Ask The Experts: Buying your first yacht Published: 09.04.2014
For many people looking to buy their first ever yacht or boat, the process can seem overwhelming. We asked some of the world's most expert yacht brokerage companies - including Burgess, Edmiston, Fraser Yachts, Simpson Marine and Y.CO - for tips and advice on how to go about taking your first jump into the water of yacht ownership. Here is the first in our series, on the initial stages of interest in the yachting market...
Photo credit Superyacht Times
How should someone go about buying his or her first yacht? What are the first steps if they think they might be interested?
The very first thing a buyer should do is find a trusted advisor and then place his (or her) trust in that person. In most cases this will be a yacht broker – but it might also be a captain. The buyer is much better advised and protected if he places his trust in one good, diligent, honest and capable broker or captain – than going into the market and playing the field between different brokers. By doing this – the broker will work hard with the buyer to locate the right yacht for the right price for that client – rather than being limited to only being able to sell the buyer listings he has not received from other brokers. Having decided on which broker to work with – the yacht search begins. The process usually follows in this order: Considering listings and working out the pros and cons of those yachts that are for sale. Then comes the inspections of the vessels that are of interest. After serious consideration, the buyer then selects his or her number one choice and will make an offer. Then will come the contract signing and deposit put down for the purchase. Lastly there will be a sea trial and survey, and if all goes well then the final payment is made and the yacht is purchased. Burgess
Find a broker who is reputable and with whom you are comfortable, before discussing what you are looking for. A good broker will know what to recommend to you once he or she has a good grasp of what you need versus what you want. Often it is the case that a buyer will end up with a boat very different from what they thought they wanted at the beginning of the search. Simpson Marine
Would you recommend chartering some yachts before you buy one?
Definitely. Charter is a stepping-stone into purchase as you can experience different types of yachts in different destinations and make a more informed decision as to what yacht would be most appropriate to you. Edmiston
Absolutely. Chartering is a fantastic way to get a taste of the yachting lifestyle and will also help potential buyers to form an idea of what’s important to them. With so many options available, charter provides the chance to experience a wide variety of yachts before making a commitment. As clients become more experienced through charter, their priorities can develop and very often a client may purchase a yacht very different from their original idea. As a hands-on way of exploring the market, charter is unbeatable. Y.CO
What are the biggest steps people can take when buying a yacht for the first time to make sure they get the end experience they are looking for?
It’s important not to rush the process at any stage. Take time to find a broker with strong credentials, who you trust and like, as you’ll be spending quite a bit of time together. An established broker like Y.CO will offer not only brokerage services, but also insight, experience and connections in the industry. Once you’ve appointed a broker, be prepared to invest some time into the search, and be open to your broker’s advice. A first-time buyer once came to us looking for a 60m yacht. After listening to his plans and how he intended to enjoy the yacht, we recommended something far smaller as it would be easier and less costly to run with fewer crew and administrative requirements, while offering the same level of accommodation and being ideal for the local coastal cruising he planned. A decade later and we still work together. Y.CO
Charter first for a season and then take advice from an experienced broker. Edmiston Yacht Management and our crew recruitment team will then ensure your yacht is maintained to the highest standard and that you have the highest quality and most professional crew onboard to look after you. Edmiston
Are there any special considerations that need to be made for Singaporeans buying yachts that have come from outside the country?
Tax is a complex area that is constantly evolving but is somewhere that brokers can help guide buyers. Y.CO works with experienced fiscal and legal advisors worldwide, who will advise the most tax efficient ownership structure, as well as providing guidance on certification, operations, charter revenue and commercial registration. Y.CO
Are there any tax implications for clients from China buying yachts built outside of the country and wanting to import them to use them in China?
There is a ‘luxury tax’ of 46 per cent for all yachts imported into China. Simpson Marine
If a client is interested in buying a yacht, what are the technical and mechanical checks that should be made before they purchase the yacht?
All buyers would be strongly recommended to carry out a thorough technical examination of the yacht before buying her. The appointment of a good marine survey team is essential. This survey team should be intimately familiar with yachts of all types as well as the shipyards. A survey team will normally consist of a lead surveyor, mechanical specialists (often from the engine and generator manufacturers), and then technical specialists for things such as electronics equipment including satellite equipment, air conditioning systems and audio- visual equipment. There are normally one or two sea trials that occur at the outset, one being the buyer’s sea trial and the second being a technical sea trial for the surveyors and engineers. It is quite common that these two sea trials are carried out at the same time. A sea trial normally lasts between two and four hours. Following the sea trial the vessel is subjected to a thorough technical survey, to include a dry-docking to allow all underwater parts to be checked and for the thickness and condition of the hull to be assessed. Burgess
What are the most common mistakes people make or things they don’t realise are important when buying their first yacht over (24m) 80ft?
A lot of people underestimate the cost of running a superyacht. This is why we like to go into detail with the client about the overall running of the yacht to make sure that they buy a vessel that fits their programme and budget, to ensure an enjoyable ownership. David Legrand, Sales Broker, Fraser Yachts
Some people may underestimate the costs involved in maintaining a yacht of this size, from the legal requirements under a flag registration [which is involved in safety regulations and inspecting yachts] to keeping the class of the boat [which also inspects the yachts in particular in relation to the state of their hull] to the number of crew. Simpson Marine
What is involved in a sea trial and at what point will this take place in the process of buying a yacht?
When the yacht has been inspected and the offer has been made and accepted, the sea trial will take place before the conditional survey to ensure that the yacht performs as expected. David Legrand, Sales Broker, Fraser Yachts
For new yachts, the sea trial is usually conducted during the handover of the yacht to the client. For new superyachts, there may be more than one sea trial done. For brokerage yachts [ie those that are pre-owned], the sea trial happens after the sales and purchase agreement has been signed and a deposit has been received. The sea trial is part of the survey for the condition of the boat prior to the boat sale. Simpson Marine
Can a client talk to more than one broker about buying a yacht at the same time?
Definitely – a client can speak to as many brokers as they want to. However, the client should consider dealing exclusively with one broker who understands his/her needs and with whom they have a good relationship. The broker will be able to offer their professional advice on the best yachts to suit the client’s needs versus wants. Simpson Marine
Of course he/she can talk to more than one broker, but in order to get the best understanding of the market, a client should choose just one broker he/she feels comfortable with and that he/she trusts. The broker will then work much harder for a loyal client than for an unstable one and the client will not receive conflicting views. David Legrand, Sales Broker, Fraser Yachts