I am selling my boat to a buddy and he is going to make monthly payments to me. Should I have him sign anything up front, or just keep track of the payments and give him the title once it is paid in full? I have never sold a boat before so this is all new to me. Thanks for any help!

Definitely need him to sign an agreement stating that his is purchasing the boat from you.

It will save you some liability issues if something should ever happen.

Be careful and the more things you have in writing the better.

The business deals that end the worst are ones made with friends or family. Let us know how this one turns out.

At the very least you need a bill of sale and a written agreement that specifies what happens in the event of a default on payments because sooner or later your buddy is going to be "a little short this month"..

Good points from hoghunter. A bill of sale clears you from future liability and TPWD will require one for the transfer of title an DMV will need one if there is a trailer involved..

I have an agreement with my bank. They don't fix marine air conditioners and I don't give credit. We are both happy.

Thanks for the advice guys!

Don't do it. You will lose a friend if you do. Let him make payments to a savings account instead and pay you in cash. But even then you will likely lose a friend. I never do bidness with family or friends.

what if he stops paying,then what?

if you own the boat free an clear the worst that could happen is you could lose all of your money in the boat an have someone sue you if it is in an accident. if you have a lien against it with a financial institution if you read your loan docs its probly against the law rather way if the purchaser is not credit worthy probly not a good idea to do it,

There will also be a question with the insurance. Your insurance man would probably not like the boat you are insured for being run full time by someone else. Not to mention stored at a place other than what they figured on. You never want to give an insurance company an obvious reason to deny a potential claim. Just my 2 cents but have your buddy get his own loan and make a clean deal. No written agreement between buddies will trump your lender and insurance company having an issue with it.
Ken

+1 In this lawsuit happy environment we live in, you don't want the liability. Title in your name = you are liable for ANYTHING that happens with the boat. Your Buddy hurts someone using the boat, they come after you. A guest of your Buddy gets injured on the boat..... they come after you. Trailering and something happens that causes an accident (tire blow out, boat falls off trailer, trailer comes loose from tow vehicle, etc, etc, etc. ) they come after the legal owner..... which is you.

Even if he were to get insurance on the boat in his name, as soon as a lawyer finds out your name is on the title, they will come after you as well. That's why I always go to the TPWD and have the title transferred the day of the sale. And I also fill out one of those forms saying I sold the boat and file with them. And last but not least (selling cars as well) I write out a bill of sale FOR ME, that says the buyer (fill out name, address, DL#) purchases said vehicle (make, model, yr, VIN, SN#, etc) on date (and time) from me (fill out name, address, etc) and is legally responsible for it from here forward. include the price, Then make them sign it. I have the originals of these in my files. That way I am covered if they decide not to transfer title and the law comes after me if the vehicle was used in a crime, involved in an accident, etc.

It has come in handy twice. I had one car I sold wind up years later abandoned in dallas. City of Dallas came after me for storage fees and towing. I provided a copy of the sale to them and they backed off. The person that bought it never changed the title, and drove it for 3 yrs without ever registering it. Then abandoned it.

The second time was when a buyer came back 18months later and wanted me to sign a document stating that I had just sold him the truck so he didn't get hit with penalties and a ticket for expired license. I told him no way, and I have the document with his signature on it from when he bought it.

Refer him to Mike at Classic Used Boats (he's on the forum). He can set up the deal. That way you get paid, your buddy can still make payments and he owns the boat (with a lien of course). He will be required to get insurance though.

I've worked with Mike and it was very smooth.

I actually bought my boat this way. Was prepared to pay cash total, but my buddy insisted on me just paying half up front and the rest in installments. Didn't understand his reasoning but I didn't argue with him. I took his checking account and routing number and set up the installments out of each paycheck until I paid it off.

I know this wasn't normal, but we trusted one another and I would never make that same arrangement with anyone else.

Not worth the risk of losing a friendship in my opinion. If it were a buddy of mine I'd have him go to a credit union and just buy it out right. You'll get your $$ and he will pay the tax, title fees and not have to worry bout it later.