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What to Expect From a Catamaran or Trimaran
Multihull Brokerage Transaction

by John Sykes

A properly performed brokerage process often saves both the buyer and seller money, time, and innumerable hours of frustration. Let's assume you've decided to buy a cruising multihull and use a yacht broker. Tell the broker what you have in mind, what you want the yacht to do, and how much you are willing to spend. A good broker is going to ask you numerous questions. Answer them as fully and honestly as you can. If you don't intend to buy a boat soon, let the broker know that. That way he need not bother you with "deal-of-the-week" boats; he has a better idea of what information to communicate and when, and will work all the harder for you when you are ready to purchase. It's also a big help if you have been to boat shows and can identify models that you find particularly interesting.

The Purchase & Sale Agreement.
Eventually, through trial and error, and by viewing many different multihulls, you'll find what you are looking for. Make an offer, but do it formally. Most brokers have a fairly standardized contract, usually called a "Purchase and Sale Agreement". The important elements in the contract are:

-The "Deposit", normally 10% of the purchase price.

-The "Acceptance of Offer Date", normally only a day or two from the date of the offer unless there are communications problems involved. A short time lapse between the two is good for the seller since it avoids a prolonged delay of the sale. It's also good for the buyer since it helps prevent his contract being "shopped", or used as a basis to solicit higher offers.

-The "Subject To's", which are many and varied, but usually involve marine survey and sea trial contingencies and may involve personal inspection and/or financing contingencies.

-The "Acceptance or Rejection Date", or the date by which the buyer accepts or rejects the vessel, a process usually in writing. If the contract is properly done, the buyer's deposit will not be forfeited unless he accepts the yacht and then doesn't pay for it.

-The "Closing Date", the date by which the buyer must pay for the boat or forfeit his deposit. Very often, if some snag occurs and there is good reason to delay this date, the buyer and seller will find a way to agree on a new date

Following preparation of the Purchase & Sale Agreement, the listing broker presents it to the seller. In most cases, the seller makes a counter-offer, suggesting a price somewhere between the original asking price and the offer. This back and forth process may take a while. Some brokers handle this orally, while others insist on a re-executed Purchase & Sale Agreement at every step. In most instances, we've found the oral process easier and perfectly adequate. Ultimately, buyer and seller will have a written agreement stating the terms and final price. Now you have a contract but you've only just begun!

The Marine Survey & Sea Trial.
Next you should schedule the marine survey and sea trial, or trial run. These are normally done on the same day unless you are dealing with a big and very complicated yacht. The buyer pays for the survey and haulout, the seller for the sea trial.

-Marine Survey. The marine survey is an extremely important part of the boat purchasing process, thus the need to choose carefully when selecting a surveyor. Most brokers are willing to suggest several, but loathe to commit themselves to recommending just one. If you trust your broker, interview his suggested surveyors. You can also ask an insurance agent whom they recommend. A survey is virtually always a prerequisite to securing insurance coverage.

-Sea Trial. The purpose of the sea trial is to demonstrate that the boat's parts operate under stress, and it gives you a good chance to take a good look at the sails. A sea trial usually lasts several hours. Most surveyors charge extra to go along on one, particularly if they think it's going to be more of an outing than a valid sea trial.

Acceptance of Vessel.
Following your review of the results of the survey and sea trial, you must make your acceptance decision. Without writing a book about it (and one could certainly be written!), the best guidance we can give involves the following points:

-If there are items in the survey that you feel should be addressed by the seller, you may want to ask for an adjustment in price. When you do this, however, remember that you are not entitled to replacement of items with new items, simply items that work or were similar to those not in working order. Our usual recommendation is that no seller do this work, but rather that the buyer and seller negotiate the probable cost of those items replaced new and allow for an adjustment to the purchase price of 50% of those costs. There is no requirement for the seller to accept any adjustment, but many sellers will be reasonable at this point, especially if a written acceptance subject to the adjustment(s) is presented, since they know that the sale is close to conclusion. Buyers beware -acceptance of a vessel and then failure to close normally results in a forfeiture of your deposit.

Documentation.
Now it's time to close the transaction. The first step, in most cases, is to hire a good documentation agent. The documentation agent checks title, prepares the necessary transfer of ownership documents, and registers and/or federally documents the vessel. We can't emphasize the importance of using a documenter enough, particularly as the bureaucracies and the origins of the vessels become more complicated every day. Buyers who attempt to do this process themselves usually become hopelessly frustrated and rarely get the work done properly the first time. The documenter does not usually guarantee title, but simply does his best to verify the title situation. We know of no one at this time actually offering title insurance on yachts.

Closing.
You have finally arrived at the closing. Most of our closings these days are not "sit-down" affairs. Generally, the selling broker or the documenter gathers all the necessary executed documents and proof of ownership. The buyer makes payment by wire transfer or sends a cashiers check(s) to the Trust Account of the broker. When both elements are in place, the money will be transferred to the seller and the documents to the buyer. Congratulations - you now own a cruising multihull!

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