A Yacht Buyer’s 14 Point Checklist For Closing A Transaction

Congratulations on accepting your new yacht! We’re so excited to have you enjoying the water soon with your friends, family and clients. At this point in the transaction, we have a few things we want you to take note of so we can not only close the transaction but seamlessly move into a great ownership experience.

Before our list, please note that your deposit is now non-refundable, unless the seller fails to deliver on their obligations to close the transaction.

Step 1: Ask Your Broker For An Introduction To Your Assigned Closing Agent. Your yacht broker will have an administrative team member that will quarterback the necessary parties required to get you and the seller's paperworks in order to close the transaction. 

Step 2: Establish the LLC You’ll Be Purchasing The Boat With - This can take some time because you’re relying on the ever efficient government to confirm the details required for all closing paperworks. It’s advisable to consult with an attorney, your CPA or a corporation formation company. Please ensure that the company name you choose is not already taken as that will drastically slow down the closing process and this can be a reason for forfeiture of the deposit.

Step 3: Provide To Your Broker General Info: The New Boat Name, The Hailing Port and The Art Work for the name

Step 4: Begin Contacting Vendors to Complete Post Sale Works. It’s likely that some work needs to be conducted to get to closing and if not, certainly after closing. Since schedules can be slow at times, begin making appointments now to avoid undue delay. Your broker should have a network of captains and contacts to begin helping you adequately resolve the open items.

Step 5: Provide Your Finance Approval Document To The Closing Agent. This document will detail how much money is to be paid from the lender, how much money is due and will help calculate taxes to be paid. This will also introduce the brokerage’s closing agent to the lender which will lead to less back and forth for you.

Step 6: Provide Your Insurance Binder: Ensure this is done as soon as possible to not delay closing so it can be added to your file in the event of an issue following closing without lapse or delay.

Step 7: Enroll in Towboat US or SeaTow. This towing membership likely is separate from your insurance but it’s a no brainer to have in the event of breakdown on the water. The cost of one single tow often exceeds the cost of a one year premium membership plus it can take some time to become active so enrolling today will protect you in the event of issue starting day one. 

Step 8: Provide Your License, Passport & Corporate Documents To Your Yacht Broker’s Closing Agent - These documents will be required as a KYC and to prepare necessary paperworks. It’s important for the documentation agent to have signatures for the right person 

Step 9: Prepare For Transport And Delivery: If the boat needs to transit on a trailer or by sea, it’s important that you have a qualified captain or transport company and service ready to go. If you’re getting a transport quote, we advise you get 3 and please ensure your measurements are precise. If you’re in need of a captain, please ask your broker for a dependable and reliable captain within their network. It goes without saying how after the sale, this individual may serve as a great sounding board or consultant to resolve some issues that arise.

Step 10: Solidify Your Yacht Management Company or Crew Hiring: Who will be maintaining the boat after purchase? It’s important to know who will be doing what, when, what they’ll be paid, where they’ll live, and how you will ensure everything is done properly on your vessel. If you’re working with a crew agency, be sure to start with the captain first and allow the captain to hire the crew from there. Crew agencies typically charge one months of salary and are obligated to find a replacement in the event it’s not a good fit. If you’re hiring a management company, ensure you know how often they’ll be onboard, what they’ll be doing and what the communication and approval structure looks like.

Step 11: Plan Your Training. Now that you’re buying this boat, you’re going to be anxious like a kid on christmas to use it; it’s just paramount that you’re an informed and comfortable operator. Training is best executed not in the transport of the vessel, but when you can allocate several straight days, as this will allow your training to stick and give you a number of repetitions quickly.

Step 12: Confirm Dockage Availability - If your dockage isn’t yet immediately available, ask your broker to secure you temporary dockage.

Step 13: Begin Your Vessel Provisioning Audit. You’re going to need to buy a ton of “stuff” to go with your purchase, almost like a tv commercial that says batteries not included. Taking inventories, purchasing cleaning materials, new bedding all the way through umbrellas and silverware. Our team has acquired a number of boats so we’ve attached some resources for you that follow this video but your yacht broker should be instrumental in making this process seamless.

Step 14: Maintain Proper Expectations. Even though you just surveyed the vessel, you must expect to work out a few kinks and have some errors early on as you dial the boat in. We can tell stories of the boat not starting when a new owner flew 10 friends in to go on the maiden voyage, the air conditioning wasn’t working on the first trip and plenty more. The survey was a short peak and with time, it’s natural to pick up a few more smaller issues so just know that it’s our advice to let you know that both the highs and lows of ownership are just over the horizon. Lastly, prepare for closing to have a few time delays or wrinkles so it’s best if you’re not at the dock, waiting to leave because until the transaction closes, you cannot move onto the boat and will likely incur additional travel, lodging and costs that you otherwise would not if you had a couple days cushion.

So again congratulations and we hope this helps as we’ve been through this a few times and want you to be as best prepared as possible to move towards a smooth closing. If you have any questions, please don’t hesitate in reaching out to your yacht broker or our team.