Boat Buying Process

MGFraser · #1 01-28-2005

I will be purchasing my first sailboat later this year and I wanted to clearify part of the boat buying proceess and was hoping people in this group would be familiar with the process.

It is my understanding that if a seller accepts my offer for his boat (conditional on surveyor''s report) and then the surveyor discovers certain things wrong with the boat that should be fixed, I then ask the seller to either fix them or lower the price to allow me to fix them. If this is generally correct, do most sellers then lower the price or is it likely they will not offer any price reduction and I should then walk away.

What are the thoughts from the people who have gone through this process?

Thank You,

Malcolm Fraser

TrueBlue · #2 01-28-2005

MGFraser . . . Based upon my experiences, upon accepting the buyers offer, the seller is not legally obligated to repair issues found defective by the buyer''s surveyor. Nor is the seller legally required to reduce the amount of the accepted offer. The Acceptance of Offer Contract, is intended to allow the buyer the option to back off in the event of unknown issues discovered during the survey.

My recent boat purchase involved the seller accepting my offer, conditional of my surveyor''s report. A formal agreement was processed by the broker which everyone signed. My surveyor found blisters and a few rigging defects, I received written estimates and presented them to the Owner (in writing) with my reduced offer. Being a fair man, he accepted my offer without countering. Technically, the seller has paid for professional repairs which are currently ongoing. However, he could have walked from the deal.

I would expect most sellers would honor a legitimate reduction, unless the boat was originally value priced with all known issues identified. Otherwise, the seller always has the upper hand in the negotiations.

Best of luck, Steve

Jeff_H · #3 01-28-2005

Like most aspects of buying a boat, the issue of the seller''s obligations to make corrections to defects discovered during survey, is another item that should be negotiated in advance of the survey. In most cases, I have required that the offer on the boat include a list of known defects at the time that the offer is being made (i.e. Items that I had already noted during my walk-through), and also ioncludes language that the seller will be required to adjust the price of the boat by up to 10% (the amount is obviously negotiable) for items listed in the inventory of the boat or which are essential to the safety, structural capabilities, durability or operation of the boat that are found to be defective or which do not meet industry standards. In including this type of condition in your offer, you can stipulate that the seller is 100% responsible, although in my offers, I generally write in that the buyer and seller are equally responsible for the costs of correcting the defect, except that the buyer may void the deal if the defect is such that the buyer considers it to be a flaw that the buyer can not live with.

Jeff

MGFraser · #4 01-29-2005

A big Thank You to everyone who has responded! Weak willed me needs all the good advice I can find.

Malcolm

SailorMitch · #5 01-29-2005

Malcolm,

I think the most important point to remember about contracts and buying a boat is that you can word them anyway you want to protect yourself. Let the seller come back with a counter offer if he wants. There are a couple of "stock" contracts online but don''t think for a minute that you are limited to what they say. Also, if dealing through a broker, don''t let him/her talk you out of a clause you want based only on the statement that such a clause "is not part of a standard agreement." So what if it''s not? Let the seller counter with better language if he wants.

Remember, it''s all open for negotiation. I just went through this process 18 months ago, both buying and selling (private deals, no brokers). When I was the buyer, I modified the standard contract in several places, primarily gaving myself an out at any stage of the process for any reason with a full refund of my deposit. The seller never blinked at the language. When I was the seller, the buyer only made minor changes in the standard contract. Both transactions went off without a hitch. I would hesitate to include arbitrary percentages for price reductions for repairs before a survey, however. The survey could reveal deal breaker problems that could go far beyond the value of a set percentage reduction, and then you are in a real bind absent an escape clause elsewhere in the contract. Make sure you have an out.

Tezor · #6 11-06-2005

"Get it in Writing" is the most important detail I can think of. I wanted to buy a boat from a seller at his asking price. Offered a deposit, as the seatrial wouldn''t be for 2.5 weeks. He said no, a handshake was good enough. Then 2 weeks later, after I had set in motion plans to move the boat to my mooring (a 2-3 day sail) if the seatrial went well, he said his family had decided they did not want him to sell the boat. I wasn''t out $, but hours of inspection, planning, and anticpation of a boat I could stand up in. I asked him about his handshake, what was it worth? Just live and learn, and get it in writing. Be well, B

PaulBl · #7 11-06-2005

Last word of advice.

Don''t fall in love until after the deal is struck. At that point she is yours better or worse. Some deals can''t be made but leaving room to negotiate can''t hurt. Even hard cases will bend a little given real evidence.

Note many surveyors will reduce the fee if you choose to bail out early in the survey and don''t require a formal report. As in - You got serious problems your eyes missed and you don''t care to negotiate anything. Time to go home sad but more experienced.