How does the boat buying process work?

[denverd0n]

What good does a deposit do? The are ALL refundable if the buyer doesn't buy, so what's the point?

It creates a legal contract. Without some consideration given and received, you do not have a contract. That means that the seller could "accept" your offer, but still sell the boat to someone else.

Oops! You already paid for a haul-out and survey? Too bad. That was a contract between you and the surveyor, not between you and the seller. Without a deposit you could arrive on the day of the closing only to hear the seller say, "Tough luck, but I sold it to someone else yesterday."

With the deposit, there is now a legal contract between you and the seller, and if he breaks that contract then you have recourse.

 

[Seevee]

It creates a legal contract. Without some consideration given and received, you do not have a contract. That means that the seller could "accept" your offer, but still sell the boat to someone else.

Oops! You already paid for a haul-out and survey? Too bad. That was a contract between you and the surveyor, not between you and the seller. Without a deposit you could arrive on the day of the closing only to hear the seller say, "Tough luck, but I sold it to someone else yesterday."

With the deposit, there is now a legal contract between you and the seller, and if he breaks that contract then you have recourse.

Denver,
True, but consideration doesn't have to be a "deposit" and can be $10 OVC, which I usually use.
As far as a "legal" contract the cost of enforcing it is often not worth it if either the seller or buyer backs out. The seller could have sold it to someone else right after your survey and sea trial, and not much you can really to that's practical. Now, one can protect themselves somewhat with a non refundable deposit (from either party, depending) to guarantee performance. I've done that on occasion, from both the buyer and seller side.

My point, is the typical fully refundable deposit doesn't do much. Maybe it makes the seller "feel good", but if refundable, what's the point. I'd never put down any deposit unless it would smooth out the deal and only then with MY representative. I've also rarely had a problem with any broker regarding this, and have never put a deposit into their account, yet.

As a buyer, my first goal is to get enough info to see if this is really a good deal. That will require getting a lot of info from the seller, and expecting him to provide good info, which can be verified later. This process may or may not take a bit of time.... and the more time, the more likely of success. If the boat is local, I may visit it a few times, perhaps bring a boating friend with (that has skills). I'll also ask for a short sea trial, and I'm willing to pay the expenses for, fuel, captain, etc. That way the seller is covered for his expenses should I not buy. However, most of the sellers I've done this with refuse any money and we very gracious with the sea trial.

Occasionally there's a killer deal, and have to act fast. In those cases I have no problem buying without a survey, but the numbers have to be really good. I do try to still do a sea trial and mechanical check.

I've never been burned with a boat purchase. Some ended up better than others, but all good. And in all the surveys inspections, sea trials I've done, there's ALWAYS something that's missed or unknown at the time of purchase that shows up later. "Oh, we should have thought of ......"

Now, as a seller.....
I doll the boat up, be sure it's REALLY clean and everything is working.... Try to make it sell itself. If ANYONE shows up, I'll take them for a ride to "sell" them the boat, which has worked will over the years. I've never had a joy rider show up. Sure, there are a few low ball offers and folks that just aren't interested enough to buy, but occasionally I've convinced them to come up to my price. The effort in "selling" the boat is small compared to the benefit of getting it sold.

 

[Bacchus]

My take is there are several ways to structure the deal and protect yourself. I don't think there is one best way and will depend on circumstances.
I would be reluctant to make a big trip w/I some assurance the seller wasn't going to sell it while I was traveling...if that takes a deposit or advancing funds for a ride I'd be willing to do that.
I've also bought & sold a number of boats & motor homes and have done it different ways depending on circumstances and my evaluation of buyer and their seriousness and timing involved.
I realize the difficulty in enforcing an agreement but like having a written agreement and exchange of funds to make the other party think twice about violating the agreement.

 

[Seevee]

My take is there are several ways to structure the deal and protect yourself. I don't think there is one best way and will depend on circumstances.
I would be reluctant to make a big trip w/I some assurance the seller wasn't going to sell it while I was traveling...if that takes a deposit or advancing funds for a ride I'd be willing to do that.
I've also bought & sold a number of boats & motor homes and have done it different ways depending on circumstances and my evaluation of buyer and their seriousness and timing involved.
I realize the difficulty in enforcing an agreement but like having a written agreement and exchange of funds to make the other party think twice about violating the agreement.

Don,

Good points, and if one wanted to enforce a contract for a deposit or travel money, they could file a small claims action.

I guess I've been lucky. If I'm traveling a long distance invoking time and money, I'll just ask the guy to hold it so I can see if, and it's never been an issue. Many times I've spend $ traveling around the Southeast to look at boats. And with planes, all over the US. Not once has someone sold one out from underneath me.

As a seller, I would never sign an agreement with someone that would take the boat off the market, and still allow him the option of inspection and cancellation. NEVER. But I would not sell it if he's traveling to look at it. If I get an offer in the mean time, I'll give him first right of refusal.

I've found for the most part, if you talk to sellers and get to know them a bit, the vast majority are honest and honorable. It's not hard to spot the ones that are not. The best sellers that I look for, is a seller that has owner the boat for sometime, certainly more than a year. And one that lives a reasonably stabile life, and is selling his own boat... not his cousin Vinny's boat.

And regarding brokers, there are some good and bad ones out there. I've been lucky with some great ones. The one thing negative about brokers is that can put a barrier between buyer and seller, so they never meet. The brokers I've used have allowed me to meet the seller and get to know them.... works great.

 

[Tom.B]

It creates a legal contract.

I am not a lawyer, but just providing a deposit, doesn't make anything a legal contract. A signed contract makes a legal contract. The deposit does do a couple of things however. First, along with a signed contract, it shows serious intent to buy the boat and move forward with the steps laid out in the accepted offer. Secondly, it provides a coffer for the seller and to the broker that would cover any expenses incurred by both should the buyer walk away and leave expenses unpaid. It happens a lot actually.

 

[eyschulman]

buying a boat. You go through a lot of hoops including surveys and financial. You fall in love with a boat or accept a compromise. You finally get the boat and spend the next few years discovering what was missed or where you could have made better choices. Some will keep their boats a long time but on average I was told by someone in the financing industry by 6 or 7 years the boat goes on the block again. good luck enjoy the boat and being on the water. What will be will be and we may have little control over that.

 

[Seevee]

I am not a lawyer, but just providing a deposit, doesn't make anything a legal contract. A signed contract makes a legal contract. The deposit does do a couple of things however. First, along with a signed contract, it shows serious intent to buy the boat and move forward with the steps laid out in the accepted offer. Secondly, it provides a coffer for the seller and to the broker that would cover any expenses incurred by both should the buyer walk away and leave expenses unpaid. It happens a lot actually.

Tom,

Agreed. A binding contract requires a few things which include consideration and agreement (with signatures). There's also terms, descriptions, exclusions, etc., etc.

I tend not to go overboard with contracts. They are very cumbersome to enforce and don't prevent either party from breaking it. There "may" be some penalties, however. Who pays for expenses should be ironed out in the beginning, preferably before the contract.

And, yes, a contract shows intent and I have no problem with one, preferably mine. I do have a problem with putting a lot of money in someone else's escrow account. Rarely do that, excepting some real estate deals and then only held with my title co or attorney or trustee.

If a buyer travels across the state and spends all day and/or gets a room for the night, that shows pretty serious intent, do you think? If the neighbors friend is curious because he saw a for sale sign, probably not.

 

[yachtbrokerguy]

Seevee, things are different here in South Florida, one of the scam capitals of the USA. I have seen potential buyers give bad checks and try to stiff the yard for haulout and not pay the surveyor. I took a written offer from a potential buyer once and we came to an agreed price, but he never sent the deposit. I found out later he did this on a regular basis, made offers but never went to survey. The IYBA purchase agreement was changed due to this guy, now the seller can go after the deposit if he wants to pay for lawyers. I showed a few boats to one guy and got suspicious, I found him on Google, he had got selling a stolen Ferrari. He did buy an 80 boat (through another broker) with my guess a was his girlfriends money, than ran it on the beach while drunk at Lake Worth and left it there until it had to be cut up and thrown away.
As a broker who represents a seller I insist on a deposit, and no checks, it must be a wire transfer. I showed a Sea Ray to some clients one time and the potential buyer said they would make an offer but would not make a deposit. The wife said they did not have a checking account. I researched these people and found out they were licensed real estate agents, where a deposit is the only way to make an offer.

 

[menzies]

YBG, see question in #28.

 

[Seevee]

Seevee, things are different here in South Florida, one of the scam capitals of the USA. I have seen potential buyers give bad checks and try to stiff the yard for haulout and not pay the surveyor. I took a written offer from a potential buyer once and we came to an agreed price, but he never sent the deposit. I found out later he did this on a regular basis, made offers but never went to survey. The IYBA purchase agreement was changed due to this guy, now the seller can go after the deposit if he wants to pay for lawyers. I showed a few boats to one guy and got suspicious, I found him on Google, he had got selling a stolen Ferrari. He did buy an 80 boat (through another broker) with my guess a was his girlfriends money, than ran it on the beach while drunk at Lake Worth and left it there until it had to be cut up and thrown away.
As a broker who represents a seller I insist on a deposit, and no checks, it must be a wire transfer. I showed a Sea Ray to some clients one time and the potential buyer said they would make an offer but would not make a deposit. The wife said they did not have a checking account. I researched these people and found out they were licensed real estate agents, where a deposit is the only way to make an offer.

Tucker,

I sure see your point, and it's too bad that there's people of questionable character out there. And they come in all shapes and sizes. And I realize you have a HUGE responsibly to look out for your client.

I guess I've been lucky, or just able to read people right. I've bought a LOT of things on a handshake, and a number of things like houses with a $10 ovc consideration contract. I've had to take legal action against a few brokers over the years... always prevailed but a PITA and they got scolded. I don't do that anymore and one reason I've pretty skeptical about deposits, unless held by my trustee. With that, I've never had a problem. However, when shopping, I have no issue paying for expenses. At times, I used to pay cash for things, but now folks think you're a crook if you use cash.

I do like to get to know the buyer or seller, regardless of what side I'm on, and his family if possible. Makes a big difference and can tell a lot about someone after meeting and/or just talking with them. And when I make an offer, I most often buy it.

 

[Tom.B]

I guess I've been lucky

Yep.

 

[gaston]

And again

Ring the broker leave a message to call back
Ring the broker leave a message to call back
Ring the broker leave a message to call back
Ring the broker leave a message to call back

 

[BruceK]

And again

Ring the broker leave a message to call back
Ring the broker leave a message to call back
Ring the broker leave a message to call back
Ring the broker leave a message to call back

Go around the broker. Unless the seller instructed the broker not to respond.
Current boat, I sent a cheque for the requested deposit. Never banked and returned at settlement, but it was a negotiable instrument and qualified as "payment". A deposit doesn`t have to be $, just something of value.(Was my cheque of value???)
In practice the only person bound by a sale agreement is the seller. "Sea Trial" and "Survey" make the sale more like an option agreement for the buyer, voidable at the buyers option.
As to a buyer enforcing the Sale Agreement, is Specific Performance available as a remedy on a boat purchase in the USA? I suspect it would need to be a very(ok, I know, it`s either unique or it`s not) unique boat for that to apply, otherwise it`s just damages for loss of the deal/bargain.

 

[Sailor of Fortune]

I wouldn't even think of making an offer on a boat without a seatrial . If it fails my seatrial, offer would reflect that. I have bought boats site unseen but surveyed by people I trust.

 

[ranger58sb]

And again

Ring the broker leave a message to call back
Ring the broker leave a message to call back
Ring the broker leave a message to call back
Ring the broker leave a message to call back

You mean this is not just hypothetical? You're really having trouble making contact with the guy?

If so... Is he maybe part of a larger brokerage house? In that case, maybe contacting the brokerage owner might get better response?

Or the seller, direct? Can you look up the boat owner's info in your registration or documentation system?

-Chris

 

[menzies]

Again, you are probably working with an agent, not the broker.

If you are struggling with the agent, call his broker.

 

[Seevee]

Again, you are probably working with an agent, not the broker.

If you are struggling with the agent, call his broker.

I've done that a few times, and sometimes it's just the agent is out of town and doesn't handle his calls well. Occasionally, I've called the owner.

 

[yachtbrokerguy]

Menzies
Reference post number 28
Once a broker/ owner knows about a fault he needs to disclose it. Where I work we ask sellers to sign a disclosure if there is information that "the vessel has not been materially damaged since he has purchased the boat or aware of damage to the vessel prior to its ownership"
A survey is owned by the person who paid for the survey and sometimes the contents cannot be shared, but in the case you mentioned the survey was released by a previous buyer. Then the broker has an obligation to inform a buyer of faults. Recourse from a broker is a different problem, as many small companies do not have the funds to pay a judgment and the cost of winning a judgment may not make sense. Just like doctors, lawyers, plumbers, boat yards, some brokers are good and others are not.

 

[menzies]

Menzies
Reference post number 28
Once a broker/ owner knows about a fault he needs to disclose it. Where I work we ask sellers to sign a disclosure if there is information that "the vessel has not been materially damaged since he has purchased the boat or aware of damage to the vessel prior to its ownership"
A survey is owned by the person who paid for the survey and sometimes the contents cannot be shared, but in the case you mentioned the survey was released by a previous buyer. Then the broker has an obligation to inform a buyer of faults. Recourse from a broker is a different problem, as many small companies do not have the funds to pay a judgment and the cost of winning a judgment may not make sense. Just like doctors, lawyers, plumbers, boat yards, some brokers are good and others are not.

Thanks.

 

[denverd0n]

I wouldn't even think of making an offer on a boat without a seatrial .

And I would never allow someone to take my boat out without a contract and a deposit. So I guess you and I will never be buying/selling from each other!

 

[TimButterfield]

And I would never allow someone to take my boat out without a contract and a deposit.

How might this differ with an owner selling their own boat vs selling through a broker? I have been out on a demo ride of an owner selling their own boat with them running the boat. They offered and I accepted. The only broker I've had a demo ride with was him selling his own boat, though he let me run it for a while. He offered saying he wanted to exercise the engine anyway. I would not normally expect a demo ride from a broker nor a full sea trial before having a contract. Do some brokers do that? I guess it never hurts to ask what's possible. But, it is nice if an owner selling direct offers it. As an owner, it might give an opportunity for a boat to sell itself or build more emotion in the potential buyer. I'm not sure I would want a broker to do that without me, but I might do it on a direct sell if the boat was already in the water.

 

[Seevee]

<<<<<Originally Posted by Sailor of Fortune View Post
I wouldn't even think of making an offer on a boat without a sea trial .>>>>>

And I would never allow someone to take my boat out without a contract and a deposit. So I guess you and I will never be buying/selling from each other!

DenverdOn,

And you'll likely not sell your boat. What the hell is the hang up? Don't you like boating? Why the hell wouldn't you give a prospective buyer a ride????? If that's your profile, I'd never buy your boat either.

You're the seller. It's up to you to SELL, not piss off a buyer.

Sailor of Fortune has it right. He's a serious buyer. You are NOT a serious seller. Get with it!

 

[Tom.B]

How might this differ with an owner selling their own boat vs selling through a broker? I have been out on a demo ride of an owner selling their own boat with them running the boat. They offered and I accepted. The only broker I've had a demo ride with was him selling his own boat, though he let me run it for a while. He offered saying he wanted to exercise the engine anyway. I would not normally expect a demo ride from a broker nor a full sea trial before having a contract. Do some brokers do that? I guess it never hurts to ask what's possible. But, it is nice if an owner selling direct offers it. As an owner, it might give an opportunity for a boat to sell itself or build more emotion in the potential buyer. I'm not sure I would want a broker to do that without me, but I might do it on a direct sell if the boat was already in the water.

THIS! Be open to take serious shoppers out on your boat for a ride. Buyer will appreciate the honesty. Many brokers lie to make the sale. If you are genuine, you have a much better chance of impressing sellers than a broker. Do it with or without a broker present. People trust and appreciate the transparency. Or maybe that is just us.

 

[gaston]

And I would never allow someone to take my boat out without a contract and a deposit. So I guess you and I will never be buying/selling from each other!

Ever considered been a broker

 

[C.O.S.T.]

Having just gone through the process my best advice is to:
1. Make very sure you hire a very good and honest surveyor. Have most of the survey
done prior to the haul-out. If the surveyor finds more than you are prepared to deal
with then no point in hauling it.
2. Expect that even with the best surveyor some things will be missed.
3. Take most of the things said by both broker and seller are not exactly accurate.
4. If the deal does come together be really really careful in selecting anyone to do the
work on the boat that you will want done. A bad marine service company will cost
you way more than you are prepared for.
5. If the deal does not go then consider the lost money a wise exchange for the many
dollars more that you will save.

I am dealing with point 4 right now and it is way worse than anything I had during the buying process. Good luck and have fun. In the end it is all worth the trouble.

 

[denverd0n]

I have been out on a demo ride of an owner selling their own boat with them running the boat.

Note that I said I would never allow "someone" (meaning someone ELSE) to take my boat out without a contract and a deposit. Taking them for a little ride myself is a whole different matter. This would be nothing like a sea trial. I would be in command, we would go where I choose to go, at the speeds that I choose to operate the boat, and so on.

If they want a full-on sea trial then they are going to have to sign a contract and put down a deposit. This is the way that boat sales normally go here in Florida. You do not ordinarily get to do a sea trial until you have made an offer. I have personally sold three boats in the past, and this is how it was done every time.

 

[denverd0n]

And you'll likely not sell your boat.

And yet I have sold several boats in the past. Hmmmm.

 

[Seevee]

And yet I have sold several boats in the past. Hmmmm.

Denverd,

That's great, three? I've bought and sold about 20.... and can't think of ONE where I didn't operate the boat (if I wanted) prior to a signed contract with a deposit. And I took EVERYONE for a boat ride that was interested and "sold" the boat, even if it was a POS. The only boat I had that took a long time to sell was listed with a broker, but I was in an awkward spot to do it myself.

No, you won't sell to me or a few others here, that's your choice. I'm just pointing out that if you really want to SELL the boat you need to SELL the boat, boating concept and sell YOUR boat to the buyer. If you take care of your buyer, he will be much more likely to buy your boat. A serious buyer doesn't need a deposit. A lot of brokers like the "deposit/contract" thing because they feel it protects them from issues that could come up, and they feel they are doing their job. Real estate brokers are the same way. (yes, I've bought a number of houses with no deposit a hand shake and a personal check, probably not one of yours).

 

[yachtbrokerguy]

A few years ago there was a guy visiting the offices of brokers here in Fort Lauderdale. He would arrive around 11 AM and ask to see one boat, sometimes with an appointment. Timed it perfectly to finish with the viewing around lunch time and then get the broker to buy lunch for him. He went to many offices and got a lot of lunches before some brokers caught on about this homeless guy.

 

[denverd0n]

(yes, I've bought a number of houses with no deposit a hand shake and a personal check, probably not one of yours).

Nope. Not one of mine. Got completely screwed over once doing it that way. Ended up spending a whole lot of money on lawyers, and a whole lot of time in court.

I can only hope that you never find out the hard way -- like I did -- why written contracts and deposits are the normal way of handling the sale of a big-ticket item like a house or a boat.