Off Shore Boat Price Consideration

[sparau]

Originally Posted by Red Sky

Between the " Dude" and the snide " some rich guy" comments on this post I think I've got a pretty good idea what kind of boat buyer you are, the kind I'd tell to take a hike, which I'm sure in the year you've been looking you've heard before.

that seems a bit harsh, IMO with the evidence we have you could look at it like.

- owner paid 40k on a depreciating asset (i assume it isn't an awesome woody or something of special interest)
- spends nothing for 3 years
- tries to sell at purchase price (thats ok, it doesnt hurt to try)

Personally at this point as a seller i would be pretty happy to get 75% back on my money, so 30k, after all it's a depreciating asset and i have reportedly spent nothing.

- offer is made of 15k, 50% of guessed value with a range they can go to and expectation of up to 22k, 70%.

Sure its a low ball offer but as above, it doesn't hurt to try and isnt necessarily indicative of any character failings IMO as long as you are respectful and don't waste the sellers time. Since brokers were involved that seems a gimme and they will soon work out whether tommyh is a waste of time.

[David_Old_Jersey]

Originally Posted by Vasco

Well there's a problem. To get a survey and sea trial (to find your 2 page list of defects) you need an offer accepted. Of course you can offer full price subject to survey but what if the survey finds only minimal defects.

That really depends on how good the buyer is at looking at stuff themselves. IMO hard to make a meaningful offer until "you" actually know WTF you are looking at!

As a Vendor I would have no problem with a 2 page list of defects! Reading it would tell me as much about the buyer as it does about the boat.

A well written and argued list would carry some weight with me - even if for much of the list I might say "already reflected in the price" . But if genuinely anything new to me (and I had verified as real rather than imagined or simply a possible maybe at some point in the future) then it would give me pause for thought that likely would result in a price drop .

Of course I would also start from the position of declaring problems (keel fell off ) and things to consider going forward (mainsail has a couple of years left, but not 10) early on (even if not specified in the advert!).......the idea being to save me wasted time and aggro during the sale process as much as for the buyer (no interest in getting half way through a deal for a buyer to then pull out for stuff that was already known to me, and I know in advance many would not want to deal with).

Actually as a Vendor I would have no problem with a Buyer getting a surveyor onboard very early, including pre contract, pre deposit and even pre offer! Indeed I would welcome it! My "price" would simply be a full copy of the Survey Report (free advertising copy if the sale does not proceed - why wouldn't I want that?).....all the risk of going that route would be for the Buyer (paying money out with the risk that the boat would get sold from under him - even if I would not usually do that, a bird in the hand etc rather than any moral reason! albeit I would keep any other buyers "warmed up")..........I can see why a broker might not welcome the arrangement (they like to have buyers balls in a vice as much as possible when it comes to negotiations with a signed contract and deposit (their commission / expenses) paid up front)......but f#ck 'em .

[sailorboy1]

I get the impression that a lot of people are looking for "deal" more than they are looking for a boat!

FWIW - if you look a boat and find 2 pages of items needing addressing you should run away. Because that boat probably has at least a page of much bigger things that you didn't see.

If you want a boat, buy a boat. If you want a project to spend time on get a project boat. But don't get a project boat thinking you are getting "deal" when all you wanted was a boat!

[hpeer]

Don,

I think that is about right.

I have found a really good ready to go boat, twice, no joke. Bought each. Happy with boat.

Still have at least two pages of stuff to do that I didn't know about or decided we're must haves.

[Fishspearit]

Originally Posted by David_Old_Jersey

Actually as a Vendor I would have no problem with a Buyer getting a surveyor onboard very early, including pre contract, pre deposit and even pre offer! Indeed I would welcome it! My "price" would simply be a full copy of the Survey Report (free advertising copy if the sale does not proceed - why wouldn't I want that?).....all the risk of going that route would be for the Buyer (paying money out with the risk that the boat would get sold from under him - even if I would not usually do that, a bird in the hand etc rather than any moral reason! albeit I would keep any other buyers "warmed up")..........I can see why a broker might not welcome the arrangement (they like to have buyers balls in a vice as much as possible when it comes to negotiations with a signed contract and deposit (their commission / expenses) paid up front)......but f#ck 'em .

David, I respectfully think you are showing a lack of knowledge of the fundamentals of the boat sale and the inherent risks.

There are several reasons why a signed contract and deposit come before a survey in the process, and none of them involve the broker getting his commission up front. That deposit is not the broker's commission/expenses as you suggest. If a Buyer walks away from a deal, even with the signed agreement, after the survey and before the Acceptance of Vessel, they get the deposit refunded in full. The broker does not get his commission, does not get his expenses, and yes, he worked for free. And yes, it happens all the time.

The reason the deposit is paid before the survey/sea trial is because all of the risk is the Sellers. You say that as a Seller you wouldn't mind having a survey/seatrial without a contract or deposit. How would you feel if your boat were hauled out for the survey, the buyer saw a blister on the bottom, said "F*** this boat" and hops in his car and drives away. Who do you think the yard is going to expect to pay their fee before they drop the boat back in the water? Who do you think the Surveyor is going to sue to be paid for his time (yes, he was hired to survey YOUR boat, he will go after you if the buyer doesn't pay).

Surveys and seatrials can be very stressfull on a Seller. It takes a full day plus the preparation time, and comes with a fair bit of risk as the surveyor runs through the operation of every single piece of equipment, runs the engine at full throttle for 3 minutes to assess the engine cooling, etc. Maybe you are willing to take on the time and risk for someone like Tommy H to then say, "Ok, I'll offer you 1/3 of your asking price" after he just had a nice day of sailing your boat and learning as much as he could from the surveyor, but I can tell you that most Sellers don't want to take that risk and go through that trouble without some indication that the buyer is serious.

The process and contracts are written and designed to protect both the Buyer and the Seller, not the broker.

[boatman61]

Buy the boat... then build yourself around it...
Greatly enlarges your options...

[sailorboy1]

it is easy to avoid all these problems


don't buy a boat!


otherwise it is just stalling for time regardless

[Eddiefuego]

Well, as OP, first I want to thank you all for your time and interest (and humor) in my situation. I very much find CF worth watching and participating in...so thanks to the folks that sustain. The experience of folks here can help fill the many holes I have in my own limited boating background. I currently feel pretty inadequate diving into the deep end of the crusing life but the attraction is something kin to a moth to a bright light. That said.
I would like to keep my out-of-pocket purchase price at somewhere a tad over 30K$. I am at that price because I know I'll need some $$'s left over to fix the massive amount of things I and the surveyor will not see.
I would like a boat that is both bluewater capable and has enough room to be relatively comfortable as a live aboard for two...and two gatos...for up to a couple of months at a time. S.O. and gatos will be on and off so the boat needs to be single handed friendly. Hence the 38'er.
I'm looking at the Panama boat because it meets...what I believe to be my needs. The boat started for sale in the mid 50's and is now on the market for the low 40's...but NADA says it should be in the mid 20's. wtf?
The owner has a second boat so he may be ready to sell. The boat has all the bells and whistles needed for crusing.
I was planning to start on the U.S. coast in order to work out the kinks, with access to parts suppliers...and get my "big boat" legs...oh...did I mention...I've sailed a trailer sailor for 5 seasons on lakes and this is my first "big boat"? I'm a past farmer so I know a 1/2" for a 9/16", plumbing system, ohms from volts, etc. AND...I really really want to get this show on the road...I'm 57 and not getting any younger...have a fair monthly income, enough cash to buy the boat, and in good health...so far...fingers crossed. Yes, i know I'm a little crazy...no need to reenforce that..but I think I'm is good company here. So, is my price point reasonable? Ideas/cautions for buying a boat in panama? Current owner has broker experience I hear so I'm way out gunned...I'm trying to learn all I can before starting negotiating.

[David_Old_Jersey]

Originally Posted by Fishspearit

David, I respectfully think you are showing a lack of knowledge of the fundamentals of the boat sale and the inherent risks.

It's not a lack of knowledge - it's just that I am in a different market place to you. In the US the model you describe does appear to be the norm, and is fiercly defended .....despite nowadays making very little sense .

There are several reasons why a signed contract and deposit come before a survey in the process, and none of them involve the broker getting his commission up front. That deposit is not the broker's commission/expenses as you suggest. If a Buyer walks away from a deal, even with the signed agreement, after the survey and before the Acceptance of Vessel, they get the deposit refunded in full. The broker does not get his commission, does not get his expenses, and yes, he worked for free. And yes, it happens all the time.

If the position is as you suggest (which I agree it is) the contract and deposit is therefore meaningless (show me a survey that has nothing in it to argue over!) so there simply is no point to it for the Vendor. Benefits to Buyer, but even then mostly relying on the goodwill of the Vendor and Broker to not play silly b#ggers and add "see you in court".....whether that is simply deducting expenses or claiming that the whole deposit is forfeit. I am sure when everyone is honest and playing by the same rules there are no problems and likely that is 99% of the time, but there is always a but......

The reason the deposit is paid before the survey/sea trial is because all of the risk is the Sellers. You say that as a Seller you wouldn't mind having a survey/seatrial without a contract or deposit. How would you feel if your boat were hauled out for the survey, the buyer saw a blister on the bottom, said "F*** this boat" and hops in his car and drives away. Who do you think the yard is going to expect to pay their fee before they drop the boat back in the water? Who do you think the Surveyor is going to sue to be paid for his time (yes, he was hired to survey YOUR boat, he will go after you if the buyer doesn't pay).

You can't avoid risk in life, but you can manage it. In this case the simple "trick" would be to ensure that the Buyer paid for the haul out (and back in) direct before the boat came out of the water, indeed I would make sure that was the case even if a deposit and contract were in place. and by ensure I don't mean take his word on it.

Surveyor coming after me for his customer having failed to pay him? Lol - good luck with that! Of course over here the rules may be different to your locale, in which case the simple answer is to make sure the Surveyor has been paid up front.

Of course the deposit could be used to meet the above expenses, but that means as a Vendor relying on the Broker not simply returning the deposit (for own self interest) - and dumping the problem onto me.

Surveys and seatrials can be very stressfull on a Seller. It takes a full day plus the preparation time, and comes with a fair bit of risk as the surveyor runs through the operation of every single piece of equipment, runs the engine at full throttle for 3 minutes to assess the engine cooling, etc. Maybe you are willing to take on the time and risk for someone like Tommy H to then say, "Ok, I'll offer you 1/3 of your asking price" after he just had a nice day of sailing your boat and learning as much as he could from the surveyor, but I can tell you that most Sellers don't want to take that risk and go through that trouble without some indication that the buyer is serious.

Yes, I am willing to take that risk. No surveyor would get unsupervised access which cuts down on the risk of having a moron with a hammer. If the engine can't cope with a few minutes of full throttle then I would already know about it.

Tommy H having a nice day sailing? Well, that very much depends on how the seatrial is conducted. Can't remove the risk, but can at least ensure that it was all business and not a pleasure trip. Then again, I would also be happy to take folks out for a nice float and sail around the bay as marketing (as long as they passed the sniff test - but I ain't that fussy!) - a captive audience to bore witless about my boat for a few hours?, what's not to like .

The process and contracts are written and designed to protect both the Buyer and the Seller, not the broker.

The terms are wrapped around the Buyer and Seller - but the process is designed around the Broker's self interest. Am not saying that is a bad thing, not for a Broker anyway! - but it is what it is (or at least used to be in ye olden days - where "the market" was well trained).

My favoured approach would be:-

1) Buyer signs option agreement to buy (time limited) with the buying process (who does what and when) spelt out for everyone (and can be tweaked, especially on time and payment).....but no actual commitment for the buyer to actually buy, just an agreed price (subject to survey being as expected - i.e. no undisclosed problems). Vendor of course also signs and actually commits to sell (during the time period), perhaps even with a signed sale agreement held in Escrow...........Might even charge a small admin fee for that (buyer or vendor!) or at least try to ......that possibly including a "free" trip around the bay just to see if they like the boat. if vendor willing to risk the boat leaving the harbour!. For me $100 for an hour around the bay covers expenses (and with the chance of making more if the boats sells)....and would screen out a few "tyrekickers".

2) No Deposit paid!

3) Buyer pays for a Survey / Haul Out / Seatrial direct (and in advance!)with whomever he chooses to use. (for me that is real earnest money - money that a buyer will not be getting back!).

4) Buyer now knows WTF he is trying to buy, so can value it (and renegotiate) or can decide to walkaway.....being guaranteed to only be out of pocket by his own expenses, and not keeping fingers crossed that the Broker has not got Divorced, gone to Vegas or has decided to be "clever" in the meantime.

5) If deal goes ahead the Buyer and Vendor then signs a real Sale Agreement, terms pretty much as before - except not subject to Survey. Likely could Sign that Agreement and complete same day if the cash and the documents are in place, but also could be a longer time period specified - including a real deposit, 10% down gives a month to complete? (no balance of cash = no buy = bye bye deposit ).

Of course I can see how the above approach might not be as commercially attractive for a Broker, but that not the same as not making better sense for the Buyer and Vendor. Welcome to the 21st Century .

[tommyh]

So far you are the only one making sense. I in fact did pay someone 100.00 last weekend to sail a nice Cal 31 that is for sale. Worked out great,no pressure and seller felt good about it. And by the way it was a "nice "4 hour sail. After that experience that boat is high on my list.

[David_Old_Jersey]

Originally Posted by tommyh

So far you are the only one making sense. I in fact did pay someone 100.00 last weekend to sail a nice Cal 31 that is for sale. Worked out great,no pressure and seller felt good about it. And by the way it was a "nice "4 hour sail. After that experience that boat is high on my list.

Just out of curiousity - had you agreed at least a ballpark buying figure with the Vendor (ie. boat listed at $50k and you would not be paying $30k, even if as described and you liked it).....no right or wrong answer! me is just nosey!

and on a general note, me ramblings above are not me saying how things should be done - just arguing how things could be done (IMO better, at least for Vendor and Buyer )........IMO / IME the best way to do a deal is the way that works, and that could be anything - could even be the "standard" way........from ye olden days .

[tommyh]

Yes we a did agree on a price.Then a survey.

[David_Old_Jersey]

Originally Posted by tommyh

Yes we a did agree on a price.Then a survey.

Cheers.

Even if you do not proceed I think the Vendor got a good enough deal not to have something to complain about. A sail and payment for lunch (and a bit more) - if only all failed sales pitches were like that!

Me would be happy with 10 failed sales a week .

[Red Sky]

David, now your talkin' I'll take low-ball offers all day long at $100 a pop.

[tropicalescape]

Originally Posted by David_Old_Jersey

It's not a lack of knowledge - it's just that I am in a different market place to you. In the US the model you describe does appear to be the norm, and is fiercly defended .....despite nowadays making very little sense .



If the position is as you suggest (which I agree it is) the contract and deposit is therefore meaningless (show me a survey that has nothing in it to argue over!) so there simply is no point to it for the Vendor. Benefits to Buyer, but even then mostly relying on the goodwill of the Vendor and Broker to not play silly b#ggers and add "see you in court".....whether that is simply deducting expenses or claiming that the whole deposit is forfeit. I am sure when everyone is honest and playing by the same rules there are no problems and likely that is 99% of the time, but there is always a but......




You can't avoid risk in life, but you can manage it. In this case the simple "trick" would be to ensure that the Buyer paid for the haul out (and back in) direct before the boat came out of the water, indeed I would make sure that was the case even if a deposit and contract were in place. and by ensure I don't mean take his word on it.

Surveyor coming after me for his customer having failed to pay him? Lol - good luck with that! Of course over here the rules may be different to your locale, in which case the simple answer is to make sure the Surveyor has been paid up front.

Of course the deposit could be used to meet the above expenses, but that means as a Vendor relying on the Broker not simply returning the deposit (for own self interest) - and dumping the problem onto me.




Yes, I am willing to take that risk. No surveyor would get unsupervised access which cuts down on the risk of having a moron with a hammer. If the engine can't cope with a few minutes of full throttle then I would already know about it.

Tommy H having a nice day sailing? Well, that very much depends on how the seatrial is conducted. Can't remove the risk, but can at least ensure that it was all business and not a pleasure trip. Then again, I would also be happy to take folks out for a nice float and sail around the bay as marketing (as long as they passed the sniff test - but I ain't that fussy!) - a captive audience to bore witless about my boat for a few hours?, what's not to like .



The terms are wrapped around the Buyer and Seller - but the process is designed around the Broker's self interest. Am not saying that is a bad thing, not for a Broker anyway! - but it is what it is (or at least used to be in ye olden days - where "the market" was well trained).

My favoured approach would be:-

1) Buyer signs option agreement to buy (time limited) with the buying process (who does what and when) spelt out for everyone (and can be tweaked, especially on time and payment).....but no actual commitment for the buyer to actually buy, just an agreed price (subject to survey being as expected - i.e. no undisclosed problems). Vendor of course also signs and actually commits to sell (during the time period), perhaps even with a signed sale agreement held in Escrow...........Might even charge a small admin fee for that (buyer or vendor!) or at least try to ......that possibly including a "free" trip around the bay just to see if they like the boat. if vendor willing to risk the boat leaving the harbour!. For me $100 for an hour around the bay covers expenses (and with the chance of making more if the boats sells)....and would screen out a few "tyrekickers".

2) No Deposit paid!

3) Buyer pays for a Survey / Haul Out / Seatrial direct (and in advance!)with whomever he chooses to use. (for me that is real earnest money - money that a buyer will not be getting back!).

4) Buyer now knows WTF he is trying to buy, so can value it (and renegotiate) or can decide to walkaway.....being guaranteed to only be out of pocket by his own expenses, and not keeping fingers crossed that the Broker has not got Divorced, gone to Vegas or has decided to be "clever" in the meantime.

5) If deal goes ahead the Buyer and Vendor then signs a real Sale Agreement, terms pretty much as before - except not subject to Survey. Likely could Sign that Agreement and complete same day if the cash and the documents are in place, but also could be a longer time period specified - including a real deposit, 10% down gives a month to complete? (no balance of cash = no buy = bye bye deposit ).

Of course I can see how the above approach might not be as commercially attractive for a Broker, but that not the same as not making better sense for the Buyer and Vendor. Welcome to the 21st Century .

I am so glad my old boat is paid for..