Buying a boat, need some help with negotiations!

[MrNoSmiles]

Hey all, I am in the process of buying a nice 40ft boat for sailing adventures.

The seller had it surveyed when he put it up for sale, and that surveyor valued the boat at about $120,000. The seller listed the boat for sale for $99,900.

I offered the seller $85,000, and we met in the middle at $90,000.

My financing company (BoatUS) is valuing the boat at $86,450, stating that they cannot finance the value of the Dinghy that the boat is currently equipped with.

Do finance companies normally refuse to finance dinghies?
Should I renegotiate the sell price with the seller based on this? Can I just negotiate what I am willing to pay out of pocket for the dinghy?

Please advise if anyone has any experience in these matters. Thanks!

[exMaggieDrum]

When I went looking for insurance for our boat last year, I found Boat US to be difficult to work with, much as you describe. I would find another insurance company. Mine is with Chubb (through the Rich Haynie broker in Seattle). I bet they will be easier for you to deal with, and cheaper, and they will cover the dink. At least they did mine. And they didn't even require a new survey. I worked with Robin there. And, no, I have no other relationship with them. You can find other brokers too.

[MrNoSmiles]

I don't think I was very clear, my apologies!

I am not using them for insurance, but I am using them for financing. Probably a much worse battle than insurance! Maybe not, I don't know.

They are very challenging to work with thus far. Instead of listing out what documents they need up front, they have asked for them one at a time, with sometimes more than a day in between responses!

It has delayed my survey date quite a bit, to the frustrations of everyone!

[Don C L]

I haven't had any experience with BoatUS for financing, or financing of dinghies, but I am curious, did you have your own survey done? I would not trust a surveyor's appraisal of a boat's value, or sale price, and I would want my own survey done by a surveyor I know. (I have seen a couple of sub-par surveys, one on a boat I bought! I learned that lesson the hard way.) If this really is the boat you want, in the condition you want, at the price you want, then I'd shop for a different way to finance if BoatUS is dragging things out.

[skipmac]

If you made a deal with the seller at $90K, unless the deal was subject to financing or other applicable issue then I think you are obligated to the price morally and ethically if not legally.

If your offer was subject to financing then you can try.

[autumnbreeze27]

Did you put a deposit on the boat already?

How much is the dinghy worth if it was sold separately?

[cheoah]

Surely it's contingent on finance if you intended to finance? If not, can't hurt to bring it up with seller. Especially if it affects your ability to close, and seller wants to get it done.

[MrNoSmiles]

Thanks so much for the replies everyone!

Don, I absolutely agree with you. This is my first boat purchase, so I already have a good surveyor lined up for the week after next. No way would I buy a boat without a survey, even (or especially!) if it was brand new.

Autumnbreeze, I have put down a 10% deposit in escrow already.
The dinghy is valued at about $3000.

Honestly, I'm ok with paying that full price. Its a pretty nice RIB dinghy. I was just wondering if I had any leverage to haggle that price.

Cheoah, according to the broker I do not have the ability to haggle it. The sales contract was not contingent on my ability to get financing approved.
At the time the sales contract was written and signed, BoatUS had emailed me back saying they didn't see any red flags for approving me for financing. Then when I needed official approval, they started asking for things one at a time! Dumb me should have known better.

[Moody46CC]

There are other companies that finance boats. If BoatUS does not come up with what you need, look elsewhere. I do not think you are under any obligation, legally or ethically, to go with BoatUS, especially since they are not meeting your needs.

If you cannot do better, make arrangements to buy the dinghy outright and the problem is solved. Of course, I hope you made purchase contingetn on an acceptable survey--the one you have planned.

[Fiveslide]

If you already put down 9,000 on a 90,000 boat, that leaves 81,000 to be financed. Which is less than the 86,450. What am I missing? Are you exceeding the bank's LTV percentage or something?



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[exMaggieDrum]

Originally Posted by MrNoSmiles

I don't think I was very clear, my apologies!

I am not using them for insurance, but I am using them for financing. Probably a much worse battle than insurance! Maybe not, I don't know.

They are very challenging to work with thus far. Instead of listing out what documents they need up front, they have asked for them one at a time, with sometimes more than a day in between responses!

It has delayed my survey date quite a bit, to the frustrations of everyone!

Sorry - it was my mistake. I did not now Boat US did boat financing so assumed you did a typo or whatever. My experiences with them on the insurance was so bad I would not consider them for anything except towing insurance, which I do have. But hope it works out for you. There are banks that will finance boats as some other posters have noticed. Good luck in sorting it all out and getting your boat.

[exMaggieDrum]

Originally Posted by MrNoSmiles

Thanks so much for the replies everyone!

Don, I absolutely agree with you. This is my first boat purchase, so I already have a good surveyor lined up for the week after next. No way would I buy a boat without a survey, even (or especially!) if it was brand new.

Autumnbreeze, I have put down a 10% deposit in escrow already.
The dinghy is valued at about $3000.

Honestly, I'm ok with paying that full price. Its a pretty nice RIB dinghy. I was just wondering if I had any leverage to haggle that price.

Cheoah, according to the broker I do not have the ability to haggle it. The sales contract was not contingent on my ability to get financing approved.
At the time the sales contract was written and signed, BoatUS had emailed me back saying they didn't see any red flags for approving me for financing. Then when I needed official approval, they started asking for things one at a time! Dumb me should have known better.

As someone else has said you can refuse the deal, or renogociate it after the survey, usually for any, or no, reason. Contracts are normally contigent on YOUR acceptance of the survey. You should get your FULL deposit back but you would be out for the cost of the survey. So the broker is not being complete with you, whether it is a broker you started working with who found the boat or the broker that listed the boat for the owner. My boat was refused by a previous "buyer" after the survey, but the survey was very good. The broker obviously did not like it, especially if they need to pay for their kid's tuition that month or whatever. Of course, none of us are lawyers and we are not reading your contract, but this is how they are usually written. And people renegociate boat prices all the time based on surveys, and they cut their losses and run sometime. You are not getting good advice from the broker if the contract is a standard boat purchase contract. Repeat for emphasis: you don't even have to give a real reason why the survey did not meet your acceptance. It is not a subject for negociation with the broker or seller. IF it is the standard purchase agreement.

[cheoah]

Well however you handle it, you sound pleased about the boat. Congrats on that.

I used sterling acceptance for my loan, and highly recommend them. It's no small feat to apply, so if you've already been through one app process, another would be unappealing. Especially if the same banks are shopped, like suntrust. That would be lame, to go through the hassle and have the same bank tell you the same thing.

[Cheechako]

It's extremely likely the surveyor will find things that can bring the value down to where you need it. Then renegotiate. Be there when it surveys! Also, mention the value issue while walking around with the surveyor. If the previous survey valued it as you mentioned... be careful that value is realistic.. it may not be, ... hard to say.
I've never seen a contract that doesn't allow for rejection from inspection , and thus.. renegotiation.
If your contract allows you to reject the boat. Do so. Then make a new offer.

[bsurvey]

suggest you get your own surveyor, or pay to get the listings of your boat on sold boats.com.


boat US generally uses BUC for their valuation and often times they do not jive with sold boats.


sold boats.com is the actual market price.


was the previous owners surveyor certified by NAMS or SAMS or just a guy


always get your own surveyor. he is representing your interests and not just trying to get paid for a valuation that the boat owner wants