Navigating the Boat Purchase Process

Below is a summary of the offer process and an outline of the process to complete a boat purchase. You are advised to read the purchase and sale agreement in detail, and invited to ask any questions you might have, directly to your broker. 

If you would like to make a formal offer on a boat, you will need to provide your broker with some information that they can use to complete a purchase and sale agreement, which will be forwarded to you and the seller for execution electronically. 

1. Full Name, Address and Contact Information 
2. The amount of your offer in US Dollars 
3. The date by which you require the sellers to respond to your offer 
4. The date by which you can complete your accept/reject declaration 
5. The date by which you can close the purchase agreement and become the owner
6. The terms which you wish to include as conditions of your purchase 
7. Anti Money Laundering Documentation 

With that information your broker will create the Purchase and Sale Agreement and you will be emailed a link to review the document and electronically sign the document. If the sellers agree to your offer within the timeframe indicated, you will have to proceed to send a deposit, by wire transfer, to the closing and documentation manager, Details Details Services LLC, within 3 days of their agreement. Only once all parties have signed, and a deposit is posted, will you then have ‘a deal’ to purchase the boat. Once this is the case, the sellers may not sell the boat to any other party (although they may take backup offers) until your accept/reject date has passed, and then only if you do not formally accept the boat on the terms of the agreement. Of course if you choose to accept the boat as per the terms of the agreement, then they must sell to you as agreed. If you do not accept the vessel in writing on or before the accept/reject date that will be deemed a rejection and the deal will be canceled, in which case you will be refunded your deposit less the fees owed to Details Details,and for bank transfers, and any others as outlined in the purchase and sale agreement. You may also discuss with your broker making a conditional acceptance with new terms that are suitable to you and the sellers, so as to still be able to buy the boat. 

It is important to read the below to better understand the details and considerations involved in making your offer, and also to read in detail the purchase and sale agreement form so that you fully understand the process ahead. It’s very important to understand that once you do buy a boat , that is absolute and final, and no finding or realization following closing will have any further effect on the fact that it is now your boat. There are no warranties, no guarantees and no returns or refunds of a fully closed completed boat deal, ever, at any time. 

1) Full Name, Address and Contact Information: This should be your full name, and also the address that you will use to register the boat, or if that has not been decided yet then just your normal legal address will suit. Please also provide a phone number and email for yourself, and anyone else who will be named as buyer of the boat at the purchase. If you will be buying as a company, then use the company name and address, and provide us with the requisite documents showing that you have the authority to act on behalf of that company such as the articles of incorporation, directors register and directors resolution to authorize you to act on their behalf to purchase this vessel. The name of the buyer must match the name of the account the funds will come from to complete the purchase, or have a clear legitimate tie to that account. 

2) The amount of your offer in US Dollars: When considering your offer price, please take into consideration the official inventory listed on our website, information already provided to you as to the current condition of the boat, any work that you consider needed, and the value of the vessel. The price that is agreed to on this offer will be the price at which the seller will be obligated to sell you the boat, do not count on a further reduction after survey. Of course, if something major comes up or you learn the boat is different than represented, you have the right to refuse the vessel as per the agreed terms, or could try to make a conditional acceptance proposal, or a new offer with different terms. Ideally, however, you will have a price here that is a number which you are happy to buy the boat, as represented by the sellers, and if the vessel turns out to be as expected then move forward as planned. Also remember that a successful offer is not just based on a dollar amount, but also a time frame and conditions. The brokers have often seen a lower offer amount succeed by reducing the conditions, or time frame… and also seen larger amounts needed to secure offers with longer times or greater conditions. Discuss these factors with your broker before you make a decision on an amount. The fees for Details Details are a minimum non-refundable $125, to activate a deal even if you later cancel it, and $500 total to close a deal. This is separate from any services you might engage to assist with vessel documentation, so please consider this as you decide on your offer amounts. Please keep aside up to $1500 for potential closing costs and documentation costs, which vary from deal to deal but seldom exceed this amount. 

3) The date by which you require the sellers to respond to your offer: This date is important as it fixes a cutoff to the offer you are presenting , and if the sellers do not agree to your offer before this date, your offer is no longer valid. It’s also important , as it fixes the latest date you could be required to post your deposit, should the sellers agree as late as that date. In any event, you are required to post your deposit within 3 days of the date the sellers agree and sign the purchase and sale agreement. As a reminder, your deposit must be posted by wire transfer from an account with a name that matches the name listed as buyer on this agreement, as well as on the bills of sale and other documents. If the sellers do not agree to the purchase and sale agreement by the date fixed here, the agreement becomes invalid. 

4) The date by which you can complete your accept/reject declaration: This is a very important date on the purchase and sale agreement, as this is the date by which you will have completed all your due diligence, and be able to make a final decision on purchasing the vessel. At or before this date you will need to sign another document, the Acceptance of Vessel, in order to confirm your intent to purchase the vessel, or you will be seen as rejecting the vessel. The sellers cannot sell the vessel to any other party from the time that the purchase and sale agreement becomes fully executed (including your deposit cleared in escrow) until this date. Should you sign the Acceptance of Vessel , then you will be obligated to complete the purchase as per agreed (with appropriate protections as in the agreement). Should you reject the vessel at or before this date, the deal is off and you get your deposit back, less agreed expenses incurred on your behalf, including Details Details fees and associated wire transfer fee from the banks. Should you make no further actions at all, then that will be deemed rejection as well. In order for the deal to continue past this date you need to sign the Acceptance of Vessel, or Conditional Acceptance of Vessel needs to be agreed by all parties by this date. A conditional acceptance of vessel can be discussed with your broker as well. If for any reason you are not 100% sure that you are ready to buy the boat, including having arranged financing, insurance, storage or custodianship, and buyers closing and documentation services, then you will not want to sign an acceptance but rather request an extension of contract dates, and you will need to discuss this with your broker. The sellers are not obligated to grant an extension, so this is a rather important date to fully consider and prepare for. This date is normally 2 to 4 weeks after your offer date. 

5) The date by which you can close the purchase agreement and become the owner: This is the formal closing date, and on this date you will have been expected to provide full closing funds, the sellers will have provided all documents for the sale transfer, and cleared all debts, making the vessel ready to transfer clearly to your ownership, and you will become the rightful owner of the boat. It’s important that you have arranged any financing, insurance, storage or other custodianship that you require to be ready for this date, as failure to complete the buyers obligations on this date, will result in a default by buyer, and loss of your deposit to the sellers, and the vessel will not be yours and could then be sold to another party. If for any reason you are not able to make a timely closing after having agreed to Acceptance, the best you can hope for is an extension granted from the sellers, who are not obligated to grant this to you at this late stage. You do not need to be present for the closing, but if the vessel must be moved at closing, then you need to arrange for this. Closing is the big day, in which you actually buy a boat. Your closing with Details Details has a cost of $500, and you are also advised to engage a documentation service at additional costs to arrange your new documentation and registry. This date can be no sooner than 14 days after your acceptance of vessel date. 

6) The terms which you wish to include as conditions of your purchase: This is perhaps the most interesting aspect of an offer, in that these terms can have a far greater effect on the attractiveness and effectiveness of an offer than price alone. A discussion with your broker about the sellers goals and expectations will help in making an offer that is likely to succeed best. The success of an offer depends not only on the price being offered, but also the time frame required for the completion of the deal, and the conditions that must be met for the parties to complete the deal. For instance, an offer which has an immediate acceptance of vessel, with no further conditions, and a closing within a week of the offer, may succeed at a price that might not otherwise be possible under more normal time frames and conditions- but then again, if the seller has a desire to remain aboard and finish a planned family visit (or whatever) then an offer to fast may not work at all, no matter what the price. It is relatively normal for an offer to allow a week for the seller to agree to the offer, an additional two weeks for the buyer to then complete his inspections and an additional week or 10 days for the closing to take place. So, in normal situations, a closing might be one month after the offer is placed. It’s very important to discuss with your broker the best terms to make for your offer, to help you get the best possible purchase, fair to all parties. 

7) Financial Services Commission of BVI Required Documents: Basic proof of source of funds documentation will need to be provided as part of the closing of the sale. THis is a legal requirement in BVI for any purchase over $15,000 USD. 

Once your offer is agreed too, then the next steps typically follow: 

1. The buyer will perform their due diligence as per the P&S agreement. The direct costs for the purchase surveyor and any launch and/or haul out , or dockage needed for inspection day, are on the buyers. However, the sellers insurance covers the boat through this process, and the sellers are responsible for the costs to prepare and operate the boat for any agreed sea-trials. 
2. Once the buyer has their inspections completed and/or survey report in hand and their chosen acceptance date comes around, they need to accept or reject the purchase. If the buyer accepts the vessel we will then head towards the closing and Details Details takes over from this point, OR if the buyer wishes they may make a new offer based on the information obtained in the process of their inspections for the sellers to agreed too, so that either way we end up with an Acceptance of Vessel, or a Conditional Acceptance of Vessel, and either way from that time both buyer and seller will work directly with the closing company Details Details. Should the buyer renege AFTER they have made acceptance of the vessel, they would forfeit their deposit (almost unheard of). Should the buyer reject the vessel rather than accept after inspections, then their deposit is returned to him and the deal is terminated, again all this handled by Details Details.
3. Prior to closing you will work with a licensed and bonded Documentation/Title Company (typically ASAP Documentation but you may choose your own) to ensure that the closing documents provided by the sellers will work for your chosen registration, and to process and obtain that registration. You may choose who to handle this step, but mostly buyers use ASAP Documentation.
4. On the closing date Details Details will wire transfer the purchase funds to the seller, and ‘hand over the bills of sale’ (typically provided by email on closing date, and sent by fedex at the same time) and you become the next proud owner of your dream boat!

WIRE INFO AND PROCESS: In order for BVI Yacht Sales to provide a higher level of service than most yacht brokerages and to offer you the most convenient and secure transaction possible, we have partnered with Details Details , a closing and escrow service based in Florida, to manage all aspects of your financial and documentation transactions for your boat purchase process. The fees for this are entirely paid to Details Details and not retained by the brokerage. This company is working for you, to ensure the most secure and safe handling of your concerns in this process. For all transactions, in which you secure an agreed offer and make a deposit to move a deal forward, there is a non-refundable fee of $125 to process your paperwork and handle your escrowed funds, regardless of if you proceed to close the deal or later reject the purchase of the boat. For transactions in which you proceed to purchase a boat, there is the additional cost of $375 to process the documents and handle your escrow funds. (total cost $500) paid by you for the service of handling your funds and documents. You may declare a different escrow and closing company if you choose, and the seller and brokers agree. You may also choose a different documentation service, if desired. 

We wish you the very best with your offer, this is an exciting step!