Buying a yacht should be a thrilling experience, promising countless adventures ahead on the open seas. However, progressing from the Acceptance of Vessel (AOV) stage to the actual closing involves several steps and potential challenges buyers should be prepared to navigate. Given the significant costs involved, many actions are typically deferred until the buyer commits to the transaction by signing the AOV agreement. Therefore, it’s crucial to maintain a realistic timeline for the closing process and understand factors such as financing, registration complexities, and the pivotal role of the closing agent.

1. Acceptance of the Vessel (AOV):
The final acceptance occurs when the buyer has resolved all contingencies in the purchase contract, completed the survey and sea trial to their satisfaction, and both parties agree to proceed with closing. Signing the AOV signifies the buyer’s contentment with the vessel’s condition and the sale terms.

2. Financing:
Securing financing is often the lengthiest part of the sales process and is typically initiated early. While lenders may pre-approve a buyer’s loan application, they await the survey results to appraise the vessel’s condition before finalizing funding. Delays can arise due to additional lender requirements, underscoring the importance of pre-approval or working with lenders experienced in marine loans.

3. Insurance:
Insurance is a critical requirement often mandated by the financing entity before funds can be disbursed. Buyers must secure appropriate coverage, a process that involves comparing policies and ensuring compliance with lender specifications, potentially impacting the closing timeline if issues arise.

4. Title and Documentation Review:
Verifying clear title and identifying any encumbrances on the vessel is essential. While straightforward for some vessels, this process can be complex, particularly for foreign-registered or multi-owner boats.

5. Vessel Flag and Registration:
If the vessel is registered abroad, transferring its registration to the U.S. can be time-consuming, involving bureaucratic processes and document translations that may delay closing by several weeks. For U.S. Coast Guard-documented vessels, obtaining an abstract of title is crucial, with processing times ranging from 3 to 6 weeks.

6. Post-Survey Inspections and Repairs:
Issues identified during surveys or sea trials may necessitate negotiations over repairs or adjustments to the sale price, potentially extending the closing timeline depending on repair availability and lender requirements.

Role of the Closing Agent:
The closing agent plays a pivotal role in ensuring all documentation is complete and accurate, overseeing financial transactions, and resolving any last-minute issues. A realistic expectation is for the closing agent to require at least 10 business days from the AOV date to finalize all aspects of the transaction.

Setting Realistic Expectations:
Effective communication with all stakeholders—sellers, brokers, financiers, surveyors, and the closing agent—is essential. Proactively gathering necessary documents, staying updated on each step’s progress, and preparing contingency plans for potential delays are key strategies to facilitate a smooth transaction process.

Buyer’s Broker:
It’s both easy and wise to have a Buyer’s Agent represent you in the purchase of your next boat. With no cost to you, our value-added services will enhance your boat buying experience and lead to more successful outcomes. Reach out today to learn more about Buyer’s Broker Services offered through Veteran Yacht Sales.