What Is Ship Sale & Purchase Brokerage?
Ship sale and purchase (S&P) brokerage is a specialised intermediary service that facilitates the transfer of second-hand commercial vessels between buyers and sellers. S&P brokers combine market intelligence, negotiating skill and industry networks to manage complex maritime transactions.
The ship sale and purchase market operates on an over-the-counter basis. There is no central exchange and no publicly available order book. Deals are concluded through shipbrokers who represent buyers and sellers, negotiate terms and coordinate the intricate closing process.
S&P brokerage is one of the most specialised fields in the shipping industry. A broker may represent any type of vessel — from a dry bulk carrier under way to a luxury yacht, from an AHTS support vessel to an oil tanker. That said, the departments within the larger broking houses have developed deep expertise by vessel type.
Clarksons, founded in 1852, is the world’s leading integrated shipping services provider, with full-year 2024 revenue of GBP 661.4 million, its Broking division being the primary source of income. BRS, SSY (Simpson Spence Young), Arrow and MB Shipbrokers are among the other major firms.
How Does the Ship Purchase Process Work?
Buying a second-hand vessel is a multi-stage journey spanning several fields of expertise. Seen from the buyer’s side, the process comprises the following stages:
1. Market Research and Vessel Identification
The buyer’s broker screens the available second-hand market against the buyer’s requirements (vessel type, age range, DWT/GT capacity, flag preferences and budget). A core strength of the S&P broker is maintaining an up-to-date inventory of every vessel offered for sale. A digital system is the most effective solution for this task; it can rapidly filter and list vessels meeting specific criteria (for example, vessels in the 35,000–55,000 DWAT range, 8–10 years old, with two hatches and cranes per hold).
2. Preliminary Offer and Negotiation (Letter of Intent / Firm Offer)
Once a suitable vessel is identified, the buyer submits a preliminary offer setting out the price and principal terms. The seller responds with a counter-offer, and the negotiation is conducted between the parties through the broker. When the broad outlines of the deal are settled, the “Broker’s Recap” is drawn up.
3. Signing the MOA
The terms agreed by the parties are converted into a formal sale contract — the MOA. The MOA sets out the purchase price, the deposit, the delivery terms, inspection rights, the delivery condition and each party’s remedies in the event of default. Within three banking days of the MOA being signed, the buyer lodges a deposit — typically ten per cent of the purchase price — into a third-party escrow account.
4. Pre-Purchase Survey
The buyer appoints an independent surveyor to inspect the physical condition of the vessel. This stage takes place within an “inspection and acceptance” window specified in the MOA.
5. Document Review (Due Diligence)
Alongside the technical survey, the class records, certificates, legal status and any mortgages or liens are also examined.
6. Closing and Delivery
Once all conditions have been met, the documents are exchanged, the balance is paid and the vessel is delivered.
How Does the Ship Sale Process Work?
For the selling owner the process is different but demands equally rigorous planning:
1. Market Timing and Pricing
Shipping markets are cyclical by nature. In the dry bulk sector, indices such as the BDI (Baltic Dry Index), and in the tanker sector, the BDTI/BCTI, directly influence both operating values and second-hand vessel prices. The seller needs expert broker advice to set the right price and time the market correctly.
2. Preparing the Sale Documentation
The sale package prepared for the vessel should include:
- Vessel specification document (particulars, technical specifications, equipment list)
- Latest dry-dock report and date
- Class certificates and survey history
- P&I, H&M and other insurance policy details
- Port state control (PSC) records for the past two years
- Current charter contract (if any)
- IHM document (where mandatory)
3. Marketing and Buyer Search
The seller’s broker circulates detailed specification sheets setting out the vessel’s particulars to the brokers of prospective buyers. In transactions requiring confidentiality, an NDA is obtained from the buyer beforehand.
4. Negotiation, MOA and Closing
The remainder of the process runs in step with the buyer’s side.
What Is an MOA?
The MOA (Memorandum of Agreement) is the binding contract for a ship sale and purchase transaction. In Turkish it is rendered as “Satım Muhtırası” or “Satım Protokolü”.
Although various standard MOA forms are in use, the most common are the Norwegian Saleform 2012 and Nipponsale 1999. Other forms include the Singapore Ship Sale Form 2011 and BIMCO SHIPSALE 22. It is generally the seller who decides which MOA form is used, so it is important for the buyer to understand the nuances between the different forms or to obtain legal advice.
SALEFORM 2025: The Industry’s New Standard
One of the most significant contractual updates in maritime history came into force at the beginning of 2026. The Norwegian Shipbrokers’ Association and BIMCO published SALEFORM 2025, the first major update to the industry’s leading ship sale and purchase contract since 2012. The new form reflects more than a decade of developments in compliance requirements, transaction practice and environmental regulation.
The key changes introduced by SALEFORM 2025:
1. Escrow Structure: The most impactful procedural change is the replacement of the deposit-holder model with a formal escrow agent structure, governed by a separate escrow agreement that must be negotiated, signed and exchanged concurrently with the MOA.
2. Sanctions Clause: SALEFORM 2025 introduces a comprehensive sanctions clause together with a standalone anti-corruption clause, both of which reflect the environment in which S&P transactions are conducted. In particular, the buyer-side sanctions warranties, which survive delivery, are designed to prevent the vessel from being transferred to dark-fleet or sanctioned actors.
3. Environmental and Emissions Compliance: SALEFORM 2025 incorporates updated compliance and regulatory provisions such as anti-corruption, sanctions, emissions trading schemes and FuelEU Maritime.
4. KYC and AML Requirements: SALEFORM 2025 includes multiple payment execution options, clearer escrow provisions and safeguards against delays in “know your customer” (KYC) and anti-money-laundering (AML) processes.
KYC requirements should be initiated early, since the form allows a party that has provided the required KYC documents to withdraw from the contract if the escrow agent is unable to be ready within the agreed period. This means KYC can no longer be treated as an administrative task addressed in the late stages.
What Is Due Diligence?
Due diligence is the process by which, ahead of a purchase, the buyer comprehensively investigates the vessel’s physical condition, legal status, technical compliance and commercial history.
Comprehensive pre-purchase due diligence examines the vessel’s physical condition, document status, legal position and regulatory compliance. Each area can reveal issues affecting both the export process and the vessel’s future operation.
The ship due diligence process covers the following components:
Technical Due Diligence:
- Pre-purchase condition survey (physical condition survey)
- Review of class certificates and survey history
- Assessment of machinery and equipment condition
- Identification of potential repair and CAPEX requirements
Legal Due Diligence:
- Investigation of mortgages, liens and encumbrances
- Flag state registry and vessel registration
- Review of current charter, lease and loan agreements
- Environmental compliance (EU ETS, FuelEU, IHM) status
Commercial Due Diligence:
- Latest PSC inspection results and detention history
- Operational performance over the past two years
- Coverage under existing insurance policies
Current class records, survey reports and mandatory certificates should be examined meticulously; experts should analyse these documents to identify potential recommendations, overdue surveys, class conditions or any issues that could affect future operation, insurance or sale value.
What Is a Pre-Purchase Survey?
A pre-purchase survey is the technical inspection process by which a prospective buyer, through an independent surveyor, has the vessel’s current physical condition assessed. It is also referred to as a “condition survey” or “vessel condition survey”.
Surveys combine technical accuracy with practical insight into operational risk, maintenance quality and future regulatory exposure.
What Does the Surveyor Examine?
A ship survey carried out by an independent surveyor should cover hull condition and integrity, machinery condition and operation, electrical systems, safety equipment, navigation equipment and general maintenance condition.
Underwater Survey: Depending on the terms of the MOA, the buyer may request an underwater hull inspection — either by divers without dry-docking the vessel or in dry dock — including the propellers, rudder and the condition of the hull coating.
The Importance of the Survey:
The pre-purchase survey is not merely a technical certificate of approval; it is also a powerful negotiating tool. Deficiencies identified in the report:
- Provide concrete grounds for requests to reduce the price
- Give rise to the right to require the seller to carry out repairs before delivery
- Protect the buyer against unexpected post-delivery costs
- Provide an independent technical reference for the insurance and financing processes
Second-Hand Vessel Valuation Guide
Valuing a second-hand vessel is an analytical process in which several variables are considered together. The principal factors influencing valuation are as follows:
1. Market Value
The recently achieved sale prices of comparable vessels — similar in age, type and size — form the basic reference for market value. Involving a complex interplay of factors such as physical condition, market trends and regulatory compliance, this valuation process encompasses elements such as the vessel’s physical condition, market trends and regulatory compliance.
2. The Vessel’s Age and Class
Each vessel type has a different depreciation curve. Double-hull tankers, ice-class vessels and specially equipped vessels have different valuation dynamics from standard dry bulk carriers.
3. Physical Condition
Historical maintenance records are regarded as a critical indicator for gauging reliability and likely future maintenance costs. For sellers, comprehensive and well-kept records make an important selling point in support of the vessel’s valuation.
4. The Market Cycle
Shipping markets are highly cyclical. In periods of high freight rates, second-hand vessel prices soar, while in low seasons the same vessel may change hands at steep discounts. What is “cheap but risky” for the buyer is a “missed opportunity” for the seller.
5. Regulatory Compliance Status
For vessels within the scope of the EU ETS (Emissions Trading System), EUA (European Union Allowance) obligations, FuelEU Maritime compliance and IHM document status are now integral components of valuation. Vessels with a high cost of complying with these regulations lose value.
6. Existing Charter Status
A vessel offered for sale while committed to a long-term time charter can command a premium price, as it offers a secured income stream.
Valuation Tools and Reference Sources
- Clarksons Shipping Intelligence Network (SIN)
- VesselsValue online valuation platform
- The daily valuation data published by the Baltic Exchange
- Independent valuation surveys (Condition Adjusted Valuation)
How Do Broker Commissions Work?
In ship sale and purchase, the commission structure differs from that of the chartering (freight broking) market.
The standard commission rate on ship sales is one per cent of the sale price. This commission is paid by the seller to both the seller’s broker and the buyer’s broker — that is, one per cent to each separately.
Let us illustrate this structure with a concrete example:
Example: On the sale of a dry bulk carrier valued at USD 10 million:
- Seller’s broker commission: USD 100,000
- Buyer’s broker commission: USD 100,000
- Total commission burden: two per cent of the sale price → USD 200,000
- Payment: by the seller, at closing
This rate may appear rather high; however, it makes sense when one considers that it must cover months of broking work, telecommunications costs, lawyers’ fees, surveys, potential travel expenses and the time spent on transactions that never conclude.
Nuances in the Commission Structure:
- A single broker may represent both the buyer and the seller (a “double broker” or “sole broker” arrangement), in which case the full two per cent commission goes to that one broker.
- On high-value or specialised transactions, the commission rate may be negotiated.
- Commission is payable only if the closing takes place; the “no deal, no fee” principle applies.
- In a sub-broker arrangement, the commission is, as standard, split 50/50.
The Advantages of Using a Broker When Selling a Ship
In the small tonnage segment, some owners may attempt to sell privately; however, using a professional broker offers concrete advantages for both buyer and seller:
1. Market Access and Network A professional S&P broker has access to a global network of buyers and sellers, to real-time market intelligence and to pricing information on recently concluded transactions. A vessel reaching the right buyer at the right price is only possible through such a network.
2. Market Intelligence and Accurate Pricing Reading market timing and price correctly can make a difference of tens of thousands to millions of dollars in a second-hand ship sale. An experienced broker tracks, in real time, where the market sits in its cycle, the price range in which buyers are moving and the intensity of competition.
3. Negotiation and Process Management MOA negotiations, technical survey processes, closing documents and payment mechanisms are each stages requiring separate expertise. Once the terms are agreed, the S&P broker helps finalise the contract, ensuring that all the necessary paperwork is completed and that the legal requirements are met.
4. Confidentiality A vessel put openly onto the market can face price pressure. A professional broker manages the confidential sale process, offering the vessel to targeted buyers without exposing it to the wider public.
5. Legal and Technical Risk Management From selecting the surveyor to the due diligence process, and from the MOA negotiation to the closing documents, the buyer’s broker protects the buyer’s interests at every step. The seller’s broker, for its part, ensures that the delivery terms, potential objections and post-delivery liabilities are correctly framed.
The Orionis Shipping Ship Sale & Purchase Service Process
At Orionis Shipping, our ship sale and purchase advisory service follows these steps:
Step 1 — Needs Analysis and Market Research
For the buyer: vessel type, capacity, age limit, budget and operational profile are established. Current market conditions, freight indices and second-hand price levels are assessed. Suitable vessels are identified from our inventory and international network.
For the seller: the vessel’s technical specifications, certificate status and market position are analysed. A realistic price range is set, and the sale strategy (open marketing or confidential sale) is agreed.
Step 2 — Negotiation and Preliminary Agreement
The negotiation between the parties is managed. Price, place of delivery, delivery date, survey terms and other key elements are documented in the Broker’s Recap.
Step 3 — MOA Preparation and Signing
The MOA is prepared on the basis of SALEFORM 2025 or another standard form appropriate to the transaction. Coordination with the parties’ lawyers is arranged. KYC/AML documents are requested at an early stage, and the escrow structure is set up.
Step 4 — Pre-Purchase Survey Coordination
An independent, accredited surveyor is appointed on the buyer’s behalf. The timing and location of the survey are coordinated. Once the survey report is received, the buyer’s acceptance or negotiation decision is supported.
Step 5 — Due Diligence Support
Class records, PSC history, mortgage/lien searches and the IHM document are examined. Any technical or legal risks identified are documented and reported to the client.
Step 6 — Closing and Delivery
The delivery documents (Bill of Sale, Deletion Certificate, Protocol of Delivery & Acceptance, etc.) are prepared. The payment mechanism (SWIFT, release of escrow) is managed. Coordination is provided for the change of flag and the new registration.
Frequently Asked Questions on Ship Sale & Purchase
Which documents must be transferred as a matter of course in a ship sale? The Bill of Sale, class certificates, Protocol of Delivery & Acceptance, Deletion Certificate (certificate of deletion from the former flag), cancellation of existing insurance documents and the IHM document (where applicable) are the essential documents.
What are the tax obligations when buying a ship from a foreign owner? This varies according to the flag states of the buyer and seller, the jurisdiction in which the transaction takes place and the charter structure. For Turkish owners, it is essential to obtain specialist financial advice on both VAT exemption and double-taxation treaties.
At which bank is the escrow account opened in a ship sale? With SALEFORM 2025, the institution that will hold the escrow account and its terms are now negotiated concurrently with the MOA. While major international banks are preferred, it is a precondition that the parties’ KYC and AML processes be accepted by the bank in question.
Orionis Shipping — Professional Support in the Ship Sale & Purchase Process
Orionis Shipping offers a comprehensive range of services in ship sale and purchase brokerage across Turkey and the Mediterranean basin. From market research to MOA negotiation, and from due diligence coordination to the closing process, we are by your side at every stage with reliable, transparent and expert support.
Contact us to obtain valuation or brokerage services for a vessel in your portfolio.
This content is for informational purposes only. For your legal and financial decisions, rely on the advice of qualified lawyers and financial advisers.
Tags: ship sale and purchase brokerage, S&P shipbroking, what is an MOA, SALEFORM 2025, ship sale process, pre-purchase survey, ship due diligence, second-hand vessel valuation, broker commission, buying a ship, ship brokerage Turkey, NOR delivery, ship sale escrow, bill of sale, Mediterranean ship market
