The buying process. Talk me through it.

[dgasmd]

Before I get flamed for the nature of the post, let me tell you I know nearly nothing as a starting point. Hence me asking about it.

I am looking at purchasing my first boat over the next 6 months or so. I have been looking in yacht world and other places for a while getting some ideas and comparing. I would appreciate it if someone could give me some ideas as to the timeline or process of going about it from looking at the boat in an add to sailing away in it? I mean the step by step process. I have bought houses and cars before, but none of those involved a sea trial

So, do I go check out the boat personally, and assuming I like it and want to make an offer, then what (assume it is accepted for the sake of simplicity)? What role does the broker have other than doing advertising for the seller and mediating the price negotiation? Do I need to get a broker myself sort of like a realtor? Who pays the broker/s?

Let me give you an example of what I am talking about in case it is not clear. Let's use the buying a car example.

1. Find model of car I like
2. Secure financing through bank/lenders with letter of approval and get insurance queotes.
3. Go see/inspect the car
4. Test drive it
5. make an offer to dealer
6. offer accepted
7. contact lender to forward check and write check for downpayment (or similar)
8. dealer does title and registration documents and submits them in my behave
9. drive car home
10. call insurance in AM to add vehicle
11. enjoy car driving around

[Ex-Calif]

There is going to be a lot of variation in replies. Unfortunately most experiences in boat buying are different. Also securitizing a loan for a boat is different as the values aree all over the place and unless buying new the lender has a hard time figuring out the value. I would guess most boat loans are secured against real estate property.

Here is how it went down for me.

- Secure financing. Not needed as I paid cash
- Search for boats. A long frustrating endeavor.
- Short list and ballpark value the boat based on markets. Read a couple of threads here on CF to get a clue on people's opinions of asking vs. sale price and make your judgments accordingly. The internet can be your friend or lead you astray
- View the boat to determine if it is as advertised and there are no obvious issues
- View boat records, maintenance and logs if available. If not available act accordingly but all records should be available at survey.
- Execute a purchase agreement. Mine stated how the sale would proceed. Basically, an initial offer, 10% refundable down. Returnable if the survey exposed issues not known and that could not be agreed to resolve. Non refundable if survey exposed nothing, buyer could not make payment in X days or if the deal fell through basically due to buyers fault. In other words I offered less than asking price and if survey turned up nothing I would pay the offer price. The purchase agreement also stated when, where and how long the boat would be available for survey & sea trial, who was responsible for survey costs and so forth. I requested and was granted 3 days for survey and 2 days on the water. The boat was on the hard so survey was one day. I paid splash and haul to return the boat to its original spot. The purchase agreement also specified what goes with the boat. It is amazing what the PO will take off. Radios, plotters, pfds etc. etc. Often categorized as "personal gear." if that term is used, make sure it is defined
- on large downpayments the money should be escrowed either with a bank or the broker if he is established and so on
- my survey turned up a few issues. Owner stated they were obvious issues that I should have been able to see. We agreed on some and I ended up getting about 20% off asking price when all was done.
- Find insurance
- Pay the balance
- Register the boat


I did owner direct with no broker. As a rule the broker gets paid from the seller. It is in the brokers interest to get maximum value but it is also in the brokers intererst to sell the boat and pay the bills. There are lots of threads about whether brokers are honest or not but I think it is fair to unstand the two motivations of brokers and go from there. A boat that is getting pinged or has been on the market a short time is unlikely to motivate the broker to advise seller to deal.

It would be a good idea to suss out the broker a bit. Are all offers transmitted to seller, both verbal and written? Is the seller going to be available at some point and be part of the dealmaking? Is the history of the boat (previous owners) known?

There are questions you can ask that I expect the broker to answer untruthfully or stretch the truth. How long on market? What is the owners bottom line? Why is owner selling? While this can be deemed unscrupulous I think it is part of negotiating since time began. Anything that helps you negotiate lower should be taken with a grain of salt. I have heard brokers "relist" a boat after a year and call it one month on market. I have seen a price drop result in a reset of time on market.

I personally would not use a buyers broker unless a really high end boat and I worked a fixed price that I paid him plus a percentage of every dollar below asking price minus repairs. For example a 250k boat. $2500 + 5%. If I got the boat for $200 and the estimate for repairs from survey was $20k he'd get $2500 + $1,500. For this I would expect him to be very active in the deal from finding surveyor, arranging haulout, veerifying contracts, reregistering the boat, helping price and find insurance and negotiating the price.

That's my dream but I never heard of a deal structured this way

[dgasmd]

Thanks. I've been reading on some of the issues you mentioned and others for the last few weeks. Lots of searches here, but I am still not clear on the path of sale. For example, if I am looking at a model I've never been on before and have never sailed on before, is it OK to ask the showing broker to just turn on the engine or generator to simply hear how loud it is while sitting below? For me personally, it would be a deal breaker if it is as my intention for the boat use is to simply do weekends on it and a week or 2 at one time in the bahamas or BVI/Caribbean. It may sound silly to discard a very well sailing yacht in very good condition and shape for such a trivial issue, but this is a family thing, and if it does not fly with the family it might as well be a floating tube! In any case, I would hate to go through the entire offer process, waste money and time in a survey and sea trial just to find out as we are pulling out of the dock the noise or vibration is a deal breaker. I am just using that as an example, but I think you see my point.

[Ex-Calif]

Originally Posted by dgasmd

Thanks. I've been reading on some of the issues you mentioned and others for the last few weeks. Lots of searches here, but I am still not clear on the path of sale. For example, if I am looking at a model I've never been on before and have never sailed on before, is it OK to ask the showing broker to just turn on the engine or generator to simply hear how loud it is while sitting below? For me personally, it would be a deal breaker if it is as my intention for the boat use is to simply do weekends on it and a week or 2 at one time in the bahamas or BVI/Caribbean. It may sound silly to discard a very well sailing yacht in very good condition and shape for such a trivial issue, but this is a family thing, and if it does not fly with the family it might as well be a floating tube! In any case, I would hate to go through the entire offer process, waste money and time in a survey and sea trial just to find out as we are pulling out of the dock the noise or vibration is a deal breaker. I am just using that as an example, but I think you see my point.

I think what you are describing sort of falls into the test drive arena and I think it will depend on the seller. If the seller has been jerked around by lots of tire kickers looking for test drives he may mot be so agreeable.

It also can depend on the vintage of yacht you are thinking of. If a production boat still in charter service the standard path is to charter. Another path is to make lots of friends with different boats and go sailing.

Also for a boat in the water, as opposed to mine on the hard. The sea trial can come first, and in my opinion should. I did it backwards because the boat was already on the hard. But at that point I had a purchase agreement and was committed. Noisy engine, for example was not a valid reason to back out. I suppose I could have complained about the engine box sealing (fumes) and insulation but I doubt my seller would have dealed on this complaint.

Bottom line is test driving is going to be problematic in most cases. Howwever I love to sail. If contacted by a prospect who I determined was serious I definitely would take him out and more importantly I would take his admiral. Our second day of seatrial specifically stated we would bring spouses and as it turned out the seller gave us the keys and didn't come along. We had already completed survey and the hard day of seatrial so he pretty much knew the boat was sold. He couldn't have done a better job selling the admirals than we did and knew it.

Have you narrowed your search criteria at all?

[Astral Blue]

Originally Posted by Ex-Calif

Our second day of seatrial specifically stated we would bring spouses and as it turned out the seller gave us the keys and didn't come along.

The seller allowed you to take the boat out on TWO DAYS of sea trial, one without his/her presence? Wow!

If a prospective buyer wanted sea trials for such a long period, I would have charged dearly for it if I was the seller. I would want to make it a point to make walking away from the transaction painful to the buyer if such a request was made.

I guess I have gotten my time wasted by too many tire kickers to be that accommodating to prospective buyers. If it is a boat that is desirable to the buyer, they should know during the showing or after they had a chance to think it through. The survey simply gives the buyer a preview of what to expect with regards to maintenance. And the only way I would agree to a survey is to receive written assurance from the buyer that the asking price stands and is not negotiable after the survey.

As Ex-Calif said, there will be a lot of different opinions here. Not all sellers are going to be the same. And especially if it is a seller who has dealt with tire kickers in the past, it might not be as easy to look at a boat without convincing them you are serious about buying.

For what its worth, the tire kicker experience has taught me a lot about selling boats. This is a principle I will consider if selling a boat in the future: Since I need to drive out to the marina and spend time showing a boat, I will be charging $50 to show the boat. If they agree to purchase the boat, I'll knock $100 off the price. If you see this, don't take offense; just know you are dealing with someone who has been around the block.

Best of luck to you.

[Boracay]

Assuming you've worked out your wants, needs and budget. That is you should know where you plan to cruise, how many crew you'll be taking, can you fix or must the condition be "cream puff", do you want a greyhound or an elephant and what will you be able to manage in 5 or 10 years time.

Then find your surveyor:-

Call a few insurance companies, get approximate quotes for your virtual boat and also get the names of surveyors whose reports they accept.

I've seen a few suggestions on this forum so check those out those surveyors as well.

Now call those surveyors and see if you can have a chat with them. Remember that they will have seen maybe hundreds of boats a year over several decades so there's a lot of knowledge there. They may even have seen a suitable boat.

Do look for someone who will be in business in 5 or 10 years.

My opinion is that the best surveyors will be cheapest in the long run.

Then as brokers show you boats you can say "Oh, so and so will be doing the survey." and watch their faces.

[monte]

I'd arrange the insurance before you drive it home btw, not in the AM!

[matauwhi]

G'day, mate. Ex-Calif pretty much laid the process out for you. It's a buyer's market, so the ball's in your court. I have taken several perspective buyers out for test sails with no contract in place. Also run the motors, genset and pretty much any equipment they wanted to check out. If someone wants to pay to have the boat hauled and survey it, prior to negotiation, like I said, it's a buyer's market. All the best with the search. Cheers.

[Larmex]

A good broker will give you recent sale prices of similar boats as a guideline for pricing your offer. On my last purchase I had a contract at a price that was well below market price IMO. When the survey showed a couple of pricey issues I was much more negotiable than I would have been if I was contracted at what I felt was the current market price. We sawed off at a fair settlement and moved on. Using the buyers market as leverage for a deep discount based on a survey problem can backfire if not done in a calculated way. BTW, the boat turned out to be FABULOUS in every way and I couldn't be happier. Hope you have the same result.

[Ex-Calif]

Originally Posted by Astral Blue

The seller allowed you to take the boat out on TWO DAYS of sea trial, one without his/her presence? Wow!

If a prospective buyer wanted sea trials for such a long period, I would have charged dearly for it if I was the seller. I would want to make it a point to make walking away from the transaction painful to the buyer if such a request was made.

I guess I have gotten my time wasted by too many tire kickers to be that accommodating to prospective buyers. If it is a boat that is desirable to the buyer, they should know during the showing or after they had a chance to think it through. The survey simply gives the buyer a preview of what to expect with regards to maintenance. And the only way I would agree to a survey is to receive written assurance from the buyer that the asking price stands and is not negotiable after the survey.

As Ex-Calif said, there will be a lot of different opinions here. Not all sellers are going to be the same. And especially if it is a seller who has dealt with tire kickers in the past, it might not be as easy to look at a boat without convincing them you are serious about buying.

For what its worth, the tire kicker experience has taught me a lot about selling boats. This is a principle I will consider if selling a boat in the future: Since I need to drive out to the marina and spend time showing a boat, I will be charging $50 to show the boat. If they agree to purchase the boat, I'll knock $100 off the price. If you see this, don't take offense; just know you are dealing with someone who has been around the block.

Best of luck to you.

To be fair he had 10% of the money, a signed purchase agreement and the survey was done. The only way the deal would fall through is if there were something serious that wew could not settle. He knew he had a sale.

If I am holding a purchase agreement and downpayment I'd be pretty felixible too.

[s/vPainkiller]

Given your lack of experience, I think a good buyer's broker would be very helpful. I would ask around for recommendations, and talk to a few. Find one who is willing to help you and that you feel comfortable working with. A good broker will understand your lack of knowledge about the process and will walk you through it. They should be able to help you understand the details and the gotchas. The buyer's broker doesn't cost you anything, but can save you a bunch of money and time, if you have a good one.

Scott

[Richard Jordan]

I personally would not use a buyers broker unless a really high end boat and I worked a fixed price that I paid him plus a percentage of every dollar below asking price minus repairs. For example a 250k boat. $2500 + 5%. If I got the boat for $200 and the estimate for repairs from survey was $20k he'd get $2500 + $1,500. For this I would expect him to be very active in the deal from finding surveyor, arranging haulout, veerifying contracts, reregistering the boat, helping price and find insurance and negotiating the price.

Actually when a buyer broker is involved the commision is split just like in real estate. There's no reason to pay him or her a fee although that would be a nice bonus!

[dgasmd]

Originally Posted by monte

I'd arrange the insurance before you drive it home btw, not in the AM!

Car insurance companies allow for coverage for up to 3 days after purchase if you already have insurance with them on another vehicle. At least that has been the case every time I have bought the last few cars. I called ahead to make sure though.

Originally Posted by Boracay

Assuming you've worked out your wants, needs and budget. That is you should know where you plan to cruise, how many crew you'll be taking, can you fix or must the condition be "cream puff", do you want a greyhound or an elephant and what will you be able to manage in 5 or 10 years time.

Then find your surveyor:-

Call a few insurance companies, get approximate quotes for your virtual boat and also get the names of surveyors whose reports they accept.

I've seen a few suggestions on this forum so check those out those surveyors as well.

Now call those surveyors and see if you can have a chat with them. Remember that they will have seen maybe hundreds of boats a year over several decades so there's a lot of knowledge there. They may even have seen a suitable boat.

Do look for someone who will be in business in 5 or 10 years.

My opinion is that the best surveyors will be cheapest in the long run.

Then as brokers show you boats you can say "Oh, so and so will be doing the survey." and watch their faces.

Thanks.

Originally Posted by Astral Blue

The seller allowed you to take the boat out on TWO DAYS of sea trial, one without his/her presence? Wow!

If a prospective buyer wanted sea trials for such a long period, I would have charged dearly for it if I was the seller. I would want to make it a point to make walking away from the transaction painful to the buyer if such a request was made.

I guess I have gotten my time wasted by too many tire kickers to be that accommodating to prospective buyers. If it is a boat that is desirable to the buyer, they should know during the showing or after they had a chance to think it through. The survey simply gives the buyer a preview of what to expect with regards to maintenance. And the only way I would agree to a survey is to receive written assurance from the buyer that the asking price stands and is not negotiable after the survey.

As Ex-Calif said, there will be a lot of different opinions here. Not all sellers are going to be the same. And especially if it is a seller who has dealt with tire kickers in the past, it might not be as easy to look at a boat without convincing them you are serious about buying.

For what its worth, the tire kicker experience has taught me a lot about selling boats. This is a principle I will consider if selling a boat in the future: Since I need to drive out to the marina and spend time showing a boat, I will be charging $50 to show the boat. If they agree to purchase the boat, I'll knock $100 off the price. If you see this, don't take offense; just know you are dealing with someone who has been around the block.

Best of luck to you.

No offense to you, but you sound ridiculous at best. At least to me. Maybe you've had such bad experiences in the past that this is simply your frustration speaking, and I can understand that, but you sound like someone that almost hopes he never sells what he has for sale. In any market, regardless of the item, it is up to the seller to make it as attractive and inviting as it gets for the buyer. You have an item to get rid of and they have the money to get it, which is what you want. The buyer can always walk away and go buy someone else's boat. While you have the choice of who you sell it to as well, if you are really being this pickie and have this many issue to deal with, I must simply wish you the best of luck with your plan.

While I very much appreciate the responses so far, I don't feel as if I have gotten my question answered yet. Regardless of the boat and location in the US, if you are buying a boat through a broker, are using personal funds for a down payment, and will also have a loan, I suspect the sequence of events will be exactly the same. I just want to know what that is and how long does it usually take. Sort of like see boat>make offer> agree on price>survey>etc. Just the sequence of events.

[dgasmd]

Originally Posted by s/vPainkiller

Given your lack of experience, I think a good buyer's broker would be very helpful. I would ask around for recommendations, and talk to a few. Find one who is willing to help you and that you feel comfortable working with. A good broker will understand your lack of knowledge about the process and will walk you through it. They should be able to help you understand the details and the gotchas. The buyer's broker doesn't cost you anything, but can save you a bunch of money and time, if you have a good one.

Scott

Thanks for the suggestion

Originally Posted by Richard Jordan

Actually when a buyer broker is involved the commision is split just like in real estate. There's no reason to pay him or her a fee although that would be a nice bonus!

That is very good to know. However, how does that work when your broker is in a particular area and the boat is in a distant one? Say, you are in South FL as well as your buyer's broker but the boat is in NC as well as the seller's broker?

[phiwum]

Originally Posted by Astral Blue

I guess I have gotten my time wasted by too many tire kickers to be that accommodating to prospective buyers. If it is a boat that is desirable to the buyer, they should know during the showing or after they had a chance to think it through. The survey simply gives the buyer a preview of what to expect with regards to maintenance. And the only way I would agree to a survey is to receive written assurance from the buyer that the asking price stands and is not negotiable after the survey.

Golly. I am a novice sailor, ill-equipped to determine the value of a boat on my own. I need my surveyor to give me an accurate estimate of what the boat is worth. I can come up with an initial offer, but I can't be confident in its accuracy without his expert advice.

Suppose he finds some significant but not deal-killing issues. Then my previous estimate of the worth of the boat has been revised. I may be willing to buy it, but not at the previous offer. If you reject post-survey revisions in the offer out-of-hand, then neither of us will be satisfied. You'll still have a boat to sell, and I'll have to keep looking.

If, on the other hand, you hear my new offer and consider it worthwhile, then we can both be satisfied with the outcome. Perhaps you will agree that the discovered issues are significant and can understand my new estimate of the boat's worth. Perhaps not, in which case we fail to reach agreement and we're done.

But to disallow renegotiation after a survey really isn't in your interest. You end up losing deals that may have been agreeable to you.