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

[Ducatihottie]

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.

 

[bligh]

It looks as if the broker is trying to add an addendum to the original purchase agreement. Seems like they could have been a little more eloquent about it. Maybe something like “the seller agreed to lower the purchase price to 57000” instead of the credit jibber jabber.

 

[Benthic2]

I have no legal training whatsoever, but that seems to indicate the price is $77k. The $20k credit is too vague for my liking.....there's no time frame stipulated so who knows when you'll get it back, or what it applies to. I would think the broker is making enough on the sale where he can take 2 minutes and print out another offer sheet.

 

[Ducatihottie]

Asking the same question I got this in return from the broker. His reply:

"We initially submitted and came to terms on $77,000.
Selling price is $77,000 with a $20,000 credit from seller at closing. So you will purchase for $57,000".

 

[Knot Fast]

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

 

[Ducatihottie]

Is there any other wording I should include in the new offer? How exactly do I phrase it, (without pissing anyone off.

Did my photo come of the offer come out clean?

 

[Ka_sea_ta]

That was probably written that way so the broker would receive his commission on 77k instead of 57k.... you want the sales price to reflect the lowest amount possible that is the amount the you will pay sales tax on.... also will be the initial amount the value of the boat is based on for use tax.

 

[Olebird]

Yep!

 

[Ducatihottie]

The difference in sales tax is over $2500 from 77 to 57 thousand here in Washington.

 

[bligh]

The difference in sales tax is over $2500 from 77 to 57 thousand here in Washington.

Right. Pretty crafty of the broker really. Funny too.

 

[BrisHamish]

Make them insert the following sentence at the end “Total amount payable by the Buyer on closing will therefore be $57,000.00 (sale price less Seller credit)”.

 

[SteveK]

Yes it looks like you are buying it for $77k, broker is paid com on that and you pay sales tax on 77.
Is there a survey that lists $20k of repairs. That part is a concern as you are getting a credit towards the seller paying to fix the boat to a limit of $20k. The survey lists the issues, does it quote the repair cost too.
Would it not be better to say $57k as is?

 

[Camasonian]

If it were me I would make sure that:

1. The seller is responsible for paying commission on the $20,000 price difference, not you.

2. You get a clean bill of sale for $57,000 to present to the tax authorities.

3. You write a check for $57,000 not $77,000

If they want to sell the boat and are already willing to sell it for $57,000 they will make that happen.

 

[AlaskaProf]

Lots of bad advice here. A sales contract should not leave you asking questions like these.

Find another boat, seller, and especially broker. RUN!

 

[Ducatihottie]

Alaskaprof bad advice from members here? Or just my "acceptance of vessel offer" I posted above? Can you be more specific?

This broker sells million dollar Yachts, (many here knows). He's selling the boat for a friend, and probably doesn't even need this commission. I'm just trying to protect my costs at $57,000.

The only reason there's so many questions is because I've never bought a boat. And I'm not running away from 5 months of boat shopping, $2000 spent in survey, engine survey, pull out, AND my wife's favorite boat. This just to change a few words.

IM ALSO GETTING PRIME TRANSFERABLE MOORAGE IN DOWNTOWN SEATTLE THAT TAKES YEARS TO GET, (Almost worth the price alone if I take the boat out and sink it in deep water)

Brishamash: that sounds about all ill need to insert:

“Total amount payable by the Buyer on closing will therefore be $57,000.00 (sale price less Seller credit)”.

Camasonian. It's the boat sellers broker. I don't think I'll be paying commission, Do I?

Soo-Valley They have a receipt for blister repairs on the Hull for $20,000. The survey and engine survey are still in my hands.

 

[BruceK]

Alaskaprof bad advice from members here? Or just my "acceptance of vessel offer" I posted above?

Can you be more specific? This broker sells million dollar Yachts, (many here knows). He's selling the boat for a friend, and probably doesn't even need this commission. I'm just trying to protect my costs at $57,000.

The only reason there's so many questions is because I've never bought a boat. And I'm not running away from 5 months of boat shopping, $2000 spent in survey, engine survey, pull out, AND my wife's favorite boat. This just to change a few words.

IM ALSO GETTING PRIME TRANSFERABLE MOORAGE IN DOWNTOWN SEATTLE THAT TAKES YEARS TO GET, (Almost worth the price alone if I take the boat out and sink it in deep water)

Brishamash: that sounds about all ill need to insert:

“Total amount payable by the Buyer on closing will therefore be $57,000.00 (sale price less Seller credit)”.

Camasonian. It's the boat sellers broker. I don't think I'll be paying commission, Do I?

Soo-Valley They have a receipt for blister repairs on the Hull for $20,000. The survey and engine survey are still in my hands.

You are buying the boat for $57K. That should be the contract price.
The Broker can make whatever arrangement he likes with the Seller. It`s no concern of yours, but you are being drawn into it.
Simplicity is certain, complications, like "a credit", may not be. Surely you have a lawyer friend you can talk to. Check the contract with the "credit" provision in mind, how does it sit with the rest of the Contract.

 

[Comodave]

Just tell them what you want the sales agreement to read, it is your offer after all. You are the one paying for the boat. I would just tell them you want the sales documentation to say you are paying $57K for the boat so there won’t be any issues at the state when you go to register it and pay the sales tax. Simple. At this point they will not back out, it is obvious they want the boat sold.

 

[Ducatihottie]

Thanks Bruce, Comodave (and all). Are you hip on telling me the exact wording I should have them insert in the offer above? And of course delete their "credit" part.

I'm also buying from a broker and there using some national "maritime" something for title tranfer, registration and all. I believe my "bank" required this as well for my loan.

I assumed this was a normal form in final boat negotiations? This after the surveys and my final offer. Now I just need to re-word it to protect myself. And don't know any lawyers

Has no one seen a form letter / offer like this before?

 

[Comodave]

I can’t read the sales agreement when I try to enlarge it. I would tell them that you want it to say something like”sales price $57,000”. That takes the guesswork out of it I think, but I am not a lawyer nor have I played one on TV...

 

[Ducatihottie]

Thanks. This whole boat buying process is more F-up than buying a house

 

[Comodave]

There are way more homes sold each day than boats and I guess a whole lot more regulations on home sales that make them more cut and dried.

 

[Ducatihottie]

Here's what I came up with

"Can the offer just read "sales price $57,000"? There's no need for the "credit" part. This will make it clear so I won't have to pay taxes on the $77,000. And possibly higher insurance on a $77,000 boat vrs a $57,000."

Tadaaa?

 

[BruceK]

Buying a house, contract advice usually comes from an independent lawyer, rather than a boat broker whose $ depends on the deal.

 

[Comodave]

Here's what I came up with

"Can the offer just read "sales price $57,000? There's no need for the "credit" part. This will make it clear so I won't have to pay taxes on the $77,000. And higher insurance on a $77,000 boat vrs a $57,000."

Tadaaa?

The difference on insurance costs would be small and I would not mind paying a bit more for the extra insured valve if you get stated value insurance and not actual value insurance, which can screw you if it is a total loss.

 

[BruceK]

Here's what I came up with

"Can the offer just read "sales price $57,000"? There's no need for the "credit" part. This will make it clear so I won't have to pay taxes on the $77,000. And higher insurance on a $77,000 boat vrs a $57,000."

Tadaaa?

Be assertive, replace the first 4 words with " The offer should read".
In real estate here, contract advice comes from a disinterested lawyer, not a boat broker protecting his commission.

 

[Benthic2]

Perhaps a buyer's broker would come in handy here ? You've done all the work already in finding the boat, having surveys and negotiating a price. I would think you would only need to hire a broker for about an hour, and could negotiate a flat fee for him representing you at the closing. It might be worth it.

 

[FF]

The broker is a wise guy attempting to enrich himself at your expense.

SURPRISE!

The sales contract needs no mention of a "credit", just the sales price.

 

[AZ2Loop]

......Brishamash: that sounds about all ill need to insert:
“Total amount payable by the Buyer on closing will therefore be $57,000.00 (sale price less Seller credit)”.

Camasonian. It's the boat sellers broker. I don't think I'll be paying commission, Do I?

One thought comes to mind. I would NOT want the words you have in parentheses on the contract. The state in which you pay sales tax could easily argue you have reiterated that the sales price is indeed $77,000 with that parenthetical statement.

Regarding paying commission, it would be unusual for you to be paying it as the broker represents only the seller in this case, which is fine. However, indirectly, you do pay it; because it ultimately determines how much the seller is netting which impacts what they will accept.

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

I think Knot Fast and others hit the nail on the head. It is likely an effort to earn commission on an additional $20K. It might also allow them to record the sale at $77 vs $57 in their own database or other shared systems that show comps for boat sales that other brokers can see. You said earlier the broker does not need the commission. He may not need it, but he sure seems to WANT it. By this effort to base it on 77 vs 57, he is effectively trying to get 35% more commission than deserved.

There is another unlikely possibility. Years ago in real estate sales when money flowed fast and loose from lenders, one could word a contract like that to help the buyer borrow more money on the home. Similar wording (again, this was many years ago) would allow some lenders to base their loan on the $77K (the "sales price" vs the $57K. So, let's say you were getting an 80% loan to value, then the buyer would be likely to borrow 80% of $77K in the purchase, making it effectively a "no money down" deal for the buyer. Many years ago I even had loan officers tell us to word it like that so their loan could be a larger loan. They would even "wordsmith" it for us because they knew what their underwriters would approve vs not. Obviously they were on commission, too! However, those decades are long gone, so I am showing my age. I highly doubt this was his motivation, but I guess it is possible.

The broker is a wise guy attempting to enrich himself at your expense.

SURPRISE!

The sales contract needs no mention of a "credit", just the sales price.

I think FF sums it up. It is probably no more difficult than that!
I bet the seller (seller, not broker) would be agreeable to whatever verbiage you want and probably has no idea the broker is creatively looking for a 35% unearned bonus while making the buyer uncomfortable. If the seller was aware of that, he/she would probably want to put a stop to that immediately.
Good luck! I imagine you will negotiate your way through this pretty quickly.

 

[jleonard]

"received from _______ for (boat xyz, hull # ______) and agreed price of $57,000. Boat sold "as is where is."

Signatures and date

Done

That's basically how we wrote the sales agreement when I sold 3 weeks ago.

 

[JLD]

Lots of bad advice here. A sales contract should not leave you asking questions like these.

Find another boat, seller, and especially broker. RUN!

Sorry, but I just don't understand this post.

The OP has found a boat he likes, has had paid for a survey and finds the survey results acceptable, has agreed to a sales price that he finds acceptable, and has his financials in order for this specific boat. Why would he bail on this boat if he can get the broker to make a simple correction to the contract?

Jim