With summer break and vacations on the horizon for most families across Texas, it’s time to start thinking about heading to the nearest lake, river or bay for some time on the water, but if you’re looking to buy a pre-owned boat make sure you add to your enjoyment rather than getting stuck with costly issues.
Private transactions between boat seller and boat buyer come with the same inherent risks as purchasing an older-model vehicle or any other item. With that in mind, here are simple tips to help boat buyers avoid most pitfalls when buying a used vessel.
Seven Paperwork Pitfalls to Avoid
1. Registration: It should be current. Also be aware that a boat that is not located in the state it is registered is one indicator that it may have tax issues that could haunt a new owner.
2. Title: The information on the title should match the registration. A title will also usually list any liens on the vessel, such as a bank loan that will need to be paid off in order to transfer the title. It’s important to include a statement in the purchase agreement that requires the seller to pay off the loan within a very limited amount of time after the sale. Any other liens should be cleared up by the seller before any sale occurs.
3. Hull Trace the HIN: Take a pencil and paper to get a rubbing of the boat’s 12-character serial number known as the HIN (hull identification number) and ensure it matches registration and title. If it does not, the seller should correct the problem.
4. Taxes: It’s advisable to get a statement from the buyer stating that any state or local taxes on the vessel have been paid. This can also be easily included in the purchase agreement.
5. Purchase Agreement: It’s smart — and a widely acceptable practice — to include contingencies for the buyer such as securing financing and receiving an acceptable survey and sea trial.
6. Bill of Sale: Prepare this document with the seller’s name as it appears exactly on the title and registration.
7. Payment: A cashier’s check is the best way to consummate the deal, but the name on the check must match the name on the title and registration.
The BoatU.S. Settlement Service gives buyers and sellers the information and guidance they need so there are no surprises at closing. It coordinates transactions between buyer, seller, or the bank and can be especially helpful when there is no broker or dealer involved. Services include purchase agreement forms, lien searches, confirming and handling loan payoffs, as well as verification and transfers of ownership. A Coast Guard Documentation Service also is available through BoatU.S.
Click here for more information on boat loans.
