unsuccessfully went through the boat buying process!

[Bmorgan562]

Recently my wife and I plus 2 smal children traveled out of state to look at a boat. and we liked it( older sailboat which checked most all hides. I wired the earnest money to the BROKER. and obtained my surveys: general survey, rigging and diesel. (not cheap as you may well know) prior to all this the BROKER wanted me to make an offer, so i did, full price 59,900. after all was said and surveys done, the standing rigging was at least 16 + years old (older as previous owner had no idea when it was ). although rigger said it was in good condition. the diesel survey said the engine was tired and wouldn’t reach its RPMs. so probably an top end job ( high pressure pump, head and injectors. along many smaller issues). the general survey (i feel lacking) valuation at 52,000. I understand that there are allowances / disclaimers for area and equipment that cannot be evaluated/ tested. but there were many things just past over. (disheartened). anyways. i updated my offer(apparently not how it’s done, i’m new). to include the deficiencies found and cost to fix change). 40,000. needless to say offer not taken which i understand now, but i couldn’t spend what they wanted and also fix what i needed to take my family on it. I still haven’t received my earnest money back. and i feel the next time i find a boat. i could do a better job surveying it ( minus the diesel part). also. the general surveyor and brokers offices were Right down the street from each other in a very small harbor town. yet they claimed to have never met. although they both knew everyone at the hauling yard. anyways. there is more details to this story but these are the basics, when can i expect to get my earnest money returned. the BROKER is obviously in no hurry. sorry for the rambling. i’m still thinking about the whole process a lot!!!!!!!!

[goboatingnow]

Check your purchase and sale agreement. You should get your earnest money back after survey related walk away

[Muaddib1116]

OP, you don't mention a P&S, but I hope you had one before you wired a deposit. There should be a section detailing the survey and how to proceed based on its findings, ie. resolving issues, amending the purchase amount, or refunding the deposit and walking away. Hopefully you had this contract prior to giving the deposit.

[Bmorgan562]

Originally Posted by goboatingnow

Check your purchase and sale agreement. You should get your earnest money back after survey related walk away

yes , the broker told me i’d get it right back at anytime i wanted during the process. Not the case.

[Muaddib1116]

Assume the broker is a liar, what does your contract say?

[Bmorgan562]

Originally Posted by Muaddib1116

OP, you don't mention a P&S, but I hope you had one before you wired a deposit. There should be a section detailing the survey and how to proceed based on its findings, ie. resolving issues, amending the purchase amount, or refunding the deposit and walking away. Hopefully you had this contract prior to giving the deposit.

Yes , we had one.

[Shrew]

The process should be:

1) OFFER: Buyer submits a signed P&S with offer amount and contingencies (subject to Survey, Sea trial, (optional: financing, sell current boat, etc..whatever).

2) COUNTER (optional): Seller submits a signed P&S with amended purchase price and/or contingencies.

3) ACCEPTANCE: Both parties sign P&S

4) Survey

From here the buyer can choose to exercise the survey contingency and walk

5) Sea-trial

From here the buyer can choose to exercise the sea-trail contingency and walk

6) BUYER's COUNTER (optional): Buyer resubmits signed P&S with amended offer price based on results of survey and/or seatrial.

7) SELLER's COUNTER (optional): Seller resubmits signed P&S with amended offer price based on results of survey and/or seatrial.

NOTE: Steps 6 & 7 can go back and forth.

8) FINAL ACCEPTANCE: Both parties sign final P&S

9) CLOSING

If the vessel didn't meet any one of the contingencies in your P&S you're entitled to walk and retain your offer. This is why you place the deposit in escrow. If the broker is holding the deposit in escrow he is legally compelled to return it.

[tamicatana]

Sir,
this is some of the best time you could spend learning about how to spot trouble before you ever get to the paper-signing/money-handing stage:

Marine Survey 101, pre-survey inspection

[Jammer]

1) What state did this happen in?


2) What does the P&S actually say about this? Nearly all of them are written so that you can cancel based on the results of the survey and get your earnest money back, as Shrew describes upthread.



3) It is unusual to wire the earnest money particularly when the amounts are relatively small. You only gave him 10% or so, right?


4) Did they counter the $40k?



5) Was the sea trial/engine survey your first indication that the engine was shot? Because if it was then I think your actions are on the whole pretty reasonable. But if you reasonably could have known that the engine was shot due to things the seller disclosed or the number of hours on it or whatever then perhaps a $20k subtraction is uncalled for. Generally the post-survey negotiation is ordinarily over adjustments for things the buyer wasn't aware of before the survey, not a renegotiation of the original contract price.



6) A $60k boat puts you in a sort of a grey area where you really do need to involve a broker, a surveyor, travel expenses, etc. but where these costs become a significant part of the purchase expense. It is also rare for older $60k sailboats suitable for a cruising family to be found without the deficiencies of the sort of magnitude that you're finding. Point being you may need to look at ways to increase your budget.


7) Have you made it clear to the broker that the deal is completely off and you're no longer considering the boat? Because if you have not they may be retaining the earnest money in anticipation that you will make another offer.

[Sailer_Med]

Originally Posted by Bmorgan562

... i updated my offer(apparently not how it’s done, i’m new). to include the deficiencies found and cost to fix change). 40,000. needless to say offer not taken which i understand now, but i couldn’t spend ...

What is the problem with updating or rewriting the offer?

[Jammer]

Originally Posted by Sailer_Med

What is the problem with updating or rewriting the offer?

From the seller's point of view, a request for a 33% price drop post-survey was probably seen as unreasonable and at odds with the seller's perception of the value of the boat in the marketplace. I would imagine that regardless of the facts, the seller and his broker saw this as an effort to renegotiate the original purchase price, rather than make an adjustment for things found during the survey.


I would expect, again from the seller's point of view, that the seller could disclose that the engine is tired and will not reach full RPMs, and still find a buyer for more than $40k, because there are many buyers who do not anticipate using the diesel for anything other than getting in and out of the harbor, or who are willing to accept that they will be on the hook for at least a top-end overhaul in a few years.


As a buyer, you can really only expect that the seller will make post-survey/post-seatrial adjustements for things that are both a surprise and a big deal, like a 3000-hour engine where it turns out the block is cracked, or serious structural problems, or refrigeration that doesn't.

[Calif.Ted]

Sellers generally view their asking price as reasonable, got nothing to do with reality sometimes. "Out of state" is a long way from here by sailboat, you don't want that with a young family, San Diego to Santa Barbara is all "local" to us. Anything further is a PITA that adds costs you don't anticipate.
I'll bet your failed deal was a "bargain", don't look for the cheapest example of whatever you want look for the best.
What are you looking for ? A friend just listed a Nantucket 33 that's WORTH a survey, I've only ever seen 3 and they are all on my dock and this one's the cleanest. Fits a 30' slip, do you have a slip ? That's usually more difficult then buying a boat around here.

[Sailer_Med]

Originally Posted by Jammer

As a buyer, you can really only expect that the seller will make post-survey/post-seatrial adjustements for things that are both a surprise and a big deal, like a 3000-hour engine where it turns out the block is cracked, or serious structural problems, or refrigeration that doesn't.

So really the survey/seatrial is pretty worthless in this frame of reference. You can quite easily find $10k of “small” stuff that will need attention “real soon now” yet there is no expectation of further negotiation? The expectation is of perfect and complete disclosure by the seller?

[DEAN2140]

I don't know how much your deposit is but assuming your contract spells out that you are entitled to it, it is a relatively simple matter to file a claim in small claims court (California) where I think the limit is $10,000. Write the broker a letter demanding return of the deposit and if he refuses, file the claim. You might also do some research on the agency that issued the broker his license. A letter to them with a cc to the broker could work wonders.

[Muaddib1116]

Originally Posted by Sailer_Med

So really the survey/seatrial is pretty worthless in this frame of reference. You can quite easily find $10k of “small” stuff that will need attention “real soon now” yet there is no expectation of further negotiation? The expectation is of perfect and complete disclosure by the seller?

No, there is definitely room for negotiation, if both parties are motivated to make the deal. On more expensive boats, you might pre-load the contract with certain clauses about what constitutes a finding that needs to be addressed by remediation or price adjustment (usually phrased as a single finding above a certain dollar amount). It is also there to protect the buyer. If a survey finding was pre-disclosed in good faith by the seller, it is usually not grounds for a price change or remediation, since it was a known issue. At this price point, if the seller shares the survey findings and opens with a price adjustment of $20k, I could see it being a deal breaker. But unless the contract is very poorly written, the seller/broker still needs to respond to the offer adjustment, and if they choose to walk away, they should be required to return the deposit.