At what point can the seller just end a deal? - SailNet Community
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post #1 of 52 Old 09-26-2015 Thread Starter
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At what point can the seller just end a deal?

We (Buyer) submitted an offer on a boat. Both Buyer and Seller signed agreement.

Buyer paid for haul out and survey at which time some items were found by surveyor.

Buyer submitted a request to reduce price based on items found and local market quotes to repair. Note - these items were required to be fixed by bank and insurance company in order to obtain loan/insurance coverage.

Seller came back with counter offer of about 1/2 of costs.

We went back asking for $400.00 more.

The seller said goodbye and ended deal.

Not too surprised the seller balked at the extra $400.00 We went back and offered to accept the arrangement where seller paid 1/2 costs.

Broker said the seller had "moved on" from this deal and was not interested in pursuing even the 1/2 costs any longer.

The boat continues to be listed at the same broker.

Not terribly devastated over not acquiring this boat as it was right at the limits of what our budget and needs were. I actually was a bit irritated with myself for caving in and attempting to agree to the original 1/2 cost deal.

This incident did make me want to learn a bit more about the buying process and at which points the seller can bail out (no pun intended). If the seller can leave anytime after buyer has paid for a survey then I will factor this into my tactics going forward.

My thoughts at the time were the seller shoulda/woulda simply said "No" to the extra $400.00 dollars and respond back "Either take the 1/2 cost offer or the deal was off." Not for the seller to just call the deal off period.

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post #2 of 52 Old 09-26-2015
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Re: At what point can the seller just end a deal?

A lot depends on what you signed for a purchase contract....some protect the seller more AND some protect the buyer "more". Contingencies can also be added and should be binding once both parties have signed. I have been told that up until the deal is closed, the seller can walk at any time. He may owe the broker commissions, but nothing to the buyer.

I would ask the broker to explain in more specifics, if you are not sure where you stood/stand in the process that this deal took. I usually ask the broker before I contract haul and survey, where the seller stands on survey items, or know from prior conversations whether the boat is priced with the needed repairs in mind, or just what will happen "after" the survey.

Best of luck.
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post #3 of 52 Old 09-26-2015
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Re: At what point can the seller just end a deal?

The options of each party are defined in your contract. If you signed the current YBAA standard form, you agreed to an Acceptance Date by which you would resolve any concerns and comit in writing to proceed with the purchase. If you do not comit in writing by the Acceptance Date, the deal is over. Now the two parties can subsequently jointly agree to resurrect the deal on the same terms or for less money, or either or both can walk.

After the Acceptance Date passed without buyer acceptance having occured, if the seller is alienated he/she has no obligation of any type to work with the buyer.

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post #4 of 52 Old 09-26-2015
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Re: At what point can the seller just end a deal?

It does depend on what was in the original purchase agreement. But unless specific contingencies are outlined, the process basically follows that you (the buyer) have made a financial offer. The seller has accepted that offer. The offer is usually contingent on a satisfactory survey and sea trial, but these contingents basically mean the buyer reserves the right to refuse the deal, or renegotiate based on the findings.

But as soon as you decide to renegotiate, the original offer and deal is essentially off the table. The seller then has equal rights to negotiate a whole new deal, which could even include cancelling the deal, or even raising the price (although I've never heard of this).

Too often I read on forums like this that survey results are some sort of license to whittle the price down. I think this is unfair and unreasonable. If a survey reveals something unexpected, then absolutely the deal should be renegotiated. But if the survey reveals a bunch of things that one should expect from a boat of that age or type or history, then I don't think a buyer should expect to use that as a means to reduce the agreed upon price. My view is you, the buyer, should already know these things. You've made your offer based on these factors. If not, then you've not done your due diligence prior to making your offer.

I have no idea what the details were regarding the deal the OP is discussing. I'm not saying Koalemus did anything wrong. But bad surveys don't automatically give the buyer the right to ask for a lower price.
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post #5 of 52 Old 09-27-2015
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Re: At what point can the seller just end a deal?

Great reply Mike. And I completely agree that something unexpected is one thing, but a bunch of issues that were evident and should be expected on an older boat is another. If it's the second, then the original offer by the seller to split the costs seems more than fair.
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post #6 of 52 Old 09-27-2015
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Re: At what point can the seller just end a deal?

IMHO no matter what the contract says, if the other party doesn't follow through you're left with the question of litigate or walk away. If small numbers like survey and hauling costs are all that is lost, legal costs could easily exceed that which you'll recover, and never mind the hassle. Boats are supposed to be fun, that includes buying and selling. Once that ceases, time to walk away.

I try to find out what I can about the seller before proceeding. You can tell a lot by looking at how the boat was kept and used. If it is well maintained, and heavily used, in my mind that's a good thing. If you can get beyond the broker and meet the seller, who's excited to show you their boat, and is clearly knowledgable that's a good thing. Googling a buyer or seller is an excellent tool.

I've bought 5, and sold 4 in my life. I still know some of my buyers, and they still call me with questions. The whole thing should be fun, and everyone should win.

Survey the seller before you survey their boat. Saves a lot of time.

Also agree that from the buying side, trying to hack away at a price due to wear and tear items expected in a boat of a given age is bad form.

Survey the buyer before you agree to a price. Saves a lot of time.

YMMV
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post #7 of 52 Old 09-27-2015
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Re: At what point can the seller just end a deal?

Mike summed it up perfectly.

Unless the buyer is competent enough to survey the boat themselves (virtually none are), then it's simply a financial risk. One I look at as an educational investment. I learn at each one, whether I buy or not. I hope you were there for the survey, it will help you the next time. You should plan to lose a deal or two over the survey, that's what they are for. I walked once, as the buyer, even though the seller was willing to repair everything. I just didn't like the feeling I had over the number of things identified by the surveyor. It cost me a couple of grand and I was better off for it.

I would be curious as to what the findings were that you and the seller ultimately walked away from.


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post #8 of 52 Old 09-27-2015
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Re: At what point can the seller just end a deal?

Here's my take on this (no, I'm not a lawyer).
You make an offer to buy a boat and once the buyer and seller agree on all terms, you now have a binding contract that neither can walk away from without possible consequences.
Now, after sea trial and survey, the buyer wants to re-negotiate the contract. During this period of re-negotiation, until both parties come to an agreement, either can walk. There was no agreement and the seller decided to walk.
You could take him to court, but my guess is, you won't win.
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post #9 of 52 Old 09-27-2015
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Re: At what point can the seller just end a deal?

I think that most of what has been said is true. There are several things that I typically include in an offer for purchase when I am a buyer. I list known defects which are a combination of my observations and information provided by the seller. I also include the terms of how additionally discovered defects will be handled. That paragraph usually says something like 'the price of the boat will be adjusted to pay for the costs of correcting discovered defects up to 10% of the agreed upon purchase price with the buyer and seller each responsible for half of the cost of repairs. In the event that the parties cannot agree on the cost of corrections each may obtain a fixed price quote from a boat yard for the work and the adjustment will be the average of the two estimates.'

The percentage of the purchase price is usually negotiated but in the half dozen deal where I have done this, it also has usually ended up at 10%. The nice thing about this is it motivates a smart seller to disclose as much as he knows up front so defects that he knows about are baked into the deal, and so do not end up on the discovered defect list. It also reduces the risk of surveying a boat and then having a seller hold a hard line against adjusting the price for a discovered defect, or the take it or leave problem. It also sets a reasonable threshold under which it is implied that the buyer is in default if they do not proceed with the purchase so the seller is a little bit more protected as well. It builds in a way of obtaining an agreement on the cost of correcting the discovered defects and makes those a part of the contract.

It should be noted that not every seller will agree to that. When I bought Synergy the seller has greatly reduced the price to cover known defects and we escrowed money for things that could not be tested where she was located far from the water, so he was not willing to discount further. I agreed to those terms knowing in advance this was a take it or leave it deal.

Jeff
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Re: At what point can the seller just end a deal?

Quote:
Originally Posted by MikeOReilly View Post

...But bad surveys don't automatically give the buyer the right to ask for a lower price.
Most contracts do give the buyer that right. That's what renegotiate means.

OTOH the seller is not obligated to comply.

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