So you have a contract on your dream boat, now what? To help guide, once buyer(s) and seller(s) obtain agreement on the PSA, the process with our key recommendations are as follows:
1. Inspection Period: The first step is for the buyer(s) to hire surveyors and any specialists to ensure the inspection is to their satisfaction. The buyer’s agent will assist with logistics and provide feedback on known surveyors, but the buyer(s)chooses and hires the surveyor directly. Buyer(s) or buyer’s agent can schedule the haul out. If the boat is on the hard, the Seller (s) will arrange launch. Seller(s) is responsible to run the boat during sea trials or provide a captain. Buyer(s) is responsible for all costs of the survey including any associated yard fees. Attendance of surveys by brokers depends on listing agreement.
2. Insurance: Before or during the inspection period, buyer(s) should start working with their insurance agent. Buyer(s) should have confidence in obtaining a binder at or before the closing date.
3. Financing (Optional): If the boat is being financed, pre-approval should be in place prior to signing the PSA. The signed PSA and a copy of the survey will be provided to the finance agent.
4. Acceptance/Rejection Process: After buyer(s) and buyer's agent conduct the survey and discuss findings, the next step is for the buyer’s agent/selling broker to write terms of acceptance. To address any deficiencies , a conditional acceptance is commonly presented, consisting of a price adjustment, repair, or combination of both. It also can consist of a straight acceptance. If agreeable to both parties, we move on to closing. Once accepted by both parties, the deposit is no longer refundable. Vessel can be formally rejected based on any findings before the acceptance date or if acceptance by the acceptance date is not reached, the vessel is deemed to be rejected. If agreeable to both parties, an extension of the acceptance date can be executed.
5. Closing Preparation: Once acceptance is reached, It is standard for the buyer(s) to hire a documentation agent. This agent performs a title/lien search (known as abstract of Title in the U.S) and prepares the bills of sale and all documents required to document/register the Vessel in buyer(s) name. Once they receive the signed documents from the seller(s), the agent holds the documents in escrow and provides final approval to Jordan Yachts that everything is in order prior to release of funds to the seller. They can also provide running papers (Copies of bill of sale and registration application) so the buyer(s) can operate the vessel while new registration is being processed. If financing is used, the finance company will often manage the documentation process via designated agents.
6. Closing: Closing requirements are detailed in the PSA (Purchase and Sales Agreement), but in summary consist of:
A. Buyer(s) hires a documentation agent for title search and paperwork preparation.
B. Seller(s) signs and provides all required paperwork to the documentation agent.
C. Buyer(s) or Finance company or both send balance of funds to Jordan Yachts Escrow. This must be performed the day before closing.
D. Jordan Yachts completes closing statements, provided to both parties in advance of closing.
E: Upon confirmation and approval of all seller documents from Documentation agent, Jordan Yachts wires funds to seller.
F. Upon confirmation of receipt of funds to the seller, documents are released to the buyer, and the deal is considered close.
Note that this is based on the IYBA contract and in yacht deals there are commonly custom conditions added to the PSA or acceptance. We are often dealing with multiple parties, uncertain findings, tight schedules and weather windows. We will help you navigate the process and help keep complex transactions straightforward.