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Old 11-01-2021, 12:57   #1
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Purchasing a vessel protocol

Folks, Wondering what the correct procedure is? We're seriously looking at a boat quite a ways from our home, I've been speaking with the owner (who also happens to be the broker) and it's gotten to the point that we'd (wife & I) would like to move forward although we've not seen the boat yet. We were planning on being there for the survey and sea trial. We want to be fair and decent so my question is do we make a formal offer now or after the survey is completed & reviewed with the surveyor?
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Old 11-01-2021, 13:03   #2
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I would suggest view it first, go on board and see if it is all you imagine it to be from the pictures.. sit in it, see if the galley is a fit and viable, test the bunks for size..
Then make an offer subject to survey results..
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Old 11-01-2021, 13:10   #3
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Re: Purchasing a vessel protocol

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Originally Posted by CaryG View Post
Folks, Wondering what the correct procedure is? We're seriously looking at a boat quite a ways from our home, I've been speaking with the owner (who also happens to be the broker) and it's gotten to the point that we'd (wife & I) would like to move forward although we've not seen the boat yet. We were planning on being there for the survey and sea trial. We want to be fair and decent so my question is do we make a formal offer now or after the survey is completed & reviewed with the surveyor?
You could make an offer contingent on your personal inspection and acceptable condition (to you).
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Old 11-01-2021, 13:11   #4
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Re: Purchasing a vessel protocol

As Boatie says, the normal approach is for you to go view your boat yourself first. Do as much of an inspection and survey as you can, and of course gather as much information as you can from the current owner and other sources.

THEN, if you still like what you see, the normal procedure is to make an offer, usually contingent on a satisfactory survey and sea trial. Usually the seller will ask for a deposit with the offer, and usually this is 10%, but you can try and negotiate other terms.

If the survey comes back without revealing anything majorly unexpected, then you proceed to a sea trial. If both those don't lead to any surprises, the deal is usually finalized.

IF either do find unexpected (or undisclosed) issues then you can attempt to renegotiate the deal.
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Old 11-01-2021, 13:13   #5
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Re: Purchasing a vessel protocol

1) View
2) Offer
3) Signed Purchase and Sales agreement by both parties (Subject to successful Survey and Sea trial)
4) Survey
5) Sea trial
6) Renegotiate price (optional)
7) Walk-away or Close

You can offer sight unseen. However, paying for a survey and sea trial for a vessel that is not under contract would be very, very, very unusual. There is also nothing preventing the owner from selling the vessel out from under you at any point as you have not entered into a formal contract.
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Old 11-01-2021, 13:15   #6
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Re: Purchasing a vessel protocol

I should have been clearer, the owner has emailed me the Purchase & Sale Agreement with the advertised price on it.
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Old 11-01-2021, 13:27   #7
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Re: Purchasing a vessel protocol

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Originally Posted by CaryG View Post
I should have been clearer, the owner has emailed me the Purchase & Sale Agreement with the advertised price on it.

That doesn't change anything. You can certainly contract to purchase sight-unseen, but few would do so.
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Old 11-01-2021, 13:32   #8
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Purchasing a vessel protocol

Note ensure that you have a ď break ď clause or clauses ie points in the contract where you can disengage and recover your deposit.

Usually this is after survey and after sea Trials. These should be unconditional. The standard YBDSA contract has that.
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Old 12-01-2021, 09:29   #9
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Re: Purchasing a vessel protocol

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Originally Posted by CaryG View Post
............We want to be fair and decent so my question is do we make a formal offer now or after the survey is completed & reviewed with the surveyor?
Purchasing protocol calls for the following steps:

1. You to see the boat
2. Make a formal offer (it might be countered)
3. Both parties sign a purchase and sale agreement based on the offer
4. Conduct a sea trial (seller pays for captain, if required) and surveys(s) (buyer pays)
5. Both parities sign Conditional Acceptance with Survey Allowance OR accept boat "as is"
6. Initiate title transfer
7. Both parties sign a final sales agreement with seller signature notorized.
8. Simultaneously with 7 Sign Insurance Compliance Letter and obtain insurance binder and receive title (local registration OR Traveling Letter)

In the process inquire insurance early and have that ready to go before the final sales agreement. Insurance company will likely require a copy of the marine survey and you will likely be required to sign an Insurance Compliance Letter to acknowledge that you will complete the marine survey recommendations by a specific date.
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Old 12-01-2021, 09:53   #10
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Re: Purchasing a vessel protocol

You can always make an offer with deposit based on a clear survey and sea trial. If the survey comes back with problems it gives you an out and refund on your deposit as well as a means to negotiate a lower price if you wish to proceed.
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Old 12-01-2021, 11:16   #11
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Re: Purchasing a vessel protocol

In the COVID era used boats in certain type & size range do not sit on the market. I cannot speak about sail yachts but that holds true for power boats. Point being, you may not have the luxury of time to view prior to making an offer or as the brokers call it "putting under contract". The key is pending survey.
I went under contract having only viewed photos. The boat (40' Sundancer) was put under contract (which essentially takes it off the market) pending inspection & survey. In a 3 month period I made inquiries on 23 used on the market 35' to 45' Sea Ray Sundancers and ALL went under contract before I could obtain any information about the boat from the brokers (less than 48 hrs).
Most broker sale contracts are written in the favor of the buyer. I could have backed out if I did not like a scratch in the hull.
Logic and common sense say view before all else but in the current competitive market for used boats (of certain types & lengths) that does not always work out. Just make certain you have the contract written pending survey.
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Old 12-01-2021, 13:15   #12
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Re: Purchasing a vessel protocol

Quote:
Originally Posted by CaryG View Post
Folks, Wondering what the correct procedure is? We're seriously looking at a boat quite a ways from our home, I've been speaking with the owner (who also happens to be the broker) and it's gotten to the point that we'd (wife & I) would like to move forward although we've not seen the boat yet. We were planning on being there for the survey and sea trial. We want to be fair and decent so my question is do we make a formal offer now or after the survey is completed & reviewed with the surveyor?
Start here. Marine Survey 101, pre-survey inspection This will give you a good idea of whether the boat is worth the expense of an official survey (Which insurance companies may require). Hopefully the boat is on the hard as 90% of a survey is done out of the water. The asking price is what the seller would like in his wildest dreams or it could already be discounted for a quick sale. Normally 90% of asking is the norm for purchasing a boat that surveys as advertised. Prior to traveling to see the boat, you should do some research of local inspectors to see who is available, how well respected they are and what their rates are. If everything checks out to your initial satisfaction contact the seller and make your offer contingent on survey and sea trial with your inspector. DO NOT use the sellers' surveyor. Insurance companies often have lists of surveyors they trust if you have difficulty finding one. After the survey ends you have the option of submitting a lower bid based on survey findings or waking away with a full refund of your deposit. Note: you'll be stuck for the survey fee and launch haul out fees either way so it's good to vet the boat yourself ahead of time so you don't end up incurring all those expenses on a pig.
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