Nightmare Buying - Broker Threats

[Tspringer]

Originally Posted by letsgetsailing3

Side Note: If you still want the boat, and the buyer wants to sell it, tell the brokerage house that as well. I don't believe there is anything stopping you from making a counter offer. The broker is acting... Strange. Part of this is just normal negotiation, and shouldn't be all that hard.

This is what really sucks. I DO want the boat. I am pretty sure the seller wants to sell the boat. Frustrating.

The boat was listed at a price. I contacted the broker and made an offer. It was accepted. On to all the survey stuff...

The day I got the initial survey, I sent it to the broker along with extensive notes about all of it. I am pretty sure he never looked at it. Later, as insurance underwriting rejects it, the issues are due to all of the things I had emailed him about over a month before. He offers up a $10K price reduction. I told him I didn't want a price reduction, I wanted a seaworthy boat. Insurance will not bind coverage without the issues being fixed and I cannot close on the purchase without insurance (required by financing).

The issues with the boat are not massive expensive things. But the boat is 32 years old. All the issues are basically age related deferred maintenance problems. Individually, not horribly expensive to fix. But it would require haul out and for someone paying someone else for all the repairs it could get expensive. Still - unlikely to be $10K.

If the broker had looked at the initial survey when I sent it too him way back on 2/20 and engaged the seller in getting it all fixed then, we wouldn't have had this mess.

But I would still buy the boat if there was some way to make it work but I just cannot come up with how that would be.

[rbk]

Originally Posted by letsgetsailing3

"Acceptable" would be defined by the buyer. No need to contact an insurance company.


A lot of people do a different kind of survey for the insurance company.

Acceptable to who? its very subjective, nothing is defined unless there are attached definitions specifically outlining. What may be acceptable to you may not be to another. This is a lazy, poorly worded contract, both the broker and his agency could end up in hot water should it go up the legal ladder.

[letsgetsailing3]

Originally Posted by rbk

should have a specific clause for insurability. It's no different than putting in an offer without subject to financing, then getting rejected by your financier, not the sellers problem. The dual agency may be a blessing as he has a higher duty of care to represent both parties and it appears he has failed to represent you adequately (prob another reason for the push back). When lazy contracts like this go to court, judges have little sympathy for what are supposed to be professional brokers/agents.

ps i have to shorthand all this typing with one hand

Since the phrase "acceptable to the buyer" was in there, seems like you wouldn't need ANY of that.


Buyer says "no", gets deposit back, minus expenses. Or, if they still want the boat, they can use it to negotiate a better price if it's a flaw that wasn't known by the buyer before the offer, or tangibly affects the value.

[rbk]

Originally Posted by Tspringer

This is what really sucks. I DO want the boat. I am pretty sure the seller wants to sell the boat. Frustrating.

The boat was listed at a price. I contacted the broker and made an offer. It was accepted. On to all the survey stuff...

The day I got the initial survey, I sent it to the broker along with extensive notes about all of it. I am pretty sure he never looked at it. Later, as insurance underwriting rejects it, the issues are due to all of the things I had emailed him about over a month before. He offers up a $10K price reduction. I told him I didn't want a price reduction, I wanted a seaworthy boat. Insurance will not bind coverage without the issues being fixed and I cannot close on the purchase without insurance (required by financing).

The issues with the boat are not massive expensive things. But the boat is 32 years old. All the issues are basically age related deferred maintenance problems. Individually, not horribly expensive to fix. But it would require haul out and for someone paying someone else for all the repairs it could get expensive. Still - unlikely to be $10K.

If the broker had looked at the initial survey when I sent it too him way back on 2/20 and engaged the seller in getting it all fixed then, we wouldn't have had this mess.

But I would still buy the boat if there was some way to make it work but I just cannot come up with how that would be.

amend the agreement to have the work completed at your cost prior to closing and deduct the amount from the offer. Most companies give 30-60 days to pay invoices (gives time to close the deal). Have the expenditures go into escrow to be paid by the broker upon completion of sale.

[Tspringer]

Originally Posted by rbk

should have a specific clause for insurability. It's no different than putting in an offer without subject to financing, then getting rejected by your financier, not the sellers problem. The dual agency may be a blessing as he has a higher duty of care to represent both parties and it appears he has failed to represent you adequately (prob another reason for the push back). When lazy contracts like this go to court, judges have little sympathy for what are supposed to be professional brokers/agents.

ps i have to shorthand all this typing with one hand

I appreciate your feedback.

Over the past couple of weeks, the broker has called me several times insisting that I immediately go and sign the vessel acceptance document. By called insisting... I mean he screamed and cursed and accused me of deliberately sabotaging the entire deal by refusing to accept the vessel. But while I might not be a lawyer or even very smart, I do understand that accepting the vessel would release the deposit and doing this before I was able to get insurance acceptable to the lender would be stupid.

He of course knows this. So why would he be insisting I accept the vessel and release the deposit if he knows I cannot get insurance on the boat?

[newhaul]

Originally Posted by Tspringer

This is what really sucks. I DO want the boat. I am pretty sure the seller wants to sell the boat. Frustrating.

The boat was listed at a price. I contacted the broker and made an offer. It was accepted. On to all the survey stuff...

The day I got the initial survey, I sent it to the broker along with extensive notes about all of it. I am pretty sure he never looked at it. Later, as insurance underwriting rejects it, the issues are due to all of the things I had emailed him about over a month before. He offers up a $10K price reduction. I told him I didn't want a price reduction, I wanted a seaworthy boat. Insurance will not bind coverage without the issues being fixed and I cannot close on the purchase without insurance (required by financing).

The issues with the boat are not massive expensive things. But the boat is 32 years old. All the issues are basically age related deferred maintenance problems. Individually, not horribly expensive to fix. But it would require haul out and for someone paying someone else for all the repairs it could get expensive. Still - unlikely to be $10K.

If the broker had looked at the initial survey when I sent it too him way back on 2/20 and engaged the seller in getting it all fixed then, we wouldn't have had this mess.

But I would still buy the boat if there was some way to make it work but I just cannot come up with how that would be.

ok then do it this way withdraw your offer have the seller remove the vessel from the brokerage. Have him fix the issues and deduct the cost of this fiasco out of the purchase price and do the deal privately . Just use a title company not brokers.

We did similar when we sold the Spencer just had to wait the requisite 6 months after taking the boat out of the brokerage.

[letsgetsailing3]

Originally Posted by rbk

Acceptable to who? its very subjective, nothing is defined unless there are attached definitions specifically outlining. What may be acceptable to you may not be to another. This is a lazy, poorly worded contract, both the broker and his agency could end up in hot water should it go up the legal ladder.

It's completely subjective, which is why it's in there. It's a complete "out" on the part of the buyer.

This isn't poorly worded. It gives the buyer a complete out of the contract, based on the survey and inspection.

The only complaint here is over the brokerage expenses.

[jrbogie]

Originally Posted by Tspringer

Thanks for all the replies so far... lots of good feedback.

Relative to the broker representing both the buyer and seller - here is the section from the purchase and sale agreement that seems relevant:


"BROKER REPRESENTATION: The SELLER and the BUYER each acknowledge that the SELLING BROKER represents the BUYER, and the LISTING BROKER represents the SELLER, each representing the party that the respective BROKER has brought to this transaction. The SELLER and the BUYER also acknowledge and agree that in the case of a sole BROKER, such BROKER represents the interest of both the SELLER and the BUYER and that such representation shall not render this AGREEMENT voidable"


I read that to mean the broker represents me just as much as her represents the seller.


The broker is with a large well known brokerage company. His website profile says he is licensed and bonded. On his website profile, it also has the CPYB Logo (Certified Professional Yacht Brokers) but when I search for him on their website he is not there. So he may have also lied about being licensed and bonded.

My deposit was sent to an escrow account in the name of the big brokerage - not to an account that has his name on it or something.

This seems to be a standard purchase and sale agreement. Here are the parts about accepting the vessel and conditions it can be rejected for:


ACCEPTANCE OF THE VESSEL: The BUYER shall notify the SELLING BROKER of his ACCEPTANCE of
the VESSEL and its inventory in writing. If said notice has not been received by the ACCEPTANCE DATE, the
BUYER shall be deemed to have rejected the VESSEL and its inventory, subject to the terms, if any, of Paragraph 8. IT IS THE BUYER’S RESPONSIBILITY TO OBTAIN ANY ASSURANCES HE REQUIRES REGARDING THE AVAILABILITY OF SATISFACTORY FINANCING AND INSURANCE PRIOR TO ACCEPTANCE DATE.

Here is the referenced paragraph 8 giving terms to reject:

ADDITIONAL PROVISIONS:
1. Visual inspection and approval by Buyer.
2. Marine survey consisting of structural, mechanical, electrical and rig all acceptable to Buyer.
3. Marine sea trials acceptable to Buyer.
4. Financing approval and its terms acceptable to Buyer.


TERMINATION OF AGREEMENT: If the BUYER gives notice of his intention to reject the VESSEL under the
terms of AGREEMENT, such notice shall constitute termination of the BUYER’S obligation to purchase and the
SELLER'S obligation to sell, and the BUYER and the SELLER both authorize the SELLING BROKER to return the
deposit to the BUYER, after deducting any fees and charges incurred against the VESSEL by the BUYER, or by the BROKERS on behalf of the BUYER, including the cost of the survey and related expenses.



The vessel acceptance date on the contract was 4/1/19. So I rejected the vessel. According to the agreement my deposit should be returned. Note that at no point did the broker EVER say anything at all about any expenses of any kind that in any instance or circumstance would be things I could be held responsible for.

I live in GA. The boat is in MD.

The part that really sucks is I love the boat. I want to buy the boat. The seller wants to sell the boat. The broker has made this impossible.

I still don't get it. this looks like a standard boat deal to me so the broker himself should not be holding any of your deposit. it's in escrow and the escrow company has a copy of the sales agreement. you terminate the sale because you will not accept the survey results. simple and a small claims judge will rule in your favor but if this still is too complicated for you then yes, get an attorney and hope you don't lose more money in fees.

[rbk]

Originally Posted by letsgetsailing3

Since the phrase "acceptable to the buyer" was in there, seems like you wouldn't need ANY of that.


Buyer says "no", gets deposit back, minus expenses. Or, if they still want the boat, they can use it to negotiate a better price if it's a flaw that wasn't known by the buyer before the offer, or tangibly affects the value.

This gets by the courts rejected too many times to count, its an ambiguous term. It is also required that the contract was entered into in good faith and both parties are to complete the terms to the best of their ability. Using some maintenance issues to terminate looks like the purchaser is making excuses to back out.

[rbk]

Originally Posted by Tspringer

I appreciate your feedback.

Over the past couple of weeks, the broker has called me several times insisting that I immediately go and sign the vessel acceptance document. By called insisting... I mean he screamed and cursed and accused me of deliberately sabotaging the entire deal by refusing to accept the vessel. But while I might not be a lawyer or even very smart, I do understand that accepting the vessel would release the deposit and doing this before I was able to get insurance acceptable to the lender would be stupid.

He of course knows this. So why would he be insisting I accept the vessel and release the deposit if he knows I cannot get insurance on the boat?

This changes things. Don't sign and let the contract lapse (there should be a timeline for acceptance). it sounds like he knows he's f*ct

[jt11791]

I made an offer on a boat a while back that was on the hard when I saw it. The boat was launched for the sea trial and I found a bunch of problems that I did not like. I decided not to close and he boat was hauled back out and re-winterized. I paid for all of the launch, haul and winterize expenses, about $5K total. No complaints.


I inspected the boat on the hard myself and I did not rely on the broker's description for anything. $5K was a lot of money to spend to not buy a boat, but it was worth it, being far far better than buying the wrong boat.


I don't know your broker, sounds like a bad one, but I don't think it is unreasonable to pay the expenses of a sea trial even when you decide not to purchase.

[rbk]

Originally Posted by letsgetsailing3

It's completely subjective, which is why it's in there. It's a complete "out" on the part of the buyer.

This isn't poorly worded. It gives the buyer a complete out of the contract, based on the survey and inspection.

The only complaint here is over the brokerage expenses.

Loose contracts like this are never black and white, ambiguous terms leave it up to the judge to interpret, which is not good. If every aspect is clearly defined, limits on acceptability with specific terms for termination, rejection etc then the judge cannot interpret the terms as it forms part of the contract.

[letsgetsailing3]

Originally Posted by rbk

Loose contracts like this are never black and white, ambiguous terms leave it up to the judge to interpret, which is not good. If every aspect is clearly defined, limits on acceptability with specific terms for termination, rejection etc then the judge cannot interpret the terms as it forms part of the contract.

You're half right. The term "acceptable" is loose. But it's completely to the advantage of the BUYER in this case, which is why the contract is written that way. This contract is fully enforceable in a court of law.

And that has NOTHING to do with the problem in this case, as they are letting him out of the legal obligation to buy the boat.

The issue here is over the broker expenses, which is also clearly written into that contract. I think it reasonable to ask for details of any expenses they with to deduct from his deposit, though.

[Montanan]

Perhaps you need a lawyer, but in the alternative one could just walk from the earnest money deposit. If at the end of the day, you desire to pursue and complete the purchase, then you need to find a pathway to achieve such.

Things to be learned as to pursuing purchases [be it of boats or other goods],

Define any and all services and / or costs to be provided and to whom they will paid for by individual parties involved with proscribed value limits.

Deposits should be made with third-party trustees, not with interested parties.

Contingencies should be explicit and detailed. By way of example.

Completion of survey: detail of scope, timing for completion and receipt of report and by whom the survey will be performed. There may be multiple separate surveyors, hull, engine, rigging, electronics, etc.

Dollar value of resolution of noted survey issues. De Minimis cutoff. Any and all issues above the de minimis to be items that can result in cancellation of offer at sole discretion of buyer and the basis for separate negotiation, a new reoffer by buyer and / or a separate counter offer. It is usually best to have the original offer rescinded and a completely new offer to sell and / or to buy implemented, clean slates for both parties.

Insurability and limit of cost for specific coverage. A requisite to obtain financing or to comfortably obtain and retain ownership and exposures.

Capability to obtain financing for sales price - define upper limit of loan and terms of loan. Purchase offers are typically dependent on being able to obtain financing to close the deal.

Clear title transfer.

Buying a boat is a business transaction, deal with it as such, professionally and knowledgeably, not amateurishly and devoid of emotion. Learn what you don't know and what you need to know. A boat is an inanimate thing, leave any and all passion out of the equation.

All screaming needs to be considered water in your wake and stiff breezes that have gone by, don't live in the past, focus on the present and the future.

[letsgetsailing3]

Originally Posted by jt11791

I made an offer on a boat a while back that was on the hard when I saw it. The boat was launched for the sea trial and I found a bunch of problems that I did not like. I decided not to close and he boat was hauled back out and re-winterized. I paid for all of the launch, haul and winterize expenses, about $5K total. No complaints.

I inspected the boat on the hard myself and I did not rely on the broker's description for anything. $5K was a lot of money to spend to not buy a boat, but it was worth it, being far far better than buying the wrong boat.

I don't know your broker, sounds like a bad one, but I don't think it is unreasonable to pay the expenses of a sea trial even when you decide not to purchase.

Actually, this is a pretty good way to look at it.

$6,000 sounds like a lot of money, but you can spend that much on a boat in no time flat.

It's just a bit of a shame to lose that much on a boat transaction when the dispute was over $10,000 in fixes.