Buying or selling a boat, explained...
If you're wondering how to buy or sell a boat and want to understand the process in a little more detail, the award-winning team at TBS Boats have produced a useful guide below, to help explain the various stages and procedures involved.
Even seasoned boat owners will find useful reminders on the buying and selling process, along with some top tips on how to present a boat to the market. There's also a really useful section which answers some key questions that are frequently asked by their customers.
"We know that it's an exciting time when you decide to buy your first boat, or even upgrade your existing one, but the chances are that it's not something you'll have done before.... For that reason we hope our article helps guide you through the process and that we'll see you out on the water very soon...!" Chris Manners - TBS Boats
Buying a Boat...
Do your Research
When you're thinking about buying a boat, an important consideration is how you'll want to use it. This will help you identify the right boat for you and ensure you get the most out of your time on the water. Some of the main considerations are....
- Do you want to be on a river, on the coast or even both..?
- Are you a family with children..?
- Do you have pets that will be joining you..?
- Do you hope to do a lot of entertaining on your boat..?
- How often will you be able to use your boat..?
- Are you planning to stay onboard often..?
- What style of boat do you like, Motor, Sail or River..?
We always like to talk to our customers in detail to find out exactly what they want to achieve from their new boat. This helps us to present boats that are best suited to their needs.
Establish a Boat Budget
How much are you looking to spend on your new purchase..? If you've got a lump sum in the bank, don't forget that there will be additional costs incurred when you buy a boat. Surveys and inspection lift-outs are obvious ones, but we always recommend you check out mooring costs at this point.
The cost of your mooring will be relative to the size of your boat, so it's wise to understand what your annual berthing commitments will be - that way, you'll avoid any nasty surprises and purchase the size of boat that's right for your budget.
Boats require regular maintenance... From engine servicing, to antifouling and even replacement canvas and covers. A qualified broker will be able to give you a run-down on approximate maitenance costs and also works that have recently been carried out to the boat by the previous owner. They'll also be able to give you an idea on what maintenance you can realistically handle yourself to keep costs down.
Undoubtedly the fun part..! We encourage our clients to view as many makes and models that we currently have for sale as we understand boats are personal to the owner, a bit like houses... You'll often know the right one as soon as you step onboard.
Take your time on the viewing and ask as many questions as you can. Ultimately, it's your boat so it's your decision, but a good boat broker can be really useful at the viewing stage and present more details about the brand, the history of the boat and how it compares to other boats currently on the market. They can also arrange insurance and mooring quotes and show examples of other similar boats they've sold which compare to the one you're viewing. Basically, a good broker will make sure you understand as much as possible about the boat you're considering and also the commitment you're about to make.
Always check the specification of the boat, which should be readily available and now is also a good time to remind yourself of your original "wish list" when you did your research... Try not to carried away with "glossy work surfaces" in a galley, or a "wall mounted back-lit mirror" in a cabin - whilst they're great complementary features, it's more important that the boat provides everything you originally set out looking for.
Making an Offer
You've decided on the boat and now's the time to secure the purchase, but how much do you offer..? There's no set answer to this as some owners would prefer their boat to be marketed at a realistic price for a quicker sale, whilst other owners may have added more features to their boats and want to redeem the money they've spent on improvements.
Again, it's a little like the scenario of buying a house which you may be more familiar with, but a good broker will be able to advise you of the sellers expectations and also other boats which have sold and can act as comparable examples to help you gage your offer. Now is also a good time to agree a price for any extras such as, life-rafts, tenders or equipment that's not included in the orginal sale price.
Purchase Price Agreed
Once the price has been agreed, it's usual for the broker to take a holding deposit. This shows a sign of commitment and secures the boat. A contract will be drawn at this stage which details the conditions of the purchase - these conditions are generally...
- Survey and/or Engine Report
- Acceptance of Finance (if applicable)
All deposits paid to a reputable broker are held in a client account, which is a segregated account that is separate to the trading account of the broker. The deposit should be returned if any of the conditions in the contract are not met to the satisfaction of the purchaser.
Terms and Conditions apply with all contracts, so now is the time to read it thoroughly, even take advice to ensure you understand the nature of your obligations. Brokers who are members of the BRBA (Boat Retailers and Brokers Association) and the BMF (British Marine Federation) can give reassurance to customers that they are dealing with professional and qualified staff, and that their business is conducted to a high standard, as expected by these professional bodies.
This is often called a "sea" or "river trial", depending on location. It gives you the opportunity to experience the boat underway and carry out manoueuvres on the water. Once this has been satisfactorily completed, we advise you to instruct a marine surveyor to inspect the boat.
Survey and Inspection Reports
A marine surveyor will look at all aspects of the boat and identify areas of concern, neglect, or possible early stage faults. A thorough inspection will involve the boat coming out of the water so the hull and underside componants can be inspected. Whilst a marine surveyor will comment on all aspects of a boat, some buyers (especially if no service record is available) like the reassurance of having a specialist mechanic check out the engine systems.
Finalising the Purchase
Once all contractural conditions have been satisfied, funds can then be transferred. All necessary paperwork will be obtained from the vendor, including Bills of Sale etc... and these will be presented to you during the handover. At TBS Boats, we like to think of your as "customers for life" so our handovers can take a little longer than usual (generally a good couple of hours). We want you to fully understand your boat, so we run through all the basic functions in detail and even help you moor the boat in your new berth..!
Notes and things to look out for...
It's worth noting that if you are not buying a boat from a registered broker or manufacturer i.e. direct from the owner, you are literally buying what you see and have limited redress against the seller should you discover faults. "Caveat Emptor" applies which basically means "Buyer Beware".
The seller should answer truthfully any questions you ask, so make sure you have plenty ready..! It's also important that you receive confirmation that there is no outstanding finance on the boat - the vendor can sell the boat with finance against it and you don't want to inherit someone else's debt.
We recommend you employ a marine lawyer if you buy privately, to help guard against many of the pitfalls that can arise, also the lack of redress you will have.
VAT is not payable on used boats, but you will need confirmation that the VAT was originally paid. A qualified broker should advise on any VAT liability and provide confirmation of previous payment.
Selling a Boat...
Now this section is a little harder for us to write... We can tell you what we do as qualified brokers at TBS Boats, but it won't act as a generic guide for how all brokers operate throughout the UK.
At the very least, it should provide an insight of how a prefessionally qualified broker should handle your sale and the level of service you should expect throughout the process.
Establish a Value
The advice that your receive regarding the value of your boat will depend on the experience, success, and knowledge of the market that the broker has. Current competition in the market should be considered and analysed, along with the general demand in place from buyers, for your style of boat.
Engine hours, age, condition, and extra features you may have added can all impact the value of your boat, both positively and negatively. It's also important that a good broker takes into consideration you desires on value, but also reports the actual truth about market activity. A broker who works in an honest and transparent way by reporting facts about pricing, will help you make educated and informed decisions.
Feedback from viewings also plays an important part, as it can demonstrate if potential buyers consider your boat value for money, or whether they're finding more attractive options elsewhere.
A Boat Specification Sheet should be prepared and be displayed in the brokers offices and also online. This can then be given or sent to potential buyers. These specifications should list all the selling features and include high quality external and internal photographs highlighting the best features of your craft. Our customer research suggests that prospective purchasers respond more positively to visual imagery, which is why it's so important to get this right.
All major boat sales portals should be employed to ensure your boat has maximum exposure to the market. A broker's own website should also have significant traffic and rank well in local search results, allowing customers to find them easily.
Another imporant part of the marketing that a first-class broker should be able to provide, is the size and quality of the database of potential boat buyers they hold. Buyers can be looking for boats for months, if not years before securing one - so it's crucial your broker has a well nutured and updated database of buyers.
We also help customers by advising them on how to best present their boats for viewings. We even employ a cleaner to ensure that all boats are presented in the best possible way during their sale period - afterall, first impressions count.
And finally, we feel that you can't beat picking up the phone to potential clients and talking them through the benefits of a boat in detail.
All sales negotiations should be handled on your behalf. Details of the potential purchaser, such as ability to purchase and financing should also be presented to you. The negotiation stage is a crucial part of any boat sale, so an up-to-date overview of the general market, competing boats and a review of the general demand is a really useful thing to have presented to you at this stage.
It's also important for a broker to have all relevant and legal paperwork available. This enables us to ensure a clear and proper title can be passed on. These items include...
- Proof of VAT
- Bills of Sale (at least 5 years)
- Conformity with the Recreational Craft Directive
- If applicable, the vessels' Part 1 Registration
Once a sale price has been agreed, we'll draw up a sales contract (produced by the British Marine Federation). This is prepared in close consultation with both the vendor and purchaser, and covers timescales, deposits, trials, surveys, acceptance clauses and completion. This is also the stage when a deposit is usually requested from the purchaser, to be paid into a dedicated client account.
Following the signing of the contract and payment of a deposit, a Boat Demonstration is arranged with the buyer (sea or river trial), which we undertake on your behalf, and following a satifactory trial a survey date is then arranged.
Some brokers, as we do at TBS Boats, consider part-exchange should the buyer currently own a boat which is unsold. This can help clients to cement the sale, safe in the knowledge that they're not dependant on a linked transaction or chain.
Once the puchaser receives their survey report, a good broker will run through in detail all the points raised (it's rare there aren't at least a few) and advise the purchaser accordingly and realistically. If your purchaser wishes to renegoitate at this point, a good broker will be able to advise how to proceed by identifying and discussing the merits of any justifiable common ground. The process from offer acceptance to the clearing balance of funds will generally take between 7 and 28 days.
Once the purchaser agrees to purchase your vessel we will, within the contractural timeframe, collect the balance on your behalf and upon clearance, make any necessary disbursements and then transfer the sales proceeds into your chosed bank account. A handover is then arranged on your behalf and we'll pass on all the title paperwork to the new owner.
Now's the time to pop the champagne cork as we find you your next boat...!
Questions we're asked by customers during the process
Q: What are the annual running costs of a boat..?
A: This depends on the size of the vessel and where you plan to moor. To give you a general idea, our cost calculator which you can find on each listing on our website gives you an overview of costs, including mooring, insurance and even licensing costs for a boat on the Thames..!
Q: What should I do with my boat in winter..?
A: You can actually read an article on Boat Central for Winterisation here, but as a general rule, get the engine and domestic system winterised by the professionals.
Q: Why should I buy from a broker..?
A: A broker will have a choice of boats for you to view and will be able to advise on many different things such as size, styles, brands even engine options. The broker will be able to advise you throughout the buying process and ensure that all relevant paperwork is in place. They should also be able to protect the purchaser against outstanding loans or finance on the vessel. Basically you'll be looked after from start to finish.
Q: How much will my boat depreciate..?
A: A boat built by a well-known manufacturer, which is put back on the market in similar or better condition and within a reasonable timeframe, will usually make a similar price to when she was purchased, with a little depreciation. Generally speaking, second-hand vessels hold their value (subject to market conditions and assuming that the correct price was paid when the vessel was purchased).
Q: Should I have a survey..?
A: We always strongly recommend you have the boat inspected by a reputable marine surveyor. This will give you peace of mind that the boat you're buying is sound and the equipment is working correctly. The surveyor will give you an extensive report on the boat and condition, including the installation of the engine(s). They will however, not give an opinion on the engine(s) themelves. An engineer can be employed to provide a report on the engine(s). If your intended purchase is over 10 years old, most insurance companies will require you to have a survey before they'll offer cover on the vessel.
Q: What's the benefit of selling with a broker..?
A: Peace of mind, market exposure and quite simply, a good broker will govern the process from start to finish and cover every eventuality - from surveys, to trials and legalities. A broker also has unrivalled access to buyers, portals and databases, so it stands to reason, you'll achieve the best price.
This article was kindly prepared and supplied by TBS Boats
TBS Boats was founded in 1998 and sells in excess of 150 used boats a year from its 120-berth dedicated sales pontoon in Penton Hook, Surrey and has further offices in both Hamble and Bray.
With a large selection of both new and used, river and costal boats for sale, of all sizes in one convenient location, you're sure to find a boat that suits your requirements.