Normal to Reduce Offer Post Survey?

[lo2jones]

Never send a dish back to the kitchen to get fixed! An old rule of mine. Same with a boat: ask for repair allowances, don’t have the owner repair the problems.

[S/V Illusion]

Originally Posted by zstine

Assuming the buyer is using a 'yacht broker association of America' accredited broker, or at least a P&S copied from one, then the seller cannot walk away just because the buyer asks to negotiate price. the Seller is Obligated to sell at the original price on the date specified, free and clear or pay the buyer any loss including the survey fee, brokers fees, etc. the seller cannot walk away from a P&S!

Can you cite language in a standard escrow agreement which leads you to think that?

Last time I checked, two things were truths:
1. It’s a seller’s prerogative to sell, and
2. Nothing can change #1.

[mvweebles]

Originally Posted by lo2jones

Never send a dish back to the kitchen to get fixed! An old rule of mine. Same with a boat: ask for repair allowances, don’t have the owner repair the problems.

I normally agree with you, but given the severity of the crack and the distinct possibility of there being follow-up damage plus yard lay-days could drive there's a distinct possibility this repairs 2x/3x/4x in cost, I'd prefer the owner shoulder the financial risk and leave me with inspection rights and ability to walk away.

Peter

[goboatingnow]

I would agree with the sentiments that the buyer gets the allowances and fixes it. Get it surveyed and yard quoted.

[ms.lau]

If that happened to me I simply wouldn't trust them and would walk away.

[Firehoser75]

Personally I would not "nickle and dime" a seller, especially on a 38 year old boat. If you want new, buy new! (talking about the "numerous small stuff" you mention).
As to the keel repair, I would insist that the buyer cover all costs for this repair, and that MY surveyor oversee all aspects of the repair, and that the repair be completed to my surveyor's specifications, with a right of refusal if not satisfied. My surveyor would be paid by me, as he would be working in my best interests, and this fact should assure the seller that I intend to carry through with the purchase assuming the conditions are met.

In this way, I could be reasonably assured that the repair will be done completely to acceptable standards, and that the seller will cover all costs (including "surprises") necessary to adequately repair this grounding (after all, the seller was the one who grounded it or else purchased it in this condition and is therefore the one who should "rectify" the problem).
Again, as to the "small stuff", it is an old boat and as such, I am sure you negotiated your offer based on that fact (old boats will have at least some smallish issues) My last boat had about 12 items the surveyor listed, all but one were small items. I did try to renegotiate for the larger item (deck damage (water intrusion)) that was estimated to be $7,000. The seller said no, and I ended up agreeing to take the boat anyway. It was and is, a great boat in very good condition for it's age. I had the deck repaired at my expense and even though I still think the seller should have covered it (previous "major" damage and the agreed price was fair for both of us), I don't regret my decision.
Also, times are different now (depending on individual area), and a lot of boats are often selling quickly for top prices

Good luck,

[Uricanejack]

Originally Posted by Dave_R

First time buyer--thanks for all the communal support so far!

How common is it to reduce your offer on a purchase, after the survey?

I have an offer in on a 1984 Gulfstar 44. One big issue, and numerous small issues.

The big issue, there's a crack at the aft end of the keel, where it meets the hull, that had been repaired before (poorly) and re-cracked. Too much epoxy and filler, not enough glass. Owner has already agreed to repair, and allow me to monitor the repair.

The other issues are numerous and small. I'm inclined to reduce my offer by about 5%. Is this normal or abnormal?

I know in home purchases, its pretty typical...

Depends.
You make an offer subject to survey, possibly other subjects, I also put personal viewing an test sail.

Typically surveys will find a list of imperfections. Minor problems should be expected.
You have 3 choices, survey showed big issue with keel,
Walk away.
Re Negotiate reduced price to allow for estimated cost of repair.

Or the boat is repaired by seller, you can still try and negotiate. The point being the boat now has a known repaired flaw.
The counter argument being, the boat is now a 40 ish year old boat, known to be structurally sound after a common repair.

I went for option no 2. I got an estimate from the yard the boat was lifted at. This was the one by surveyor and yard this way I had control over the repairs.

PS not many 30 or 40 year old boats will not have a few issues. How big a deal they are depends on the price.

Which is best, My boat the keel bolts were a bit loose, I had the keel dropped, faired and resecured. In doing so the yard found a crack not in the survey, so I had this repaired. It came in round about the amount the price was reduced.
I sailed away quite happy. A boat which fit my budget, and I knew was structurally sound.
It’s got a repaired smile, (crack in front of keel) most older boats of type, are susceptible.

In the end it’s up to you, will you be happy with the boat, only you can answer.

[loneshark64]

People do this all the time, it is very common. But I think it is poor form. In your situation I would insist that the guy have it professionally fixed, or walk.

[Dave_R]

Thanks for the variety of opinions. Just an update...

We did get a repair allowance, and repairs are in process.

[ksuderman]

Originally Posted by S/V Illusion

Can you cite language in a standard escrow agreement which leads you to think that?

Last time I checked, two things were truths:
1. It’s a seller’s prerogative to sell, and
2. Nothing can change #1.

This is the language in the P&S I signed:

If the Seller defaults per the terms of this agreement and the sale is not consummated, the full commission shall be due and payable to the Broker by the Seller, and the expenses of the Buyer’s survey become the obligation of the Seller. This does not preclude any other rights the Buyer may have.

But that is after a price has been agreed and the contract signed, the seller can't default on an agreement they haven't agreed to.

[S/V Illusion]

Originally Posted by ksuderman

This is the language in the P&S I signed:

If the Seller defaults per the terms of this agreement and the sale is not consummated, the full commission shall be due and payable to the Broker by the Seller, and the expenses of the Buyer’s survey become the obligation of the Seller. This does not preclude any other rights the Buyer may have.

But that is after a price has been agreed and the contract signed, the seller can't default on an agreement they haven't agreed to.

Thanks. I assume you understand the above P$S agreement language is substantially different than what you described below:

You wrote earlier:
“America' accredited broker, or at least a P&S copied from one, then the seller cannot walk away just because the buyer asks to negotiate price. the Seller is Obligated to sell at the original price on the date specified, free and clear or pay the buyer any loss including the survey fee, brokers fees, etc. the seller cannot walk away from a P&S!”

The last sentence particularly awkwardly written - there can be no “ default on an agreement” to which both parties HAVEN’T agreed.

Also absent is any other language which requires a seller to sell, nothing herein forces a seller to do anything other than reimburse survey expenses. In any case, the broker retains his commission.

If you are still confused, you would be best served by discussing it with a local attorney.

[zstine]

Originally Posted by S/V Illusion

Thanks. I assume you understand the above P$S agreement language is substantially different than what you described below:

You wrote earlier:
“America' accredited broker, or at least a P&S copied from one, then the seller cannot walk away just because the buyer asks to negotiate price. the Seller is Obligated to sell at the original price on the date specified, free and clear or pay the buyer any loss including the survey fee, brokers fees, etc. the seller cannot walk away from a P&S!”

The last sentence particularly awkwardly written - there can be no “ default on an agreement” to which both parties HAVEN’T agreed.

Also absent is any other language which requires a seller to sell, nothing herein forces a seller to do anything other than reimburse survey expenses. In any case, the broker retains his commission.

If you are still confused, you would be best served by discussing it with a local attorney.

I wrote the first quip not ksuderman. If the survey took place as the PO stated, then the P&S sure should be agreed to, signed and executed. So yes, the seller can default! Why, Mr. Illusion, do you think otherwise?? I am not confused and understand the process and standard contracts quite well. Further, my quip is corroborated by ksuderman's P&S quote. No the seller is not "forced" to sell or sentenced to death. As I clearly stated, the seller would be liable for any financial damages such as the broker's fees, the cost for the survey, etc. Many thousands in loss would be incentive to give a little money to the buyer for repairs... Anyway, moot point now. The PO did negotiate and got repair allowance and the deal did not go bust.

[ksuderman]

Originally Posted by S/V Illusion

Thanks. I assume you understand the above P$S agreement language is substantially different than what you described below:

You wrote earlier:

You do realize that wasn't me the wrote that? You asked what clause might have made zstine believe the seller would be liable to cover the costs of the survey, I simply provided the clause from the P&S.

[Cheechako]

Basics:
-The buyer can walk away at any time by simply rejecting the inspection.
-The seller can walk away if the buyer requests ANYTHING outside the original contract.

If you want to negotiate a lower price etc, just REJECT the inspection by the date required on the contract.
Then offer what you want to for the boat.... and if you want a deal explain why, including any concerns you have over fixing it to your satisfaction and the risks involved.

Something worded nicely including : "The yard says it will be $8-$10k to resolve the keel issue. However the full issue cannot be determined until it is worked on. For that reason I am offering $15k less to cover unknowns , risks and time lost"

[svtickles]

We completed a survey on a boat last week. As I was leaving, the agent said the seller would not negotiate on any defects. There were numerous, so we gave up on the purchase. Since then, the seller has offered to fix virtually everything! But we don't trust them anymore. The boat is back on sale for $10k more (roughly what we estimated it would cost to fix the items - plus our time, of course).

Previously, we did a survey on another vessel and the seller said they would be willing to negotiate on small items after the survey. So it depends on the person.