How to Buy A Used Sailboat: Part 5 – Closing The Deal

This is the final post in this series on how to buy a used sailboat. This is based on our journey to buy a Poetry, a 38′ Sabre which you can see us sailing on here. If you have been following these steps, you’ve spent time working out how you will use your sailboat. You have developed a long list then shortened that the list to a few models. You have done your homework and found YOUR boat, now finally it’s time to close the deal.

1. Determining the right price: This is tricky as there is no standard formula. During our research we heard many stories of people buying boats for 30+% under the asking price. We were actively considering 3-4 Sabre 38s to make offers on and each was a different case. Two were identical models from the same year and priced the same. One needed a lot of work and the other very little. A third was an earlier model and although it needed a significant upgrade, it would come with a long inventory of extra gear. The last one was overpriced but in good shape.

We decided to make an offer on Poetry, one of the two identical models that would require the least amount of work. The boat had only been on the market for a month and we felt that it would sell from underneath us if we messed around trying to squeeze every penny out of the deal. We believed that 10% below the asking price would be a fair price. Looking at the total cost of ownership, we were confident that Poetry was well within our budget.

2. Making a Purchase/Sale agreement: Like most boats we were looking at, Poetry was listed through a broker. Theoretically buying directly from an owner would cost less. As they don’t have to pay a fee to the broker you should be able to agree a lower price. In my view, buying through a broker was more practical as they are more experienced in handling the transaction which is as complex as buying a house.

Making the offer was a simple matter of calling the broker and telling him how much we were prepared to pay for the boat. The broker said that our offer at 10% below the asking price might be a little low but was a fair enough offer to take back to the owner. He then sent me a Purchase/Sale agreement for signature that he then submitted to the owner. I was surprised by the need to sign a formal document before the broker would discuss the offer with the owner. From the sellers point of view it makes a lot of sense as it ensured that I was a serious buyer.

The seller countered that we meet half way between the asking price and my offer, i.e. 5% below the asking price. Although I had always envisioned that I would buy a boat at a significantly lower price than the asking price, this seemed like a reasonable price for this particular boat. I accepted, the Purchase/Sale agreement was amended and signed by both buyer and seller. We had a deal.

There are two milestones in the transaction of buying a boat.The first is acceptance. This is where the offer is formally accepted by seller and buyer. The last step is completion, where ownership changes hands officially. It’s important to understand this as these two milestones are locked in the Purchase/Sale agreement. Our Acceptance date was October 11th and Completion Date was October 25th. If either party missed those dates the deal could be voided.

3. The Sea Trial: The one condition of purchase was that we would take the boat out on a sea trial before acceptance.  It wasn’t a long sail but enough to gte a sense of how she sailed on all points, how she motored and how she maneuvered.

Every owner I had spoken with about Sabres raved about them. In an hour of sailing Poetry, we could see why. She handled beautifully and were delighted with the condition of the sails and electronics. She was as advertised! We sealed the deal by handing over a 10% deposit check. We had an acceptance conditional on survey.

4. The Survey: A good surveyor is worth their weight in gold. The surveyor we engaged in the purchase of Messing About, our 1981 26′ S2 had been a cowboy and missed obvious issues with the engine. In retrospect, he was just some joker with a moisture meter who charged us $500 for 2 hours work.

This time around, I was determined not to repeat the mistake. A great friend and highly experienced sailor recommended a surveyor to us, Tony Knowles, from Newport Marine Surveyors. He had engaged him to survey his Swan 44 for insurance purposes and was impressed by his attention to detail.

Had I not engaged Tony Knowles, I would have looked for surveyors on Boat US’s web site as these surveyors are approved by Boat US for insurance purposes. It’s important to note that the survey serves two purposes. First and foremost it is to provide you with a clear and professional analysis of every aspect of the boat so you know what you are buying. Secondly your insurance company requires it. This is a double-edged sword. We were delighted by Tony’s meticulous attention to detail. The downside is that the insurance company required that we address all the issues he surfaced.

I spent an hour or so on the phone with the surveyor discussing the boat. He knew Sabres well and pointed out that there were issues with the keel bolts on some models. Fortunately ours was not one these as this would have been a deal-killer.

There were four stages to the survey. First, inspecting her out the water to check below the waterline. No major issues found here. Then Poetry was dropped back in the water, where the surveyor checked the deck and rigging. Only major issue was mast corrosion. Thirdly, an inspection down below. Here a number of fixable issues with the engine were found and Tony also saw some signs of minor leaks that could be fixed by re-bedding the deck fixtures. Joy! Lastly we took her on a short sea trial to check sails, engine and electronics. No issues surfaced here.

Overall, there was a long list of minor issues, some that needed immediate attention but most things we could deal with over the next year or so. The one issue he was especially concerned about was the signs of corrosion on the mast. This was a significantly costly issue and needed to be addressed.

5. Closing the deal: We took stock of all the costs associated with addressing the issues surfaced during the survey. The vast majority of the issues were things that we could be reasonably expected to address ourselves. The issues related to the mast and engine were costly and we felt that it would be reasonable to share these costs with the seller.

We called the broker and suggested going back to our original offer at 10% below asking price. He took this back to the seller. The deal wobbled here. The broker relayed that the seller almost backed out at this point but he talked him round. For the seller the options were take a little bit less than he had hoped for or pay for another winter’s storage fees and put her back on the market next year. In the end the seller decided that a bird in hand was worth two in the bush and accepted.

The Purchase/Sale agreement was amended and we sent a check for the balance. The title and other documents were mailed to us within a week. We were Poetry‘s new owners!

6. Taking ownership: The process of taking ownership requires a lot of preparation. Firstly you have to get insurance for the boat. We applied for a quote on-line through Boat US three weeks before the completion date. This allowed plenty of time to surface any issues. The quote was conditional on the survey.

One issue that surfaced in the survey were leaky washers on the engine cylinders. This meant that a little diesel was escaping. Boat US made us fix this before we could take the boat from the mooring. All other issues could  be addressed over the next year.

My next step was getting the boat from Stonington CT to our mooring in New Jersey. I didn’t have the time to do it myself. I toyed with keeping Poetry at the yard where she had been in CT for the winter. While the yard was clearly well run, the cost they quoted was 3-4 times more than keeping her in New Jersey. It was an easy decision to have her delivered.

I found a captain through BoatUS.com. I received quotes from 3 and plumped for one based in NJ. I checked his references and they were excellent. He and his crew delivered the boat for around $2K including expenses. The skipper did a great job and kept in contact twice a day.

The final step was registration. My wife, God bless her, had the unenviable task of registering the boat with the NJ DMV. This “only” took two trips including paying sales tax. Although we had budgeted for this, it’s still a huge amount of money to outlay for no apparent reason other than the great privilege of keeping our boat in the Garden State. She also registered the change of ownership with the Coast Guard as Poetry is a documented boat.

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The whole process of buying a boat had been a great adventure. It started with a dream 20 years ago that some day we would own a boat like Poetry. The actual process of buying the boat was “work” but still a lot of fun. We met some interesting people along the way and learned so much.

There are no short-cuts for research and preparation. Our boat has been the single biggest expenditure other than our house or a college education for our son. Thanks to all the homework and great advice we got along the way, we feel confident in our decision and most of all we love the boat. No buyer’s remorse of what-if’s, we feel we made a great choice and found the right boat for us.

I hope this has been useful to you. If you have any advice or ideas please add them as comments below or email me.