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Join Date: Nov 2008
Location: Tampa Bay Area
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Re: Sunk costs and boat purchasing
This is an interesting concept of the sunk-cost fallacy.
Contemporary Cognitive Therapy: Theory, Research, and Practice - Google Books
Sunk costs - Wikipedia, the free encyclopedia
Applying this concept to boat buying may lead one to follow a purchasing process that is a little different from normal.
For example. Lets say you just had your potential boat surveyed and it was noted that the keel boats for a flanged iron keel had not been checked in 25 years.
If you were to buy the boat one of the first things you might do it to extract a couple bolts to check or replace them.
So typically someone would buy the boat do the work and have to just suck it up if the bolts had to be replaced.
What if you were to pay to have a couple bolts inspected before purchase.
The survey is already a sunk cost. If pay maybe $500 extra to check the bolts and they are bad then you still don't have a boat but maybe you can get some money from the PO or if you can't make a deal you are at least not committed to an expensive repair.
So my question is has anyone as part of the purchasing process gone beyond the standard survey and with the owners permission had other work done on the boat before purchase or talked the owner into doing exploratory work.
Yep. Rudder looked quite questionable so, absent an exploratory laparotomy, which we agreed to pay for, the deal was off. The procedure revealed damage that eventually cost several thousand dollars to correct, the majority of such cost being with-held from the purchase money in escrow and disbursed to the ship-yard that made the necessary repairs. Having discovered the rudder issue, it was a matter the Seller would have had to disclose to another prospective buyer unless he handled the matter himself so he would have been in the same situation with a subsequent buyer as he was in with us. Wiser to simply handle the matter and complete the sale.
"It is not so much for its beauty that the sea makes a claim upon men's hearts, as for that subtle something, that quality of air, that emanation from the waves, that so wonderfully renews a weary spirit."