ABYA advises you should always use a professional to ensure your sale is managed properly and the correct documentation passed to the new owner.
Note: this page principally covers the sale of a boat through a broker acting as an intermediary.
Listing your boat
You can choose to list with one broker (sole agency) or several. Alternatively, you can ask the sole agent to sub-contract with other brokers, meaning that he retains control of the sales process and the brokers negotiate the split of fees between themselves.
The seller pays the brokerage commission, which will be a fixed percentage of the final sale price (plus VAT). This fee includes:
- Advertising your boat in magazines, on their website, through web portals, through their client list and at boat shows;
- Following up on all leads;
- Showing clients over the boat;
- Providing a contract to both parties which sets out the progress of the sale;
- Ensuring all the relevant paperwork is available – RCD compliance, VAT evidence, Bills of Sale, Builder's Certificate, Service History, etc.
The broker will also advise the seller of all offers and negotiate with the purchaser as well as liaising with the surveyor and assist in re-negotiating the fee if this is appropriate.
The % rate will be advised at the beginning of the contract, and the broker will provide you with a Listing Agreement setting out the contractual terms. This % is against the sale price ultimately paid.
Be guided by the broker over market price – he is the expert. You need to be realistic.
Sea trials and inspections
Discuss with the broker the arrangements for viewing, inspection and sea trials. You may find that some brokers require accompanied viewing or a skippered sea trial. The IPV Code will apply so ensure this is covered.
Vessels for sale in the UK should be VAT paid. Visiting yachts may not be offered for sale (HMRC Notice 8 refers). Due to the closure by HMRC of the type of Customs Warehouse held by ABYA (May 2019) to allow the sale of non-VAT paid boats, several brokers are setting up individual warehouses.
BREXIT – as information becomes available, we will update this website. We know UK yachts will become visiting yachts in Europe after Brexit. This is available for a period of 18 months and re-admission for a new 18 month term can be achieved by exiting the EU, logging a visit outside the EU for a couple of days and then returning. However, bear in mind some EU countries comply with the clause that states the boat may not be used commercially/offered for sale as a visiting yacht.
You should ensure the boat is clean and tidy and all personal effects removed, fridge empty, etc. Prepare a careful inventory of all the things that are staying with the boat and ensure they are available for inspection by prospective purchasers and surveyors. It is preferable to remove all personal items if you are not using the boat during the sale period. Do not remove items you have listed on the inventory and ensure items you have listed that are not on the boat are available prior to completion, not stored hundreds of miles away in a barn somewhere!
Ensure you have all the relevant boat documents gathered together and show them to the broker who may take copies of the significant ones to keep in his file. These must be passed to the new owner in due course and should include the paper trail of Bills of Sale showing the ownership history, evidence of the VAT status (see below), evidence of RCD compliance (see below) when first placed on the market in the EU, registration (if any), Builder's Certificate, Owner's Manual, Service History (engines, sails, etc.), outstanding finance details, any large repair bills, etc. This documentation is required for all sales, not just those done through a broker.
The broker will market your boat using a variety of options, such as websites, web portals, client lists, magazines, second-hand boat shows. He will let you know when he has any viewings, and when he receives an offer. He will negotiate an agreed sale price. This will either be conditional – that is, subject to survey and possibly in-water or sea trial and any other agreed conditions; or unconditional – "as is, where is".
The broker will provide a Sale & Purchase Agreement which both parties sign. Any amendments must be agreed by both parties. This is a binding contract so be sure before you sign. Note: The broker is not a party to the contract – he is acting as the seller's agent.
The prospective purchaser will advise the broker of anything that is of concern or any questions that have arisen in the survey. They may require negotiation of a revision of the price, a repair or replacement of some equipment, or, if there is significant defect found, the buyer may wish to withdraw and his deposit refunded.
When negotiations are complete, the broker will send the seller a Bill of Sale to complete and return, together with all the documentation (as above) and keys. He will advise when completion has taken place (when the funds have cleared) and once he has finalised all issues, such as payment of any outstanding finance, he will issue a completion statement and send you the balance of the monies, less his agreed fee. The Bill of Sale makes the legal transfer of ownership of the boat and should be correctly filled in.