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Eigenvector 16-10-2016 13:29

Survey and Negotiation
 
I am seeking discussion and advice as to how to play out the following real scenario. I have reduced this down to a summary as to not make this a dissertation.

I’ve been looking around for a while for a 40+ mono on the usual sites. I find a few (8) candidates in the USA that look promising at a single large marina. A broker is contacted and the list (links) is supplied of boats that I am interested in looking at in a few weeks when I can come down. A few telephone conversations here and there about the list, but nothing major other that what my sailing intentions are in order to collect a couple other boats to look at on the upcoming trip.

Two weeks later head to the marina for a couple days looking at the boats on the list (less 2 that sold), a few new ones, and 1 one whose contract could fall thru.

Drink on it for a couple days with others who have interest and knowledge. I subsequently decide to make an offer on one, which is rejected without a counter offer.

No problem. Everything is contingent on a survey and sea trail. I offer the original price as listed on Yachtworld. ($140K if it matters)

Fast forward a couple weeks and I’m back with a surveyor……………

Everything is really good except the following:

1) 1. Some ancillary items from the listing are not present on the boat.

2) 2. USCG equipment is out of date or non-functioning.

3) 3. All of the helm instruments are broke. By broke I mean “do not function as originally intended”.

IE, panel you can’t see without cupping your hands over the display, radio transmits but doesn’t receive, display that is obviously non-functioning due to water, autopilot works from pendant only, and other just non-functioning indicators.

Now the questions for discussion:

Am I wrong to assume that if it is listed (yachtworld) in the equipment section and even has pictures that it should work? Shouldn’t the broker have at least made a cursory survey prior to getting to this point? Or is it “Used Car/Boat salesmen, the only difference is 10x price”

Bottom line, boat is nice but needs electronics (2002 vintage). I seek the path forward while I drink on it. I’ve got time on my side.


Thanks

Jd1 16-10-2016 14:07

Re: Survey and Negotiation
 
All items on the list must be present or available for you, else deduct from the offer and explain why
Deduct for non working USCG equipment and explain why
Ask for vendor to fix non-working instruments or deduct enough to replace yourself

It's buyer beware and it is up to you to find out that stuff doesn't work.
Definitely used car salesman unless you get the one in a thousand good broker

Bottom line, how good is the price - does it reflect the defective equipment? How badly do you want it ?

A little unsolicited advise - do an extremely thorough checkout of absolutely all equipment on board because what you have found is a sure sign of poor maintenance. It is amazing how auxiliary equipment adds up if you have to fix/replace it. Do not count on the surveyor to find this stuff (mine didn't test ANY equipment)

GordMay 17-10-2016 05:47

Re: Survey and Negotiation
 
Greetings and welcome aboard the CF, Eigenvector.

barnakiel 17-10-2016 06:00

Re: Survey and Negotiation
 
IMHO all items LISTED are assumed working condition unless stated otherwise.

However, not all items PICTURED belong in the deal. There may be personal items, deco/props, etc.

These are my observations from house market. I do not think the boat market has any unique rules.

I think that a detailed list of items onboard that are part of the deal should be made up at a point of the deal. And this relates to everything onboard (sails, anchors, batteries, compasses .... EVERYTHING). Quite commonly, make, age and condition of the items is also given.

b.

S/V Illusion 17-10-2016 06:27

Re: Survey and Negotiation
 
Look at it objectively - the seller is trying to sell a boat marketed as complete but it isn't.

The broker should know that. Either he knows or he isn't doing his job.

Are you the "sucker" they both hope to find?

kmacdonald 17-10-2016 06:42

Re: Survey and Negotiation
 
Yacht brokers are notoriously much worse than used car salesmen.

CaptTom 17-10-2016 06:42

Re: Survey and Negotiation
 
Even if there IS a law against listing things that don't work as expected, it's irrelevant here.

Can you and the seller agree on a price for whatever the seller is offering?

If yes, proceed. If no, keep looking. It's that simple. Market Economics 101.

In practice, I'd question the motivation of a seller who won't entertain lower offers. Tradition holds that the asking price is always more than the selling price. There are exceptions, like a very sought-after model or an imbalance in the market. But in this case it does sound like the seller has a distorted view of the value of the boat. It's very hard to negotiate in that situation. Maybe come back later and if it still hasn't sold, reality may begin to sink in.

a64pilot 17-10-2016 06:48

Re: Survey and Negotiation
 
If I really wanted the boat I would list the items that need replacing in order to make the boat usable itemize cost to replace them and offer that I split the price with the seller, but by doing all of the install myself I'll save much money.


Think of it like buying a used car, would you really itemize windshield wiper blades, new tires, oil change etc., or just make an offer?

Shrew 17-10-2016 06:50

Re: Survey and Negotiation
 
The listing is at face value the items listed are assumed to be working. The broker is not going to 'pre-survey' every boat they have listed (this would be hundreds of boats) and it wouldn't be reasonable to assume so.

The owner listed the items included in the sale. The Broker takes the owner at their word. The survey and seatrial are there to specifically ferret out what is in disrepair.

If it's listed I assume it's included in the sale. If it's pictured and not specifically listed I would ask.

The problem here is that the offer is contingent on survey and trial. That means it's a "Go/No Go" offer. If you want to deduct for items not in repair then that should be included in the P & O as well. such as offering $140K with $20K in escrow pending survey. This should allow you to negotiate up to $20K off of the $140K.

Suijin 17-10-2016 07:00

Re: Survey and Negotiation
 
The bottom line is that if equipment is listed in the boat description/ad then it should be either functioning (as in the electronics) or present in the boat's inventory (USCG equip). Just because it's in a picture of the inside of a locker does not mean it's included.

Yes, you are free to negotiate. You can request that the non-functional items be repaired at the owner's expense, but you are far better off simply deducting the cost of the purchase and installation of new electronics from your offer. Seller's confronted with required repairs to complete the sale are not incentivized to have the work performed properly. That, and you get new modern equipment.

And yes, it's "usual and customary" to go this route, deducting the price of replacement from your offer. The selling broker may whine and complain, as he/she represents the seller, but hold fast.

As an aside, it sounds like you're dealing directly with the selling broker. You would have been better served in some respects retaining the services of a "buyer's broker" who negotiates with the selling broker, is familiar with all the contractual and paperwork issues, and can help you with documentation, etc. during the closing. It would have been no cost to you as the brokers split the commission which comes out of the seller's pocket.

That said, if the seller's broker is going to get the full commission, he/she is incentivized to close this specific deal and so may counsel the seller to accept your requirement that the cost of replacement equipment be deducted from your accepted offer.

HappyMdRSailor 17-10-2016 07:02

Re: Survey and Negotiation
 
Quote:

Originally Posted by barnakiel (Post 2236930)
IMHO all items LISTED are assumed working condition unless stated otherwise.

However, not all items PICTURED belong in the deal. There may be personal items, deco/props, etc.

These are my observations from house market. I do not think the boat market has any unique rules.

I think that a detailed list of items onboard that are part of the deal should be made up at a point of the deal. And this relates to everything onboard (sails, anchors, batteries, compasses .... EVERYTHING). Quite commonly, make, age and condition of the items is also given.

b.

You have props for decoration???
Brilliant double duty if they are spares...
:whistling:

OP-Eigenvector - agreed as above

Quote:

Originally Posted by S/V Illusion (Post 2236957)
Look at it objectively - the seller is trying to sell a boat marketed as complete but it isn't.

The broker should know that. Either he knows or he isn't doing his job.

Are you the "sucker" they both hope to find?

Likely... Very likely...

Quote:

Originally Posted by kmacdonald (Post 2236969)
Yacht brokers are notoriously much worse than used car salesmen.

A truer statement was never uttered...

Quote:

Originally Posted by CaptTom (Post 2236971)
Even if there IS a law against listing things that don't work as expected, it's irrelevant here.

Can you and the seller agree on a price for whatever the seller is offering?

If yes, proceed. If no, keep looking. It's that simple. Market Economics 101.

In practice, I'd question the motivation of a seller who won't entertain lower offers. Tradition holds that the asking price is always more than the selling price. There are exceptions, like a very sought-after model or an imbalance in the market. But in this case it does sound like the seller has a distorted view of the value of the boat. It's very hard to negotiate in that situation. Maybe come back later and if it still hasn't sold, reality may begin to sink in.

Not to counter is a sign to start with...

FIRST RED FLAG WAS...

Two weeks later head to the marina for a couple days looking at the boats on the list (less 2 that sold), a few new ones, and 1 one whose contract could fall thru.

Really??? 3 of 8 boats you were looking at are under contract 2 weeks later??? This time of year???
Hmmmmmmmmmmmmmmmmmmmmm...........

There are a TON OF BOATS OUT THERE... Gems... with negotiating owners...

EVERYTHING LISTED SHOULD WORK...
Play hardball back... Tell them you want 20k off for electronics...

barnakiel 17-10-2016 14:57

Re: Survey and Negotiation
 
Let's not look for ill will where there is probably none.

Just ask for that bloody equipment list and you are set.

b.

Pelagic 17-10-2016 17:39

Re: Survey and Negotiation
 
My best advice is to keep it very simple and trust only yourself.

1....Make an offer of what you are prepared to pay (if survey is good) and then give it lots of time, while still looking.

2.....Take lots of pictures on your inspection Then ask broker/owner to provide a detailed list of what is NOT included in the purchase price.

3.....Do not assume you are in a good negotiating position if you agree to asking price hoping survey will help to reduce it....they see you as already invested by cost of Survey and broker will feel he has you....refer to #1

4.....Always follow your gut instincts and take your time

Sea Dreaming 17-10-2016 18:08

Re: Survey and Negotiation
 
We offered a much lower price than the seller was asking. They were reluctant to accept the offer until presented with a list of similar boats that were priced lower. We gave them a list of what was observably needing to be fixed and the list of similar boats.They accepted our offer. Be rational, logical and dispassionate. Do not argue. Just inform.

Dulcesuenos 18-10-2016 05:06

Re: Survey and Negotiation
 
Flip side is if you do not agree to then purchase and offer a lower price it gives the seller an out if they have a back up offer. I know someone who had a contract and after survey tried to knock off another 5%. Lost the boat and his time and survey $ completely.

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