Can anyone please explain what this means. They accepted my offer.

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Ducatihottie said:
New purchase and sales agreement photo below. Compare to original posted photo and I think we accomplished something, (I like this one better).

Great job everyone!
Click to expand...


Good on you! It looks like everything is now copacetic!

One point that no one mentioned (and is a moot point now), just for future reference, the addendum to the sales agreement that still stated 77k as purchase price, but stated $20k "credit" to buyer upon closing . . . . as well as affecting sellers commission to broker (not your concern), sales tax due (DEFINITELY your concern), also, by strict interpretation of tax law probably constitutes "INCOME" and therefore requires you claiming it on state/Federal tax return and paying Income tax on it. . . .not that the Feds would probably ever connect the dots, but it probably WOULD constitute a legal tax liability!
Disclosure: I am NOT an attorney (I had an honest profession), so take my advice for what it's worth, and what you paid for it!:dance:
 
Survey credit

Knot Fast said:
I think it means the broker want his commission based on $77K, not $57K.
He does not care what happens to you.
Click to expand...




I agree.


Just sold my boat yesterday. After the survey and sea trial, the buyer and I agreed to reduce the price by $4,000. When we got the closing statement, the broker called this a "Survey credit" and tried to get his 10% commission on the $4,000.


I objected, and the broker reduced his commission.
 
slowgoesit said:
Good on you! It looks like everything is now copacetic!

One point that no one mentioned (and is a moot point now), just for future reference, the addendum to the sales agreement that still stated 77k as purchase price, but stated $20k "credit" to buyer upon closing . . . . as well as affecting sellers commission to broker (not your concern), sales tax due (DEFINITELY your concern), also, by strict interpretation of tax law probably constitutes "INCOME" and therefore requires you claiming it on state/Federal tax return and paying Income tax on it. . . .not that the Feds would probably ever connect the dots, but it probably WOULD constitute a legal tax liability!
Disclosure: I am NOT an attorney (I had an honest profession), so take my advice for what it's worth, and what you paid for it!:dance:
Click to expand...


I'd be real surprised. The $20 is a credit that reduced the price of a purchase, it's not income. You generally don't pay income tax on a purchase.
 
Interesting LJK and thanks Seevee.

Everything is near finished and I'm awaiting for my insurance to clear the Survey. I'm down to one insurer as many have refused insuring this boat. Well see on Monday.
 
Hope you get a fair premium right on time. No income taxes would be due, there's no income.
 
This was in response to the person who suggested you may own income tax on the discounted/credit against the sale price. I thought it would be good to hear that from another member besides Seevee. Keeping track of multiple threads can be a challenge.
 
Just like his screen name, SlowGoesIt post #61 finally had some effect. LOL. Ducttihottie, you're a great guy, very happy you're a member here.
Perhaps you could ask the seller for a simple hand written note saying you bought the boat for half of what you actually paid (like happens with private car sales) to keep the state sales tax low. Just kidding!
 
Swfla said:
Just like his screen name, SlowGoesIt post #61 finally had some effect. LOL. Ducttihottie, you're a great guy, very happy you're a member here.
Perhaps you could ask the seller for a simple hand written note saying you bought the boat for half of what you actually paid (like happens with private car sales) to keep the state sales tax low. Just kidding!
Click to expand...

Like happens with individuals importing and getting into big trouble. When I was in college we went on choir tour to Europe and in the Black Forest, I bought a large cuckoo clock for what I felt was a good price of $150. The guy then gives me a receipt for $80, saying it's to save me in customs. I told him, then give me $70 back because what I pay is going to be what's on the receipt. He complained but corrected. First, I wasn't going to have to pay anyway on my small amount but second, customs knows what things like that sell for and the games played.
 
BandB said:
Like happens with individuals importing and getting into big trouble. When I was in college we went on choir tour to Europe and in the Black Forest, I bought a large cuckoo clock for what I felt was a good price of $150. The guy then gives me a receipt for $80, saying it's to save me in customs. I told him, then give me $70 back because what I pay is going to be what's on the receipt. He complained but corrected. First, I wasn't going to have to pay anyway on my small amount but second, customs knows what things like that sell for and the games played.
Click to expand...

They do that all the time in Latin America. It isn't to help the customer out. It is a way for them to cheat on the sales tax or VAT which can be high in some Latin American countries. If they do cash sales or give you a reduced receipt then there is less VAT they have to submit.

In your case, I think the German VAT rate is 19%. So if that shop is reporting a $150 dollar sale as $80 then he is pocketing the $70 x 0.19 = $13.30 that he charged you for VAT but doesn't have to submit to the government. Unlike in the US, in most other countries the sales tax or VAT prices are built in to the price, not charged separately on the receipt so you don't know you are paying it but you are.

It doesn't have anything at all to do with helping you through US customs.
 
Bandib: My father bought a $70 watermelon in Switzerland once, (before the euro). We crossed the border into France before he figured it out.
 
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Hey Ducatti, did you get the survey on Mon as promised? How about the insurance you were waiting on? It must be like waiting for Christmas to come.
 
The Purchase and Sales Agreement is just that - an agreement to purchase a boat subject to certain terms, survey/sea-trial being one of them. Typically the listing agreement states the sales commission will be based upon the contracted price on the P&S, not the final selling price after adjustment for survey items.

A "Conditional Acceptance" states that the Buyer will accept the boat and proceed to a purchase subject to agreed upon conditions - in this case a price adjustment. Signing the Acceptance commits a Buyer to the sale so it's important to be certain you wish to proceed before signing. The deposit would typically be forfeit if you don't complete the deal after signing this document. I think the wording was a little awkward on the original Acceptance form but I doubt the Broker was trying to be deceitful. As in all contracts, the more straightforward and simple the wording the better.

Sales tax is based on the Bill of Sale which would reflect the final selling price, it's not based on the P&S or Acceptance documents.
 
Some of the post are correct when they refer to the Broker/Commission, the boat is selling for $77K the fact that the Seller has to provide the Buyer what is called Survey Allowance of $20K for deficiencies - this is not on the brokerage this is on the condition of the boat and that is between the Seller and the Broker not the Buyer. The Buyer is actually paying $57K for the boat.
 
Correct. Brokers will often adjust their commission to be based on the final selling price, but not always.
 
Credit back

Ducatihottie said:
IF YOU CAN read the photo below, please explain. Or help me with better wording to include in the offer.


The owner excepted my offer of 20,000 less for my boat.

I was under the impression the boat would now costs $57,000 (down from $77,000).

1. Does this mean I still have to get the a loan for $77,000 or for $57,000?

2. What is the, "$20,000 back in credit? What is credit, Cash?

3. Or do I need to fix the items first before I get the credit or cash?

Is the "credit for survey items" a trick as they will only pay to fix items on the survey, (prices to fix items are not listed the survey. The $20,000 off I requested is from the "hull" repair from blisters.

HELP!! Never had to do this with a motorcycle purchase:).
Click to expand...

That is so vague, it could mean almost anything. Perhaps the "credit back" means that he will give you up to 20k credit towards the purchase of other items from them. Perhaps it means that he will give you 20k in credit towards repairing issues with the survey. Seems like the broker wants commission on 77k vice 57k. My question here is, if they are being that shady, evasive and obtuse regarding what you are paying for the boat, what other issues are they being less than honest or forthcoming about? Personally, this would probably make me find a different boat. At the very least you should send the broker a letter specifying that the purchase price of the boat is 57k, due at closing, period. Tell him that any other wording kills the deal. When he sees almost 6k of commission getting ready to walk out the door I suspect he will come around.
 
Has anyone modified their sales agreement to include that the broker gets paid commission on the final selling price rather than contract price?
 
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jim.johnson3570 said:
Some of the post are correct when they refer to the Broker/Commission, the boat is selling for $77K the fact that the Seller has to provide the Buyer what is called Survey Allowance of $20K for deficiencies - this is not on the brokerage this is on the condition of the boat and that is between the Seller and the Broker not the Buyer. The Buyer is actually paying $57K for the boat.
Click to expand...




In other words, the agreement the seller has with the broker governs whether the commission is based on the 57 or the $77 price, correct?
 
Correct, it's important to read the agreement. The YBAA agreement states the broker is paid based on the Selling price.
 
Ducatihottie said:
IF YOU CAN read the photo below, please explain. Or help me with better wording to include in the offer.


The owner excepted my offer of 20,000 less for my boat.

I was under the impression the boat would now costs $57,000 (down from $77,000).

1. Does this mean I still have to get the a loan for $77,000 or for $57,000?

2. What is the, "$20,000 back in credit? What is credit, Cash?

3. Or do I need to fix the items first before I get the credit or cash?

Is the "credit for survey items" a trick as they will only pay to fix items on the survey, (prices to fix items are not listed the survey. The $20,000 off I requested is from the "hull" repair from blisters.

HELP!! Never had to do this with a motorcycle purchase:).
Click to expand...

WJIJr: Time to LAWYER UP
 
definitely looks like a shady broker trick.. Also, the tax difference is a big piece as well... I would decline and have it rewritten to reflect the ACTUAL agreed upon price...
 
Ducatihottie said:
IF YOU CAN read the photo below, please explain. Or help me with better wording to include in the offer.


The owner excepted my offer of 20,000 less for my boat.

I was under the impression the boat would now costs $57,000 (down from $77,000).

1. Does this mean I still have to get the a loan for $77,000 or for $57,000?

2. What is the, "$20,000 back in credit? What is credit, Cash?

3. Or do I need to fix the items first before I get the credit or cash?

Is the "credit for survey items" a trick as they will only pay to fix items on the survey, (prices to fix items are not listed the survey. The $20,000 off I requested is from the "hull" repair from blisters.

HELP!! Never had to do this with a motorcycle purchase:).
Click to expand...

I’m assuming you are the buyer, but you really confused the situation by calling it "my boat". It’s not "your boat" until you hand over $57,000 at the closing. Do not hand them more than $57,000, don’t even bring it. The broker wants a commission on $77k rather than $57k, it’s not your problem.
 
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The sales agreement should spell out exactly what the deal is. If the actual sales price is 57,000 it should say that because that is what you will pay tax on. Buyer pays the sales tax , not the seller. If survey says it needs 30,000 worth of work then have the seller have it repaired and have the surveyor check and verify the repairs and make certain the seller pays for the repairs. You sure don't want any liens filed on it if seller doesn't pay the bills.
 
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