Steps to a Proper Private Purchase (non-brokered)

[swami maximus]

After the lively post thread regarding the "conflict of interest" we expierenced my wife and I have decided to pursue this purchase non-brokered with the seller. As this is our first major purchase together, we are green horns in the whole paperwork and process of it. Would someone kindly explain how to go about the purchase of a used vessal sans broker?
Warmly,
SM

[ssullivan]

Originally Posted by swami maximus

After the lively post thread regarding the "conflict of interest" we expierenced my wife and I have decided to pursue this purchase non-brokered with the seller. As this is our first major purchase together, we are green horns in the whole paperwork and process of it. Would someone kindly explain how to go about the purchase of a used vessal sans broker?
Warmly,
SM

My advice would be to follow the broker process exactly. They don't sell boats using those methods for no reason. They are time tested.

Do an offer subject to survey
Set up escrow services
Put down a deposit to show you are serious (refundable if the sale doesn't go through)
Do the survey
Talk price more specifically after the survey
Settle on a number/terms
Draw up any odd terms in a contract
Do proper documentation, transfer of ownership, etc...
Walk to the bank together and do the paperwork together if possible.

Talk about "we" and be understanding. The broker is there to insulate you from each other. It's easy for a deal to go bad because one person insults the other over the boat or anything. Be extra patient and don't get angry if the seller calls you a "cheap b*st@rd" or something like that. Remember... it's the boat you're after.

Hope that helps some.

[Pblais]

San Has it right. If you don't have a broker then do it like they would becauase that is how business is done. If the seller won't work that way then you can't do serious business.

You do need to make expectattions clear and communicate in an honest fashion.

[swami maximus]

i couldn't agree more. there is no reason to proceed under stressed circumstances. we have a very open and friendly relationship with the seller. we after all began the conversation and brought the broker to him <cough, cough/slight grumble>... specifically:

Do an offer subject to survey
- i assume that we just write up our own nearly verbatim offer as the one the broker used minus the letterhead of the firm?
Set up escrow services
- this could use a little explain as it is totally foreign to me??
Put down a deposit to show you are serious (refundable if the sale doesn't go through)
-i assume once more that this is deposited with the escrow service?
Do the survey
- check... got that one down pat
Talk price more specifically after the survey
Settle on a number/terms
- i am going to reserve this question for a little later. we are making a very low offer on the boat as is, not to be read "as is", and might want to ask some thoughts on this later as to what might be reasonable.
Draw up any odd terms in a contract
- anything legal like a notarized blabityblah?
Do proper documentation, transfer of ownership, etc...
- this will be done in california, do we just go to the DMV or is their more to it? do we need to research the documentation? i have heard lots of fragmented information about this step. could use some clarification.
Walk to the bank together and do the paperwork together if possible.
- i don't see why not. finish it off with a handshake.

thanks in advance,
SM

[Pura Vida]

swami,
A couple of thoughts. Do you have an attorney to review your contract? Is the boat federally documented or state? After rereading the thread on the conflict of interest I could not conclude if the buyer had signed a listing contract with the broker that obligates him to commission regardless of the nature of the sale. Does he have one? If so it may be pragmatic to go ahead and use the broker's services.

[TaoJones]

Originally Posted by Pura Vida

swami,
A couple of thoughts. Do you have an attorney to review your contract? Is the boat federally documented or state? After rereading the thread on the conflict of interest I could not conclude if the buyer had signed a listing contract with the broker that obligates him to commission regardless of the nature of the sale. Does he have one? If so it may be pragmatic to go ahead and use the broker's services.

I'm pretty sure that the seller did sign an exclusive listing agreement with the broker, PV, else why would the broker have put the listing up on YachtWorld? I believe, as I stated way back in this thread, that swami's prior knowledge of the vessel supercedes the listing agreement and allows him to deal with the seller directly. That is, he wasn't brought to the boat by the broker, he brought the broker to the boat, and certainly not with the intention of having the broker then go behind his back and get the seller to sign a listing agreement.

If swami closes the sale without the broker's participation, the broker may make a claim for a commission, but what court is going to take a close look at this broker's actions and agree that he has a case?

TaoJones

[swami maximus]

I do not know the details of the contract between the seller and his broker. But our (verbal) agreement thus far is to wait for the broker to finish up with his business, then the seller is going to terminate any contracts with him, and proceed with us. The seller has little faith in the broker and his actually coming up with a buyer. Thats fine, it means we don't need to pay the next coupla months of dock fees. Silver linings and patience. We need a home by Fall, so there is still time.
SM

[ssullivan]

I didn't feel like editing this much, so please see the asteriks in your post below... ***

Originally Posted by swami maximus

i couldn't agree more. there is no reason to proceed under stressed circumstances. we have a very open and friendly relationship with the seller. we after all began the conversation and brought the broker to him <cough, cough/slight grumble>... specifically:

Do an offer subject to survey
- i assume that we just write up our own nearly verbatim offer as the one the broker used minus the letterhead of the firm?
***Yes, that would work fine.

Set up escrow services
- this could use a little explain as it is totally foreign to me??
***There are a number of services, some geared specifically even to the marine business that will set up escrow. If you've bought a house you know what that's all about. Escrow is an uninvolved 3rd party that is contracted to release funds along the way according to your agreement and law. They charge a fee, but it's quite worthwhile. Just start looking around online for "escrow" and "Marine" and you will probably stumble upon one. Check their reputation of course.

Put down a deposit to show you are serious (refundable if the sale doesn't go through)
-i assume once more that this is deposited with the escrow service?
***Correct.

Do the survey
- check... got that one down pat
Talk price more specifically after the survey
Settle on a number/terms
- i am going to reserve this question for a little later. we are making a very low offer on the boat as is, not to be read "as is", and might want to ask some thoughts on this later as to what might be reasonable.
*** Reasonable approach. This part is a little touchy-feely and will happen as you progress through the deal. You might pay asking or negotaiate a lower price. OR... the seller might tell you to take a hike if you don't pay asking. Either way, your deposit is safe in escrow so you can act rationally and logically. Whatever you do... don't "fall in love" with your boat. You'll have plenty of years fixing all the stuff and waxing her to fall in love.

Draw up any odd terms in a contract
- anything legal like a notarized blabityblah?
***Yes, if there are any odd terms, such as "previous owner will replace heads" or "boat must be delivered to such and such"


Do proper documentation, transfer of ownership, etc...
- this will be done in california, do we just go to the DMV or is their more to it? do we need to research the documentation? i have heard lots of fragmented information about this step. could use some clarification.
*** Good God yes! There is a lot more to do than that. First, you really ought to do a title search/USCG Vessel Documentation search and make sure there are no leins. Investigate the history of the boat. Find out all about it. It's a federal investigation, not a state one, although you can investigate the state level too.


Walk to the bank together and do the paperwork together if possible.
- i don't see why not. finish it off with a handshake.

thanks in advance,
SM

Finally, I'll add that for a few bucks, I'll do this entire process for anyone interested. I'll get your boat surveyed, do a 2nd "post survey" which will catch other things surveyors miss, give advice on what needs to be done first on your "to do" list, work through historical searches regarding title/lein/vessel history, help negotiate a closing price and help you get the boat documented, insured and ready to use.

PM me if interested. You all know I need to pay off my boat badly... if you want to spread the love a little bit and help yourself out with a difficult and frightening process, while helping me pay off my boat let me know.

[Pura Vida]

I'm just working from the brokerage contracts I have seen here. Generally they will state something on the order of "if the boat sells in the next X months the broker gets the greater of X% or $k." Not if the broker sells the boat, only if the boat sells. I am not sure I agree that prior knowledge of a boat being for sale cancels the sellers contract with the broker. But then again I'm not in California,nor an attorney, so there may be some difference in the way contracts are handled. In any case it sounds like swami is waiting out the contract.

[swami maximus]

yeah we are waiting out the contract. if any broker should get any cut of the deal i guess it would be the one who the seller had first who showed us the boat months ago. or maybe lat38 where he ran the ad that I saw...

-- Do proper documentation, transfer of ownership, etc...
- this will be done in california, do we just go to the DMV or is their more to it? do we need to research the documentation? i have heard lots of fragmented information about this step. could use some clarification.
*** Good God yes! There is a lot more to do than that. First, you really ought to do a title search/USCG Vessel Documentation search and make sure there are no leins. Investigate the history of the boat. Find out all about it. It's a federal investigation, not a state one, although you can investigate the state level too.
this is where i would love some guidance. anyone willing/able to offer some navigational insight into these waters?

[Pura Vida]

If the boat is federall documented there will be obvious numbers somewhere on the hull that will look like this "No. 123456". I recall they need to be about 4" high and installed in a way that would leave a damaged spot if they were removed. Type ini the number in the link below and it will give you information on the vessel.

If the boat has numbers on the outside near the bow something like "CA1234B" then it is likely state registered.

Office of Science and Technology

[hellosailor]

Swami, you can find sample "bill of sale" forms on the web ranging from the simple http://www.uslegalforms.com/samples/CA/CA-00431A.pdf which is supposed to be acceptable in California, on up. Of course that makes no provision for escrow, survey, timely performance, etc. but that's all stuff you'd find in a more formal broker's contract, which you probably can obtain elsewhere as well. A review by a lawyer who knows the laws of that state is important, i.e. to consider issues like previous LIENS or CLAIMS that might be against the boat, or non-performance, or delays, etc. Whatever degree you folks and your budget think is reasonable between you. In some areas "AS-IS" has special legal meaning, which may be for or against you as well. Attorneys also routinely deal with holding escrow funds, so you may be able to deal with everything locally.

And needless to say <G> don't share an attorney like you shared the broker.

[swami maximus]

i have a brilliant bill of sale provided by one of the members of this forum. thank you again! they emailed it to me and it will serve quite nicely. i found the link to the vessel registry and the boat is federally documented. i will wait to order the abstract of title until the contract is over with the broker and the seller and i are proceeding with the sale of said vessel. quite in my favor there is a very active owners forum where the previous owner had detailed all the little things he did to his boat, including being hit by a whale at one point and the damage and repairs of it, there is very little history that he did not talk about with it.

[swami maximus]

sorry when i said bill of sale i ment purchase offer/contract.

[GordMay]

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