# Buying First Boat Advice Needed On Offer Process



## Sailski3 (Jul 29, 2011)

Hi All,

After a few months of searching, I've found "The One". An Ericson 27. Since I am a boat-buying virgin, I need some help on what is customary. I am not willing to rely strictly on the Broker for advice as they are after max commission. (sorry to any brokers out there).

I will make an offer subject to personal inspection, survey and sea trial and a reasonable amount of time to launch the boat to new destination (till end of current month). Those are really the only stipulations I can think of as I am a cash buyer and have no other boat to sell.

What else do I need to know? What is the customary deposit to hold a boat through inspection? Do I have to be specific about what is not acceptable with the survey report or is it up to my discretion upon survey review? Is the offer a written or verbal process? Under what conditions is my deposit at jeopardy if the boat does not meet with my approval upon survey?

Anything else you seasoned boaters can suggest would be very much welcome information. I am hoping to make the offer today.

Thanks in advance.

Mike


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## Boasun (Feb 10, 2007)

I just bought my own sailboat... 
Start with an offer of 20% less than asking price. There may be some haggling after the first offer. 
After the the sea trial, you will need to decide on whether you want that boat or not. If you do take a really good look at the vessel while you are aboard it. Any discreptencies can allow you reduce the agreed on price lower to cover the cost of repairs. If they demand "As Is". You will really need to take a good look at the vessel to see if you have the skills or money to do the repairs. Usually you may want to walk away and look else where. 
You may have to put about 10% down with the first offer, (with good brokers) it is refundable, but it goes to toward the price of the boat and the broker knows that you are serious. 
And talk with the broker and get a feel for him/her also. The good ones will be up front with you on any boat you are interested in.


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## dhays (Jul 9, 2010)

I'm not an expert by any means but...

The offer needs to be written and signed. If accepted, a 10% deposit is usually customary and the selling broker would hold it. If you don't like the boat on inspection or sea trial, or you don't like the survey for any reason, you can back out and get your deposit back. The only reason for the deposit is so the seller knows you are serious.

The process is really very much like buying a house. Make offer, they counter, you accept, counter again, or walk.

Good luck. The Ericson 27 is a nice boat.

Dave


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## Boasun (Feb 10, 2007)

But one minor detail, You will have the onus of paying for the survey and haulout. This was close to a thousand dollars for both on the vessel that I've gladly acquired. So how enthralled are you with this boat??


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## Sailski3 (Jul 29, 2011)

I have seen pictures and read alot of reviews. I have not seen the boat and broker is telling me he has offer already. I am not real comfortable making any offer without my own visual inspection. The boat was just listed and I can't go down until Saturday to inspect. I am wondering if broker is just trying to turn the heat up on me. Boat is well equipped and looks very well cared for - but pictures have a way of making all look good. . .


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## dhays (Jul 9, 2010)

You end up making the offer based on what you think the condition of the boat is. If they accept the offer, then you find out upon inspection that it isn't in as good of shape as you thought, then you withdraw right then. Bosun makes a good point about the survey.

Sequence of events goes like this:
1. Ask questions of broker about condition of boat.
2. Make offer based on that information.
3. If accepted, inspect the boat yourself (there is a good thread on that here).
4. If you still like it, then you do a sea trial.
5. If you still like it, then you have the boat hauled and surveyed.

Keep in mind that after steps 3, 4, or 5 you can amend your offer. If you see something on inspection you don't like, tell the broker and that due to inspection you would like to renegotiate the price. If they agree, great. If not, you walk. You can do the same after the sea trial or survey as well.

PS: Keep in mind that it is a buyers market. Don't feel pushed by a broker. You have cash in your pocket and are buying in one of the worse boat markets ever and are doing so at the end of the season.

Dave


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## saildork (Feb 20, 2007)

dhays said:


> Sequence of events goes like this:
> 1. Ask questions of broker about condition of boat.
> 2. Make offer based on that information.
> 3. If accepted, inspect the boat yourself (there is a good thread on that here).
> ...


The thread referred to is the 'Boat Buying Trip Tips' by Sailingdog in the Boat Buying Forum here on Sailnet. Print it out and take it with you when you travel to see the boat.

Remember, boats grow on trees. If this one gets away or it's just not the one for you, don't worry. There will be another one soon. Good luck!


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## apogee1mars (Aug 13, 2011)

If you have decided on the type and model of boat you wish to own, stay away from the brokers and just buy one private party. They made lots of Ericson's. They are tough boats with lot and lots of fiberglass in them. Not a bad choice for a boat of that size, but then again Columbia 26's cheap, fast and roomy. The biggest decision is to settle for what you want. Then find one that has been loved and care has been taken to keep it in good order. If you seek, ye will find. There is some private party guy out there right now chomping at the bit to upgrade or get out right this second. Everything should always be contingent on a survey. If you find something that looks the part on the topside, when it is hauled out and gone over you will be in a better place to make a deal, and you can re zinc/ bottom paint before you relaunch with true peace of mind.


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## sfchallenger (May 17, 2011)

I'd amend Dave's advice above as follows - 

Make your own inspection before making an offer - I wouldn't accept a broker's word on anything. If the broker won't let you inspect the boat without an offer, keep walking. 

If you don't find anything horrifying during your own inspection, you make an offer, and usually a deposit, then you get your sea trial, etc as described above. 

I would also really emphasize what Dave mentions about amending your offer based on sea-trial/survey results, but I'd suggest that you hold it all in for after the survey unless you find anything really flagrent. 

Try to find out how long the broker has had the boat, this can be a good clue to how motivated the seller is - my boat had been sitting at the brokerage for over a year - and come down very significantly from the initial asking price already. 

Also, don't take the broker's advice on surveyors, and ask around - find the most particular person you can to help you identify every single problem with the thing, then itemize those to the broker as reasons why you won't pay more than _____ for the boat. 

Best of luck, 
h


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## Minnewaska (Feb 21, 2010)

Don't ever give one second thought to a broker's pressure.

*Never fall in love with a sailboat until after you own it.* There are always others.

The only other contingency I would consider is that you can get it insured, if you intend to insure it. This can be a bigger issue with larger boats, as your experience is going to dictate that as much as the boat's condition. However, condition is on your radar with the survey already anyway.


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## Donna_F (Nov 7, 2005)

Boasun said:


> But one minor detail, You will have the onus of paying for the survey and haulout. This was close to a thousand dollars for both on the vessel that I've gladly acquired. So how enthralled are you with this boat??


These costs depend on the size of the boat, what marina you use for the haul out and how much the surveyor charges. Our haul out and survey wasn't anywhere near a thousand dollars.

But yes, the prospective buyer pays AND eats the cost if he or she decides not to by the boat. But don't give up the survey even if you bought the boat. You paid for it, it's yours. If the boat owner wants a survey he or she can pay for one. I have heard of owners asking if they can have the survey if the buyer decided against the boat.


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## Sailski3 (Jul 29, 2011)

Thanks to all who have offered advice. Do I have to get all of this in writing from the broker? That I can back away post inspection, post survey, post sea trial or is this a given? Deposit is 100% refundable at any point prior to actual agreement of sale? As for the offer, I manage and train comodity buyers, so it is not lost on me that it is the mother of all buyers markets and it is end of season. Sellers will be more likely to want to clear the books so as to avoid winter storage. Additionally, it is an estate sale.


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## eherlihy (Jan 2, 2007)

If you are dealing with a broker, he or she will have an offer form that you need to complete and sign, and accompany with a 10% check. If it is the standard YBAA form, you can walk away for just about any reason - within reason .

However, I read in your previous post that there is already an offer on this boat. If there is already an offer, why are YOU looking at it? Yes, I know that the offer may be rejected. If so, then there is no offer on the boat.* DON'T let the broker use you for leverage. *

Ask the broker if the other offer is still being considered. If it is, tell the broker that you need to look at other boats. The broker should only tell you about this boat if, and only if, the other offer is rejected. If ANYONE has the right of first refusal, it puts both buyers at a disadvantage. I would only enter into negotiations if I were the only one making an offer on a boat.

I had an experience with another member of sailnet where the other member was selling a gorgeous boat, that I would have loved to purchase. However, he told me that another person had made an offer, and he granted that person the right of first refusal. I never made any offer for that boat, and have no regrets. I have nothing but respect for the other buyer, and the seller of that boat. I can only hope that _they _respect my decision not to initiate a bidding war.


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## apogee1mars (Aug 13, 2011)

DRFerron said:


> These costs depend on the size of the boat, what marina you use for the haul out and how much the surveyor charges. Our haul out and survey wasn't anywhere near a thousand dollars.
> 
> But yes, the prospective buyer pays AND eats the cost if he or she decides not to by the boat. But don't give up the survey even if you bought the boat. You paid for it, it's yours. If the boat owner wants a survey he or she can pay for one. I have heard of owners asking if they can have the survey if the buyer decided against the boat.


*You can make a pre arrangement with the seller to split the cost of a survey. The advantage for the seller is that a recent survey is good for the prospective buyer if you opt out. It is just part of the dance. It is the same with aircraft. *


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## Donna_F (Nov 7, 2005)

A good broker will tell you all that upfront and it will be in the agreement you sign.

Although it's good to approach a broker with eyes open, they aren't all bad. We had an extremely good one who was open with us and stopped us from making some potential mistakes.


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## apogee1mars (Aug 13, 2011)

DRFerron said:


> A good broker will tell you all that upfront and it will be in the agreement you sign.
> 
> Although it's good to approach a broker with eyes open, they aren't all bad. We had an extremely good one who was open with us and stopped us from making some potential mistakes.


A good surveyor will do the same, and is unbiased towards the sale.


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## dnf777 (Jun 23, 2007)

can someone comment on how surveyor's fees are structured? Is is a flat rate based on boat size, or a percentage of surveyed value? Or something else.

I'm also considering an upgrade to a boat in the 9k range, and in this economy plan on offering around 5k. Boat is a mid-80s Cal24, so prone to age issues. I don't want to pay more for a survey than the boat, but don't want to blow 5k on an irreparable problem, either. I don't mean to hijak, but thought these tied in to the OP's question.
thanks


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## apogee1mars (Aug 13, 2011)

can someone comment on how surveyor's fees are structured? Is is a flat rate based on boat size, or a percentage of surveyed value? Or something else.

I'm also considering an upgrade to a boat in the 9k range, and in this economy plan on offering around 5k. Boat is a mid-80s Cal24, so prone to age issues. I don't want to pay more for a survey than the boat, but don't want to blow 5k on an irreparable problem, either. I don't mean to hijak, but thought these tied in to the OP's question.
thanks[/QUOTE]

Depends on the arrangement you make with the surveyor.


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## tommays (Sep 9, 2008)

If you don't have and idea how the boat sails the sea trial is not the correct way to find out 

The further you get into the deal the more difficult it is to back out without losing money UNLESS there is a true deficiency in the boat that shows up in the survey OR the sea trial which is at least around here the final part of the deal

For example on Long island i payed 300 just for and insurance survey in my driveway BUT you cant get real marine insurance without a survey from someone accredited with SAMS or its equivalent as a big part of the deal is them putting a value on the boat that can be justified

You surely don't want to be paying for several surveys as a way of weeding out boats


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## Minnewaska (Feb 21, 2010)

dnf777 said:


> can someone comment on how surveyor's fees are structured? Is is a flat rate based on boat size, or a percentage of surveyed value? Or something else.


I've only paid for a survey based on a quote, which in turn is based on LOA. I did pay by the hour once, but it was capped at that quote based on LOA. I stopped the survey about mid way, rejected the boat and saved money.

On another point made, that seller did ask for the partial survey. I did not provide it. They could have bought it from me, however. The boat was not as represented in many way, which is why I rejected it.


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## eherlihy (Jan 2, 2007)

dnf777 said:


> can someone comment on how surveyor's fees are structured? Is is a flat rate based on boat size, or a percentage of surveyed value? Or something else.
> 
> I'm also considering an upgrade to a boat in the 9k range, and in this economy plan on offering around 5k. Boat is a mid-80s Cal24, so prone to age issues. I don't want to pay more for a survey than the boat, but don't want to blow 5k on an irreparable problem, either. I don't mean to hijak, but thought these tied in to the OP's question.
> thanks


$/foot

See Marine Surveyors - What is a Marine Survey and why should you get one?


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## Sailski3 (Jul 29, 2011)

Big help from all of you. Seems like a pretty straight forward process. The broker did tell me the "offer" he had was not going to be presented today because prospective buyer was waffling on conditions of sale. I will clarify with him tomorrow that no one has first right of refusal. If not, I plan to tender an offer with a time limit on accepting. Thanks again for all of the helpful coaching!


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## eherlihy (Jan 2, 2007)

Oh, the broker has identified someone that might make an offer, if certain conditions are met...

Dude, that's not an "offer."

You have CASH available. (You're an endangered species in this market.)

Here is how I would handle this in your situation;

Look at the boat, and take your sweet time. Make notes, take pictures; shake the rigging, work the tiller, move the cushions, look at the sails, look at the engine, look in the bilge, look at the chain plates, shake the propellor shaft, take everything out of the lockers, lie in the berths, do what ever you damn well please - well, within reason. Also, you should not use any tools to open anything.
After you (and your significant other, if appropriate) have looked at everything thoroughly, tell the broker that you want to sleep on it.
Go have a nice dinner
The next day, look through all the notes and pictures that you took. Talk it over with your SO, again, if appropriate.
Ask yourself two questions
"At this time of my life, is this boat worth >80% of what the buyer is asking?"
"Can I live with that much money missing from my bank account?"
If the answer to both of these questions is "YES," call the broker, and offer him 80% of asking. If the answer to either question is "NO," call the broker, and tell him why you are not going to make an offer. Regardless of your decision, at this point you owe the broker a call.
If you go for it, be prepared for the broker to try to persuade you to increase your offer. If he does, tell him to present your offer as is, or you'll walk. 80% of asking, without involving a loan officer, in the fall, is a great offer.

Good luck!


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## Minnewaska (Feb 21, 2010)

I've never prescribed to the process that you must buy anything at a standard discount to the listed price. I assure you that those listing boats do not prescribe to any formula that sets the price they are asking. The advice to offer a standard discount stands as good a chance of still overpaying as it does that you missed a great value by not bidding closer to asking.

You need to research value and make an offer just below what you really believe it to be worth, so that you can negotiate up to that value. The percentage below asking will vary deal by deal.


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## afrinus (Feb 27, 2011)

Minnewaska said:


> I've never prescribed to the process that you must buy anything at a standard discount to the listed price. I assure you that those listing boats do not prescribe to any formula that sets the price they are asking. The advice to offer a standard discount stands as good a chance of still overpaying as it does that you missed a great value by not bidding closer to asking.
> 
> You need to research value and make an offer just below what you really believe it to be worth, so that you can negotiate up to that value. The percentage below asking will vary deal by deal.


I believe this to be sage advice!

I recently bought my first boat. I thoroughly researched the value of the boat, and found the asking price to be very reasonable.
I paid the asking price, but got 6 months of free docking included for my effort.
Feedback from the seller afterwards - Many tried to low ball, but as he was serious to sell, he priced it fair. He was not going to budge.

Do your research, and offer what you think the boat is worth! (Just my opinion)


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## dhays (Jul 9, 2010)

Minnewaska said:


> You need to research value and make an offer just below what you really believe it to be worth, so that you can negotiate up to that value. The percentage below asking will vary deal by deal.


Well said.

Figure out what the boat is worth to YOU. If you get the boat at that price or lower, then you have gotten value for your money, which is what it should be all about.

Too many view negotiating purchases as some sort of competition. They feel that if the seller walks away happy, they somehow didn't "win" that encounter. Pointless.


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## eherlihy (Jan 2, 2007)

afrinus,

Was there a broker involved in your purchase? Brokers get 10%. Brokers also help the seller set the asking price.

However, I definitely agree with the point. Any buyer should be prepared to offer and pay a fair price.


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## MonteB (Aug 30, 2010)

Awesome Advice! I am in this process as well. I feel that I am well armed with the information to make an intelligent decision on this purchase. Thank you all very much


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## Sailski3 (Jul 29, 2011)

Wow. The folks on this forum are really great. I appreciate all of the input. I will let you all know how I make out after the weekend. Thanks again!!


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## Allanbc (Apr 19, 2007)

apogee1mars said:


> A good surveyor will do the same, and is unbiased towards the sale.


Actually, that is not entirely correct. The surveyor works for you, the buyer. They are your experienced second set of eyes accessing the boat. Listen to what the surveyor tells you.

When we bought our current boat, we had an EXCELLENT surveyor. He kept telling us, "This is a _really_ nice boat." Sure, it had some issues and some problems but lots of things were fixed really well in the past.


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## Donna_F (Nov 7, 2005)

Allanbc said:


> Actually, that is not entirely correct. The surveyor works for you, the buyer. They are your experienced second set of eyes accessing the boat. Listen to what the surveyor tells you.
> 
> When we bought our current boat, we had an EXCELLENT surveyor. He kept telling us, "This is a _really_ nice boat." Sure, it had some issues and some problems but lots of things were fixed really well in the past.


Ours had experience surveying Catalinas and, away from the seller, let us know the approximate selling prices of other Catalinas that he had surveyed that were in the same condition.

He also went aloft, which the broker seemed surprised about. I don't know if that's unusual.


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## afrinus (Feb 27, 2011)

Eherlihy,

We did not have a broker involved. We bought the boat (a Beneteau First 26) off of Craigslist.
I've been researching different boats for about 6 months, and knew what I was looking for and what those boats were worth.
I also made sure I knew the issues related to the boats, so when the boat was listed I knew the price point I was willing to pay and what the issues potentially could be.

I believe that as I was fair with the seller, he returned the favor in offering free docking.

Win-win !


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## Minnewaska (Feb 21, 2010)

DRFerron said:


> .....He also went aloft, which the broker seemed surprised about. I don't know if that's unusual.


Surprisingly, it is unusual. I've had them done both ways, but was clear about my expectations over the necessary review of standing rigging. When I was buying a boat that had been used heavily for racing, the surveyor when up to check everything. When I bought a 4 year old, lightly used boat that looked like it just came out of the box it was shipped in, I did not require it.


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## mikel1 (Oct 19, 2008)

Good luck...I love my Ericson 27... great boats! I'll be watching, hoping for the best...


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## eherlihy (Jan 2, 2007)

... Also, the reason that I suggest that he offer 80% (or more if it is really worth it), or tell the broker that he will take a pass is; 80% is a serious offer. If he looks at a sunfish that some guy is asking $10K for, and he feels is only worth $100, he shouldn't bother wasting anyone's time with offer/counter etc...

On the other hand if he sees this Ericson 27, and it is in pristine condition, and the guy wants $3500 it, his offer should be at, or above asking price.


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## eSailor (Mar 8, 2011)

I am in the process of buying (hopefully) a 31 Catalina - 2001. I took the family to see a bunch of boats over the weekend and everyone was pleased with this boat.

I have a question about the process. 

Does the sea trial usually come before or after a survey?

Thanks,
Matt


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## MonteB (Aug 30, 2010)

I have found that a good broker is essential. I wish I had known that I could have swithed brokers earlier in this process


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## jameswilson29 (Aug 15, 2009)

*Fee?*



MonteB said:


> I have found that a good broker is essential. I wish I had known that I could have swithed brokers earlier in this process


What is your broker charging you?

Who pays the fee?

Under what conditions is the fee earned?


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## TakeFive (Oct 22, 2009)

eSailor said:


> I am in the process of buying (hopefully) a 31 Catalina - 2001. I took the family to see a bunch of boats over the weekend and everyone was pleased with this boat.
> 
> I have a question about the process.
> 
> ...


You should ask to do the sea trial before the survey. If it's unacceptable for some reason, you will have saved the surveyor's fee. However, you should negotiate price, sign a contract (with sea trial and surveyor contingencies) and offer a deposit before doing this. Othewise, you might get labeled as a tire kicker looking for a free boat ride.


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## MonteB (Aug 30, 2010)

It seems I am paying for flippin everything


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## TakeFive (Oct 22, 2009)

MonteB said:


> It seems I am paying for flippin everything


It's customary for the buyer to pay for survey, finance charges, etc. However, it's very unusual for the buyer to pay the broker. Are you looking at boats that are listed with brokers, or are you using a broker to help you look at Craigslist boats? If the latter, the sellers are probably going the DIY route to avoid paying the fees, and you could end up on the hook for broker's fees, depending on what the contract says.


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## apogee1mars (Aug 13, 2011)

MonteB said:


> It seems I am paying for flippin everything


*Welcome to Boat Ownership*


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## MonteB (Aug 30, 2010)

apogee1mars said:


> *Welcome to Boat Ownership*


Hahaha Indeed:laugher


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## MonteB (Aug 30, 2010)

How long are they allowed to keep the deposit?


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## jameswilson29 (Aug 15, 2009)

You need to address the return of the earnest money deposit in your contract, who will hold it - the seller or escrow agent, under what conditions it can be retained, and under what conditions it can be applied or released.

As a buyer, you are safest depositing the deposit with a neutral escrow agent, such as a closing agent. If there is a dispute over the deposit, the escrow agent may deposit it with a court in a procedure known as an interpleader, and the court can decide who is entitled to the deposit.

Normally, the earnest money deposit would be either credited to the purchase price at closing, returned to the purchaser because a contingency was not satisfied - such as a satisfactory sea trial or satisfactory marine survey, or applied to damages because the purchaser breached the ratified contract.

You should provide that the deposit would be returned to you immediately if certain conditions are not met.

I would never accept the uniform broker's contract that primarily protects the broker's interest. Do not allow these brokers or sellers to lead you around by the nose simply because they may know more than you do about the procedure, or about boats. Do not accept something because they tell you this is the way we always do it. It is all negotiable. In this market, as a buyer you should control the transaction, not the broker or seller. If they do not like it, find another boat.


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## jstroup (Sep 11, 2007)

I just closed on a boat early this month. Deposit was held in escrow. Deposit was due when the contract was signed by both parties. I could back out of the deal at any time for any reason up until the acceptance date. I had about 4 weeks between when we signed the contract and the acceptance date to get the survey done. I paid for the survey. If I didn't "accept" the boat by the acceptance date the deal was "off" and I would get the deposit back. Once formally "accepted" I was committed to the deal. If I didn't complete the transaction by the close date (about one week after acceptance) I would forfet the deposit. Seller paid broker costs.


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## jameswilson29 (Aug 15, 2009)

Congrats on your successful purchase.

Was the seller free to sell the boat to someone else for a higher price before the acceptance date?

Was your check held or actually deposited, presented and cleared upon signing of the contract? 

Did you have the right take the boat on a sea trial before the acceptance date? Was the boat in the water or on the hard?


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## sailingfool (Apr 17, 2000)

jameswilson29 said:


> ....
> I would never accept the uniform broker's contract that primarily protects the broker's interest. ...


I believe there is nothing wrong with the standard brokers contract, it has been reasonably structured to fairly cover the interests of all parties:
http://www.integrityyachtsales.com/images/Blank_Sales_Agreement.pdf. In standard form it supports all the concerns listed in your post and others.

Obviously you can and should adjust the standard form agreement to meet any particular or specific reasonable concerns. Because everything CAN be negotiated, does not mean you want to negotiate EVERYTHING.

For example, the standard text does not mention a sea-trial...but it has a section titled _Additional Provisions:_ where you add your expectation about a sea trial linking it back to _Acceptance of the Yacht_, and anything else that is special or additional to your concerns.

The boilerplate document covers a lot of legal territory that needs to be covered, and you would be looking for far more trouble if you tried to cover this territory from scratch, even if you didn't mind the legal fees. Plus it'd be a waste of time.


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## TakeFive (Oct 22, 2009)

Yes, at some point you need to presume positive intent on the part of all participants. You can send the wrong signal if your first priority is to negotiate excessive bailout options that deviate from standard practice of the industry. You may think you're protecting yourself, but if the negotiations become protracted, you may risk another buyer coming along with more reasonable stipluations.


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## jstroup (Sep 11, 2007)

jameswilson29 said:


> Congrats on your successful purchase.
> 
> Was the seller free to sell the boat to someone else for a higher price before the acceptance date?
> 
> ...


Once the purchase agreement was signed I had exclusive right to purchase the boat until the acceptance date at which time I had to "accept" or walk away. The check for the deposit was cashed and held in escrow. Between the date the purchase agreement was signed and the acceptance date the seller was obligated to present the boat for survey and sea trials. We made sure there was sufficient time before the acceptance date to complete the survey and for me to receive and review the report. The boat was in the water when the purchase agreement was signed. The boat was hauled for survey then put back the water for sea trials.


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## jameswilson29 (Aug 15, 2009)

jstroup said:


> Once the purchase agreement was signed I had exclusive right to purchase the boat... .


Wow, I searched for your boat on Google - that is a beautiful boat!


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## jameswilson29 (Aug 15, 2009)

sailingfool said:


> I believe there is nothing wrong with the standard brokers contract, it has been reasonably structured to fairly cover the interests of all parties...


I do not like the mandatory arbitration clause in paragraph 13 and the limitation of seller's liability in paragraph 17. Together, they allocate the risk away from the seller and broker. (I also do not like the description of the subject matter property requiring a reference to an addendum that is likely the broker's listing - this requires the buyer to determine whether the description is adequate and complete.)

The big issue in these cases (or any case concerning the sale of a physical object) is fraud or misrepresentation concerning the condition and quality of the vessel. It seems the buyer has to pay to discover whether the seller and broker are honest, and if they are not, then the buyer can only recover his survey costs and he may have to force the issue by paying for arbitration.

Most people are honest and act in good faith. In most transactions, the written contract is never tested.

If the seller or broker are dishonest and I suffer damages as a result, I want to be able to sue them for fraud. The fear of being sued, and particularly being sued for fraud, does keep some folks honest. Unfortunately, industry practices sometimes conform to the standard forms used, and in this case, there is little incentive for the seller and broker to honestly disclose the true condition of the vessel.

Obviously, this contract was drawn up to protect the interests of the broker and the seller, and not the buyer. It would be difficult to amend the form to alter the basic structure of the transaction, with its reliance on the buyer's "acceptance" for final formation.

Look at the recent posting by the buyer who bought a boat only to discover that it had severe damage from a grounding that would cost him thousands of dollars. It is difficult to believe that the seller or broker did not know about that damage and failed to correct it or reveal it. A buyer can spend a lot of money buying a boat, not only for the survey, but also airline tickets, hotels, meals, valuable time lost, etc. At a minimum, the buyer is out the cost of a haulout and perhaps a survey.

"Buyer beware" should not be used a license to the seller and broker to act dishonestly, and the standard form that is used in the industry should not provide cover to the seller and broker to commit fraud with impunity.


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## TakeFive (Oct 22, 2009)

Since fraud is a criminal act, I don't think it can be superseded by a contract.

If you want to protect yourself against other smaller things that do not meet the standard of "fraud," (such as suing instead of arbitrating disputes over condition, etc.) I can see why you would want to modify the contract.


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## sailingfool (Apr 17, 2000)

jameswilson29 said:


> .....
> "Buyer beware" should not be used a license to the seller and broker to act dishonestly, and the standard form that is used in the industry should not provide cover to the seller and broker to commit fraud with impunity.


Your comments make sense, but have you ever seen a boat purchase agreement that included them?

They just arn't relevant to the real-world boat buying process, I would expect if you tried to introduce an open liability for the seller (not to mention the broker) for defects in a used boat, which they may or may not know about, you would find yourself unable to buy a boat.

I think this tread was about how the boat buying process does and does not work, and someone taking your reservations to a deal would at least result in a lot of spinning wheels and legal battling to probably no gain.
If these comments not only theory, can you share an actual boat purchase contract reflecting them?


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## jstroup (Sep 11, 2007)

jameswilson29 said:


> Wow, I searched for your boat on Google - that is a beautiful boat!


Thanks, but if you mean the M36 listed in my sig, that's my "west coast" boat. The new one is a 1995 Morris Justine located in Maine. Just as beautiful as Yare in her own way. I think of Yare as Ginger and the new boat is Mary Ann. It was time to move up (over) to a cruiser.

Probably should update the sig one of these days.


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## jameswilson29 (Aug 15, 2009)

sailingfool said:


> ...If these comments not only theory, can you share an actual boat purchase contract reflecting them?


Sure, the following is a simple contract for my personal use in Virginia. I appreciate any comments anyone might have:

CONTRACT OF SALE

THIS CONTRACT OF SALE is made this ____ day of ______________, 2011, by and between __________________________________________________("the Seller") and _____________
______________________________ ("the Buyer").

WITNESSETH: that for and in consideration of the mutual promises and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, Seller and Buyer agree as follows:

1. Property. Seller agrees to sell to Buyer and Buyer agrees to purchase from Seller a ____ _____________________ sailboat, "______________", hull identification number __________________________ along with all property attached to and enclosed in the vessel, including but not limited to the following ( all of which, the vessel and the property, to be referred to as "the Sailboat"):
a. All standing and running rigging, mast, boom, spreaders, stays, shrouds, traveler, mainsheet, jib sheets, ________ winches, ____ winch handles, cleats, traveler, and boom vang;
b. Main sail and ____________ jibs, sail bags and mainsail cover;
c. ____________________________________ engine and gas tank;
d. Electrical system, wiring and electronics, marine battery, VHF radio, depth finder, cabin lights, battery switch, running lights, and _______________________________;
d. Below decks/cabin furnishings, equipment, cushions for all berths, cooler, _________ toilet with _____________, foul weather jackets/gear, books, charts, and __________________;
e. Safety gear/equipment: ¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬ electric and manual bilge pumps, lifelines, stanchions, bow pulpit, stern pulpit, life preservers, flotation cushions, bell, flares, horn and ________________________________;
f. Anchor, anchor chain, and rode, mooring lines, cleats, ____ fenders; and,
g. Other: _________________________________________________________.

2. Price. The total sales price for the Sailboat is _____________________________________
Dollars ($___________.00). Seller acknowledges receipt of an earnest money deposit check in the amount of _____ Hundred Dollars ($______) from Buyer, with the balance of the total sales price to be paid by Buyer to Seller at closing.

3. Seller's Representations: Seller represents and warrants the following: that Seller has clear title to the Sailboat, free and clear of any liens, levies, charges, assessments, or attachments; that Seller is the sole owner, with full and complete authority to enter into this contract of sale and to transfer title to the vessel to Buyer by a certificate of title; that the Sailboat is in normal operating condition for a vessel of its age; and that Seller has no knowledge of any material defect(s) in the Sailboat, patent or latent, except as follows:___________________________________________ _____________________________________________________________.

4. Contingencies: The sale is subject to a satisfactory marine survey or professional inspection, and a satisfactory sea trial by Buyer, both to be completed at Buyer's option and expense by ____________________. Seller shall make the Sailboat available for the survey and inspection and Seller shall cause the Sailboat to be placed in the water and ready prior to the sea trial at Seller's expense. In the event that either the survey/inspection or sea trial are not satisfactory to Buyer in his sole discretion, then the earnest money deposit shall be forthwith refunded to Buyer.

5. Closing: This sale shall close on _____________________ at _____________________, at which time Buyer shall deliver to Seller a certified or cashier's check for the balance of the Sales Price in return for Seller's transfer of the title to Sailboat to Buyer, by endorsement and delivery of a certificate of title to Buyer and by Seller's transfer to Buyer of any and all keys, locks, and operational devices. The Seller shall deliver and transfer the Sailboat to Buyer at closing, launched/re-launched in the water at _________________________________________. Risk of loss remains with Seller until delivery of title to Buyer.

6. Addresses: Seller and Buyer each warrant and represent to each other that his residential address and telephone number are as follows:
Seller:____________________________________________________________________
Buyer:____________________________________________________________________

7. Modification: This contract may only be modified by a writing signed by the parties.

WITNESS the following signatures and seals:

SELLER: BUYER:

__________________________(SEAL)	___________________________(SEAL)

__________________________(SEAL)	___________________________(SEAL)


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## Minnewaska (Feb 21, 2010)

RhythmDoctor said:


> Since fraud is a criminal act, I don't think it can be superseded by a contract.
> 
> If you want to protect yourself against other smaller things that do not meet the standard of "fraud," (such as suing instead of arbitrating disputes over condition, etc.) I can see why you would want to modify the contract.


Fraud can be both civil and criminal. Each have different burdens of proof. Civil fraud is easier to prove and can award monetary damages.


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## jameswilson29 (Aug 15, 2009)

One more complaint about the standard broker contract:

Why is the broker named in the contract when it is not necessary (presumably the seller has a written listing contract creating his obligation to pay the broker when certain conditions are met) and the broker is not a party/signatory to the contract?

At least three explanations could be given, none of which favor the buyer:

1. The broker is getting the seller to reaffirm its obligation to pay a commission for this particular sale;

2. The broker is protecting itself from a claim of dual agency or agency for the buyer by having the buyer admit that the broker works solely for the seller; and,

3. The broker is attempting to make itself a third-party beneficiary to the contract, to lay the foundation for a possible lawsuit against the buyer for a loss of commission due to buyer's breach of the contract, even though buyer does not have an express contract with the broker.


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## Minnewaska (Feb 21, 2010)

James, I think you're right in your interpretation. However, why would the buyer care, they are all statements of fact.

If you trying to exclude the affirmation of single seller agency so that you may argue otherwise in favor of the buyer, that is unethical. The broker does only represent the seller, unless the seller has hired and paid for their own separately. Taking advantage of not affirming this is the reason these contracts proliferate.


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## jameswilson29 (Aug 15, 2009)

This contract has been recommended to buyers several times in different posts on this listserv as a fair contract and I just want potential buyers to realize that it was drafted to protect the broker's and the seller's interests, and not the buyer's interests.

The broker's interests are to earn a commission, to quickly resolve a sale one way or the other, and to avoid being sued, all while protecting the seller, and the contract reflects that.

(I have no quarrel with a written disclosure of the agency relationship, which could more properly be done on a separate form much earlier in the process when the broker first has a substantive discussion with the potential buyer.)


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## marcusc130 (Oct 8, 2011)

I've just negotiated the purchase of my second boat. The sellers asking price was very reasonable, and had already been discounted for some needed repairs, so he wasn't willing to accept a lower offer. However, I was able to negotiate some other benefits. 

Since I'm buying in the fall, I wanted the boat to remain on his property for the winter. The seller also agreed to shrink-wrap the boat. On top of this, the seller has allowed me use of his mooring for the next season. All of this has added up to several thousand dollar worth of saved storage, maintenance, and mooring fees. 

If the asking price is firm, look for other concessions.


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