation, the address, and that the bottom of each page is signed, including the Exhibit A. (The Exhibit A shows the vessel’s inventory to be sold. This lets both you and the seller fully understand what is included. Any changes to the inventory must be agreed upon by both parties.)
A 10% deposit is industry standard for brokerage yachts. This lets the seller know you are a serious buyer. (California and Florida are the only states requiring a government regulated escrow account for the safety of your deposit funds. Our office is Florida based and our escrow account is regulated.) If you do not come to an agreement with the seller, we can use your deposit for another yacht or we will return your funds within 24 hours of your request with your expressed location for the return. Further please understand that your deposit is refundable at any time in the process until you have made a commitment via a signed Acceptance of Vessel (Ask for the document in advance so that you are understand what is implies).
Here is a list of what will be required before before submitting your offer:
1. Corporation or Buyer name and address (Please let me know if you plan to create a corporation)
2. Offer amount
3. Indicate when you sent/will send the 10% deposit to escrow, standard today is wire transfer
4. Choose you Acceptance of Vessel date
5. Choose you closing date
6. Choose your terms of sale along with Location of turnover at time of closing
7. Sign the bottom of each page, including the Exhibit A
Once you are ready, you can scan and email direct to me. You can fax your offer to our head office at (954) 727-0024 if scanning is not possible. Once received along with the deposit I will submit the offer to the seller and wait for either: an Acceptance of Offer, a Counter Offer or Rejection of Offer.
Here are is further what to expect:
Under Negotiation (Optional) This stage only takes place if the seller does not accept your offer as-is. Usually, a seller will send a counter-response. They can change any portion of the agreement, including the offer amount and dates. This process is continued until a mutual agreement has been reached. Once an agreement is reached by both parties then we are now:
Congratulations! The seller has accepted your last offer. All parties (Buyer and Seller) have agreed on the terms, signed the Purchase and Sale Agreement and Exhibit A and we have a deposit in escrow, per the contract requirements. Now we have to set up for the completion of your sales terms, i.e. locate a surveyor, schedule travel for inspection, etc., depending on your offer terms. At this stage, you will be contacted by our in-house closing department Details Details with an introduction and certain contacts that you may or may not need, depending on your situation. If you have any final financing arrangements made with a lender, please let us know who we can contact to ensure all necessary paperwork will be completed on time for closing. (We also have numerous finance companies that we work with and can provide you with a list if you so choose. But, again this is entirely up to you.) Please also note, if you have a financing contingency as a term of sale, this must be removed prior to survey/sea trial of the vessel.
Survey and Sea Trial
Per the standard FYBA (Florida Yacht Brokers Association) contract, the seller is responsible for a captain to take the vessel to your survey location. It is the responsibility of the buyer to select/pay for the services of an independent surveyor and the haul-out of the vessel at a boat yard for inspection of the vessel’s bottom.
I will accompany you through the whole process, Haul-Out, Survey and Sea Trial.
1-Select a surveyor (we can provide a list of surveyors we have worked with in the past that are familiar with catamarans) but, it is entirely up to you who you choose as a surveyor.
2-Sea Trial and Survey of the seller’s yacht is scheduled. (We usually help to coordinate all parties involved.)
3-Meet for survey/sea trial. It is not necessary for the buyer to attend but most buyers do. The day usually begins at 8 a.m. with a cold engine start by the surveyor, motor to the yard for approx. 11 am haul. Lunch, at noon while vessel is out of the water and drying. Surveyor checks the bottom about 1 p.m. and then we sea trial from about 1- 4 p.m. (all in a day’s work!)
4-After the inspection, the surveyor can give you his basic findings on the spot. You will be given a full Survey Report in 1-2 days. Don’t fret; it is completely normal for a yacht (even new) to have deficiencies!
It is also important to note, any yacht insurance is dependant on a successful survey. (We can provide a number of recommended insurance companies.) Lenders will also require a copy of the survey in some occasions.
Acceptance of Vessel
If the Sea Trial and Survey Report were positive and successful, you can decide to sign the Acceptance of Vessel (AOV) any time on or before your Acceptance of Vessel date.
Once we receive the survey report, we can also request adjustments in price based on the report. This can be negotiated with the seller in either repairs or compensation for repairs needed. This is known as a Conditional Acceptance of Vessel (CAOV). Always remember a CAOV is construed as a rejection by contract, use the opportunity with caution.
If you no longer want the vessel, you will need to submit a rejection, be sure any rejection is submitted before the AOV date, otherwise you automatically accept the vessel. Therefore, if you cannot send your written acceptance or rejection on time, speak with me as soon as possible and we can either request for an extension or reject the vessel and submit a new offer when possible. Usually an extension is accepted.
At this point, you are almost set to sail!
The Catamaran Company has a whole department dedicated to just the closing of your vessel, Details Details. They will handle all of the closing documentation and help with a smooth process. At this point, I defer to their expertise. They are very good at what they do! This complex area requires the final transfer of the vessel into your name. Take a look at key areas Details Details offers assistance on:
-Prepare transfer of ownership documents.
-Complete federal registration of the vessel.
Details Details will remove frustrating administrative issues and ensure this complex process is done correctly. Now, make sure your final payment by Wire Transfer has been made (this is to ensure a timely process of funds). Once everything is in place, the money will be transferred to the seller and the closing documents will be sent to you
Congratulations! You are now a proud yacht owner!
If you need any after sales service, we can arrange delivery to your chosen destination and/or help provide you with dockage. Thank you for giving me the opportunity to help you. I look forward to your cruising updates and sailing stories! Anything I can help you further with, please don’t hesitate to contact me.
Summary: I hope that this document is helpful in covering the process of purchasing a Catamaran. Whether large or small the process is really the same. As mentioned in the introduction if you are currently still in the process of defining what yacht best works for you, need assistance in clarifying the associated cost of ownership, that is what I do best. Do let me know a good next step in moving your forward in the process of owning a Yacht. Making the fulfillment of your Dream come true and get you off sailing!
John Anderson, Broker License #1235
The Catamaran Company
Purchase Agreements are Available upon Request! Email me email@example.com