Trying to be a Reasonable Buyer

JVM225: I'm actually optimistic we will reach an agreement. We essentially went with your option 3: "offer to pay the seller the previously agreed on price for the boat if they make the necessary repairs or replacement. If they do it, pay them the full price you agreed to pay." We, however also gave them the option to provide a credit to us to complete one survey item if they preferred not to go through the hassle of the repair/replacement prior to closing the sale. It's a very fair offer - in my opinion, and I'll be addressing a lot of the survey items myself in the off-season. Thanks.

Sounds pretty fair, just try not to underestimate what things will cost to take care of yourself. Hope it all works out. Good luck!
 
I don't agree with your negotiation doesn't end strategy.

I think it is unethical to enter into a contract to buy a boat with the intent of re-negotiating the deal later. The initial contract is to purchase a particular boat at an agreed upon price suject to any contingencies you place on the deal for surveys, sea trial, insurability, etc. After the survey you can do one of 2 things: a.)Accept the boat under the original contract terms or b.)Reject it and get your deposit money back.

In actual practice, no broker or seller is willing to lose a sale to you over the survey findings. The boat has now failed a survey which will make selling it to another buyer difficult and means the broker has to find another interested buyer. You and the seller can then negotiate an ammendment to the original contract, but this is a separate negotiation that deals only with the defects the surveyor discovered.

It is important to recognize the difference between the 2 negotiations: the first is to buy the boat when you are on equal footing with the seller...i.e swapping your $100,000 in cash for his $100,000 boat. In the second one, you are negotiating how to handle the defects, but the leverage is substantially weighted in your favor: his boat had failed a survey, his broker has to find another buyer if you reject the boat, the sales process must begin again from square one, and the sellers overhead (slip rent, insurance, interest/payments if he has debt) continues.

One final point worth mentioning: your ability to negotiate the repairs can be seriously hampered if the seller is upside down with any debt he may have on the boat, so be reasonable.

I wasn't suggesting that you deliberately use the survey to renegotiate the price independent of defects, because I agree that is unethical, but, as you state, you are negotiating on how to handle the defects. You are still negotiating. Whether the leverage is tipped in the buyers favor is debatable. The seller has to find another buyer, but the buyer has already sunk some $$ into the boat in the form of survey costs. The seller may or may not have known about the defects before the offer, but for some types of defects the buyer would not have a reasonable opportunity to know about these in advance. I think the survey puts the two parties on equal footing at the buyers expense, and now both have something invested. The seller has typically lost some time, and the buyer has lost time and has lost their investment in the survey if they walk away.

The fact that the boat has a failed survey shouldn't make the boat harder to sell - it is just an objective evaluation of the condition of the boat. The boat was already in that condition, it's just that the buyer (and maybe) the seller and broker didn't know it ahead of time. Now everyone knows the actual condition of the boat and all can decide agreeable value.

I'll provide an example. I purchased a boat this spring. The survey found that there was $10,000 in bottom work that was needed. There was a tach that wasn't working correctly, a fuel gauge that wasn't working, and all sorts of "typical" issues with a 20 year old boat. The seller used the boat regularly before I bought it, so it is unlikely he didn't know the tach and fuel gauge weren't working correctly. I don't know whether he knew about the bottom condition or not. The boat was listed as "turnkey - great condition". The broker knew the seller and the boat very well and had sold the boat to this seller 3 years ago.

I made an offer assuming that the boat was turnkey and based on the condition I could see and the broker's representation of the boat. Was I being unethical when I negotiated a price adjustment based on the survey findings? I was willing to completely ignore 90% of the survey issues and I didn't ask for anywhere close to the cost of the repairs as an adjustment, but I also wasn't willing to eat the whole thing. The seller didn't just offer me the adjustment for the repairs, it took some further negotiation to come to an agreement that we were both happy with based on what we knew after the survey.
 
A boat doesn't "fail" a survey based on normal maintenance type issues. Boats fail when the survey reveals major structural or mechanical issues. The biggest are water intrusion into the deck and/or hull, stringer rot, and engine issues. Those are big ticket items which if found requires both parties to reevaluate.

I would consider an obsolete non-functioning radar/mfd to be a maintenance related nuisance rather than a deal killer.

Also if allowing the seller to get issues fixed make sure it's done right. They have an incentive to do it on the cheap.
 
Nope....you are mistaken and it doesn't work that way in real life.

The survey report doesn't end with a "pass" or "fail". The buyer pays for the survey, it is done at his request with the goal of finding out the condition of the complete vessel. The buyer is certainly within his rights to reject the boat when key pieces of safety equipment are included in the listing but do not function. If the buyer rejects the boat on the basis of the survey findings, then I'd call that a failed survey.

The canvas and Isinglass are maintenance items you expect to replace every few years........the plotter and radar are not maintenance items and, other than occasionally wiping off the screen, there is no user servicable thing about them.

If you were buying a $100,000 boat and the MFD, radar, the refrigerator, ice maker and air conditioners all failed to work........about $15,000 worth.....would you say, "Oh well" or would you reject the boat?
 
Nope....you are mistaken and it doesn't work that way in real life.

The survey report doesn't end with a "pass" or "fail". The buyer pays for the survey, it is done at his request with the goal of finding out the condition of the complete vessel. The buyer is certainly within his rights to reject the boat when key pieces of safety equipment are included in the listing but do not function. If the buyer rejects the boat on the basis of the survey findings, then I'd call that a failed survey.

The canvas and Isinglass are maintenance items you expect to replace every few years........the plotter and radar are not maintenance items and, other than occasionally wiping off the screen, there is no user servicable thing about them.

If you were buying a $100,000 boat and the MFD, radar, the refrigerator, ice maker and air conditioners all failed to work........about $15,000 worth.....would you say, "Oh well" or would you reject the boat?

No you go back to the guy and say "there are $15,000 worth of things that need to be fixed. You want to fix them or discount the price." You send the seller the punch list and he can come back and say I'll fix x,y, and z. But I am not doing A and B. Then you can decide how to proceed from there.

Plotters and radar, like all electronics fail. And these days they go obsolete quickly. It's worth discussing with the seller, but not killing the deal over.
 
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I just bought a 2006 Crownline last week and just had a survey done. Frank is right in that a survey is not a pass or fail. The surveyor identifies any issues and notes them. At the end he determines an appraised value based on his findings, condition, and comparables. In my case there were a few issues but nothing deal breaking and the survey came back in 'Above Average' condition. The AC pump and fresh water pumps wouldn't pump water. I knew these were pretty easy fixes and felt I was getting a pretty good price on the boat so decided to accept the boat as is. I did get them to throw in the shore power cord though since they had wanted to keep it. They agreed since they didn't have to fix the pump issues.
 
With regard to "honesty" I think your putting a lot of faith in the listing process. I have seen broker listings so far off it's ridiculous -- an inboard boat with bravo 3s, etc. Most likely the seller dropped the keys with the broker and he went through a checklist to list the boat. He probably didn't check functionality of anything.

^ This
 
Absolutely! I’ve even reviewed multiple pictures of a boat, then went to see it in person and couldn’t believe it was the same boat in the pictures......

The ones I "like" best are when the broker puts stock images of the boat on the listing and they don't even match the color scheme of the actual boat. We shouldn't be too hard on brokers, because real estate agents and car dealers do the same thing. Some are decent, some have attention to detail, and then there's the rest
 
One other question, since everyone has been so helpful . . . It has been 5 days since we gave the seller our proposal to fix survey items and no response. I think that's adequate time to respond, particularly since our proposal is in line with what we know to be their agreed "credit" toward repairs. I think I'm telling the broker we're moving on to look for other boats. Either they're hoping for a better offer or they don't care enough to stay on top of the sale process. Plenty of fish in the sea, plenty of boats for sale in the slips . . .
 
5 Days???? FIVE? I would be calling the broker if I hadn’t heard in 24 HOURS. And canceling after 48. But what does the contract say as far as turn around time for them to reply? Maybe it doesn’t say anything. So then there’s probably a state law about contracts that might take precedence.

You’re being way more patient than I would be. Call and calmly ask for your deposit back. If there’s some sort of crisis in the seller’s life, they can explain. But you owe them no other explanation.

Apathy isn’t a character trait that comes and goes. It’s who they are. If they can’t be bothered to attend to the sale of their boat, I would question how well they attended to routone maintenance on it. This is not an attentive boat owner. Hope you get a great deal if you stay the course.
 
5 Days???? FIVE? I would be calling the broker if I hadn’t heard in 24 HOURS. And canceling after 48. But what does the contract say as far as turn around time for them to reply? Maybe it doesn’t say anything. So then there’s probably a state law about contracts that might take precedence.

You’re being way more patient than I would be. Call and calmly ask for your deposit back. If there’s some sort of crisis in the seller’s life, they can explain. But you owe them no other explanation.

Apathy isn’t a character trait that comes and goes. It’s who they are. If they can’t be bothered to attend to the sale of their boat, I would question how well they attended to routone maintenance on it. This is not an attentive boat owner. Hope you get a great deal if you stay the course.
Thanks. Agree. We're giving them until the end of the day.
 
the ability to effectively negotiate takes a certain set of skills and experience....you can be polite and professional while at the same time be firm and persistent....you have to be careful and not come across as being weak and willing to take a bunch of crap....you also have to not give the impression that you want this boat so bad you are willing to overlook things that should be addressed before the sell is completed....

unfortunately IMO opinion in your efforts to 'be reasonable' you have unintentionally given the seller the impression you want the boat too much and it is impairing your judgement....

be polite and reasonable and call the broker and get your deposit back....period....no more d!cking around with the seller....they had their chance and they told you what they want to do with their silence about the issues which is nothing....

as you stated there are many, many other boats out there....you will know the 'right one' when you find it...it is hard to explain but you just get a good feeling when the right one comes along....

I applaud your efforts to be reasonable but IMO you let it go a little too long and fell into the perceived 'weak and desperate' position with the broker and seller...I negotiate for a living so I have seen this happen many times.....

also, always put a deadline on pending items and clearly state what will happen if the deadlines are not met...leaving things open ended without consequences is never a good thing....

a boss I had many years ago said 'during a negotiation you can either steer the ship or be a passenger'.....I would rather steer the ship....

good luck with the search....

cliff
 
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Cliff: Thanks, but both my wife and I negotiate in vastly different fields for a living. We actually negotiated a great deal on the base price, which is why we have been more patient than usual. We've told the seller and broker all along that we're prepared to move on at any point if we can't reach a point acceptable to us. My questions were intended to be more on the customs, practices and procedures (including timelines) in boat sales and surveys, at which we are not that adept and in which the written agreements leave a lot of room for movement on both sides. It seems to be a whole different world and we are grateful for all the advice and guidance that everyone has given.

I do appreciate your input, though. It's great advice.
 
I used to write and administrate contracts for construction. The intent of a contract from my point was to get as much as I could for as little as possible but make sure the contractor made money. I put offers and deposits on 2 boats before I bought this one. Both boats were in south eastern US. We live in Alberta Canada (north of Montana). It cost us about $2,500 for each trip to look at the boats. The boats were not as represented in the brokers add. Rather than try to negotiate a deal to fix the problems I went back to my contract knowledge. "If not as presented in contract reject immediately". One boat had soft deck and general lack of maintenance the other did not have the head room as represented. My theory was if they did not tell me about theses items what else did they not mention.
 
Cliff: Thanks, but both my wife and I negotiate in vastly different fields for a living. We actually negotiated a great deal on the base price, which is why we have been more patient than usual. We've told the seller and broker all along that we're prepared to move on at any point if we can't reach a point acceptable to us. My questions were intended to be more on the customs, practices and procedures (including timelines) in boat sales and surveys, at which we are not that adept and in which the written agreements leave a lot of room for movement on both sides. It seems to be a whole different world and we are grateful for all the advice and guidance that everyone has given.

I do appreciate your input, though. It's great advice.


great, so you know exactly what I am talking about....IMO the same type of negotiation practices and expectations should be the same regardless of the item being considered.....I see no reason for things being different just because it is a boat in this this case....I understand that buying a boat vs. buying real estate may have specific quirks related to each but setting realistic expectations and timeframes should be basic to all types of negotiations....

buying a boat should not be hard work.....if both parties are reasonable and the boat is presented accurately things should go smoothly....whenever I read threads like this how a negotiation starts to break down because of issues with a boat the 'hair on the back of my neck' starts to stand up a little and red flags start popping up in my mind.....a well maintained boat will be presented in that form to prospective buyers which will start the 'good feeling' I mentioned above right away...then as you start 'peeling back the layers' and look closer at things if the boat has been well maintained it will be obvious and the 'good feeling' deepens....if I walk onto a boat for sale and it is dirty, messy with things lying around, has evidence of lack of mechanical maintenance, and obviously not in the condition represented by the seller or broker I just turn around and walk away....IMO there is no need to go any further with that boat....but that is just me....;)....

again, good luck in the search....

cliff
 
One other question, since everyone has been so helpful . . . It has been 5 days since we gave the seller our proposal to fix survey items and no response. I think that's adequate time to respond, particularly since our proposal is in line with what we know to be their agreed "credit" toward repairs. I think I'm telling the broker we're moving on to look for other boats. Either they're hoping for a better offer or they don't care enough to stay on top of the sale process. Plenty of fish in the sea, plenty of boats for sale in the slips . . .

Yeah. Five days is plenty of time. Call the broker and ask what's up. Maybe they are out getting estimates? Maybe their dog died? But if there is no action, void the sale, get your deposit back, and move on. However, leave yourself open to taking the boat if/when the seller comes around. You just never know.
 
5 days to negotiate a counter offer only means one of 2 things: 1.)The broker is shopping your offer all over the country to beat it or, 2.) the seller is broke and is trying to get his lender to agree to a short sale concerning the MFD and radar.

I'd call the broker and give him until the end of business today to either counter or reject your last offer.
 

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