Boat Buying - Off Season

[Hal]

Here in Michigan everything is sort of tucked in for "w". Obviously I would not want to buy a previously enjoyed vessel without both a survey and a sea trial.

Since I can't trial until spring how would I present an offer? I can think of two options.

- Offer an escrowed deposit with a purchase in the spring contigent on the trial?
- Offer to purchase with $xxxx.xx held in escrow pending the sea trial where all systems are fully verified?

The first seems great to me but prospective sellers might balk? The second seems risky to me based on not knowing how she rides?

Whaddya' think?

:huh:

THANKS,
.Hal

 

[Presentation]

It’s a negotiation thing so you can offer what ever you want.

Personally, if the water is not yet frozen I’d tell the person “Lets go do the sea trail now and if you find a issue then either I fix our you are out of the deal†I’d need to word it better, but you know what I mean.

As a person who has a boat for sale I would not agree to a winter sea trial unless we have agreed on a price and I have been given at least enough cash down to pay for re-winterizing the boat. With out this I would think the person is not serious.

 

[JeffM]

As a person who has a boat for sale I would not agree to a winter sea trial unless we have agreed on a price and I have been given at least enough cash down to pay for re-winterizing the boat. With out this I would think the person is not serious.

Doug, If the sea trial found a problem and the deal fell through, would the prospective purchaser be expected to pay to re-winterize the boat? Just curious, as I don't know how that would work.

Jeff

 

[searaycruisn]

I bought a boat in Long Island, NY in December a few years ago. I had the boat surveyed on land, and purchased the boat subject to sea trial, which we did in April.

 

[Hal]

I bought a boat in Long Island, NY in December a few years ago. I had the boat surveyed on land, and purchased the boat subject to sea trial, which we did in April.

Thanks Cruisn,

Did you actually purchase the boat in Dec. or simply put a down payment. Was the purchase price, or down payment, held in escrow pending the sea trial?

.Hal

 

[sbw1]

Also here in Michigan. The boat you are interested in will not be going anywhere soon. If it's a big boat, no one will buy it without doing the homework. Make an offer contingent on a survey and sea trial acceptable to you. Stipulate that the sale will be subject to acceptable financing and the deal will close by name a reasonable date. (May 15, 2007?) Put $100 down and stipulate the offer must be accepted within 3 days. If the seller is serious and you are too, the boat will be yours if you want it. This is basically the way it is done.

 

[Presentation]

As a person who has a boat for sale I would not agree to a winter sea trial unless we have agreed on a price and I have been given at least enough cash down to pay for re-winterizing the boat. With out this I would think the person is not serious.

Doug, If the sea trial found a problem and the deal fell through, would the prospective purchaser be expected to pay to re-winterize the boat? Just curious, as I don't know how that would work.

Jeff

I would give the money back, 100%.

I would figure out something in writing so it’s a reasonable thing. Not, “Hey that small mar on the rub rail that you already showed us when we first looked at the boat on land we looked at it again and we decided this is not perfect so give us the money back, thank you for the free boat ride†would not fly. However “Dude, we could not get the boat to go in gear†would mean a full refund.

I think you know what I mean but I just don’t know how to say it.

Once I launch in spring I’d have no issue since it would be in my slip anyways.

 

[Presentation]

....Put $100 down and ........

I do not understand the reason for the $100. Would you expect the person to take the boat off the market and hold it for you until spring for $100? To that I would say no.

 

[Alex D]

....Put $100 down and ........

I do not understand the reason for the $100. Would you expect the person to take the boat off the market and hold it for you until spring for $100? To that I would say no.

I agree $100 is a joke ... 10% of the offer price down as earnest money is the going rate with any broker ... normally fully refundable if you reject the vessel for ANY reason AFTER sea trial and/or survey.

 

[SearayPaul]

I bought a boat sight unseen in January 2006. I got lots of CURRENT pictures and information then decided what I was willing to pay.

I wrote a contract contigent on inspection and trial at a later date with a full refund of my deposit to be given if everything was not perfect. I faxed the letter and a copy of the check (15 percent) to the seller with a note I would mail the check if the offer was accepted. I gave the seller 24 hours to reply. Done deal.

Boats are not selling. If you think you have a good one make YOUR offer and see what happens. Put any stipulations YOU want in the offer and do as Frank says make YOUR offer and stay with it. What the seller wants is not always what the buyer offers.

Good Luck

Paul

 

[SearayPaul]

You have mail Hal

Paul

 

[Hal]

You have mail Hal

Paul

Thanks Paul

 

[sbw1]

....Put $100 down and ........

I do not understand the reason for the $100. Would you expect the person to take the boat off the market and hold it for you until spring for $100? To that I would say no.

The boat is in storage. It is off the market until spring as no one will buy it without a sea trial and survey. The $100 and the buy/sell agreement create a binding contract once the agreement is signed and the check is cashed. In effect the boat is sold pending an acceptable trial, survey and financing. Most people would not buy a boat any other way. To do so would be foolish.

 

[sbw1]

....Put $100 down and ........

I agree $100 is a joke ... 10% of the offer price down as earnest money is the going rate with any broker ... normally fully refundable if you reject the vessel for ANY reason AFTER sea trial and/or survey.

So..what you are saying is you would put $30,000 of your own money down for 6 months on a boat the seller was asking $300K for not knowing the boat would pass a survey? That's just not the way it is done in this market. Before you reject the deal you should also qualify the prospective buyer. A person with high net worth and a strong balance sheet is not likely to do the deal any other way as there are so many other boats to buy. A signed contract from a qualified buyer trumps a person with 10% down who might have trouble getting a loan. Brokers who required 10% down are really saying they are looking for some sign of financial health. They are obligated to present any reasonable offer to the seller from people they judge to be serious qualified buyers. The deal I outlined is reasonable and done all the time in West Michigan. You should also make your offer contigent on getting acceptable financing if you do not have the cash to make the purchase.

 

[sbw1]

I bought a boat sight unseen in January 2006. I got lots of CURRENT pictures and information then decided what I was willing to pay.

I wrote a contract contigent on inspection and trial at a later date with a full refund of my deposit to be given if everything was not perfect. I faxed the letter and a copy of the check (15 percent) to the seller with a note I would mail the check if the offer was accepted. I gave the seller 24 hours to reply. Done deal.

Boats are not selling. If you think you have a good one make YOUR offer and see what happens. Put any stipulations YOU want in the offer and do as Frank says make YOUR offer and stay with it. What the seller wants is not always what the buyer offers.


Good Luck

Paul

This is even a better deal. A copy of a check is no money down. It's the contract that's important, not the amount of money you put down. :smt038

 

[bliss]

I just bought a boat that is stored in a heated facility on Lake Michigan. It is buried deep in the building and cannot be moved until spring.
The reason I did the deal was I had done all my homework and found the exact model with the exact equipment in the exact color THE ADMIRAL wants. The boat is by no means new, however, it has very low hours and is exceptionally clean. During the good weather months the seller tried to sell the boat at a slightly inflated asking price. In October the seller lowered the ask to about where all the other sellers were. I sold myself on making an offer now when no one else would. I was sure I would be given very serious consideration by the seller as there probably was no line of buyers behind me.
THE ADMIRAL and I sat at the kitchen table and came up with a number that we thought was acceptable or might get a counter. I put everything in a four page hand written offer and sent it on its way. It was valid for three days and contingent on a sea trial and survey acceptable to me.
The offer was in letter form and cordial. It also was very specific. I pointed out the obvious-there could be no sea trial until spring. However, the survey could be done now. I enclosed a check for $2500. to be cashed if our offer was acceptable; to be promptly returned if not. I even enclosed a stamped addressed envelope for that purpose. The $2500 was nowhere near the 10% brokers ask for. When was the last time you were handed $2500. by someone who didn't mean business? The offer was contingent on a survey done by our local SAMs surveyor by a specific date about ten days out. Survey expenses are mine UNLESS the seller backed out then they were his. If the survey results were acceptable to me and my insurance underwriter we close NOW. They present the boat free of all encumbrances. I also said the offer was for the boat splashed in the spring, ie. no yard bill, storage bill,etc.I pointed out that if he waited until next season that would be the case anyway. I also pointed out that although the offer was low that he could be on to whatever is next and that if he factored in the value of today's sale against a May sale -if he had one- my offer was worth about 5% more. (6 month CD Rates)
If the offer was acceptable I required written acceptance WITH a complete list of the items included such as --here I listed everything I saw on the boat and a list of about everthing you'd find in the West catalogue. That actually produced a few items I did not know about.
Now the tricky part. In every state most attorneys that handle client's money have trust accounts. These accounts serve various purposes like avoiding commingling of funds, escrow, etc. Some of these accounts are called IOLTA accounts-Interest on Lawyers Trust Accounts. My offer stated that the SALE was contingent on a x% holdback and that it was acceptable to me that the $$ be held by there family attorney in his IOLTA acount. Any interest earned on these small amounts goes to charity thus removing any potential conflict of interest. As an aside, this is a pain for the attorney. He could find himself in the middle of an argument come spring. He would only do this as a courtesy for his good client.
I said , in the offer, that the holdback was to cover any system items that failed the sea trial. To try to be specific, I addressed several examples and said the items were not limited to just the examples. I said that to convince them that I wasn't looking to "beat them up" at sea trial I would waive the the first $XXX.
I had done some homework on who the seller was. The results were that the seller owned his own business and had the ability to live in a very nice home in a very nice neighborhood and had all the appropriate accoutrements. The readers of this tome will quickly recognize that there is some risk involved and that all I have done is of limited value. You do the best you can!
SURPRISE! He accepted my offer and said I could hold the holdback money. I think he did some homework too. Do you think I offered to much? Maybe. We'll know more after a, season. The survey was a cake walk. The surveyor said the boat looked almost new and he could find nothing.
I prepared all the paper work, talked with the yard and his lender got a cashier's check cut . We passed notorrized papers, wrote to the USCG, etc., etc. I now OWN the boat. Of course there is the sea trial and holdback to be addressed in April or May. I hope it goes well, we'll see.
After thought: I think that most lawyers will say no to holding the holdback money, unless the seller is an important client. My fallback position was going to be to offer $xxx fee for service to a local broker to do that job and to do the paper work as well. I'd go straight to the owner of the firm and I think he'd do it.