How to buy a boat in the USA

1. Decide what you’re actually buying

Before you write an offer, get clear on two questions that determine the entire downstream process:

Is this boat federally documented or state-titled?Vessels of 5 net tons or more (loosely, most fiberglass boats 27′ and longer, or smaller if built of steel) are eligible to be documented with the U.S. Coast Guard’s National Vessel Documentation Center (NVDC). Smaller boats are titled by the state. A boat can only have one legal title framework — never both. Documented vessels travel with a federal Certificate of Documentation (COD); state-titled vessels have a certificate of title and a registration number painted on the hull.

Are you taking delivery in a state where you’ll owe sales/use tax?Some states (like Oregon) have no sales or use tax at all, while others (like Florida) place a strict cap on the maximum tax owed. Conversely, states like California, Washington, and New York charge full local rates. Where the boat physically changes hands and where you principally keep it afterward both matter. Don’t guess — have your broker verify the specific tax exposure in writing with the state’s revenue department before closing.

2. Make a written offer

Verbal offers do not bind anyone. The proper legal instrument is a Purchase & Sale Agreement (PSA), sometimes called an Offer to Purchase. While a broker’s standard form is usually fine, you must read it carefully. The clauses that actually matter include:

• Subject to Survey and Sea Trial: This must include a defined acceptance period (typically 10–14 days) starting after the last contingency event completes. This is your contractual escape hatch.
• Subject to Financing: If applicable, give yourself 21–30 days. Marine financing takes considerably longer than auto financing. Financing requirements make your offer weaker, consider providing supporting documentation that your financing won’t be a problem.
• Subject to Clear Title: The seller warrants the boat is free of all liens at closing. You will verify this independently.
• Deposit and Escrow: Typically 10% of the purchase price, held by the broker in a dedicated, segregated escrow trust account — never the broker’s business operating account. If the deal falls apart inside the contingency period, this deposit is fully refundable to you.
• Inventory List: Anchor, dinghy, outboard, electronics, sails, tools, and spares — anything you assume stays with the boat must be explicitly listed on a written inventory attached to the Purchase Agreement. Arguments over included equipment at closing are common and tedious.

3. Survey and sea trial

Once the offer is accepted and the deposit is secured in escrow, you schedule the survey. You pay for the survey, and you choose the surveyor. Be cautious before accepting a surveyor recommended by the listing broker due to conflicts of interest. Retain a SAMS Accredited Marine Surveyor (AMS) or NAMS Certified Marine Surveyor (CMS) with specific experience in the exact hull type and material you are buying.

The survey day typically runs in this chronological order:

1. Haul-Out & Bottom Inspection: Buyer pays yard fee ($300–$800). The boat is lifted to inspect the underwater gear, hull moisture readings, gelcoat condition, keel joints, rudder bearings, through-hulls, props, and shafts.
2. Splash & Sea Trial: 1–2 hours. The vessel is returned to the water to run the machinery under load. The engine must be run through its full RPM range to check against factory-rated Wide Open Throttle (WOT). A diesel engine that fails to reach its rated WOT indicates a heavily fouled bottom, an overloaded propeller, or lost engine compression.
3. In-Water Systems Inspection: 2–4 hours. A deep-dive review of the internal structures: rigging, DC/AC electrical grids, plumbing, marine electronics, and mandatory safety equipment.
4. Dedicated Surveys: Optional. For large or complex diesel engines, a separate engine mechanics specialist should be brought in. Drawing oil samples ($30–$50 per engine/transmission) can catch internal metal wear or coolant intrusion. For sailboats, a rigging inspector will inspect the condition of the standing and running rigging, which can be costly to replace.

4. Acceptance, renegotiation, or walk

Inside your contractual acceptance period, you have three distinct choices:

1. Accept the vessel as-is at the originally agreed price.
2. Renegotiate based on the survey findings. You can request a structural price reduction or an escrow holdback for the seller to fix specific safety defects. Choose one path per item: either it gets fixed before closing by an authorized yard, or you take a cash credit. Do not rely on verbal promises.
3. Reject the vessel and walk. Your deposit must be returned in full. You will be out the survey fees and haul-out costs, but that is a cheap price for proper due diligence.

5. Lien check and title work

Before you wire final funds, verify the boat is free of debt.

• For Documented Vessels: Order an Abstract of Title from the USCG National Vessel Documentation Center (NVDC). The abstract lists the complete chain of ownership, any recorded preferred ship mortgages, and active notices of claim of lien.
• For State-Titled Boats: Verify the title history with the state’s DMV or Department of Natural Resources, and run a UCC-1 search through the Secretary of State’s office where the seller resides and where the boat is moored. Maritime non-mortgage liens (like unpaid yard bills or mechanic’s fees) can hide there.

6. Closing, escrow, and the bill of sale

At closing, a licensed broker or an independent marine documentation agent acts as the disinterested third party to manage the exchange. The transaction flows as follows:

1. You wire the balance of funds to the designated escrow trust account.
2. The seller executes the Bill of Sale. For documented vessels, this must be on USCG Form CG-1340. For state-titled vessels, it uses the specific state’s bill-of-sale form alongside a signed-over title.
3. The seller surrenders the physical, original Certificate of Documentation or state title, along with keys, manuals, and inventory items.
4. The broker disburses funds directly to any recorded lienholders to satisfy existing mortgages, pays out the seller’s net proceeds, and releases the title paperwork to you.
5. You take legal and physical possession.

7. Documentation, registration, and tax

You have three separate paperwork tracks to execute immediately after closing:

• Ownership Transfer: For a documented vessel, file an Application for Documentation (Form CG-1258) with the NVDC, enclosing the signed Form CG-1340 and the prior owner’s COD. For state-titled boats, submit the signed-over title to the state titling agency. Hiring a professional marine documentation service ($300–$600) is highly recommended for first-time buyers.
• State Registration: Even federally documented vessels must be registered (not titled) by the state of principal use. You will pay a nominal registration fee and display a state-issued validation decal on the hull. Documented vessels do not carry state “CF” or “NY” style numbers painted on the bow; they display only the decal externally, while the official documentation number is permanently marked inside the hull structure.
• Sales/Use Tax: This is due to the state where you take physical delivery or where the boat is principally moored. Pay this promptly. State revenue agencies aggressively audit marina registration logs to catch unpaid use tax.

8. Insurance, moorage, and after-sale

You cannot close the transaction without insurance in place; marine lenders and commercial marinas require it. Secure a formal insurance binder prior to closing so coverage activates the exact minute title transfers. Underwriters will require a copy of your recent survey report to evaluate their risk guidelines.

Additionally, secure your moorage well before making an offer. Slip waitlists in popular coastal ports can run anywhere from one to five years. If you do not have an assigned slip waiting, budget for transient daily moorage rates ($1.50–$4.00 per foot, per night) while you source a permanent home.

Common pitfalls

• Letting the Seller’s Broker Pick the Surveyor: Even honest brokers have professional relationships that can subtly soften a survey report. Pay for your own independent surveyor, every time.
• Skipping the Engine Survey: A general hull surveyor will check if an engine starts, but they will not run compression tests or catch internal wear. Skipping a dedicated engine survey or oil analysis can cost you tens of thousands in premature machinery overhauls.
• Trusting Verbal “Included” Claims: If an item is not explicitly listed line-by-line on the inventory attachment to the signed PSA, assume the seller will remove it before closing.

The danger zone: private, broker-free sales

If you are buying a boat directly from a private seller without a licensed broker, the safety nets disappear. Watch out for these specific traps:

• The “No-Escrow” Trap: In a private sale, the seller will often ask you to wire the 10% deposit directly to their personal bank account. If you reject the boat after the survey, you have zero leverage to get that money back. Solution: hire an independent marine documentation agency or maritime attorney to act as an escrow agent to hold the funds securely.
• Unrecorded “Hidden” Liens: While preferred ship mortgages are recorded with the Coast Guard, maritime mechanics’ liens or unpaid marina slips do not require a federal filing to be valid. They attach to the boat itself, not the owner. If you buy a private boat with a hidden yard debt, you inherit that debt. Solution: require the private seller to sign a notarized affidavit stating the vessel is free of all unrecorded debts, and call the local yards where the boat was stored to verify their bills are paid in full.
• The Out-of-State “Ghost” Seller: Private transactions across state lines frequently fall prey to title fraud, where the person selling the boat is not the actual titleholder listed on the state registration. Solution: demand a photo ID matching the state title or Coast Guard COD exactly, and physically verify the Hull Identification Number (HIN) stamped into the starboard transom matches the paperwork before transferring any funds.