We should have written this article a long time ago, because buying yachts or commercial vessels is something we are particularly good at (yes please let us brag for a moment). On the other hand, we are sellers’ worse nightmare because the more competent the buyer is the more it will give the seller a run for his money. There are also a number of factors in buying a vessel that are not terribly obvious to most buyers and in this article we are going to try to explain some of them.
The following are some of the areas where we usually make the difference once appointed buyer representative:
What does a yacht buyer representative do?
1) Anonymity and Information during the buying negotiation:
When the vessel you are buying is already above £150k just the sheer level of anonymity that a buyer representative can provide for the actual buyer can be a very powerful weapon in negotiations.
If you want to know a reasonable price for acquiring a vessel for charter we actually built a whole sophisticated excel model you can download here
The yachting world can be a very small world. You would be surprised how easy it is for us as buyer representatives to figure out how ‘motivated’ a seller is but also it is relatively easy for the seller to figure out how much more money he/she/they can ask to the buyer during a negotiation by figuring out the source and nature of his/her/their wealth.
When the price of the yacht or vessel is instead in the 7 figure and upward in 8 figure zone it becomes increasingly beneficial for the buying party to no be know for a number of reasons that can go from unwanted press exposure to the obvious leverage during the negotiation itself.
The buyer representative oftentimes manages to cut off a potential battle of big egos and sail the transaction through faster and more efficiently. Anonymity also plays a financially advantageous role for our buyers when the vessels need work .
2) Competence
When engaged in acquiring a vessel, whether we source it from one of our off-market opportunities or the vessel is sourced ad-hoc upon client specifications or has been already found by the client we usually go to visit the vessel with one of our trusted yacht/ship surveyors. In many cases, we would actually choose to inspect the vessel with a naval architect rather than a surveyor.
Depending on the material and type of vessel we do choose the best suitable professional for the job.
Our process delivers, peace of mind for the buyer and also financial savings. We will find out everything there is to know about the boat and more. In a recent yacht acquisition, we were able to track down the project manager who had overseen the construction [back in 1995] and the two captains who had sailed the vessels for most of its 3500+ engine hours . We did so within the 24 hours from when our client had communicated with us the name and model of the vessel he wanted to buy.
Furthermore, we had a complete history of the last 5 owners and able to access plans and go-to people to recover an hydraulic system plan that was missing in the paperwork of the vessel.
3) Documentation
A lot of professionals focus on the status of the vessel but what about its paperwork and background checks? Having a team in place for every yacht purchase, we can carry on background checks on the legal title of the vessel and make sure that every bit of fundamental piece paperwork and documentation is present.
[think of Electrical plans, Hydraulic plans, manuals for all engine room systems, registry compliance certifications etc.].
If some of those key documents have y hgone missing through the years we are often able to find an agile solution to replace them by sourcing them from the original builder or recreate them if necessary.
4) Purchase, legal, contracts and registration/flags
More often than not vessels of a certain size are titled to companies. Regardless of whether our buyer buys the holding company or the asset alone we do our due diligence to make sure that nothing is legally pending on either of them, from the most obvious mooring fees to more complex structured loans that can have the vessel holding company as collateral guarantees.
Once everything clears, we go into the specifics of the sale and purchase contract with the appropriate jurisdiction that is accepted by both parties (often in two languages too).
Lastly, we advice our clients and support them in re-registering the vessel under a different flag if our client has decided to do so or if its advantageous for the vessel new ownership depending on the circumstances. There are number of variables in re-registering and re-flagging a vessel that can range from fiscal advantages to political protection of the asset and even regulations on the nationality/ies the crew can hold if the vessel is going to be a charter vessel in some specific waters gathering to specific nationalities of guests.
5) Financing your yacht acquisition
Financing a yacht acquisition or
6) Logistic, Works, Crew and Charter Operations
Once the contract is sealed the vessel will need to be moved. Depending on the vessel condition (seaworthy or not) the logistic of moving a vessel can be more or less burdensome but in any
