Buying a new boat during Covid

[boatsisboats]

Thanks Cam, yes this is in the plans.

We have arranged 2 day 'lesson' to be done on the new boat for the purpose of making the insurance happy. We look forward to it for our own benefit as well.
The issue is that the one insurer that will even think of giving us a quote will not discuss specifics until after a survey. The issue with that is that we only have 24 hours post survey to accept or deny the boat from an escrom standpoint.

Hoping it all works out well

[sail sfbay]

Originally Posted by boatsisboats

............The issue is that the one insurer that will even think of giving us a quote will not discuss specifics until after a survey. The issue with that is that we only have 24 hours post survey to accept or deny the boat from an escrow standpoint............

Insurance specifics are standard............P&I liability and fuel spill liability to name the most important in addition to collision and comprehensive, if you want those. Suggest getting insurance quotes PRIOR to the survey through a broker. Marine insurers will quote unless they do not insure boats of a certain age and will want to see the survey after it is done and have you sign a survey compliance form that states when you will complete the survey recommendations. After the survey you will have 1 -2 weeks to secure insurance binder during title transfer after the bill of sale has been signed by you and notarized and signed by the seller.

[boatsisboats]

Hey sail-sfbay
Maybe we have a different escrow timing configuration? Our timing won't allow that flexibility.
Our survey is 1/18. We need to accept or release within 24 hours. Once accepted, escrow closes in 5 business days. Was told this was standard.

We cannot get a final insurance quote without a survey, period. Even with a survey from 10/19 and a pre-survey from 12/15/20. The one insurer that seems to want to play ball has only given a framework but will not let us know the specifics until after a survey. We can't tell if they want additional lesson hours, etc.

The boat is a 2000 Hallberg Rassy, so not too old and not crazy $$. From the start, we wondered how this will all work out with timing seeming undoable...
Time will tell.

[sail sfbay]

Originally Posted by boatsisboats

............From the start, we wondered how this will all work out with timing seeming undoable...Time will tell.

Hopefully the seller will relax the 5 days to close after survey to close. If the survey recommendations warrant a repair allowance then that will add a few days while the broker negotiates with the seller to approve this and that will give you an additional 2+ days. I just purchased a boat 2 months ago and that was how the process went. Since you already had the survey and are happy to accept it as is or with a repair allowance then I assume you both have insurance quote/binder and a final purchase agreement in process. Hope to hear it all worked out.

[MultiCountryDon]

Originally Posted by boatsisboats

Hey sail-sfbay
Maybe we have a different escrow timing configuration? Our timing won't allow that flexibility.
Our survey is 1/18. We need to accept or release within 24 hours. Once accepted, escrow closes in 5 business days. Was told this was standard.

We cannot get a final insurance quote without a survey, period. Even with a survey from 10/19 and a pre-survey from 12/15/20. The one insurer that seems to want to play ball has only given a framework but will not let us know the specifics until after a survey. We can't tell if they want additional lesson hours, etc.

The boat is a 2000 Hallberg Rassy, so not too old and not crazy $$. From the start, we wondered how this will all work out with timing seeming undoable...
Time will tell.

You are getting a royal screwing by the selling broker regarding the accept/reject timing. You won't have the formal written survey with findings and photos for 24-72 hours if the surveyor is really fast. Don't make your decision based on the verbal summary. I made that mistake 2 years ago. Several things were in the written document that were not in the verbal summary and I was shoulder to shoulder with the surveyor for the entire time. Cost over $18K to fix the safety and functional "surprise" findings. "Normal" is not 24 hours. Normal is 4-8 days after the survey!
Good luck, but you best be careful because the other side is not passing the "smell" test.

[contrail]

Also, we have decided to keep the BVI flagging that the vessel currently has.



As someone who lives and works, in the marine industry, in the BVI, and is well acquainted with VISR (Virgin Islands Shipping Registry), may I ask why you are planning to keep the BVI flag?


Cheers,
Tim

[contrail]

And, further, have you tried Caribbean Insurance, Ltd, in Roadtown, on Tortola? They are very reputable, typically work with Guardian as the Underwriter, and write lots of Caribbean insurance, including hurricane season etc. They write mine, and that of many other charter boats. Sometimes, it is easier to find insurance closer to where it is going to be needed, as the conditions are more familiar. Stop and think about it....does it make any sense at all that every charter boat in the Caribbean has only one Underwriter to choose from? The answer, is no.

[goboatingnow]

The OP is being “ ridden “ here. In my sale I had 3 weeks after survey to complete , pantenious gave me a hard quote before survey and then simply confirmed with me that the few items would be done to confirm in commission cover ( they have me in water out of commission cover until that point, prior to paying them ! )

The smell is strong on this one.

[sail sfbay]

Just purchased a 36-year old 44 ft sundeck motorboat and below is the timeline:

Sept 27 - offer made
Sept 28 - buyer accepted B] with close 3 weeks after offer acceptance or by Oct 19[/B]
Oct 2 - insurance inquiry through 4 insurance brokers
Oct 6 - obtained competitive insurance quote that I later purchased
Oct 6 - engine survey
Oct 8 - marine survey and sea trial
Oct 12 - written survey received 4 days after survey
Oct 12 - repair allowance requested from seller
Oct 12 - repair allowance approved by seller
Oct 15 - notarized bill of sale received from seller
Oct 15 - USCG travel letter to show proof of ownership
Oct 15 - insurance application signed and binder received

It was interesting that this purchase 1) took 10 days to schedule a marine survey after offer acceptance due to high surveyor demand due to strong boat market, and 2) I had 11 days from survey to complete the purchase, which I did in 7 days.

As a side note, I sold a Hunter 386 last August and that took 5 days from offer acceptance to notarized bill of sale and that included sea trial and marine survey.

[boatsisboats]

Thanks so much for these experiences and comments. I am learning quite a bit. Mainly that our contract is far too tight. Will be writing to my broker now to see how to push it out. Expecting that to be doable.

@sail_sfbay Yes, we will need far more time to accept considering insurance let alone sellers credits for repairs. You are totally right. Still looking to understand our insurance options and time to bind once accepted. The time that things get done is so slow in my opinion. The contract timing does not allow for any of that. Your recent Sundeck sale had luxurious timing comparatively ;(

@MultiCountryDon You are totally right. We didn't properly consider the repair allowance timing or the slow insurance concern. Writing to my broker for extensions in 2 minutes.

@Contrail Thanks for your thoughts! Love to hear more. On the insurance idea, I will reach out to them today. Initial thought is that we have a quote from Jack Martin in Annapolis with Besso/Guardian. We have noticed that the insurers all seem to have the same policy based on the location and cruising plan regardless of the broker. So, they may give me the same quote? Will let you know.
As for the BVI flagging. We are newbies, so there is a decent amount of ignorance here. 1) The boat is currently flagged in the BVI's, we are told that it's generally easier to re-reg in the same place. 2) We don't want a US flagging. For a number of reasons, some financial, some political. 3) We have understood that a BVI flag is preferred when checking in to a country and between sailors (that are not US flagged) 4) We are looking at about $2500 to re-reg into our own LLC in the BVI's. It will take 4 days. Thats better than anything else that we have seen. Happy to hear thoughts!

@goboatingnow We have received 2 insurance quotes. Both saying that they will re-review the quote (for real) once given a current survey ordered by us. At that time, they can change the policy as they wish AND decide if we need additional USCG RYA lessons (which we already have booked JIC). BUt that have made it clear that they could just drop the quote all together. Back to the initial concern, we may not be allowed to have the time to wait for a insurance carrier to 'decide' to cover us within the agreed upon contract timing. That is the second issue after finding insurance in the first place. Whew!!

Writing to my broker now to see about extending acceptance time.

Thanks again everyone.

[k_21_au]

I Just started following this thread last night.

I'm more than interested in this thread as I'm on a similar path. As in I live in Aus, thinking of eventually purchasing a yacht and sailing for a good portion of the year.

@boatsisboats You guys are on a very similar path. I am in love with HR as well ATM.

Also would be interested in how you go with keeping the BVI flag via that LLC etc.

Anyway Good luck and keep us updated

[goboatingnow]

The key to a sales contract is to seeks mods before you sign it. You need a minimum of 4 weeks , better 6 weeks and preferably 8 weeks to closing. In my case it took 6 weeks to close and I had a “ sample “ insurance quote already in hand and had my surveyor set up

Remember once a seller agrees a price and just before you sign , that’s you’re strongest position

[boatsisboats]

Thanks for the comments!

NOTE: we have made an addendum to the agreement extending the acceptance date (from 24 hours) to 7 days. This should be good to get everything done. Also, the close days has been extended 5 days from the agreement.

@goboatingnow We tried before signing to extend the close of escrow to more than a week after acceptance of the boat. No go. 'The market is too hot' both brokers said. No seller will wait that long. to close an escrow.

@K_21_au We are keeping the BVI flag, yes. We will either use TRICOR, in the BVI's for the flagging and a local attorney for the corporate structure required to hold a BVI flag. OR a company in Florida called International Vessel Documentation LLC. They will do the BVI flag and the corporate filing for $4500 US.
On a side note, we were planning to sail for about 6 weeks in March and April and may now only sail around Grenada as the Q period during Covid makes it very difficult to 'cruise' You'd spend so much time in Q, you wouldn't want to change countries too often.
Best of luck!

[AdamInYardley]

Think about flexible language that gives you 4 days or 7 days from receipt of survey from your surveyor, this makes the surveyor's delay a none issue for you and doesn't squeeze you in time.

Also, consider hiring a well experienced local broker to participate in the survey and sea trial. What you want more than anything is the information to walk away than buy a damaged boat. $500 or $1000 more to hire an experienced local would seem more than worth it if they help find major flaws. Usually they can help negotiate savings beyond their expense and are often a no brainer. Being new to yacht ownership, get more eye balls on your side of the transaction now that your broker won't travel.

Regardless best of luck to you in the pursuit of your dream.

[boatsisboats]

Hey all. A final update to this thread.

The deal is done and we own a new HR53. Thats the short story.

The brokers agreed (and the sellers) that the time for acceptance needed to push out to 7 days after survey. We were all fine with that.
The final 'deal' was far more complicated. After the survey revealed a number of other issues that were otherwise unknown to us, we put together some numbers and presented them to our brokers, to keep them in the loop and ask for opinions. They agreed that 14K was reasonable to ask for in credits to the bottom line. So we did. The selling broker blew his top as you would imagine. On a side note - How did yacht brokers work language into the contracts that gives them 10% no matter what the ultimate selling price is negotiated down to. WOW and real estate brokers fight for 2-3% of the final price -for real homes??

After 3 days of silence from all brokers and the sellers, we figured the deal was dead on the final day for acceptance. We emailed the sellers a good bye and thank you. They were surprised and immediately wanted to meet in person. Realizing that all brokers had failed the transaction, we got together for a few beers and 5 hours of discussion about all issues found on the survey. There were a handful of items that were not actual issues and handful of items that we later deemed acceptable, etc. In the end, we agreed on a reduction od $6500 and the sellers got the brokers to kick in $2K each toward the deal. They both understood the nightmare we had gone through.

All is well. The boat is up on the hard per insurance requirements for now. We look forward to actually sailing her for the first time.

Happy to answer any questions for other buyers.

Thanks for tuning in!