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  #1  
Old 03-11-2002
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Buying from a private party, not a broker

Does anyone have comments on buying a boat from a private party, not through a Broker? I know it happpens every day, but I wonder how involved it is and what should be done.
My idea:
1) locate boat
2) if remote, establish price subject to survey & sea trial Before traveling to see.
3) Go and look at boat
4) If acceptable, get surveyed & do sea-trial.
5) finalize price
6) exchange money for keys
7) Go sailing!

The parts I''m unclear about involve buying a CG documented vessle. Here in California, the DMV handles boats like cars, but I don''t know yet what the CG does & if I can (or should) do it myself.

Tom Boles
SF Bay
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Old 03-11-2002
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Buying from a private party, not a broker

Buying and selling a boat without a broker is a bit more complicated than buying a boat with a broker and frankly I don''t think that I ever saved any money on the boats that I bought without a broker. There are several deals where I think having the broker actually acted as a neutral party to negotiate the price down to where it needed to be.

But if have your heart set on buying a boat direct from an owner then you need to amend step two of your sequence to make a formal contract to purchase and make a good faith deposit. Most owners will not give you their best price on a "what if" without the paper to back it up and without a good faith deposit he is under no obligation to hold the boat until you arrive. Of course this is where it gets dicey as there is no broker to hold the money and make sure its returned if things go south.

So, if the boat is remote, you should try to get the boat ''under contract subject to initial inspection, sea trial, full survey including engine and sail survey'' before heading off to see it. The initial inspection condition is important. Without it you can arrive at the boat and decide you''re not interested but have to go through a full survey in order to get your deposit back.

After the survey and seatrial there may be an adjustment to the sales price to accommodate items noted in survey. The contract to purchase should include language about that contingency. (I''ll be glad to send you a copy of a contract to purchase that I used recently when I sold my Laser 28).

As far as documentation goes it is pretty straight forward but if you have a loan the bank may require you to use thier professional documentation handler which is probably not the worst $150 or so you''ll ever spend.

Jeff
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Old 03-11-2002
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Buying from a private party, not a broker

I''ve bought boats with and without brokers, and from my personal experience, going with a broker is a lot easier and didn''t cost anything. First, they handle all the paperwork and as Jeff noted, take care of holding the deposit in escrow. Second, when you go through a broker, you never meet the seller, which is a good thing most of the time. With them handling the back-and-forth negotiations, I feel more comfortable drawing a hard line and being a bit of a pain over small details. Most brokers are professionals at the game and know exactly how it''s played, and do it well.

I''d also add a step after your "Step 7" such as "Make needed changes and repairs." The reality is there are most likely a handful of things to deal with on any newly purchased boat (both new and used). Save a few grand (at least) in your bank account after the down payment to cover the cost of an untold number of things you or the surveyor didn''t notice, or to alter the things you''ll want done to make it YOUR boat. One good step is to have a certified mechanic go over the engine, and to replace ALL the items that wear down over time (pump impellers, batteries, shaft bearings) so you''re starting from fresh (unless you know of recent upgrades or replacements).

Jeff has a very good point on the documentation. Most lending firms will want you to use their service, but check this cost out EARLY in the process. I had one bank that had no closing fees, only to find out later that I HAD to use their documentation service. At that point we were heading into closing and backing out would have lost me the boat, so I shelled out the $450 ''documentation fee'' (the broker would of charged me only $75 if I could have gone through them) and wrote it off as a life lesson.
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Old 03-13-2002
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Buying from a private party, not a broker

In re: documentation services. If you have a loan on the boat they are helpful. If not, the coast guard forms are available on line and you can do it yourself.

If you have a "Preferred" ships mortgage (i.e. what almost every lender writes on a boat) you have to get a seperate form signed by the bank which complicates things.

We had our recently purchased (used) boat re-documented at purchase by a service. Initial documentation fee was $250 to the service plus the Coast Guard documentation fees ($84 for a reissue/sale, plus like another $22 or so in filing fees. It''s $133 for a 1st time documentation)

Because we''re boneheads and couldn''t settle on a new name for the boat prior to the closing, we then had to redocument to get the new name on record. The documentation service was nice enough to offer us a half price on the re-documentation since they just did the docs in November, so it was $125 to them, plus $84 to the CG for the new certificate + $24 for the "Approval of Change requiring Mortgagee Consent" for the CG requires with the Mortgage.

If we did not have a mortgage on the vessel I could easily have filled out the two page form and spent only the $84 for the coast guard fees to rename her.

Defintely block out money for post survey work. Surveyors aren''t perfect, they''ll miss stuff. And not everything they recommend is an absolute must either, a good surveryor will tell you that he''s professionally bound to msake the observation but will also talk about how serious the problem really is.

Also, watch the survey on the sails. You almost want to figure something into you budget for purchase or repair. They are very difficult to determine condition on without actually hoisting them and looking at the shape. On one boat purchase I had a sail marked in "Good" condition on the survey that as soon as we hoisted it, it started dropping chunks of Mylar on the deck as we watched it delaminate in front of us. Another one had mildew spots on it, still sailed but kind of baggy and ugly. So the survey came back with all of these "nice" sails, and I bought two new ones the next year anyway.
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Old 03-13-2002
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Buying from a private party, not a broker

My Two Cents Worth ...

While I understand that the hovering owner is an impediment to a thorough check of a boat and while I agree that the owner will over value his property .... I also feel that there are some bonuses to buying directly from the owner.

First of all we get to meet the previous owner. This should tell you a lot about the boat. A good boat with a sloppy or careless owner quickly becomes a bad boat. The owner''s personality also extends to the boat and its systems. Of course a very competent survey should discover most of this.

Second a broker is very quick to discount a price and sell a boat. Generally the selling price for a boat is the selling price and an owner will eventually realize the proper price. It should even out with the buyer getting a boat for 10% less when cutting out the middleman. After all the owner selling privately has to compete with the brokers selling the same models...

Thirdly most owners will tell you more about a boat and its history than a broker can know. I have yet to meet a boat owner who does not love his/her boat like a child and wish for the new owner to "adopt" the boat and take proper care of it.

I guess from my point of view it depends on the dollar value of the boat. If it is under 10,000 and over 15 years old then there are unlikely to be liens or other strings attached and the transaction is reasonably simple. I suppose if it was $150,000 boat then I would be more careful. When I bought my first boat (23 feet) the bank informed me that the value of boats over 15 years old is zero in terms of loan collateral. From this perspective it stands to reason that there are also no outstanding liens on such boats??? And for such small amounts of money it may not be worth all the bother.

I have always bought privately and have not yet been burned (probably will be someday). I feel that speaking directly to the owner tells me a lot more about the boat than most brokers even know about that partuicular vessel. So while there are pitfalls to avoid there can also be some benefits.

Mike

PS. A friend was negotiating with an owner for a private sale of a Pearson. The owner started playing games and the deal fell thru. This "meet the owner" experience was not good but I believe from stories I have heard that the boat had about the same personality as this owner ... so it was not all bad that the deal fell thru.

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Old 03-13-2002
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Buying from a private party, not a broker

Whether I am working with a broker or not, I generally set up the survey or the sea trial so the owner can be present for part of the time. In a survey you need to have permission to disassemble things and without the owner on board for a part of the time it is hard to get that permission to do the kinds of disassembly necessary to perform a proper survey. Of course I agree with you that meeting the owner at some point is very useful to sizing things up.

With regard to buying a boat through a broker, and with all due respect, I have not found it to be true that boats for sale by owner sell any cheaper than boats for sale with a broker.On the contrary, while you hear that mythology all the time, at least in my experience which includes negotiations on nearly identical boats one with a broker and one without, the broker involved deals have been equal or less than the For Sale By Owner (FSBO) boats. Often a FSBO owners are more parsimonious and are therefore less willing to negotiate.

Respectfully
Jeff



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Old 03-13-2002
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Buying from a private party, not a broker

Isn''t it true that the broker gets his cut?
If your boat sells for $100,000, (that being exactly what it''s worth) you get $90,000 and the broker gets $10,000. You loose $10,000!
I must confess, I''m bias on this issue.
When I bought my currant boat, my broker tried to rip me off. He deliberatly
dragged his feet after I submitted my deposit in an attent to let the time run out so he could keep it. As a result, I did every thing. I set up the survey, the financing,insurance,documentation, every thing. He did nothing and still got his ten percent! You have to be carefull. Alot of brokers never even see the boat!
I supose if you don''t have the time to show the boat, then
you might not have a choice.

Dennis L.
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Old 03-13-2002
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Buying from a private party, not a broker

It is true that the seller pays the commission so that if a boat sells for $100,000 the brokers split somewhere between $7000 and $10,000 depending on the deal that the seller made with the Broker. But if you are buying a boat, the amount that the seller pays the broker really does not affect the value of the boat. The boat is worth what is worth and so when you compare prices there is no increase in price because a broker is in the deal.

Most people assume it works like cars where buying a used car through a dealer is generally more expensive but in the case of a uded car, the dealer is providing a warrantee that is why they get to charge more.

You are right that there are differences between brokers. Some really earn thier commissions and provide a lot of valuable assistance. Others are merely used car sales man in blue blazers. (I didn''t mean to insult used car salesmen.) I was extremely pleased with the broker who helped me put together the boat buying deal I just completed. I assure you he more than earned his commission and certainly made my life easier.

Regards
Jeff
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Old 03-14-2002
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Buying from a private party, not a broker

It''s obvious that every transaction is going to be a little different. On my last boat it wasn''t hard to determine that the owner was a complete yutz, so when it came time to do a sea trial, I hired the guy who commissioned the boat originally and intalled all of the 3rd party gear. It was one of the most educational afternoons of my life, not only did he cover how to work the gear, but also how to maintain it, and dozens after dozens of tips on how to tweak things. In all, it cost me about $180, and to this day is the best money I''ve spent on the boat.
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Old 03-14-2002
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Buying from a private party, not a broker

Sorry! I really can''t help myself ... but here goes.

Yes I absolutely agree that a Broker can save a lot of problems. I also believe Brokers know the value of boats more than do most owners. From a Buyer''s perspective it is very advantageous to use a broker.

Now here is my first experience with a broker... it went something like this:

"Hi I am looking for a 23 foot boat. I was thinking PY23 or similar"
"We do not normally sell boats that small but I have this Viking 28 that is listed for 11,000 that you can probably buy for 8,000"

Every time I inquired on a boat the brokers were quick to tell me how low I could probably bid. As a buyer that is great. But what about the seller? Why was the first boat listed at 11,000 if it was only worth 8,000? It seems in this instance the broker convinced the owner that he would get one amount and then eventually sold it for far less. If I was asking for 11,000 I would typically expect to have it sell for 10,000 and as the owner get 90% of that ... $9000. If the broker quickly lowers the price to $8000 I am only getting $7200. The broker only loses $200 by reducing the price but the owner loses $1800!

I would think a realistic owner would check around to see what similar models sell for and then could sell it for 95% of what the brokers are asking to save himself and the buyer each 5%. Now this would be an honest seller who wants to sell the boat in a reasonable amount of time.

Is it really any different than real estate? And in real estate does not the Lawyer do all the important work and the real estate agent simply show the property to the marketplace? When buying a boat does the broker actually check for clear title, etc ... or do you still need a lawyer? (talking more expensive boats here).

This is a very interesting topic and can be viewed from many perspectives. I think like a car when selling you probably do better on private sale if you can advertise it to enough people ...
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