Boat buying etiquette

[Juggerknot]

Originally Posted by Manana5

Hello again, this forum has been greatly helpful and I have learned a whole lot, leading up to my first ever boat purchase attempt. I would like to know some more about the buying/selling process - what is usual practice, what is considered good etiquette. Like for example:
- When making an offer on a boat is there any guideline how much below the asking price is ok to offer?
- How quickly do the negotiations typically happen? Like, we contacted the broker with our offer yesterday - when should I expect a reply? I don't want to seem too impatient by calling him the next day, but how long to wait before I call to check what is happening?
- If they are not ok with our offer (if it is too low) will they make a counter offer? Or simply ignore us?

Can you tell me about your own boat-buying experiences, how did it go, did you negotiate the price, on what basis, how much the final price was below the initial asking price?

As many have stated, any offer, be it realistic or bottom feeding should be submitted in writing and include an escrow deposit. I disregard all offers lacking that criteria as they are vaporware... Put some skin in the game and you'll get a reply.

[sailingharry]

Originally Posted by Juggerknot

As many have stated, any offer, be it realistic or bottom feeding should be submitted in writing and include an escrow deposit. I disregard all offers lacking that criteria as they are vaporware... Put some skin in the game and you'll get a reply.

List prices are often (very often) very unrealistic. It's hard to accept that the boat you paid so much for, and put so much money into, has fallen so much in price.


I offered 50% of list for my current boat, and we settled $500 above that offer.


The first boat I looked at was offered for $30K, I offered $5K, and have been eternally grateful they didn't take it -- $5K was a charity offer.


Last fall, we looked at a boat listed for $169. The last boat of that model to sell sold for $112K, and was newer and better equipped. We offered $115 (34% off list) and were declined. The boat still hasn't sold.


There was a Sabre 425 that listed for $150 or so, fell steadily to under $100, and eventually went to FSBO.



List price does not mean it is worth what they are asking.

[Happ]

Originally Posted by sailingharry

List prices are often (very often) very unrealistic. It's hard to accept that the boat you paid so much for, and put so much money into, has fallen so much in price.


I offered 50% of list for my current boat, and we settled $500 above that offer.


The first boat I looked at was offered for $30K, I offered $5K, and have been eternally grateful they didn't take it -- $5K was a charity.


Last fall, we looked at a boat listed for $169. The last boat of that model to sell sold for $112K, and was newer and better equipped. We offered $115 (34% off list) and were declined. The boat still hasn't sold.


There was a Sabre 425 that listed for $150 or so, fell steadily to under $100, and eventually went to FSBO.



List price does not mean it is worth what they are asking.

You have brilliantly made the case for using a buying broker. They have access to information not available to the general public.

Every seller thinks they have the most perfect boat. They often forget that the solar panels they put in 5 years ago are just that 5 years old. Replacing them will often cost what they believe their current depreciated value is. Almost every boat will get a new set of electronics if they are more than 3 years old. As has been stated many times in this forum the purchase price is just the beginning. Maintenance and upgrades to make the boat yours can be costly.

[Elzaar]

First off - and this is an assumption on my part from real estate side - the Seller's Broker is legally obligated to act in the seller's best interest. Not the buyer's. While they are likely legally required to disclose any safety issues with the boat, they are unlikely to have to volunteer much else if not specifically asked. They are likely also required to negotiate in the seller's best interest, not yours. So whatever advice you ask for should be taken with a grain of salt. Im not trying to paint the Seller's broker badly, just recognizing that similar to your ex-spouse's attorney, they have allegiances they are legally obligated to - even if they think he or she is a nightmare and you are getting screwed.

In the boat world, I think the best advantage of the Buyer Broker is they can help you select the best boat for you, offer advice on that or specific boats beyond those listed by a given seller broker, and in negotiations they are legally required to look out for YOUR interests. My Buyer Broker had been a dealer for the specific line of boat I was looking at AND had owned and sailed one extensively. He also runs the Yahoo Owners Group for that line. There was no way even the most respectable used boat broker was going to match that. More than two years later, I still call him for boat advice and I trust him completely. I happen to now be friends with the Seller's broker as I rent a slip from him, but he knows almost nothing about my particular boat.

I say this fully disclosing I looked at a lot of boats without a Buyer's Broker, but having used one I dont know why anyone wouldn't. Maybe someone more knowledgeable will chime in. As there is no cost to you, it just seems silly not to have a second head on your side.

[sailingharry]

Originally Posted by Elzaar

I say this fully disclosing I looked at a lot of boats without a Buyer's Broker, but having used one I dont know why anyone wouldn't. Maybe someone more knowledgeable will chime in. As there is no cost to you, it just seems silly not to have a second head on your side.

I struggle with the ethics of using a buyer's broker. I know, I don't write the rules and I should not worry about it. But here's my problem. Unlike real estate, where the buyer's broker does 90% of the work (running many tire kickers around looking at houses they won't buy) and get 50% of the commission, it's the reverse in boats.


In the mid-range boat market, the buyer is looking at boats +/- 1000 miles from home. I live in MD, the last boat I looked at was in Toronto and the next one I've got an appointment to look at is in Florida (both were "convenient" travel-wise). The buyer's broker provides no "finding" service that the buyer doesn't already do themselves (a boat hunter spends far too much time on Yachtworld), knows NOTHING about the particular boat in the listing, won't travel to see any boats (even a "mere" 50 miles away), doesn't personally know any surveyors or boatyards in the area, etc. The listing broker shows the boat, schedules the survey (even if the buyer selects the surveyor), etc. The buyer's broker does pull comps, but I've been successful leaching that service (there is a surveyor on this site that offers that as a community service) from various friends and contacts. Beyond suggesting a boat brand/size (such recommendations are free and frequent -- just read this forum!), reading the contract, and providing comps -- just what does the broker do for his 50%?


A cynic would, as I commented above, not worry about the "fairness" of the system, and do what is in his best interest. But it still bugs me that the seller's broker visits the boat 50 times to show it, and gets paid the same thing that the buyer's broker gets paid to make a few phone calls. Hell, a buyer's broker could be in California and be as good for me as one here in Maryland!

[Elzaar]

All fair points.

At least in my instance, the Buyer's Broker traveled 100 miles three times to meet me at the boat, then again to be there for the survey (for which he arranged a haul out that the yard otherwise said was not available when I needed it). He provided a ton of advice in at least a dozen phone calls and emails, and I knew he was on my side. The Seller's broker listed a boat, got it cleaned, wrote up paperwork, took some pictures of a boat 100 yards from his office and posted an ad on Yachtworld. I assume he also dealt with phone calls and emails, and showing that boat he likely also showed the same person a few other boats - all near his office. And likely offered to act as a Buyer's Broker if they seemed uninterested jn any of his boat listjngs.

The Seller's broker simply lacked the knowledge to answer questions I had that if they remained unanswered would likely have led to me making no offer at all. So the Seller would have showed me the boat a couple of times and likely received 100% of the commission on a no sale. In a very real sense, the Buyer's Broker made him money.

I used this site for advice and also posted to the Owner's Group to get information. That is how I met the Buyer's Broker. If the Seller's Broker had that knowledge and I could trust him to divulge it objectively you might be right, but he didn't and I didn't.

Your situation may be different and what makes sense for you may not make sense for me. Certainly as in many things, not all brokers (seller's or buyer's) are created equally.

My advice is offered as what my experience says seems wisest for the buyer since that is what this thread is about. Whether that is cynical or not seems a personal decision best left to the individual.

[sailingharry]

Elzaar,


You have indeed had a wonderful broker experience. It's a rare and happy circumstance. My current boat, a Sabre, has led me to to become friendly with two brokers, one in Florida and one in Washington State, that would be very high on my list if I were shopping for a Sabre, as they are very knowledgeable. But I'm not sure they would add much value if I were looking at a Sceptre (they are on my list, if you can find a 43 on the East Coast!). In many cases, hiring a professional is exceedingly difficult, as we use these professionals once, and can't really compare. Real estate brokers, funeral homes, divorce lawyers, surveyors, boat brokers, etc. We can't form opinions (at least comparative opinions), and we can't even find people to recommend professionals as they have the same problem. It's a conundrum! I have hired one surveyor, and spent the last 10 years lambasting him as inept -- until my buddy hired another surveyor who made mine look brilliant!

[Elzaar]

SeeI would concur with that. Maybe the key is to only use a Buyers Broker who has knowledge about a particular line or type of boats, or at least comes very highly recommended? As always, due diligence, due diligence, due diligence.

Surveyors are an entirely new thread. My advice there would be if you can't use the best - who seemingly can only really be identified by being generally booked three months out and effectively unavailable - use a very knowledgeable friend or do it yourself with a good book. Unfortunately, if you need a loan or insurance on the boat that may not be an option, in which case I would pay the minimum to get the required paperwork. If you want to know about your engine or rigging, do it yourself, ask a knowledgeable friend, or hire a mechanic and a rigger. It will cost you less and you will know more - and you may be able to put that money toward any needed repairs.

The surveyor I used came with reasonably good recommendations. Now with a couple of years of ownership under my belt it is painfully obvious that, whatever knowledge he may have possessed, a few hours spent with the boat led to almost nothing of value beyond creating required paperwork. Many of his concerns turned out to be either wrong or totally misdiagnosed, while any real issues were completely missed. But the boilerplate suggesting items of no or obvious consequence made a nice package. The survey game strikes me as more of a racket to please insurance companies and lenders than useful service IMHO. It offers little to no real value to a boat buyer that I can discern at this point.

Missed items included wiring so dangerous AT THE PANEL that when an electrician flagged it to me I realized my trust in the surveyor had led me to operate the boat for three months when it really should have been totally disconnected from shore power until it could be re-wired. The same trust caused me to do about $3000 on unrelated, completely unnecessary repairs that didn't fix the issues he misdiagnosed. Oh, and then there was the thru-hull with no backing plate and slowly leaking seawater he totally missed ...

Apologies if this bit sounds like a rant, but a bad surveyor is like a random reminder every few months that many "professionals" in life and in boat ownership are only interested in getting your money. They offer nothing of value compared to what they cost, but some entity with a financial interest or cause has managed to make them legally indispensable. All while creating in you an unjustified peace of mind that could kill you and anyone you care about.

Clearly i need my morning coffee. ��

[sailingharry]

Originally Posted by Elzaar

Surveyors are an entirely new thread.

Ha -- a new thread indeed. I have been around boats a LONG time, and do all my own work on everything I own. I do a lot of reading, and I read the code (I've read the National Electric Code cover to cover -- twice -- and I keep the entire ABYC standards at ready reference and have read and understand them), so it's book learning AND OJT. Bottom line -- I know the "real stuff" as well or better than the surveyor and am more motivated to see it. He's got a check list, so he can say "no crash bar in front of the stove.


My last surveyor, certified and recommended, literally confused my main halyard (wire/rope) with a shroud and noted that the main halyard was missing (I used it another 6 years before replacing it....).


A buddy just had a Benne Oceanis 45 surveyed in Florida (1000 miles from home) using the "pick the closest surveyor" approach. I read the survey, and without seeing the boat, noted over 30 factual errors just by reading the document (he mentioned lead ballast and encapsulated keel -- but Benne's have external iron keels; he mentioned the stainless anchor -- but the picture shows a very badly bent galvanized anchor that had to be replaced before the delivery could be done).


The frustrating thing is that these two surveyors are CERTIFIED, and have demonstrated gross ineptitude. Not just poor work, but inexcusably bad work. Certification SHOULD set a floor of "minimally competent" but in the case of surveyors, certification isn't worth the paper is it printed on. There are good ones out there, and I don't mean to malign them -- my issue is how you find them!


It's a racket. But for a grand or two, you get admitted to the insurance club.

[Manana5]

Hi everyone, I thought I'd come back and give an update. Thank you all for your replies and different perspectives! We ended up buying the boat at 10% below the initial asking price. It was just over our budget and seller would not reduce further but we liked the boat so much we are making funds stretch and compromising with other things in order to afford it.

We are now the proud owners of a Wauquiez Centurion 32! And very excited for our first Mediterranean crossing this June. Still doing paperwork and pending registration, so many things to prepare before we sail (so you might be hearing from me again, as I have lots of questions). Thanks again!

[Tricolor]

Congratulations, now proud owners. Wishes you many many happy miles.

[Elzaar]

Congratulations!

If I had caught that the boat was a Wauquiez I would have PM'd you! I have a Wauquiez Hood 38 and have been VERY pleased with it (surveyor rant aside).

If you haven't already done so, may I suggest you join the Wauquiez User's Group on Yahoo. It has a wealth of information and very helpful members.

There is a meet up every Spring in Puget Sound and I saw the East coast folks were trying to organize one there this year. You can show with or without a boat.

Happy sailing!