There are many things to consider when selling a boat – from writing a great boat listing with professional photos and videos showcasing your vessel in the best possible manner, to choosing the right online platform and responding promptly to potential buyers with answers to their questions. Knowing exactly what documents you need to sell your boat will also help you when it comes to finalizing a smooth transaction. Not having all the relevant paperwork about your boat and its history can potentially erode a boat buyer’s confidence when it comes to making a purchase. Therefore preparing any and all required legal documents for a transaction ahead of time will help you mitigate the risk of losing the buyer to another seller, as well as speed up the closing of your final sale, helping transfer ownership efficiently without any unforeseen hassles.
Above: Having the proper documentation, including a blank Bill Of Sale is important when you are selling your boat. Photo: Pond5.
Let’s take a look at the most important key documents you’ll need to have prepared for the boat selling process.
Prior To The Sale
Commissioning a marine survey of your boat from a professional marine surveyor will help to determine the condition of your boat and its actual market value. It can also help diminish a buyer’s concerns and set their mind at ease about the history of the vessel. The older and larger the boat, the more useful it is to keep this document up-to-date. When choosing a surveyor ensure to choose a service provider that is widely accepted, has a good reputation and is very thorough.
Above: A marine engineer inspects a boat engine in an engine room during a marine survey. Photo: Pond5.
Once the survey is complete, make sure you have a copy of the full inspection so that you can show interested buyers the complete details. It is wise to make a few copies of this survey for future use, and multiple interested buyers. In this day and age, it is also helpful to have this in digital form, such as a PDF or Word document so that you can email it and share with interested parties.
For The Sale
Bill Of Sale
A bill of sale is a document that outlines the terms of a transaction between a private seller and a buyer and legally transfers the ownership. This is perhaps one of the most important documents you will need to have ready when you’re ready to actually sell your boat. Each state in the U.S. may have their own requirements for a bill of sale for a vessel, and it may differ by size, weight and class (such as motorboats versus sailboats, and boats under certain lengths/horsepower). Regardless of your state’s requirements, having a bill of sale is always wise because it can protect you legally should any future disputes arise, plus it helps keep historical record.
Above: An example of a boat bill of sale from Massachusetts. Photo: Boat Trader.
There are many templates available online but you can also draft your own, so long as it includes the information required by your state. Of course an attorney can also help to prepare a bill of sale but as a general rule a bill of sale must include a description of the boat and hull number, purchase date, price, and the signature of both buyer and seller. It should also include contact information for both, seller and buyer. If you’re uncomfortable writing your own bill of sale or managing this aspect of the sales process, you can always consider bringing in a yacht broker to help facilitate the process of selling your boat for you. Yacht brokers often get around 10% of the sales price, which may seem high at first, but when you consider all they do and the time they save you, plus the fact they may be able to get a higher price for the boat, it is often worth it (especially in the case of larger vessels).
Above: A man and wife signing a boat warranty agreement. Warranties are a key document in the boat selling process. Photo: Pond5.
A warranty on a boat sale is a proof that there are no outstanding claims against the boat. New boats are sold with a manufacturer’s guarantee however selling a used boat often happens on ‘as is’ basis meaning that the buyer agrees to finalize the deal based on the condition of the boat on the day of the purchase. Some buyers may find this lack of security daunting so you may want to consider a warranty. If you decide to offer a warranty to your potential buyers then you will need to consider the terms you are willing to provide. Do you accept a return? If so, how long for? On what terms?
Boat Title Or Proof Of Ownership
A boat’s title is perhaps the most important document about the boat, as it provides proof of ownership and ensures the vessel is legal and has not been stolen. The majority of U.S. states require a title for a vessel, although some may accept a different proof of ownership document. Selling a boat to a buyer in a different state may call for more desk work. It is actually legal in some states for a boat to not have a title but if your state allows it, it is a good idea to title your boat anyways. Why? Because a title proves that the boat does in fact belong to you and many buyers will inquire about it, and it will make it easier for buyers to sell when it comes time for them to part ways with the vessel eventually. It may often be more difficult for a new owner to apply for a new title without a previous title.
Title For The Trailer
If you’re buying a boat with a trailer, you’ll need to make sure you also get a title and all necessary proof of ownership documents for the trailer as well. In most states, you’ll need to show that the trailer has been certified to be street legal for use on public roads, so that you can register it and get trailer license plates.
Keeping detailed records of your annual maintenance is always a good idea when you own any boat. That includes any repainting, general maintenance or cleaning you may have done over the years. All maintenance records should be handed over to the new owner at the time of the sale. The bigger the boat, the more maintenance it requires, generally. So if you’re selling a boat with a cabin interior such as a cabin cruiser or a larger motor yacht that has numerous appliances and onboard electronic equipment, this can be quite an important aspect of the sale.
Above: A female yacht broker goes over a large yacht’s warranty and vessel history with a man at the docks. Photo: Pond5.
Buyers will want to know how recent all of the peripheral equipment is, when things like bilge pumps, engines and filters were last changed or serviced and when certain onboard devices were last updated. This can include things such as GPS maps, satellite gear, operating systems, etc. Note: when selling a boat over 30-35 feet, it is usually wise to work with a yacht broker to help with all of the necessary documentation in regards to boats of that size and complexity.
Proof Of Loan Repayment (if appropriate)
Selling a boat with a loan on it is possible as long as the buyer is ok with it, and the lien holder (or loan company) agrees to the sale. You will need to present the buyer with a clear plan and make sure any liens are released before they take ownership of the vessel. You may want to repay your loan with the money from the sale, in which case, you may consider providing additional statements from the institution you have used to finance your boat. If the buyer is still uneasy, consider accompanying them to your loan provider and ask for a delegated employee to explain the process.
Proof of Seaworthiness
Check if your boat needs to have a current Certificate of Seaworthiness on file. Depending on the size of the boat, your vessel may be required to have this certification before it can be sold. However, this is usually for very large ships such as ocean freight vessels and oceangoing ships. If you have chartered your boat in the past, or your buyer plans to use the vessel for charters, this can also be relevant since seaworthiness in chartering is regulated for safety reasons. In the vast majority of cases you don’t need to worry about this certificate as the seller, and it would be incumbent on the buyer to attain. On most small recreational boats and mid-sized family boats, the HIN (or hull identification plate) contains the federally required information from the manufacturer that helps the government regulate vessel safety requirements, identify any defects and track any recalls.
When finalizing the transaction, the seller should provide the buyer with a receipt that includes a unique invoice number and the specific boat model, VIN and vessel information. This document can be used as proof the seller has been paid for the boat, and can make tax documentation easier. Not being able to provide the necessary receipt documents may delay the sale on the day of purchase. In the case of an older boat, possessing the right documentation is important.
After The Sale
Remember to cancel your insurance. Some companies may be able to cancel your contract on the day of the sale. When you’ve finalized the transaction and your boat is off the market make sure to remove all the ads.
The bottom line is, being diligent about your documents is the best way to keep this process as fuss free as possible. Paperwork is just a formality and having everything ready to go will help to make the sale quick and easy!
Editor’s Note: An earlier version of this article was in February 2021 and it was last updated in December 2021.
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