Buying a boat is like any other major investment: take a few precautions and chances are you’ll be happy with your decision for years to come.

Using a yacht broker can relieve a lot of anxiety, particularly if you are new to boating. A broker can help you determine the best boat for your needs, and then help you find it. They can also give you an idea of how a boat measures up against similar vessels. Your broker will walk you through the transaction itself, from making the offer to working through conditions and closing the deal.

Choose Carefully

Whether you’re working with a broker or going it alone, don’t rush a decision. Think about the right boat for you: Does the boat fit your intended use – day cruises, fishing, extended cruising, racing? How much room will you need to comfortably accommodate your family and other guests?  How much maintenance will the boat require? Be careful about tying up too much money in the purchase itself. Moorage, insurance, fuel and maintenance costs add up. You’ll need enough coin in your jeans to enjoy your boat.

Making an Offer

So you have now found your ideal boat. If there is no broker involved, due diligence to protect your interests and close the transaction will take a little more work. You’ll probably haggle a bit to agree on a purchase price, and perhaps over what onboard equipment will be included in the sale. Once you’ve agreed on price, your offer should be in writing and subject to a survey, a sea trial, and if necessary financing. Also, set a closing date and list any equipment on the boat that is not included in the sale. You may want to list all inventory to be included in the sale. Get the seller to sign the document.

At this stage, the seller has agreed, in effect, to take the boat off the market for the time it takes to complete a sea trial and survey, so be prepared to pay a deposit. Ideally, the money should be held in trust pending completion of the sale.

Sea Trial and Survey

The sea trial is your opportunity to see if the boat performs as expected, ensure all onboard equipment functions properly and assess the mechanical condition. If it’s a sailboat, hoist all the sails to inspect their condition. If you’re new to boating, take along an experienced friend or think about hiring a consultant.

The survey is perhaps the most important pre-purchase inspection. Not only do you get peace of mind, your insurer and financer will require a recent survey. A qualified surveyor assesses the overall condition of the vessel, and determines whether it meets insurance and safety requirements. The surveyor will also estimate the boat’s fair market value. The costs of the survey, and the haul-out for below-the-waterline inspection, are generally covered by the buyer.

It is not considered wise to accept a survey previously obtained by the seller. Choose your surveyor carefully. If possible, seek recommendations from friends or your insurance agent. Try to be on-site for the survey. It’s a great way to learn more about the boat and its onboard systems. You’ll also have the chance to ask any questions you may have. A standard purchase survey does not include inspection of the engines and drive systems, or sails and rigging. These inspections are available from qualified professionals, and can be a good investment.

Depending on the age of the boat, a few blemishes will inevitably be discovered during the survey. Don’t expect the seller to pay for minor deficiencies. But depending on what problems emerge, you have a choice of negotiating with the seller to have them repaired, renegotiating the purchase price, or walking away from the deal. If you walk, the seller is not obligated to reimburse you for survey or any other costs you may have incurred. You are, however, entitled to a full refund of your deposit.

The time it takes to complete the sea trial and survey gives you time to make other necessary arrangements: moorage, insurance and financing if required. You should also conduct a search for any liens on the boat. (In British Columbia, visit http://www.fin.gov.bc.ca/registries/pprpg/default.htm for more information.) Any liens should be discharged when you complete the transaction.

Completing the Transaction

To complete the transaction, obtain a signed receipt from the seller transferring to you all interests in the boat. Include all particulars: boat manufacturer, builder, year, model, length and serial number. Both you and the seller will also need to complete the back of the vessel licence or registration. All vessels powered by an engine of 10 horsepower or more must be licensed or registered with the Department of Transport. You will need this completed document to register the boat in your name. If the seller cannot produce registration or licence papers, contact appropriate authorities for advice. If a tender with a motor over 10 horsepower is included, you should also receive licensing documents for it. For information on pleasure craft licensing, visit http://www.tc.gc.ca/BoatingSafety/pcl.htm#Transfers.  

The Canadian GST is not payable on used boats, provided they have previously been registered in Canada. However, you will have to pay provincial sales tax. Contact http://www.sbr.gov.bc.ca/ctb/. If it slips your rmind, don't worry; they’ll find you.