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PURCHASE AGREEMENTS

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Posted On: September 24, 2020
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Jul 30, 2020

You've completed your fact-finding missions and the used boat you are considering has come up clean.

Now it's time to PASS ... Purchase Agreement, Survey, and Sea Trial. These are the steps you need to take to make sure the boat makes the grade.

Purchase agreements are important because they protect the buyer and the seller. The agreement should clearly state that the purchase is contingent on a satisfactory survey and sea trial and the ability to obtain acceptable financing (if you are getting a loan) and marine insurance. A "good faith" deposit of about 10% should be included with the stipulation that the deposit is refundable if any contingency can't be met. Also be sure to specify a delivery date when the sale will be completed.

It is extremely important that you read the agreement before you sign it. Not only should you look for the above contingencies but also the details of what you have to do to get your deposit back if the deal falls through. The Bureau has dealt with many complaints where buyers have lost their deposits due to the contracts being broken without cause. Protecting yourself is important because the majority of used boats are sold "as is," which means that you will have little or no recourse against the seller if problems become apparent after the sale. Finally, be sure that all signature lines are signed by both buyer and seller.