Here's what you need to know to protect yourself when buying a boat without the safety net of a dealer or broker.
BoatUS frequently hears from Members who find themselves unhappy after buying a used boat from a private party. After the sale, they may find that the boat's condition was not as advertised. The stories are similar: The boat looked great, the seller said it worked like a dream, and the buyer can certainly contact the seller if "something goes wrong." Too often, though, something does, and contrary to the seller's enthusiastic presale offer of help after the sale, the buyer is met with a cold "not my problem" response from the seller. Here's how to protect yourself, both before you purchase a boat and after you discover a problem.
1. Don't buy a boat sight unseen!
Yes, people do it all the time. Go and see the boat in person and inspect it from bow to stern. If you absolutely can't get there yourself, find a friend or hire someone who can. Visit this article to learn more about boat shopping long-distance.
2. Protect yourself with a contract.
Once you've decided that this is the boat you want to buy, have agreed on terms with the seller, and checked that the title and registration are in the seller's name, fill out a purchase agreement form. Visit our online boat buyers guide to download one.
An old legal adage says, "If it's not in writing, it didn't happen." A "purchase and sales agreement" is the best method to protect you. Too often a private-party boat purchase includes an exchange of money and handshake to consummate the sale. A purchase agreement spells out the details of the sale, including contingencies (such as an unacceptable survey or sea trial, or inability to obtain financing and/or insurance) that allow you to renegotiate or even back out of the deal completely. Make sure you spell out exactly how and when your deposit is to be refunded.
Don't forget to note the boat's 12-digit hull-identification number (HIN) and engine serial numbers on all forms. You'll also want to include, in writing, all equipment (along with serial numbers) that is part of the deal, or any repairs to be made by the seller. Any changes or additions to the contract should be initialed and dated by both parties. Both parties should sign and date the contract and ensure that everyone gets a copy. Sample purchase agreements and bills of sale can be found online here.
Choose your own surveyor to ensure he or she is working on your behalf.
3. Next, you'll need to hire a competent marine surveyor.
It's easy to think that after spending many thousands of dollars on a boat, another few hundred dollars spent on a condition and valuation (C&V) survey and sea trial seems like too much, especially if you're not required to have a survey for insurance or financing. But consider this: A majority of the complaints that BoatUS received from private-party used-boat buyers are from Members who didn't have a survey or sea trial. The engine is the most frequent problem with a used boat, and engines are usually the most expensive component, often making up half or more of its value. A survey is cheaper than a replacement engine — or making amends with an angry spouse.
In addition, attending a survey and sea trial will teach you about the boat and how it handles. This is beneficial whether you're new to boating or stepping up in size, complexity, or expense. Another benefit of a survey and sea trial is that the contract price can be renegotiated or you can back out of the deal if problems are revealed, with the proper purchase agreement.
The cost for a survey and sea trial is typically between $15 and $20 per foot. Choose your own surveyor to ensure he or she is working on your behalf, and have a separate engine inspection to include a compression check, if appropriate, and oil analysis. Click here to learn how to find a qualified surveyor.
4. Check for open recalls or problems.
Note that not all states assign titles to boats. In states that don't require titling, ask to see the seller's bill of sale from his seller. Insurance policies and boat registration cards are also good ways to help confirm ownership.
5. Photograph the boat's HIN.
Don't sign the check yet! Find the HIN on the upper part of the starboard side of the transom and make sure it matches both the registration and title. If it doesn't match exactly, at the very least there could be issues retitling the boat.
The boat's title will list any liens on the vessel, such as a bank loan that will need to be paid off in order to transfer the title. If there's a loan, you'll want a statement in the purchase agreement that requires the seller to pay off the loan within a specified amount of time after the sale. Better yet, you may be able meet at a local bank that has the lien and have it released on the spot. If you're not completely comfortable with the seller's ability to sell the boat, walk away.
6. Zipped lips sink ships.
Disclosure by the seller regarding the boat's condition can be a sticky subject. Most private-party sellers sell their boat in "as-is" condition. As-is sales offer virtually no recourse against the seller should a problem become apparent, so having a survey and sea trial becomes even more important. Generally, there's no obligation on the seller's part to volunteer information for which the buyer doesn't ask. Consider adding a line in your purchase contract that asks the seller to state if he or she is aware of any serious defects, prior accidents, or sinkings in which the boat may have been involved. If the seller balks, you may want to walk.