[argalax]

We have made an offer for a boat, conditional to a satisfactory survey, sea trial and ... SELLER being able to secure a bridge loan.

At a time we were assured that it's a just a matter of seller going to the bank and settling the outstanding loan (and lien) on the boat, sighting pending sale and its proceeds coming to cover the loan.

We understood later that the proceeds of the sale will not be sufficient for the seller to cover the outstanding loan and he needs to arrange a bridge loan for the boat sale to succeed.

Edit: To clarify - as a buyer, our finances are not the issue here. It's the seller who needs to arrange the bridge loan to settle his finances and remove the lien on the boat.

It has been more than a week and seller is still working on his finances. We are running out of time to have the survey arranged before the acceptance date, and we are very reluctant to commit survey expenses until seller's finances are not settled.

We would not expect the SELLER's finances could become an issue when buying a boat.

My concern is that what if seller, due to his personal financial situation, will not be able to arrange a bridge loan (on time) and sale will fall though. We would have wasted time, travel and work arrangements, costs of boat survey + sea trial, and would have to start our search again.

Did anyone have experience like this? How it turned out?
What are my options and next steps should be?
Any insight will be appreciated.

 

[denverd0n]

...we are very reluctant to commit survey expenses until seller's finances are not settled.

As well you should be!

I know that you are reluctant to let this deal go, but how much more reluctant are you going to be if you put in even more time and money, only to have the deal fall apart? I would start looking for other boats while you wait to see what happens here. What I would absolutely NOT do is spend another single penny on this deal, until the seller works out his financial issues.

Good luck to you.

 

[christian.hess]

bingo

I bought a boat once like this...I was young, owner financed with half down...but the boat was his and paid for and well taken care of...

he liked me and I liked him and the rest was history...

now fast forward to my current boat...its another story and one that irks me but the boat is in my name and paid for in full...

the issue was the seller before me failed to pay the previous owner in full when he had it...and they have been battling for a while now...its not my fault in any sense but I feel bad for the previous previous owner...

I would not under any circumstance spend one dime in your scenario...from experience you are in essence paying off someone elses debt with no safety factor for you...

a sea trial amd time wasted is the least of your worries....easy to forget about...something else will pop up

 

[jameswilson29]

Did anyone have experience like this? How it turned out?
What are my options and next steps should be?
Any insight will be appreciated.

You should consult with a Canadian lawyer in your province concerning your legal rights under your written contract. You did use a written contract, right?

Consider this a blessing, to allow you to reconsider the wisdom of financing a boat purchase.

You should only finance property that appreciates, such as real estate, or that which you need, such as a vehicle for commuting, if you are not able to pay cash. You should not finance depreciating. luxury items, such as a boat, unless it will be your residence.

Pay cash from your savings, after you satisfy all your necessities. If you cannot afford to buy the boat you want, save more money for it, or adjust your wants.

Boats are not investments, they are unnecessary, ongoing, entertainment/recreational expenses.

 

[christian.hess]

james man while I agree with you on a lot of stuff, what wrong with buying a boat in payments?

the same can be said for buying a new car with payments, utter nonsens as it depreciates by 40 percent once it turns around the block

but its done all the time right?

Im having a hard time understanding why this is so far out there...

regarding the OP´s scenario of course he should stop right now and cut his losses or wait untill the seller has his crap together

I agree on that for sure

Im also having a hard time why even the simplest things need to be run by a lawyer

 

[argalax]

jameswilson29,

You misunderstood: As a buyer, our finances are not the issue here. It's the seller of the boat who has financial issues.
Also, the boat is in US and being purchased through a registered broker.

 

[christian.hess]

op I missuenderstood too...I thought you wanted owner financing and the seller needs financing in order to be able to sell the boat

in any case I would not spend a dime...unless for example the loan the seller needs to be able to sell the boat is deduced from what you want to offer on the boat

meaning the seller would probably not want to do this since that chunk of change would be deduced instantly...and not financed from the bank per se

good luck

 

[jameswilson29]

james man while I agree with you on a lot of stuff, what wrong with buying a boat in payments?

the same can be said for buying a new car with payments, utter nonsens as it depreciates by 40 percent once it turns around the block

Im also having a hard time why even the simplest things need to be run by a lawyer

Cars are usually necessary, boats are usually not. There is a big difference between buying a necessity and buying a luxury item.

When someone posts a question that requires a legal answer, they should be referred to an attorney. His question concerns contractual rights and remedies. Only a Canadian lawyer is qualified to answer his specific question about his recourse under the contract.

 

[christian.hess]

a new car is not a necessity!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

nor is a used boat a luxury item...

 

[argalax]

PLEASE stay on subject!

 

[christian.hess]

did you read the previous posts...Ive had experience with both your situations...I will delete my last post if it offends you

 

[jameswilson29]

jameswilson29,

You misunderstood: As a buyer, our finances are not the issue here. It's the seller of the boat who has financial issues.
Also, the boat is in US and being purchased through a registered broker.

You are right, I don't understand the circumstances. Your use of the term "conditional to" throws me, too.

Is your contract "contingent upon" those occurrences, meaning there is no enforceable contract unless those conditions are satisfied, with the result that the earnest money deposit is returned? Did you use the standard broker's contract? Does the broker represent you or the seller? With whom is the broker registered? In which state did contract formation occur? Where is the boat located? Did you specify a choice of governing law/forum for enforcement?

So you are paying cash. Your cash will be used to satisfy the lien and you receive clear title.

Are you saying the seller is upside down - owes more than the boat is worth - and must come to the table with money, or are the sale proceeds necessary for the seller's other purchase and this contract was made contingent upon closing on the other purchase?

Why does the seller need a bridge loan?

In the U.S., a bridge loan is a short term loan used until permanent financing can be arranged. How is that applicable to this transaction?

 

[christian.hess]

just a question what is your broker doing? if you are using a broker he should be helpinh you a lot more...is that only for the buying from out of the country(us boat)

 

[argalax]

To answer some of the questions:
- Yes, the seller is under water - he owes more than the boat current value, and proceeds of the sale will not cover his loan. That's why he needs to arrange bridge loan with his bank.
- We used the standard broker's contract - we will get our deposit back if seller's finances are not settled and the deal will fall apart - but we would loose the boat, time, money for travel, survey and sea trial, etc.
- The broker is saying that seller is working in his finances and no need to worry.
- I am sure it has nothing to do with Canadian buying a boat in US from US seller - the seller would have to settled his finances in any case / sale.

 

[christian.hess]

hope it works out
good luck

 

[tommays]

That defiantly gets complex as there will be a lien on the boat which will take time to clear

If it was documented it would take a good amount of time to pass through the CG

If it is state registered it is different in every state

 

[jameswilson29]

O.K., you should consult with a lawyer in the appropriate jurisdiction concerning your legal rights and options.

I suggest you post this question with more relevant factual information on Avvo.com - The right attorney makes the difference in the question and answer section.

 

[argalax]

If it is state registered it is different in every state

The boat is registered and being sold in MD, I will be re-registering (re-flagging) it in Canada.

 

[jameswilson29]

Call Sailnet member and lawyer Joel Aronson regarding your contract rights.

There are plenty of maritime lawyers in Annapolis, Baltimore and the surrounding areas.

 

[capttb]

This shouldn't be your problem, the contract should stipulate that seller must delivery a clear title and so far all evidence says he can't. The "bridge loan" would actually appear to be an unsecured loan for money that's already "gone", I wouldn't make that loan would you?
Tell the broker that despite his assurances you are concerned and don't intend to proceed until seller can deliver a clear title. If you really want the boat let them extend the acceptance date or whatever, be agreeable but make it THEIR problem, not yours.