SailNet Community banner
  • SailNet is a forum community dedicated to Sailing enthusiasts. Come join the discussion about sailing, modifications, classifieds, troubleshooting, repairs, reviews, maintenance, and more!

Seller agreed to offer, but set a clause,"no discounts after survey"

12K views 70 replies 36 participants last post by  flyingriki 
#1 ·
I was looking for a Gemini 105 MC, I looked at several during the last year and found many in a sad shape and a few with exaggerated prices. Last Saturday, while inspecting an MC, we were pointed toward a 1996 M and we were very impressed with the boat, immaculate maintained with many extras, clean engine, new wiring, a 2100 dollar Garmin, a brand new dinghy, new upholstery, a new AC unit etc, etc, etc. So far the best boat we have seen. We offered the owner 15% less than the asking price, he counter offered and we offered 10% less than the asking price and he accepted. Here is the question and dilemma. On the Purchase and Sell Agreement accepting my offer he wrote, "No price reduction after survey". I know I can reject the boat, but then I will be out of the cost of the survey, haul out and my traveling expenses for an out of State trip. What do you guys suggest?
Thanks
 
#2 ·
Seller agreed to offer, but set a clause,"no discounts after survey"

You can offer a price reduction and he can say yes or no. "Yes" and he sells the boat, no and you can buy it at the contract price or he can take his chances again on the open market.

Don't let that clause scare you.

Elan
 
#7 ·
Re: Seller agreed to offer, but set a clause,"no discounts after survey"

You can offer a price reduction and he can say yes or no. "Yes" and he sells the boat, no and you can buy it at the contract price or he can take his chances again on the open market.

Don't let that clause scare you.

Elan
I agree and get the haul-out. We didn't as I believed some work orders that were misleading and we didn't see the need for the haul-out. After buying and getting the boat hauled there were bottom problems that have resulted in about $3000 in repairs we didn't count on. If we would of hauled the boat the need for those repairs could of been cause for us to not take the boat or put in a new offer and like Elan said he then would of had to of made a decision,

Sum

-----------------------------------

Our 37 Endeavour --- Our 26 MacGregor --- Trips With Both

 
#4 ·
That clause would kind of negate part of the reason to get a survey -- or sea trial.

Make the sale conditional on a survey with no issues and a succesful sea trial.

If you don't like whats found on the survey you can offer less, seller can take it or not.
 
#5 · (Edited)
if you are ok with the price and they find things on the survey, then don't buy until the problems are all repaired to your satisfaction. it's a buyers market
Counter offer with the same price but with your own clause that it passes the survey 100%
 
#6 ·
So he already dropped his selling price and "now" you want to add(subtract) survey and sea trial discounts on top....??Isn't that double dipping...?

Seems you should start at the "asking price...subtract the defects noted in survey/sea trial (which may be great or inconsequential) and then "discount" the offer even more if you feel lucky...

That's like negotiating best price on a new car and "then" asking how much for my trade in...
 
#8 ·
as long as you can back out of the deal and recover your deposit if the survey uncovers issues you are fine. as others have said you can make a counter then. The key is for the sale to be subject to a satisfying survey so you're no locked in a bad boat.
 
#11 ·
I think it's a fine clause, and doesn't really change the facts of the deal.

Without the clause, he has no obligation to change the price based on the survey, you can ask for a discount, but he can still say no. He's just letting you know up front he doesn't want to haggle.

I sometimes think people take the whole haggle after a survey thing to far very often. For instance, if the price is already set to reflect an issue, you can't expect the price to be reduced after the survey confirms the issue. Surveys help you look for major things that might not be known or disclosed. If there's something major on the survey that wasn't known before, the buyer decides if its a deal breaker, and the owner has the option (not obligation) to change his asking price if he feels it's warranted.

For instance, when we bought our boat, the previous owner had it for 27 years, and had not replaced the rigging. He told us that, we knew it needed to be replaced ASAP before we had a survey done, and we knew the price reflected that. We couldn't very well ask for a discount for the rig when the price was more then fair with a bad rig...

Bottom line, don't sweat it. If there's nothing new on the survey, and the price still seems fair given the condition of the boat, buy it. If the survey turns up a few things that are major, and now the price no longer seems fair, walk away. If they owner then sees that his price isn't fair, given the major issues discovered he didn't know about, perhaps he'll change his mind and lower the asking price after all to reflect the new information.
 
#12 ·
The Seller's caveat is kind of meaningless other than putting you on notice that he/she doesn't intend to reduce the price further if you do not accept the Survey/Sea Trial "as is". In fact, however, if a major flaw is discovered (unlikely given your description of the yacht), it is something he/she will have to correct or, if not, disclose to the next prospective buyer who will certainly adjust their price accordingly. Considering carrying costs alone, a negotiated price adjustment with you, if reasonable, is more sensible. On the other hand, it is not uncommon to find things that do need correction/repair during a routine survey of a good boat--out of date Fire Extinguishers, Flares and the like, battery cable covers, battery tie-downs etc.--that are not material and really have little/no effect on the value of the yacht but may involve some costs to "correct". The unfortunate fact is that there is always something that needs correction on every boat, bar none. It is the nature of the beast. Further, get behind the idea that you will likely spend 10% to 20% of the purchase price of the yacht for upgrades/repairs in the first year of so of your ownership of the yacht.

FWIW...
 
#13 ·
That would be fine for any obvious defects - what you see is what you buy.

It is not acceptable for latent defects. If the survey reveals recommendations that you could not have reasonably discovered by your thorough pre-contract inspection, then you and the seller should be willing to re-negotiate, especially if you have reason to believe the seller must have known about the defects.

If you are using the standard broker's contract as some members advise, you have very little recourse in any event, since the contract is largely conditional until after the survey takes place (and you have already spent hundreds or thousands of dollars, thus putting you over the proverbial barrell). In this buyer's market, I have advocated using a buyer's contract that requires the seller to reveal known latent defects, among other things.

Change the clause to discover the seller's willingness to allow re-negotiations for recommendations concerning latent defects revealed by the marine survey, or walk. Othewise you are out all the costs to survey the boat with no expectation of any re-negotiation.

An honest, reasonable seller should be willing to agree to that because he or she would be morally (and perhaps legally) obliged to reveal the latent physical defect to the next buyer (or face a fraud-in-the-inducement claim for the buyer's survey costs and expenses - depending on the contract used).
 
#15 ·
The problem is that brokers will generally not list what is wrong with a boat. Their hope is that you pay asking price and skip the survey. That only happens in fairly-tale land.

When I sold my last two boats, I clearly stated what was wrong with the boats and included that in the asking price. Anything above and beyond those issues could be negotiated after the survey.

Both boats sold for asking price or within 2% and for at least 10% more than asking price of YW boats. Very little haggling, no brokers, happy buyer and seller. Nice and clean.

I bought my last boat from a private owner the same way. He used the same technique of listing what the boat needed and included it in the asking price.

The whole yacht broker business would work much better if they used this method and had buyers/sellers with realistic expectations.
 
#16 ·
As stated, that clause does not technically change anything. No contract ever says "post survey adjustments are welcome"

What they're telling you is they are going to be hard arses. To be fair, there are many buyers that use the survey to chew down a reasonable price, despite it only identifying the obvious. I sympathize with sellers that have to deal with that. I've seen it proposed by some on this board. It isn't honest.

However, I would have a conversation with the seller about latent undisclosed defects they may be unaware of, if any. If zero change is zero change, despite potentially finding a fatal flaw, you have your risk well identified. They may admit they just won't accept nickle and dime stuff that you should have noticed yourself.
 
#19 ·
To be fair, there are many buyers that use the survey to chew down a reasonable price, despite it only identifying the obvious. I sympathize with sellers that have to deal with that. I've seen it proposed by some on this board. It isn't honest..
This is what I was alluding to as "double dipping"....

"YOU" are the primary value assor in the transaction...you looked the boat over and you made the offer...

If accepted that should be the selling price....

The survey (and the home inspector) are just there to cover all the bases and make sure there were no hidden or undiscovered , major, defeciencies which may affect the value of said item...

If found, that would negate the deal, period...

And then it's time to start a "new" offer on what is now known...seller may want to correct to original offer specs, or take repairs in account when "you" make new offer...

But that is major hidden/unknown issues (deal breakers) not the mundane and obvious and easily recognizeable issues (which were taken into account in the "first" offer....
 
#17 ·
p.s. I once put a deposit on a boat, flew to the caribbean, witnessed the survey and rejected the boat, even thought the seller was fully willing to correct the defects. I just didn't like how the boat seemed like she was treated. I was more concerned that it would become a maintenance dock queen down the road. Lost some money on the survey, but would have lost more. Got my deposit back. That's the idea behind a survey.
 
#18 ·
Doesn't mean a thing, you can still walk away - assuming you aren't leaving a deposit behind.
If you've made a deposit - and try to haggle post survey - you might lose the deposit if it is clearly stated to be non-refundable.
 
#21 · (Edited)
There's no reason to put this into the contract because the seller always has the right to offer "no discounts after survey". Maybe they've been "burned" before where they tried to make a deal and the buyer came back with a bunch of discount demands once the survey was completed. However, again, the seller has the right to look the buyer in the eye at that point and say no to any discount demands they produce.

As others have pointed out, you have the right to reject this deal after the survey, for any reason. And if you reject this deal, you are certainly able to offer the seller a new deal, based on the new information. It strikes me that this is just as silly as you writing a clause into the contract stating that you can reject the deal for any reason at all.

A long time ago I was moving from New Orleans to the Boston area, and I was selling the stuff I didn't want to bring with me. This included a cheap weight bench and set of weights. I had listed them for 50.00 knowing full well that I wanted to get rid of them, and they were at least worth that much. I figured that 50.00 was the bare minimum price to make the transaction worth my while. Any lower and it would have been easier to just donate or trash it.

The first call I got, (the minute the ad hit the street), was from someone who setup an appointment to see them that morning. When he arrived he starting pointing out how the bench wasn't a modern design, and that he could buy cast iron weights for .25 cents a pound, and on and on. I just waited him out and when he stopped talking I asked him, "So how much do you want to offer me for the set?". He said, "25.00 dollars". I told him, "Thanks, but I want 50.00. I've got your number and if I can't find someone to buy the set for 50.00, I'll call you back." He looked hurt that I hadn't agreed with him and sold him the set for 1/2 what I was asking. The very next guy that showed up within 60 seconds, asked me what I wanted, I said 50.00 dollars, and he said I'll take 'em.

Both parties should feel empowered in a deal, because they actually are.

Good Luck..
 
#22 ·
I agree the clause is of no particular effect, I'd proceed. Any post-survey reduction in price is always subject to negotiation, clause or not, and the buyer has an absolute power to say NO. to a reduction.

Even with the clause, you want a reduction for cause, the seller has to make the same decision they would, without the clause. I'd call it just a little gamesmanship, ignore it.
 
#25 ·
I fully agree with this assesment.

When you've come to the point of surveying a boat, you're at the point of "hold your nose and jump in". If the survey turns up unexpected warts you can still make a lower offer or walk, knowing the survery cost was really a savings.
 
#23 ·
The seller is just telling you that you've negotiated your best price and there is no more room.

If you want the boat go for the survey. Remember the survey, for all intense & purposes, is so you can get insurance and know the boat is safe.

They are not intended, as many people try to use them, as a further negotiation tool. Sounds to me like the seller is an experienced seller and been through the nickle & dime dance before.
 
#26 ·
.... Sounds to me like the seller is an experienced seller and been through the nickle & dime dance before.
All true, but if a substantial un-disclosed defect is found, say delaminated decks, the negotiation will start again, clause or not. It has too, as the finding lowers the value of the boat... and the seller will largely have to suck that fact up.
 
#28 ·
This is exactly how a home inspection provision would work in a P&S contract. You don't get the right to deduct from the purchase price for things found in the inspection--you get the right to walk away.

Practically speaking, the seller is going to make a price accommodation or fix the issue, because if you walk then the next buyer is bound to find the same issue. Even more, now the seller knows about the issue and has to consider whether he'd need to disclose it to a future buyer.

Ever see this Gemini for sale? The Slapdash | No Fixed Address
 
#29 ·
Bottom line, Do you think that you want this boat for that price? If so, put a refundable deposit on it, and have it surveyed.

After the survey, ask yourself the same question. If the answer is still yes, proceed to close the deal. If not, get your deposit back and walk away. Consider the survey an education expense.
 
#34 ·
Thank you all for the comments and suggestions. I rejected the Purchase and sell agreement that contained the clause. The broker sated, "the seller is already mad and you will loose the boat" How can you loose something you don't have? And why should emotions be part of the negotiation? In any case, the seller took the clause off and we are moving on with the purchase. Thanks and see you in the Bahamas.
 
#35 ·
Seems to happen frequently on sailnet - the OP disappears in a sea of helpful suggestions...

Not this particular OP, but some seem to post in order to receive reaffirmation of their thoughts and proposed course of action. When they instead receive different viewpoints and ideas, some of which they may not have considered, they bail and are never heard from again.

Many are uncomfortable with the fact that truth often emerges from controversy and conflict.
 
#39 ·
The broker sated, "the seller is already mad and you will loose the boat"
So what if the seller is insane... This is the broker's, not your, problem.

This is a transaction pure and simple. Tell the broker that his psychological assessment of the owner is irrelevant to whether this transaction takes place (and he gets paid).
 
#40 ·
He has accepted your reduced offer. Make sure your deal is subject to a satisfactory survey. If the boat is OK with only minor issues then you have already agreed to buy it at the agreed on price.

If the boat has major issues then the "subject to survey" clause kicks in and you pull your offer. Nothing stopping you at that point from making a new offer which would be likely your original offer less the cost of fixing the newly found problems.

The survey is for you not for the owner. It is your own cost and he should not pay for it up front or by price reduction

It is a used boat. Your offer was made and accepted on that basis. if you want a new boat then go pay someone else a whole lot more and get a beneteau ....

Mike
 
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top