Ethics of negotiation

[Mike OReilly]

Originally Posted by crooks

I attempted to buy a boat. My offer was what I could afford.

I insisted on a survey. The broker said no, because my offer was so low.

I won't buy a pig in a poke.

I don't understand. You mean the financial part of the deal was accepted, but not it being contingent on a survey? How can a broker can say no to a survey . As the potential buyer, it's your survey. You arrange and pay for it.

I would definitely run from that "deal."

[crooks]

Originally Posted by Mike OReilly

I don't understand. You mean the financial part of the deal was accepted, but not it being contingent on a survey? How can a broker can say no to a survey . As the potential buyer, it's your survey. You arrange and pay for it.

I would definitely run from that "deal."

Yes of course I pay for my survey.

I walked away. Running is an indicator of guilt. I had no feelings of guilt.

[letsgetsailing3]

Originally Posted by Mike OReilly

I don't understand. You mean the financial part of the deal was accepted, but not it being contingent on a survey? How can a broker can say no to a survey . As the potential buyer, it's your survey. You arrange and pay for it.

I would definitely run from that "deal."

There is such thing as an offer that's so low that it already considers all possible risks, and that the boat is worth that, no matter what.

In that case, I can understand how a seller might say that if we accept that offer, it's final - go find someone else to lowball. It's an indication that the offer was really way too low, in the seller's opinion.

I'm not saying they're right, I'm just saying that's the thought process.

[crooks]

Originally Posted by letsgetsailing3

There is such thing as an offer that's so low that it already considers all possible risks, and that the boat is worth that, no matter what.

In that case, I can understand how a seller might say that if we accept that offer, it's final - go find someone else to lowball. It's an indication that the offer was really way too low, in the seller's opinion.

I'm not saying they're right, I'm just saying that's the thought process.

You are correct.

Older boats in questionable shape may require repairs in excess of their value.

There were indications of a leaky deck based upon stains in the interior.

I'm willing to pay 10s of thousands of dollars. I want to know what I am paying for.

[letsgetsailing3]

Originally Posted by crooks

You are correct.

Older boats in questionable shape may require repairs in excess of their value.

There were indications of a leaky deck based upon stains in the interior.

I'm willing to pay 10s of thousands of dollars. I want to know what I am paying for.

This is absolutely true.

But if you want to have contingencies on a purchase, you have to offer what feels to the seller a "fair offer".

In this case, it's clear that the seller at this time feels it's too low. Fair enough. No harm, no foul.

I remember reading that John Kretchmer surveyed the boat he wanted to purchase, and made a low offer, but with no contingencies. You might get the best price, but you have to really have faith in your ability in evaluating a boat's value in order to do that.

[Poche]

Originally Posted by crooks

I'm willing to pay 10s of thousands of dollars. I want to know what I am paying for.

I suspect the seller had a bad experience with a surveyor at some time. I've heard surveyors called many names.
And probably had a few bad experiences with buyers.
The trouble is, insurance companies are demanding current surveys and then marinas require insurance. You don't want to get stuck with an non-insurable boat or a place to put it.

[tecmo]

I think the most important aspect in negotiations is to be honest with your intentions. What this means is that if you make an offer, ensure you plan on completing the deal at that price if all conditions are met.

Which brings up the next point - ensure the seller understands what conditions are needed for you to complete the sale. To me a good set of steps would be.

1. Get a full inventory of everything that the seller is including in the deal. This is critical for you to make an offer - it is fair for you to understand what exactly you are buying.

2. As for a condition assessment of all the included items. A scale of 1-5 is probably easiest.

1 - Needs replacing
2 - Should be replaced in the next 12 months
3 - Good working condition
4 - Excellent condition
5 - New / Recently replaced

3. Submit your offer based on the information gathered in steps 1 and 2. In the offer ensure the seller understands that if during the inspection any deficiencies are found (either items are missing, or not found to be in the condition specified) the offer will be rescinded. At this point it is probably a good idea to also indicate who is paying for the haul out and survey. I would push for the seller to pay and that the amounts will be refunded on the successful completion of the deal. A good sized deposit here will help indicate your commitment to closing. Its also a good time to indicate your intentions on how the transfer process will work - ie: how and when you will take possession of the vessel as well as as the timing of the inspections (see below).

4. Perform the inspection , survey and sea trial - make sure you compare this to the original seller declaration and note any discrepancies.

5. If there are deficiencies ask the seller to address it; or credit back reasonable remediation costs to the deal.

If the seller understands your process up front, your offer will be much more well received - as they will know you are serious about buying and not wasting their time. I don't think there is much value in trying to justify the original offer - it is what it is - the seller can choose to engage or not knowing that if they do engage they have an equally engaged buyer on the other end.

tecmo
...

[Mike OReilly]

Originally Posted by letsgetsailing3

There is such thing as an offer that's so low that it already considers all possible risks, and that the boat is worth that, no matter what.

In that case, I can understand how a seller might say that if we accept that offer, it's final - go find someone else to lowball. It's an indication that the offer was really way too low, in the seller's opinion.

I'm not saying they're right, I'm just saying that's the thought process.

Yes, well as we know, a deal can include (or exclude) anything really. But if a seller said I couldn't survey a boat before finalizing a deal, that would scream problem!

I do think it's important for the buyer and seller to be on the same page when it comes to the deal. My understanding is that a survey is to be used to turn up unexpected, or in nefarious cases, unreported issue.

When a buyer agrees to a price they are doing so based on their own assessment of the boat. Unless otherwise asserted by the seller, this must include normal age-related wear-and-tear, especially when dealing with an older boat.

Too often I see people online suggesting that potential buyers make an offer, with the premeditated plan to demand a renegotiate based on whatever the survey turns up. I think this is false use of a survey. If the survey simply confirms the boat is old, and has the expected problems, then that's an acceptable survey. If it turns up serious unexpected issues, THEN it is grounds for renegotiation.

[slug]

Originally Posted by Mike OReilly

Yes, well as we know, a deal can include (or exclude) anything really. But if a seller said I couldn't survey a boat before finalizing a deal, that would scream problem!

I do think it's important for the buyer and seller to be on the same page when it comes to the deal. My understanding is that a survey is to be used to turn up unexpected, or in nefarious cases, unreported issue.

When a buyer agrees to a price they are doing so based on their own assessment of the boat. Unless otherwise asserted by the seller, this must include normal age-related wear-and-tear, especially when dealing with an older boat.

Too often I see people online suggesting that potential buyers make an offer, with the premeditated plan to demand a renegotiate based on whatever the survey turns up. I think this is false use of a survey. If the survey simply confirms the boat is old, and has the expected problems, then that's an acceptable survey. If it turns up serious unexpected issues, THEN it is grounds for renegotiation.

You always make an offer pending survey

The seller accepts your offer , you lock in the price with a deposit ...you have just bought the boat pending survey

After survey either the seller adjusts the price to compensate for survey failures , brings the boat up to survey ....or you walk away

[Mike OReilly]

Originally Posted by slug

You always make an offer pending survey

The seller accepts your offer , you lock in the price with a deposit ...you have just bought the boat pending survey

After survey either the seller adjusts the price to compensate for survey failures , brings the boat up to survey ....or you walk away

Yes, that's what I said.

[slug]

The big unknown is how hard can you play with the survey results

Play real hard and the owner may refuse and give you your money back

I think it’s best to play real hard ... max discount

In this present time on economic collapse you may win

[Poche]

Originally Posted by slug

In this present time on economic collapse you may win

Has not been a good time to sell in a long time. The present crisis only makes it worse.

[slug]

Originally Posted by RELENTLESS 1

First of all isn't "Ethics of Negotiation" a oxymoron?

We looked at dozens of boats, missed a couple of deals, but got very educated. We made an offer on a nice boat that had been for sale for 6 months, our Broker recommended we go in 30% under. They rejected our offer, another opportunity came up in the interim, and the Seller still owns the boat 2 years later - and to my bewilderment - hasn't lowered the price! Yikes! In the RE business we call that an unmotivated Seller - or a fool w/more money than sense.....

Many times owners list boats at high prices as a sort of fishing expedition

See if any fool bites

I was recently involved with one in which the owner was asking replacement cost for a 7 year old boat

I expect that boat to be listed for a long time

[Poche]

Originally Posted by slug

Many times owners list boats at high prices as a sort of fishing expedition
See if any fool bites

Then they are just playing at selling. Doesn't work.

[Jim Cate]

There's always the case of:

Wife: Boat goes or I go...
Husband: I don't wanna loose you, so I'll list the boat for sale (wink,wink)

A joke that sometimes is reality.

Jim