Understanding the Purchase Process

We have created this Purchase Process to smoothly guide our transactions and create a predictable path through the thorns to a mutually satisfactory transaction completion.

The purchase process itself is quite simple and is very similar to a conventional real estate purchase transaction. We structure all transactions in a manner that protects the interests of both the buyer and the seller. Our simple purchase offer / agreement form preserves contingencies for you, the buyer, and it protects your earnest deposit.

Once you’ve decided that the boat is suitable for your purposes, you can evaluate the boat further by having us arrange a condition survey and sea trial for you. To signal your intent to engage the buyer and begin your evaluation, you would bind the boat in transaction with a contingent purchase agreement. This prevents the seller from negotiating with any other parties until either your transaction is complete, or the transaction is cancelled by you. We will provide you with our standard purchase agreement for your review and signature. You would then sign it, scan it and email back for us to present to the seller on your behalf. The contract will stipulate timeline milestones that predictably guide the process through the phases of your due diligence: review of seller’s ownership documents, survey, defect remediation, acceptance and finally, transaction completion.

You would then wire a 10% earnest deposit to our designated escrow account, establishing us as the Stakeholder in the proposed transaction. The funds are then held in that escrow account pending eventual disbursement to seller or return to you in the event that you decided that this wasn’t the right boat for you. Note: You must inspect a vessel, or have a delegate inspect it on your behalf, however, a survey and sea trial may only be conducted after earnest deposit is on account. In the case where you may be traveling a long distance to inspect a boat, you’re encouraged to arrange transfer of earnest deposit in advance of your trip so that you can clear the way for sea trial and survey while you are there inspecting the boat.

The sellers always have three choices when presented with an offer on their boat: they can accept the offer and the transaction proceeds; they can reject the offer and neither party is under any continuing obligation or liability to the other; or third, the seller can make a counter-offer. If there is a counter-offer made (as is often the case), and it is acceptable, then the transaction proceeds. Once the parties have reached mutually acceptable price & terms, we would appoint a Title & Escrow company to manage title validation and coordinate closing documentation and flagging of the vessel.

Often, a seller will require that we obtain a buyer’s Proof of Funds prior to accepting a contingent offer. You are encouraged to contact your banker and prepare this in advance to facilitate your evaluation. Additionally, you as the buyer should anticipate providing “Know Your Customer” type information to your broker. Financial compliance laws in both the US and in Europe require that brokerage entities meet anti-bribery, anti-terrorist funding and other anti-financial crime statutes. Information to be provided will include full name, proof of address & nationality as well as background information regarding the source of wealth and principal’s business activity.

Next, we would help you arrange for a sea-trial & survey so that you can be assured of determining what the condition of the boat is and that it is to your satisfaction. You can engage your own surveyor or we can make recommendations for you as necessary. We would attend the survey and sea trial to be a resource for you in the evaluation of the boat. If the survey is unacceptable to you for whatever reason or if you are not able to reach a negotiated change in the original agreement (as a consequence of unanticipated issues which may be discovered in the course of the survey), then the transaction can be voided and the earnest deposit is immediately returned to you in whole. Otherwise, following your acceptance of the survey & sea-trial, we would move through the final step of the transaction, coordination of the transaction completion process.

After final acceptance of the boat, you would wire the balance of funds to our designated Title & Escrow Agency account. The Escrow company would then prepare all of the closing documents and as all parties sign off on transaction completion, we would direct disbursement of purchase funds, de-register the boat from its hailing port and assist you with re-registration of the boat. Generally, the entire process, start-to-finish, takes 2 to 3 weeks.

We take our transaction management responsibilities very seriously. It is the most important part of our commitment to providing you with expert, world-class yacht brokerage services. We will strive to ensure that upon successful completion of the purchase transaction on your new yacht, you will be happy to be another very satisfied reference for us.

For more inside secrets to yacht purchasing, sales and ownership, contact us at: daniel@aurorayachtsales.com or call +12064076411 or +393470485433.