Procedures for making an offer..

[Calif.Ted]

I've used a friend who is a broker as my rep to buy last 2 boats, wrote him a personal check for 10% which he merely waved at selling brokers, he never deposited them and returned them at closing. Any offer or contract to buy I've used in California has been heavily weighted in favor of the buyer. Once had a seller decide he didn't want to sell, had been 'mislead' by his broker and no longer trusted said broker. Wouldn't come to harbor for closing due to 'health' reasons, wouldn't accept a check drawn on his broker's escrow account. My friend and selling broker and my banker drove to his house with a bag of cash and the closing papers already signed by me. They made it clear I'd already paid for a haul out, survey etc. and he could not cancel "free of charge" at that time.

[Terra Nova]

On a private sale it can be useful to pay a broker to handle escrow and title transfer.

[OldFrog75]

Originally Posted by tuffr2

IMHO a boat can pass a survey but still fail owners acceptance.

SM-G360V using Cruisers Sailing Forum mobile app

That is one of the concerns. Everything is surveyed as "satisfactory" but there are a few issues that could be addressed if the buyer were so inclined but seller doesn't regard as a problem - "electric bilge pump is old and could be replaced." Seller thinks it's fine but buyer is nervous about it. (trivial I know but trying to make a point). Same for thru hulls, valves in the head, standing rigging...you name it. Could be adequate and functional but also a time bomb waiting to explode. I think my experiences on so many different boats have provided me with valuable insights but also made me hyper-skittish.

[Terra Nova]

Originally Posted by OldFrog75

..."electric bilge pump is old and could be replaced." Seller thinks it's fine but buyer is nervous about it. (trivial I know but trying to make a point). Same for thru hulls, valves in the head, standing rigging...you name it. Could be adequate and functional but also a time bomb waiting to explode...

No. Buyers' unsubstantiated fears are no reason at all for a seller to be paying for improvements. If the bilge pump functions properly, it must be acceptable. If the surveyor finds excessive corrosion on a T-hull fitting, that's reason to replace. Not fear of aging.

[barnakiel]

Originally Posted by denverd0n

What area are you in? Also, who gets to decide if the survey is "fine."

Spain, EU. Civil law. An offer to buy is one of codified forms of an agreement (a pre-agreement, in this case) and IF an amount is paid at this point it is considered a vadium (a mechanism loosely similar to a bid bond). Should the offering party withdraw without a good reason (this is decided by a civil law court, should the parties disagree), the amount is lost (kept by the owner of the object).

The bond is not a required element of the agreement (making an offer without the vadium is still a legally valid method), but it may be required by the owner of the object.

Should the survey found the ballast is missing while the owner claimed the ballast is just fine, there is no need for meeting in the court. The buyer gets their bond back.

b.

[Davidhoy]

Originally Posted by Terra Nova

No. Buyers' unsubstantiated fears are no reason at all for a seller to be paying for improvements. If the bilge pump functions properly, it must be acceptable. If the surveyor finds excessive corrosion on a T-hull fitting, that's reason to replace. Not fear of aging.

The buyer has the right to ask for anything, unsubstantiated or not. And the seller has the right to tell the buyer to get lost if the requests are unreasonable. It's all about the negotiation, and how reasonable both parties are willing to be...

-David

[Terra Nova]

Originally Posted by Davidhoy

... the seller has the right to tell the buyer to get lost if the requests are unreasonable...

On this we can agree.

Buyers' imagined fears are of no concern whatsoever to the seller.

[Cheechako]

A buyer can simply "not like the way it sails", "not like the engine noise", "find the cockpit uncomfortable at sea". There are many forms of unacceptable. The buyer also has money invested in haulout, survey etc. Buyers don't simply contract to buy boats without wanting to seal the deal. But have many opportunities to opt out also.

[HalfHitch]

Not an attorney either but here are practical notes from experience:


Make the contract specific to your situation by adding contingency clauses which can be in your own words and with details regarding something as minute as a piece of décor to agreements such as "contingent upon satisfactory survey as determined by the buyer" and "contingent upon satisfactory sea trial as determined by the buyer". Also put in the contract a specific Title Company that will hold the escrow and perform the closing. Make sure to include dates and deadlines for everything. If financing or contingencies or surveys aren't met by the deadlines the buyer and seller can extend the contract for an agreed upon period at which time an additional amount might be added to escrow. The agreement to extend must be in writing and executed by both, the same as the original contract was. Otherwise, if the contingencies are not met timely or satisfactorily then the escrow money should return to the buyer. Buyer should protect himself by cancelling in writing prior to the deadlines. If he doesn't give written and timely intent to cancel he opens himself up to potential dispute over the escrowed funds.

[Terra Nova]

Originally Posted by HalfHitch

...if the contingencies are not met timely or satisfactorily then the escrow money should return to the buyer...

You were doing pretty well up to this point.

If the buyer fails to meet the contingencies/timeline, deposit goes to the seller.

[Sea Dreaming]

Originally Posted by denverd0n

What area are you in? Also, who gets to decide if the survey is "fine."

The person buying the boat! No survey is really "fine".

What the survey will do is to tell you about the general condition of the boat. Very rarely is this ever perfect. What you will get is a description of the over all condition of the boat and a list of recommendations for repair.
IE: The running rigging is worn and may need to be replaced. Frozen seacock at x place. A soft spot of x in the stern quarter is a possible spot of concern and may indicate (or does indicate) delamination....

The surveyor works for the buyer and he / she will be brutally honest in their assessment. They don't "approve" or "disapprove" the boat. Approval is your job. The surveyor may tell you the boat is crap but you can still decide that you are willing to accept the risks if you desire. Or you can decide that the condition of the boat does not meet your needs, or you can use that survey to negotiate a lower price or get the owner to complete some repairs.

The survey is very much like a home inspection. The survey attempts to give you a much clearer and objective assessment of the condition of the boat.

[HalfHitch]

"YES" to Terra Nova's clarification. Thanks! Point is that a well written contract provides protections to the buyer via contingencies but also to the seller via deadlines to exercise those contingences timely and in writing.

[boatsail]

Originally Posted by Davidhoy

One advantage of using a broker is that they can hold the deposit in escrow. There are also independent escrow services, as long as you and the seller agree.

-David

I'm in real estate and I can tell you for fact that for deposit to be released it needs to be signed off by both parties. 99.9% of people and agents think that it's only needed to be agreed how it will be release if the other side is in breach, but the 10% I saw mentioned earlier. ROFL. Good luck, knowing what I know about release of a deposit is a reason I would not put a 10% deposit. And furthermore, Most often I see an amount of around 1% on a home, so a 300k place is only 3k deposit (not fixed amount by any means, negotiable) so on a 100k boat you would be talking 10k. That seems high to me as a deposit/"hold this for me" fee. I'd be at a number willing to walk on or not to pissed off about if for some reason release was not spelled out the way I thought. Most people don't read the contracts enough imo.

[Terra Nova]

Originally Posted by boatsail

I'm in real estate...

Good for you.

Regarding boat/yacht purchases, listen to what's being said by boat brokers, buyers and sellers with lots of experience.

[boatsail]

Originally Posted by Terra Nova

Good for you.

Regarding boat/yacht purchases, listen to what's being said by boat brokers, buyers and sellers with lots of experience.

Wow guy. I'm simply talking about any type of purchase agreement/offer/contract as most people are so unfamiliar with the way contracts work and giving some pointers from experience. Sorry to have contributed to your forum in a manner that you did not like.