The decision to buy a superyacht isn’t an everyday sort of decision. It’s a significant, often very personal one that’s rarely driven solely by business factors, and so it requires a careful balance between commercial reason and emotional judgement.
After all it may be the largest single financial investment you make, but get it right and it will also be the most rewarding experience for you and your family. With the European boat show season upon us, we sit down with Henry Craven-Smith, senior sales broker and Jonathan Hind, Dubai Managing Director of global market leader Burgess for their advice on how to go about the search for the yacht that is right for you and, should you find it, what the main steps are in the actual purchase process.
It is easier than ever to find facts, figures and forecasts on today’s superyacht market and with so much information to hand, some buyers will be tempted to go it alone. Far harder to find though is experience and the real industry intelligence, the best ‘off-market’ opportunities, for instance. This is where the experts come into their own. Find a broker you can trust, who works within a multi-disciplinary team in a reputable firm and start learning. “A sales broker should be working for you, not just for any ‘deal’ that comes along,” says Henry Craven-Smith, Burgess Sales Broker. “They should provide you with expertise, real market insight, and ultimately should give you honest, unbiased advice that will help you settle on the yacht that’s right for you.”
Set a realistic budget and think about what you want to do with your yacht: where do you want to cruise and where will you base the yacht? Are speed and/or fuel efficiency important to you? Do you want to offer your yacht for charter? And what kind of operating budget are you comfortable with? Maybe you’re interested in building your own yacht? Answering questions like these will help your broker put the right yachts and projects in front of you.
Review those selections carefully, keep an open mind, and plan some good visits. “The more you see, the more you will learn, not only about the yachts themselves, but also about your requirements,” says Jonathan Hind, Dubai Managing Director. “We started the process with one client who was initially looking for a traditional, ‘white’ yacht. But as we looked over the market, his focus shifted, and he eventually bought an explorer, which was perfect for the adventures he’d planned.”
Unbiased advice will help you settle on the yacht that’s right for you.
The only sure bet when working in this industry is that no two deals are the same. The process of buying a yacht can be quick when everything lines up, but it doesn’t happen often, as Henry notes. “We recently closed the sale of a large, high profile yacht to a client who first enquired only six weeks earlier,” he says, but deals like that are the exception to the rule. “Don’t rush. Study the options, then when an opportunity arises you’ll understand the inherent value and be able to jump quickly.”
August is over, but the Mediterranean yachting season is not done quite yet. While the French Riviera takes a deep breath after the frenetic summer pace, the yacht industry turns to Monaco and Cannes, for the world’s finest yacht shows. But navigating your way around an international boat show can be challenge enough, even before you get down to the real business of finding the yacht, tender or state-of-the-art watertoy that’s right for you. We’ve done our fair share of boat shows here at YACHTS and if there’s one thing we’ve learned, it’s that a knowledgeable, reputable broker will help you cut through the hustle and bustle dockside and make the most of your boat show experience.
As Jonathan points out, “The best brokers have the inside track on what’s going on and when; what the hottest deals at the show are; and we can arrange access to those yachts that are usually only available to a handful of select, pre-qualified clients. The savvy visitor goes with their sales broker by their side to ensure they get onto the yachts they want to see, with minimum fuss and maximum discretion.” And what of the shows themselves?
First, set your sights on the Cannes Yachting Festival. Says Jonathan, “With 600+ boats spread over the two Cannes ports this show really is a must for the semi-custom, sub-50m market sector.” Just ten days later, the world’s most exclusive yacht show rolls into the Principality of Monaco. Four days; 580 companies including all the major shipyards and brokerage houses and most importantly, 125+ superyachts with another 100+ yachts lying at anchor in the bay.
We all know it, a boat show is a marathon, not a sprint but those who come prepared can do all the research they need while enjoying everything the shows have to offer. Jonathan’s advice: “Talk to your broker beforehand and make a plan that takes in the yachts you want to see, but also gives you the chance to go back for second visits and spend extra time on the areas that really interest you.”
The best brokers have the inside track on what’s going on and when; what the hottest deals at the show are.
You’ve settled on a yacht and agreed a price with the seller, so now the purchase process begins in earnest. We asked the Burgess team to walk you through some of the main stages. Henry: “The most important point is that if you build a pragmatic team around you and work with a level-headed broker who has sound transactional experience, buying and selling a yacht can be a smooth process for both buyer and seller. Keep focused on the endgame, listen to your broker and should it become necessary, be willing to compromise to get a deal done.”
First up is the contract. The majority of large yachts are sold via the MYBA (Mediterranean Yacht Brokers Association) MOA, a balanced contract that provides the framework for the sale of the yacht itself with clearly defined stages for buyer and seller. It will also cover elements such as the yacht’s inventory and plans for the actual closing, including the all-important transfer of a clear, debt-free title.
A deposit representing 10% of the purchase price is lodged in escrow upon signature and from there a sea-trial is arranged. If the buyer is happy to go ahead after this, the next step is the condition survey. The Surveyor is engaged by the buyer and will review all the yacht’s machinery and systems as well as its documentation and certification. Note that it is rare to find a brokerage yacht that receives a perfect survey report (every yacht has strengths and weaknesses and the deal will reflect this), but a good broker will have already given you a reasonable idea of what to expect when that report comes in. If anything unexpected comes up in the survey, the best advice is to keep a calm head, focus on the final goal and work systematically towards it with your broker’s advice. The contract allows for the opportunity to cater for a sensible re-negotiation at this point if the situation deserves it.
The final closing of the deal and the purchase of the yacht sees the yacht’s documents and the clear ownership exchanged for the final payment. This will normally be handled by your team and broker, with support from a specialist yachting lawyer in the larger and more complex transactions, who will have made provisions for various factors including the location of the yacht for closing and the tax jurisdiction where it will be registered after the sale has completed. And this is where a broker working with a multi-disciplinary team is an excellent ally to have, so read on…
The deal is done! But before you start cruising, there are a few things to take care of and these elements, although less sensational than the thrill of the purchase itself are of critical importance to the future enjoyment of your yacht. So, it pays to get them right first time and use a good yacht management company to smooth your transition into yacht ownership.
The best companies will do everything in-house for you simultaneously so that when the deal is done you are ready to step on board, confident in your yacht ownership structure and the team that you have around you, from the purchase itself and registering the yacht under its new ownership with the relevant authorities, to advising on and employing captain and crew, and placing insurance. It takes a lot of experience to find the right captain who is not only well-qualified and sufficiently experienced to run the programme for your yacht, but who also fits with you as owner. “We work with clients whose captain has stayed with them as they’ve bought and sold and bought yachts time and again because they have such a strong relationship. So rely on the specialists who know their field,” advises Henry.
There really is nothing like taking ownership of your own yacht, it’s the ultimate adventure and will provide a lifetime of rewarding, fun experiences for you, your family and friends. Get the purchase process, ownership and operational structure right first time and you’ll be able to enjoy many years of yachting built on strong foundations. As Jonathan concludes, “Any buyer or seller, or client building a yacht should find a trusted expert and build a close relationship with them. Buying or building the right yacht at the right price is the key to having a comfortable position in the marketplace when it comes to ownership, charter success and resale.”