This is the last part of a three-article series. Read the first two parts here:
What happens to storm damaged boats after an insurance company declares the boat a total loss? They go to a liquidator, whose job it is to get whatever remaining value is left, at auction. You can buy these boats and sometimes, if you are capable and patient, get a fabulous deal.
Much like buying a house that is a fixer-upper, buying a boat with known damage and repairing it can result in owning a good boat, at below-market costs—but you’ll need to be prepared for the work, frustrations, and risks. There are three national liquidators who routinely work with BoatUS’s Catastrophe team after big storms like Sandy or Katrina. They are:
Liquidators often provide multiple services in finding storm damaged boats new owners. First, they may act as transporters to get the boat to a storage facility. Then, they may act like brokers, posting ads and facilitating sales. They will also provide a clear title to the boat’s new owner. Remember, they work on behalf of the insurance companies to recoup losses, but they work to move inventory quickly and legally.
You may see some of these same brokers/liquidators representing boats on this site, too, or you may click on their Internet sites shown above for all their listings. If you find a boat you are interested in purchasing from one of these liquidators, you’ll want to do the following things:
- Find out the value of the boat in good condition.
- Arrange to view the boat, which typically requires signing a waiver.
- Hire a qualified marine surveyor to review the boat and give you insight on repair estimates.
- If you choose to proceed with the purchase, you’ll have to put in a bid at auction.
Many liquidators run simple phone auctions that might take a week or so to resolve, but they are incentivized to move forward quickly as they make a percentage of the sale price only when the boat sells. They also charge some nominal fees for processing the paperwork and transferring title. They may also make money if you hire them to transport the vessel to your designated locale after the sale.
Buying a boat with known damage is usually straightforward, but the buyer needs to be prepared for unseen or unknown damage which may reveal itself during the course of repair. I suggest finding a reputable boatyard to effect the repairs. Documentation that the repair was done professionally should settle any prospective buyer’s concerns down the road when it is time to resell. I also suggest having a contingency budget for those unknowns as part of your overall approach. Buying a storm-damaged boat will take some effort, risk, and investment, but can result in owning a good boat.
To read part 1 and 2 of my storm-damaged boat series click below.