Just bought first boat in California, seller wants to use title company?

[TheNomadicAspie]

Just bought my first boat on Ebay and am going to drive out to California in the next few days to complete the sale. The seller directed me to contact a title company in the area to complete the sale. Is that normal/necessary? If so what kind of fees should I expect, and if not what's the normal process that's supposed to happen from this point?

Thanks in advance for any help.

[Chotu]

It could be normal. Or it could be suspicious. To be 100% sure, use a different marine title and escrow company to make sure there is no link between the seller and the title company.

The title company “in the area” make it so you want to pay some attention to it.

[thomm225]

It simply doesn't sound right to me.

Usually you go see the boat, do a thorough inspection or get a survey, discuss pricing with the owner or broker, maybe take the boat out for a sail.

I would think seeing the owner and the boat would be first on the list even if you already paid. Paying first isn't what I would do but folks do it like that sometimes.

It seems strange he is sending you not the boat or to himself but to a title company.

But, I don't live in California and maybe it's different out there

[denverd0n]

Are you making a down payment? Is the sale contingent on survey/sea trial?


Title companies can manage escrow. If that is what the seller is doing then it is very reasonable. More details are needed.

[AZUS]

When we bought our boat, we used a marine registration/escrow agent.

Property Title Companies insure title to real estate, but they also routinely handle escrow under conditions and instructions signed by both parties.

It’s reasonable, but make sure that the escrow agent has detailed instructions (refundable to you upon demand until you have accepted survey, sea trial, and condition of boat) and that they also hold the transfer documents and are authored to sign them over to you upon payment in full. Escrow goes both ways.

[Portage_bay]

I think using a marine title and escrow agent is a good idea. It protects both you and the seller. Make sure you have a good solid contract. As a previous poster suggested find the title and escrow agent on your own, this is an eBay transaction, a place known for scams.

The last boat I bought the title / escrow agent charged $800 to hold the deposit and the final payment, ensure the boat had a clear title, manage state registration and federal documentation. There was no gray area of ownership. I got title the same day the owner got payment in full. A fee I felt was quite reasonable for the services offered.


I have bought and sold without those services when the price was low enough the risk was acceptable and I was dealing face to face with the other party.

[lvictorlucas]

If all you want is the title just check the numbers on the boat with the paper work, go to his bank and have his signature guaranteed (notarizing means nothing if there is a dispute) then to a state registration location to transfer the title and pay the taxes and fees.

[Sailor647]

The title company will ensure there aren't any outstanding liens against the boat. HOWEVER, if the boat is documented, you can get that information from the USCG for a tenth of the cost. You can do everything yourself from this link if the boat is a USCG documented vessel.

https://www.dco.uscg.mil/Our-Organiz...ons-and-Forms/

We opted to NOT use the Seattle title company the broker "wanted" us to use. He said, "You don't have to use a title company, but I highly recommend the process. Most people just don't want to be bothered with all the complicated paperwork."

Well, we didn't use the title company because the USCG forms are NOT complicated, and boy was he pissed! And so was the title company. I literally saved us over $1,000 USD by doing the paperwork myself with the USCG. What the title company wanted to charge us for filling out a few forms was ridiculous! Example: $250 to document the vessel for a year. Uhh, say what?! It's $24 dollars at the USCG website, folks.

Be sure to get a California legal Bill of Sale (meaning it has all the necessary information on it - google it) and if it has a Title, get that signed over as well. (In Oregon, we can have both a Documentation certificate and a State Issued Title, not sure about California.)

Or, find your own title company.

[Cpt Mark]

I used an escrow company on my last boat. Well worth the money because I didn't know I could find out about liens on a documented vessel.

One thing the escrow company did NOT check was back taxes. California is ruthless on this. I directed them to specifically look for back taxes on the local (city and county) AND state level. Guess who owed over $5000 in back taxes? Owner was furious because that money was paid per the contract out of the escrow funds. He thought he was going to skip out on it.

[Cpt Mark]

BTW. CA does not know or care about filing liens with the USCG so you won't find them there.

[Calif.Ted]

In California boats are either registered with DMV or documented by Coast Guard, neither agency allows a boat to be both. If registered with the state it will have a "pink slip" just like a car that is used to transfer title.
I think you need to clarify if the seller wishes you to use a documentation service or simply an escrow company to insure safe payment between the parties.
Here's a couple web pages may be of use.
https://www.marinetitle.com/library/...settlement.htm
https://www.vesseldocumentation.com/

[zeehag]

title company??> use a boat specific documentation company.. dona jenkins is excellent.. i used these folks for the purchasing of 2 sailboats and sale of a third.

[Tayana42]

I also used Donna Jenkins. You can do it yourself for less but these people know the ropes in California. They were honest and worth the cost for us. Of course that was 20 some years ago.

[Shrew]

Originally Posted by Calif.Ted

In California boats are either registered with DMV or documented by Coast Guard, neither agency allows a boat to be both. If registered with the state it will have a "pink slip" just like a car that is used to transfer title.
I think you need to clarify if the seller wishes you to use a documentation service or simply an escrow company to insure safe payment between the parties.
Here's a couple web pages may be of use.
https://www.marinetitle.com/library/...settlement.htm
https://www.vesseldocumentation.com/

To clarify. A vessel documented with the USCG means that is who has issued the Title. The USCG does not care if you register a vessel with one or more states. You simply cannot title a vessel with the state if it is documented with the USCG. In fact most other states still require that you register a vessel with the state if you boat in that state for longer than a predefined period.

It is true that in California you don't register a USCG documented vessel. The California DMV describes it as "registered with the USCG" however that is incorrect verbiage. However, to claim that the USCG doesn't allow you to register a vessel with a state is simply incorrect.

[zstine]

I just sold my boay for 40k privately. You don't need a title company unless this is an expensive boat, like 75K+ at least.
If USCG documented, you can request an abstract of title to see the person who owns it, any lines, etc... its like $25 to process the paperwork.

As for escrow, PayPal has a feature that it will hold money until the product is received. Maybe a small fee.. i think my buyer paid $30 or so.. There are also many other online escrow sites that charge a small amount..

Pay deposit into escrow, sale contingent on survey and sea trial. Do the inspections and pay with a certified bank check and release escrow.... you should have a purchase and sales agreement of some type to explain who pays for hauling for survey (buyer), damages if any during sea trial (seller) etc...