Walking away from sales agreement

[TrueWest77]

Greetings -

I recently made an offer on a small boat and put down 10% pending survey/sea trial. Two days later, a relative offered to sell me their (much nicer) boat for very little money as they would like to see it remain with the family.

So - I no longer want the boat I made an offer on. The survey is scheduled already. My question is: Do I even need to do the survey?

Can I walk away from a signed purchase and sale for ANY reason? I understand I can nitpick the survey and kill the deal, but I would prefer to just tell them what happened. Can I do that?

The agreement is the standard "Yacht Brokers Association of America" purchase and sale.

Any advice is appreciated. Thank you.

[DrB]

Be ethical about it. If you really don't want the boat, call the surveyor and seller/broker and cancel. Explain why. They shouldn't have a problem with that.

As far as the seller/broker, nothing has been lost to them yet, so they should not have a problem with you backing out. However, if the seller had to make stuff right at your request before you put in an offer, then your financial position is now different. Hypothetically the seller could have you help pay for the "upgrades".

Has your deposit check been cashed yet? If so it makes getting your money back a little tougher if they raise a stink. If they haven't, you could always put a stop order on it to avoid it being cashed if it starts to get ugly

I would get back to the surveyor and seller sooner than later. You don't want to spend money on a survey if you don't want the boat.

DrB

[tommyt]

You can certainly walk away from the deal at any time. Your only risk is the 10% that you put on the table. Legally, if you do not follow the contract as written, those dollars are the boat owners. But what happens if you do the survey and it is perfect? Then you have added more expense to the equation.

Having said that, it really comes down to the seller. They can see where you are coming from and give you your money back. Or, they can say fine, but i am keeping your money. Nothing wrong with either of those responses, it is just that you prefer one over the other.

The seller may have turned down another offer in the interim. Probably not, but you never know. In that case they would definetely have an issue.

Hope all works out for both of you.

[teshannon]

I'd go through with the survey and then walk away (you need not say why) for a couple of reasons. One, it's cleaner contractually. Two, you have booked the surveyors time and he may easily loose money if he can't book someone else for that day. Three, never burn a bridge with the surveyor or broker. You may need their services again some day and people have long memories. Good luck.

[DrB]

Well I understand the POV of teshannon, I don't think that you should have a survey. Why spend money on something that is necessary? What happens if the survey comes back 100%? Highly unlikely, but let's say it does. What are you going to tell the seller to get out of the deal then?

The point about the surveyor's time is noted. If they survey was tomorrow, then you're kind of set it would be unfair to back out now. You still could call him and cancel and maybe pay half his time to not do it as it saves him drive time or do it anyway as a learning experience (if you have never gone through one). If the survey was say late next week or later, you should cancel. These guys/gals know stuff comes up all the time, so it shouldn't phase them.

I don't think any of the above is unreasonable or unethical and should keep everything on business friendly terms.

DrB

[Jeff_H]

I think you need to go back and read your contract because there isn't standard language on this issue. Iin some contracts there are specific reasons that entitle you to back out of an agreement and get back your deposit back, and other contracts which allow you to back out for any undisclosed reason at all.

You need to be clear on what the contract says before your approach the owner. In many contracts, the owner is permitted to keep your deposit if you back out but don't have a reason related to items disclosed during survey or seatrial. This compensates the owner for the time that the boat was off the market and possible buyers were turned away.

Once you know your contractual obligations, I would quickly get in touch with the broker to see if you can get out of the contract without forfeiting your deposit. If your contract does not allow you to get out without forfeiting your deposit, at this point it is a negotiation. As a Seller, I would rather know as soon as possible that the buyer was going to default rather than go through the sham of a survey on a boat that you have no intention of buying. Most buyers and brokers will let you off the hook if you are upfront and don't drag this out too long.

As to the surveyor, you can use him to survey the boat that you are buying from your relative.

Jeff

[sailingfool]

Don't do the survey.

That agreement if standard and not marked-up, does not require that you actually have the survey done (it says "may" survey) nor to state a reason for which you reject the boat. I would not tell the broker/seller you found something else. Just follow the contract provision for rejection, in the time period permitted, but asap; Send the broker a letter by registered mail stating that you feel the boat is not what you thought and that you reject the yacht under the terms of the agreement.

Case closed. you will get the deposit back, less any costs you have made the seller or broker incur in support of your purchase.

If you ever want to do business with the broker again you should call him/her asap, apologize and tell them there's nothing wrong with the boat, then an understandable excuse, such as your SO doesn't like the color.

[pigslo]

"subject to survey and sea trial" Do a sea trial if neccesary and decline the boat, but read the contract on what the order of things is.
pigslo

[TrueWest77]

Thanks All - it's a tough issue. I can clearly go through with the sea trial and reject on nothing more than performance..."it's too slow" is fair game, at least according to the broker.

I guess my real conundrum is that it seems unfair to put the broker and owner through that when I already KNOW what my answer is.

At the same time, if I tell them that now...can they keep my deposit?

The "terms" for acceptance/rejection on the contract are just "survey and sea trial"

[jimmd]

most states do have a "cooling off period" after the executuion of a contract. maryland has a 72 hour window though there are some exceptions that come into play depending where the contract was signed - your place or theirs.