Pay Before You Even Get a Survey

[SaltyMonkey]

Originally Posted by DWJensen

Just curious here: I understand and have worked through the process when brokers are involved, but how does it work when the boat is for sale by owner with no brokers? Do you give the seller a deposit? Where's the protection then?

You use an escrow service, or a brokerage, or even some place like Boats US to handle the event. I would not buy without a middle man, but then again I never bought through an owner directly - always through a broker or a yard. Owners typically are horrible sales people in my own experience, and I just gave up. I'd rather deal with a broker. They also know the market, whats available off listing, coming to market soon, or the neighborhood enough to find owners that may be willing to sell. A good broker is a conduit for whats going around the area.

[David_Old_Jersey]

Originally Posted by SaltyMonkey

They also know the market, whats available off listing, coming to market soon, or the neighborhood enough to find owners that may be willing to sell. A good broker is a conduit for whats going around the area.

I would caution anyone visiting the UK against expecting quite that approach from a broker

But if anyone does find out what their business model actually is I would be curious (although some may giggle at the apparently common US broker approach of convincing both buyers and vendors that a turd is apple pie - at least it is an understandable business model )

[gettinthere]

I bought from a private party. I involved a finance company to fund part of the transaction. It brought in a documentation service that handled all the paperwork verifying there were no leans and providing escrow service for the transaction prior to survey. Went smoothly.


As to how the deposit system works: you find a boat, you make a REFUNDABLE deposit and then get a survey. The deposit assures you that the boat will not be sold out from under you. It is off the market for the term of the agreement or until you reject upon survey for any reason.

Doing a survey before signing a contract can screw you out of a deal. Broker tells other interested parties a buyer has stepped up and has ordered a survey. Interested third party comes in and makes an offer with a deposit and you are out of luck and out the cost of the survey. Many good boats have lurking buyers out there on the fence. Your survey could spur them to action. The broker will let them know what is up.
Also, you negotiate a price before doing the survey. If you have spent good money on the survey and then start to negotiate, you are at a disadvantage. You've tipped your hand. All the while that you are dickering is more time for another party to step in, with the broker pushing that scenario along. Making an offer with deposit first takes the boat off the market and protects your position.

[SaltyMonkey]

good advice gettinthere

[hellosailor]

" putting up a fully refundable deposit in your own currency with a reliable Broker who has you and Seller sign a conditional contract….. is the best way "
Pelagic-
That ain't gonna happen. A US broker will only have access to accounts in US$. If someone from Oz or Cambodia or England wants to put up a deposit in their local currency, first it has to be wired? fedexed? to the broker, and then the broker has to do what? CONVERT IT TO US$ before his US bank will accept it! Unless you physically mail over the currency and the broker physically sticks it in his safe (oh yeah, how would I know if $5000 AU$ was counterfeit or not?) there's no way to operate unless the broker uses his domestic bank, domestic currency conversion, and yes that means paying a conversion fee each way as well.

Hey, trying to go shopping in a global market is a b|tch. Some of us remember Europe before the EU, when you also had to convert wheelbarrows of monopoly money every three or four hours when you crossed a border.

"Deal with it". That's the price of admission. Folks who don't like it, shouldn't be trying to make global business transactions.

[ozskipper]

Frankly, who would make and offer on a boat unseen, let alone one in a foreign country? The more I think about it, its crazy . The only way to do it, is to hop on a plane and do the leg work.

I am thinking about doing exactly the same thing (either US or Greece), and am doing the usual internet research. But I wont make the any decisions untill I actually get to kick a few tyres.

I truly believe the OP should just buy a plane ticket, with a handful of possible boats in mind, then spend the time enjoying the US and looking at boats at the same time.

Cheers
Oz

[Passage50]

Originally Posted by Tellie

I agree. Whiskey Tango Foxtrot. Here in S. Florida we have some really good brokers and some really shady ones. I'm sorry the owner gets his hopes up and let down by a few jerks. Many if those jerks are the brokers themselves. How many buyers get their hopes up when a boat advertised turns out to be a friggin piece of crap after you've traveled to see it on the good advice of a broker or seller. Ever get any up front money for that experience? You also won't see a broker put up a dime when they promise the world to a seller and get his hopes up just to let him down after six months of listing his boat. Some of these yahoos are in the business of listing and keeping boats at the dock for as long as they can to collect a percentage of the associated fees. Ask any real estate person what MLS stands for (More Lazy Sales people) many boat brokers are cut from the same cloth. Not interested at all in their cry baby show. Not your problem to solve with what can easily amount to tens of thousands of your dollars at 10%. Believe me these brokers will bend, especially in this economy. Tell the seller or broker you have a reputable surveyor standing by ready and willing to see the boat. Give the buyer/broker his number to verify if they want. For a few hundred dollars hire an attorney to hold a deposit of your choosing in his escrow account. I would never give that amount of money to a boat broker. They are not held to the same standards as real estate brokers and I wouldn't give them that kind of money either. If you give someone 20-40+K They are going to be in the drivers seat and many will not hesitate to make you jump through hoops to satisfy the seller, the broker and all the little annoying people that come out of the wood work when the sale is near it's completion. I don't care what anyone in that business tells you, everything is negotiable, even earnest monies. If the broker doesn't like it say adios, there are dozens more waiting in line behind them. I know a lot of folks will disagree with me that's fine. But the majority of my customers are recent new to them boat buyers or people ready to sell. Many are still smarting after their buying/selling experience.
OK rant over.

Well said

[BlueWaterSail]

Any broker will verify that the sales contract (and refund of any deposit) is conditional upon the buyer accepting the survey and sea trial. That seems fair enough - you're being asked for a deposit to show the seller you are serious about wanting to buy his boat (having done your own research), and have recourse in the event that things don't turn out the way the seller represented. Seems fair to all parties involved, not least the broker, who's trying to make a living by matching earnest buyers & sellers.

BWS

[AllezCat]

Originally Posted by BlueWaterSail

Any broker will verify that the sales contract (and refund of any deposit) is conditional upon the buyer accepting the survey and sea trial. That seems fair enough - you're being asked for a deposit to show the seller you are serious about wanting to buy his boat (having done your own research), and have recourse in the event that things don't turn out the way the seller represented. Seems fair to all parties involved, not least the broker, who's trying to make a living by matching earnest buyers & sellers.

BWS

I agree, and this is my current situation.
We have finished the survey and sea trials.
Acceptance date is today.
But I will not receive the survey report for several days
Not sure whether to ask for an extension of the "Acceptance" date. Or accept subject to rough outline of what I know some of the problems to be.
What do you guys think?
Don't want to have it bought out from under me after all this expense...

[MitchM]

you paid for the survey, why not call the surveyor ASAP and get a detailed verbal report?then figure out the cost of the fixes needed.
what if the survey shows $25K in maintenance is absolutely needed to make the boat seaworthy-- would you not try to negotiate a lower contract price?
since you paid for the survey, it is your right to get that information so that you are in a position to negotiate a different sale price , if necessary.
i am not sure whether the language of your contract allows for anythin other than unconditional acceptance. ' asking seller to 'accept subject to..rough outline of problems..' legally is a change in the terms of your original contract. by adding such a condition, you are now making a counter offer to seller by conditioning your 'acceptance' on 'rough outline of problems..', which the seller must then agree to.

if i were you i'd try to get an extension of the acceptance date, based on your not having the survey results.

(and remember that free legal advice even from a degreed professional , is worth what you pay for it ..)

[AllezCat]

Originally Posted by MitchM

you paid for the survey, why not call the surveyor ASAP and get a detailed verbal report?then figure out the cost of the fixes needed.
what if the survey shows $25K in maintenance is absolutely needed to make the boat seaworthy-- would you not try to negotiate a lower contract price?
since you paid for the survey, it is your right to get that information so that you are in a position to negotiate a different sale price , if necessary.
i am not sure whether the language of your contract allows for anythin other than unconditional acceptance. ' asking seller to 'accept subject to..rough outline of problems..' legally is a change in the terms of your original contract. by adding such a condition, you are now making a counter offer to seller by conditioning your 'acceptance' on 'rough outline of problems..', which the seller must then agree to.

if i were you i'd try to get an extension of the acceptance date, based on your not having the survey results.

(and remember that free legal advice even from a degreed professional , is worth what you pay for it ..)

Thanks for the info
I have a verbal report - he ballparks 20k.
Later the seller and broker and agreed verbally to wait.
But, the contract says....
So I will meet with the seller today. Maybe hash out a partial agreement on repairs.
At the very least sign an extension to the "Acceptance Date".
Either way aren't we renegotiating the price?
And either can reject the sale?
TBD

[SuenosAzules]

You are correct MitchM. I call all of my clents when I have finished the survey and worked out the fair market value of the vessel typically on the same day before I submit the written survey to give them a verbal run down of the vessel so they can move into action on their in and know what they've got. I should have mentioned that detail before in my pervious post. Thanks for bringing up the point.

[BlueWaterSail]

Originally Posted by AllezCat

Either way aren't we renegotiating the price?
And either can reject the sale?
TBD

Yes on both counts. If you are unhappy with the survey (the surveyor found previously undisclosed issues with the boat), you can walk away (and get your deposit back, though not the cost of the survey), or work out a deal with the seller to deal with the issues raised - he fixes it, or reduces the selling price and you accept the survey as it stands.

Most importantly, don't sign anything based on verbal communication - insist on having a signed survey in your hands before any negotiating begins.

There is one last thing to be aware of - surveyors will limit their liability to the amount paid for the survey. This means that if the surveyor fails to detect a defect that ends up costing you thousands to repair, you have no recourse except the few hundred you paid for the survey. So, you should be careful to select a reputable surveyor to do the work.

Good luck, BWS

[hellosailor]

"Either way aren't we renegotiating the price?
And either can reject the sale?"
Depends on how the contract is written. You wouldn't want a contract that allowed the seller to simply walk away without sound reason, after the prospective buyer had laid out haul and survey fees, would you? (i.e. got a better offer)
Do take your time reading the contract, and if you're not comfortable, have someone else review it.

[AllezCat]

Originally Posted by hellosailor

"Either way aren't we renegotiating the price?
And either can reject the sale?"
Depends on how the contract is written. You wouldn't want a contract that allowed the seller to simply walk away without sound reason, after the prospective buyer had laid out haul and survey fees, would you? (i.e. got a better offer)
Do take your time reading the contract, and if you're not comfortable, have someone else review it.

According to the contract, if seller defaults, they are liable to pay full commission to the broker and my survey fees. That guarantee and $2 will get me a bus ride.
If I default broker/seller split my deposit 50/50.
What I mean is if there are 20k in necessary repairs that would prevent me obtaining insurance. And he says no way jose not paying nothing. Then I either pay or walk, ostensibly the same as him walking...
I also see the boat being stripped.
The inventory list is extensive, mostly high end, much obsolete. But all charts, tools, spares, stuff, other stuff, and everything else is not listed. And they are posturing to offer for sale/extortion. I should have checked in the beginning, but I will not pay for a bunch of 2nd hand stuff, even though would be inconvenient - they can take it with them. Not sure if this is the norm, but seems kinda sleazy to me...Which will make me more inclined towards inflexibility on repairs...and as someone (hellosailor?) mentioned in another thread obtaining a very strict escrow clause for unknown or hidden faults.
Cheers