Buying a Yacht at FLIBS? Look Beyond the Asking Price.
A two-part conversation on what a yacht broker and a lawyer each see before a buyer signs.
At FLIBS, a $5 million yacht can go under contract in an afternoon. Even experienced buyers are often surprised to learn:
The usual 10 percent deposit, $500,000 on that yacht, does not always come back “subject to survey.”
A clean title report can miss unpaid yard bills and crew wages, and some of those claims can follow the yacht to its new owner.
The weeks you want the yacht are often the weeks charter guests want it too.
“Charter it and write it off” leaves out most of the math.
Jorge Camaraza is President of Beyond Yacht Group and a Certified Professional Yacht Broker who has represented Sanlorenzo and Azimut. Daniel Novela is the founder of Novela Law, a Miami transactional firm that advises buyers on yacht purchases, registration and ownership. Ahead of the Fort Lauderdale International Boat Show, Daniel asked Jorge how a buyer finds the right deal. Then Jorge turned the questions around and asked Daniel how a buyer protects the purchase.
Part One: Finding the Right Deal
Daniel Novela asks Jorge Camaraza
Everyone wants a boat-show deal. How do you know whether you are actually getting one?
Resale starts on day one. Compare the asking price with the yacht’s condition, equipment, maintenance history and what similar yachts are selling for, because the next buyer will. A lower price can look very different once you account for overdue work. I would rather a buyer understand the next two years of ownership than focus on the discount at closing.
What can buyers overlook when they fall in love with a yacht at the show?
Whether it fits the way they will actually use it. Where will you keep it, who will run it, and are you cruising locally or spending weeks in the Bahamas? Those answers should shape the shortlist before the finishes do.
The survey comes back with problems. Is that a reason to walk away or an opportunity to negotiate?
First, understand what the findings mean. Routine maintenance, a major system nearing replacement and a structural concern are very different things. Get the surveyor’s assessment and realistic repair estimates, then decide on a price adjustment, repairs or moving on, within the rights and deadlines in your agreement. Make that decision with numbers rather than emotion.
What should a buyer price out before making an offer?
Dockage, insurance, maintenance and crew, plus any major service coming due. Fuel is easy to picture because you see yourself using the yacht. Paying to keep it ready when you are not aboard is the part buyers need to understand just as clearly.
If a buyer hopes charter income will help cover the costs, what would you tell them?
The weeks you want the yacht are often the weeks charter guests want it too. Have that conversation before choosing the yacht, with a realistic assessment of demand, rates and expenses, including management, crew, maintenance and downtime. I want the buyer comfortable with a conservative budget, including periods with no charter income.
Part Two: Protecting the Purchase
Jorge Camaraza asks Daniel Novela
A buyer finds the yacht and wants to make an offer that afternoon. What do you want to see before they sign?
The proposed agreement and a clear picture of the purchase: who is buying, where the yacht will be kept, and whether it will be used privately or chartered. Then I look at the immediate commitments: the deposit, inspection rights, acceptance deadlines and closing requirements. We can work quickly, but those decisions should be understood before the buyer is bound.
Buyers often assume they can get their deposit back if they do not like the survey. Can they?
Not automatically. It depends on the agreement and the circumstances. “Subject to survey” is not enough information by itself. We need to know what permits rejection, when and how notice must be given, and what expenses may be deducted. Asking the seller to fix something is not necessarily the same as preserving your right to reject. I want the buyer to understand the exit before wiring the deposit.
If the survey looks good and the title report is clean, what else are you checking?
The yacht can come with someone else’s unpaid bills. The survey addresses condition and the title review addresses recorded interests, but repair yards, fuel suppliers and crew may have claims that do not appear in the record and can follow the yacht to its new owner. So we also investigate outstanding obligations, obtain seller assurances and releases, and confirm the seller’s authority to sell and the documents due at closing.
Buyers hear that a company or a foreign flag can save taxes. How do you approach that?
I start with the owner and the intended use. A company, a flag and a tax plan are separate decisions that need to work together, and the yacht should fit the same ownership and estate plan as the buyer’s homes and art. Forming a company does not automatically make a yacht tax-free, and foreign registration does not by itself eliminate Florida tax obligations. For an international purchase, we also establish customs status and responsibility for any duties before closing.
And what about the pitch that you can charter the yacht and write it off?
That phrase leaves out most of the math. A genuine charter business may qualify for depreciation deductions, including bonus depreciation when the requirements are met. Whether the owner can use those deductions against other income is a separate question, and personal use, participation and the way the activity operates all matter. A later sale, or a change in how the yacht is used, can bring part of that deduction back as taxable income. I coordinate the structure with the buyer’s CPA before the purchase, so the buyer knows what the projected benefit actually assumes.
What is the one thing you would tell someone heading to FLIBS ready to buy?
Put your team together before you find the yacht you cannot resist. A broker representing you evaluates the yacht and negotiates the deal, your surveyor investigates its condition, and your lawyer and CPA handle the purchase terms, ownership and tax planning. With those people ready, you can act decisively when the right opportunity comes along.
Considering a yacht purchase at FLIBS? Contact Daniel Novela before you sign the purchase agreement.