Purchasing a houseboat is quite different than purchasing a home on land.
We live aboard a dual stern paddlewheel vessel on Lake Union – The KevLin
; so we have been through the process. Additionally, we have helped a number of people dive in to this lifestyle, so we are quite familiar with the steps involved in a houseboat purchase. We, like most people who purchase a houseboat for the first time, were very surprised at what was involved.
The KevLin is a 1200 square foot, 2 bedroom, 2 bath home with all the necessary amenities for a busy professional PLUS
no lawn to mow! The benefits of living on the lake are mostly obvious (million dollar views!), but additionally there are lifestyle improvements. Now, our time off work consists of hopping in the runabout and heading to a restaurant located on the lake for dinner, or BBQ’ing and hanging out with friends on the dock. Maybe a workout by walking, kayaking, or biking around the Burke Gillman trail, or simply enjoying a glass of wine on the deck while taking in the ever changing sites and sounds of the lake.
Okay, well there are some drawbacks too (For us, the benefits FAR outweigh the drawbacks);
- Space is usually at a premium… If you need lots of square feet, then a houseboat is probably not for you. On a boat, it is all about the square inches! You will probably need a storage space in addition to your houseboat.
- Boats move. Houses do not. You will feel motion on the lake. The amount of motion you will feel is dependent on the style, and size of houseboat, as well as your dock location.
- Maintenance – Boats require maintenance – Typically more than a house and may include more mechanical type maintenance.
- You will probably not be able to run 220 volt appliances, so some concessions are required – i.e. 110 volt washer/dryer
- Some houseboats will not have washer/dryers – shop for what you want.
- You may be using propane & will make occasional trips to fill the tanks.
Here are some questions to ask if you are considering a buying a Houseboat, or other liveaboard:
What are the differences between Floating Homes, Houseboats, House Barge, or Vessel? Click Here
Marinas have a limited number of live aboard rental spaces available and there can be very long waiting lists to get a space. Exercise caution when purchasing a liveaboard. You must have permission from the marina to liveaboard
How Do You Buy a Houseboat?
Here is our “Buying a Houseboat Guide”
Buying a Houseboat (Vessel)
Living on the lake is amazing and something that many only dream of and if you are considering here are the steps to this process:
Financing on houseboats can be a bit tricky, but here are some options…
Write the offer
- Seller Financing – Many houseboat sellers will carry a contract on their houseboat
- Asset Financing – Lenders may finance using your own assets as collateral
- 2nd Mortgage or refinance of existing property
- Cash – This always works!
Things you need know about buying a Houseboat Vessel:
- Offer should be written on Marine P & S forms for lender financing and these are not available on the NWMLS. Your agent can either use Special Agents Realty marine houseboat specific forms, reviewed by our Office Attorney – Michael Spence, or have your own attorney write up an offer. Contact Linda@SpecialAgents.net for offer forms.
- Offer should be contingent on Survey (inspection & valuation). Allow lots of time for this to occur (15 to 20 days). The lender and insurance will require a full Survey be completed. The survey consists of a haul-out inspection of the hull and inspection of the interior. It is critical to use an experienced houseboat vessel Surveyor. Check with Linda@SpecialAgents.net for referrals.
- Typically, Buyer pays for the Survey and Lift. A lift is the lift out of the water to inspect the hull.
- It is important to understand the difference in a lift and haul-out and block. Blocking costs more and the only reason to block a houseboat is if you are planning to work on it while dry-docked. Once the houseboat is put on blocks the cost to repair and blocking should be at the expense of the seller.
- Typically, Seller is responsible for getting the houseboat to a shipyard for the hull inspection.
- There are two types of shipyards, closed and open. A closed shipyard does not allow outside contractors to do work orders if called out in the inspection. The on site shipyard workers will do the work, so the selection of the shipyard will be up to the seller, because they will be responsible for the work. An open shipyard allows seller to bring in contractors or do the work on site.
- Offer should be contingent on insurance. Insurance is obtained through a Marine insurance company, unless it is clearly a VESSEL/BOAT. If it is clearly a boat such as the ARK or the Contemporary Houseboat I would recommend State Farm Insurance – Contact Tammy.Eaton.email@example.com (360) 435-2419. You must be using the vessel as a primary residence to be approved by State Farm Insurance.
- Other houseboats insurance companies:
- Anchor Marine Underwriters, Inc, Sam Landback, firstname.lastname@example.org (206) 273-6996
- Allison Agencies, Charlie Woods, email@example.com, (206) 634-0600
- Offer should be contingent on continuation of slip rental/lease. Once you have Mutual Acceptance on the offer get Marina approval before you spend money on a Survey.
- Typically, Buyers pay sales tax for houseboat vessels at 9.5%. This can be rolled into the loan and check with you CPA; it may also be a large tax deduction.
- Houseboats pay an annual June 1st re-licensing fee, same as any other vessel/boat. This cost varies depending on the size and value of the houseboat. This may also be a tax deduction, see your CPA.
- Houseboats have Black water pumped out. How often depends on usage and costs vary from service to service. There are 3 pump-out services on the lake and all charge approximately $25.00 per pump. Pump-me-out.com offers a discount on regular maintenance.
- Houseboat owners do not pay property tax, however they pay dock rental fees. In turn, the marinas pay property taxes. Dock rental fees vary by marina from $8.50 per foot to $14.00 per foot.
- Houseboat owners usually pay an additional Liveaboard fee if registered as a full time liveaboard, ranging from $55.00 to $150.00 per month.
- Marina’s may turn off dock water if freezing weather. You should have an appropriately sized fresh water tank aboard your vessel.
- Request a specification sheet, so you know what is in the boat.
This is the Life!!!
If you have additional questions please email or call:
Linda M. Bagley: (206) 419-0065 or Kevin Bagley: (206) 915-3766
2401 N. Northlake Way #2, Seattle WA 98103
Office: (206) 419-0065 Fax: (425) 650-6907
Houseboat Purchasing FAQ (Frequently Asked Questions)
What is the average interest rate for a houseboat loan?
Interest rates are typically higher than a mortgage loan and vary depending on the lender, down payment and credit scores. So it is highly recommended that you get quotes from several lenders. Also, rates vary by lender, and are affected by the economy.
How much down payment is required?
Typically 25% to 35%, depending on lender, credit, and other factors.
What will the lender require?
- Good credit.
- A Marine Survey for barges and vessels.
- Appraisals and dive inspections for floating homes.
- Owner Occupied (may be 2nd home or primary residence)
- Standard Income, Asset, and Employment documentation
- Proof of insurance
- Each lender may have different or additional requirements
What is the standard loan term?
Currently the options are either 20 year amortization or 30 year amortization with a 10 year cash out . Floating homes vary similarly to residential mortgages.
What is the inspection / appraisal process?
Vessels and barges require a Marine Survey (includes the inspection and the appraisal to determine value). The Survey will be used by the lender and the insurance company. Buyer pays for the survey, price depends on the size of houseboat and must be hauled out to survey the hull. The haulout is an expense to the buyer and can cost aproximately $14.00 per foot and up depending on the size and service used. A lender may require a sea trial. Floating homes have appraisals and diver inspections. Most lenders have their own approved surveyors and divers.
Who pays the sales tax at close and how much is it?
Vessels have sales tax and buyer pays the sales tax , which in Seattle is 9.5%. Housebarges may be exempt from sales tax – please check with your title company regarding this. The sales tax may or may not be rolled into the loan, so check with your lender. If Sales Tax cannot be rolled in to the loan, you must plan for this to be in addition to the downpayment and the survey costs.
Is there Excise Tax? (paid by seller)
Floating homes (deeded property) – yes
Vessels – no, only the deeded dock space, such as condo type dock (Gasworks Marina for example). Housebarges – check with title/escrow company.
Are there property taxes?
Floating homes (deeded property) – yes
Vessels do not have property taxes, only the deeded dock spaces. Check with the title/escrow company regarding Housebarges.
Can an owner deduct interest paid when filing taxes?
Yes, you can typically deduct the interest you pay on the loan as these may be considered primary or secondary residences. Check with your CPA.
Who insures houseboats?
Vessel insurance companies will typically insure houseboats and the cost varies, so you need to check around. I will be compiling a list of contacts for insurance to be available soon.
How much is the insurance for a house boat?
It will depend on the size of the houseboat, however the cost can be much higher than you expect, so be prepared. Do not be surprised to see insurance rates of $2500 or more per year on larger houseboats, usually payable in quarterly payments. It really pays to shop around for the insurance before you close.
What will the insurance company require?
- Insurance requires a copy of the Survey , or diver inspection.
- Most insurance companies require boating experience if you are insuring a Vessel
Who closes the sale transactions:
- Floating homes – Residential title/escrow
- Vessel or barge – Marine Title Companies.
What is the difference in the Marina versus owned dock, and how does this impact the loan?
- Marina’s are typically month to month rental slips and must be approved for each owner. You must be approved by the marina before you buy, because there are no gurantees that you will be approved for the slip once you close on the deal.
- Rental cost determined by the length of the boat.
- Liveaboards usually have an additional fee
- Deeded docks are similar to condo’s, with member associations and HOD’s.
- HOD’s vary depending on the locations.
Other things you need to know:
- The lake will varies in elevation about 2 feet, so you will need to adjust mooring lines on fixed docks, and you also may need a removable step stool to board.
- Water is typically turned off in the marina’s when it is freezing to prevent exposed pipes from freezing and boats from sinking. It is helpful to have a water storage tank.
- Some marina’s have restrooms and showers.
- Marina’s are limited to a certain percentage of liveaboards, therefore there can be a long waiting list to get into a liveaboard space if you decide to move to a new location, or if you buy a houseboat not already located in a slip.
- In the marinas, grey water (showers, dishwashers, sinks, clothes washers) goes into the lake. You must take care of the lake and use eco friendly products to protect the lake enviornment.
- Pumpout services for sewage (black water) are available on the lake and will pick up on a regular schedule, or on call. They get busy in the summer, so pays to have a regular servicing scheduled. Sewage should NEVER be dumped into the lake and is a seriously fineable offence.
- Electrical is from a plug in on the dock, typically limited to 110 volts.
- Water is from a water hose connection.
What contingencies need to be in the offer should you choose to purchase a vessel, barge or floating home?
The following are minimal contingencies that should be in any offer you make on a Floating Home, Houseboat, or other liveaboard:
It is strongly recommended that you use an experienced vessel, barge or floating home agent when buying or selling. If you have questions, or just want to come visit to see what liveaboard living is like, call Linda (206) 419-0065 for a personal tour. If the weather is nice, we will take the runabout out on the lake and tour the lake living, sites and marina locations. Allow a minimum of two hours for the tour.
- Ability to obtain Financing
- Ability to obtain Insurance
- Satisfactory Inspection (appraisal or survey)
- Ability to live aboard