Thursday, February 14, 2008

Boat Quest, Part 8

1979 Valiant 40 for sale in San Carlos, Sonora, Mexico Last summer I spotted a 1979 Valiant 40 in the listings that looked promising. It was located in San Carlos, Sonora, Mexico, which is an easy two-day drive from Colorado. At $79,500, it seemed reasonable enough and the pictures in the listing showed that it was in good shape and well-equipped.

San Carlos Yachts was the listing broker. I spent some time perusing their website and found this useful information:

If you're new to working with a broker, here's how the boat-buying process typically works. Full specifications on the boats we represent are listed on our website. Give us a call or send us an email at if you need more details. Once you are ready to make an offer, we will work with you and the seller to come to an agreed selling price. We formalize your offer with an "Offer to Purchase" agreement which must be backed by a 10% deposit. You set the time period it will take to complete the transaction, usually between five and forty-five days. During that time, you will be able to personally inspect the boat, hire a professional marine surveyor, and take the boat out for a sea trial. Once all the contingencies in your offer are met, closing instructions are sent to the escrow and title companies to complete the process. Your deposit is returned to you in the unlikely event that the sale is not completed.

In all my investigations, this was the first time I had seen the boat-buying process explained step by step. It was more complicated than I expected, more so than buying a new car but less so than buying a house. Thinking in more familiar real estate terms, the marine surveyor would be equivalent to a real estate appraiser, making sure that any problems or shortcomings which would affect the value of the boat are carefully detailed. And like the appraiser, the surveyor would assist with compiling a list of contingencies to be met in order for the transaction to go forward.

In the real estate world, the broker normally makes a six percent commission on a sale. Looking around, it seems that ten percent is more the norm for yacht sales, which in the case of the San Carlos Valiant 40 works out to almost $8000. Surveyors normally charge between eight and fourteen dollars per foot, which works out to between $320 and $560. The title company would make at least a point, or about $800. So with all the fees considered, it would cost a little over $9000 to buy the boat at its listed price. This seems like a lot of money, but it is the cost of doing business with a yacht brokerage. If it was possible to bypass the broker and deal directly with the owner, as so many are doing now with real estate, the savings could be substantial.

As I was pondering all this new information and trying to figure out a way to convince my wife to let me drive down to Mexico to check out a boat, I happened to check the listing one day and saw that it was marked as "Sale Pending." Another hard lesson was learned, I guess: If you find what you're looking for, you need to act quickly or it will be gone.

1 comment:

Brett said...

Enjoyed reading up on you boat hunting experience! I know what you're looking for is very specialized, but you might find something closer to home at Boats Around Town or Craig's List. Good Luck!