General Purchase Information
Your offer is made through an “Offer to Purchase” form. This is uncomplicated, and standard in the industry. This form specifies the vessel, your offer price, anticipated closing date, and variables such as financing contingencies, etc. An earnest money deposit equal to 10% of your offer is collected at the time of your offer. Should the offer not be accepted, all of your earnest money is promptly returned to you.
Once the terms of the Offer to Purchase Form are accepted by the seller, the vessel is not marketed while you go through your decision process, at your own pace, in a relaxed fashion. The process can be as quick as you like, and the terms of the Offer to Purchase agreement will specify the length of time you wish to take to go through this process.
There are accommodations in the form for your inspections. As you accomplish the sea trial (equivalent to a “test drive” in an automobile), and the survey (technical inspection by you or a professional in the field); you initial those items as being satisfactory to you on the Offer to Purchase form. Should the vessel not meet your expectations, your 10% earnest money is promptly returned to you. There is also an area in the offer form which allows for any other contingencies, or requirements you may have.
It is extremely rare that a vessel does not have “exceptions” at survey time. It seems that no matter how nice the vessel is, there is always a “list”. These items are very rarely “deal breakers”, and are normally dealt with in stride. Usual items include fire extinguisher tags (many are time expired), additional hose clamps needed (diesel fill hoses and all raw water hoses require double hose clamps-and many just have one), the addition of a GFI outlet(ground fault interrupter outlets are like the ones in your house, near a sink with breakers in them) or two, and other vessel-specific items. Please bear in mind the age of the vessel, and also the fact that some items like GFI outlets were not available or an “industry standard” at the time of the vessels construction.
There are exceptions, but the general routine is to let the surveyor get started on the vessel first thing on Survey day, then Sea trial the boat in the morning, returning to the haul out dock at around noon, so that the vessel can be hauled out and left in the “slings” for inspection during the lunch hour. The vessel is returned to the water (splashed), and the remainder of the day is used to complete the survey, with a de-briefing of the survey exceptions in the afternoon. The paper survey follows in a few days, but all findings are discussed right there at the boat so we can look at the items found together.
There is no need to be overwhelmed on survey day. The purpose of the sea trial and survey is to verify the condition of the vessel. Generally, the seller and buyer get together after the close of the transaction for more in depth operating instruction on systems. It is not necessary to go through the “how to’s” on vessel operation on sea trial day. It will slow the surveyor down and it is best to allow the surveyor to more through the vessel completely at his or her own pace. The purpose of the seat trail is to verify that systems operate. “Which switch does what”, is best handled in a relaxed fashion after the sale.
Your transaction will be handled through an independent title company, Pacific Maritime Title Company, in Seattle, Washington. Pacific Maritime Title holds funds in trust, distributes funds at the time of sale, generates and original “Bill of Sale”, then registers or documents the vessel with the state or United States Coast Guard. If the vessel is not to be registered in the United States, they will delete the USCG documentation, and prepare you to cross borders with an original Bill of Sale. Title transfer costs are borne by the “buyer”.
If there is a loan against the vessel, Pacific Maritime Title will pay off the vessel mortgage, and send the remainder of the funds to the seller-ensuring you a clear title. You are provided with a closing statement as well.
The actual closing occurs the moment funds are transferred from Pacific Maritime Title. The costs of inspecting the vessel, hauling the vessel for hull inspection, the surveyor, etc. are born by the “buyer”. These costs generally run around $1000 for a 40 foot vessel.
No need to be overwhelmed subsequent to your acquisition, either. Many magazine articles and stories center around life on the high seas. I have found that most real life apprehension centers around docking, etc. If you have experience with vessels, you may only need a little help at first to become familiar with your new vessel. If your experience is limited, then a few lessons may be in order, so that you are completely comfortable maneuvering in marinas, setting your anchor, etc. Rest assured that we will address whatever your specific needs are. Handling a vessel is not as complicated as it may seem, and there is no reason that any activity cannot be reduced to simple drama-free events.
Wallace Yacht Company