How does the boat buying process work?

[TimButterfield]

A serious buyer doesn't need a deposit.

The serious buyer might not need the deposit, but it would sure help me. As an introvert, I have trouble reading people to know if they are really serious or not or whether they will be serious in deed or just in words. Too many people lie. I wouldn't want to dissuade the next buyer only for the former, so called serious buyer, to change their mind. A minimal contract along with some deposit, even if a much lower than normal amount, indicates a level of seriousness that is a bit harder to misunderstand.

 

[Sailor of Fortune]

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!

I would have no problem paying for fuel for the sea trial. If owner wasn't amiable to that, serious red flags in my opinion. I don't want a joyride for free,just a little verification of sellers claims .

Just out of curiosity, would you buy a used car without a test ride? Would you expect to put a deposit on a vehicle if the owner refused to let you take it around the block?

 

[SoWhat]

Do your own survey before deciding to invest in professional survey and launch fees. You can obtain sample survey forms online to ensure you inspect everything and not get wrapped up admiring the upholstery pattern. A form will keep you focused and organized.

http://www.pcmarinesurveys.com/SampleMarineSurveyReports.htm
http://www.accmarcon.com/purchase_survey_example.pdf
http://www.allboatsurveys.com/Docs/SampleSurvey-POWER.pdf

 

[Sailor of Fortune]

I wouldn't need to do a pre-survey,survey. I have been around boats long enough to know if a survey is the next step. If I couldn't run it for a short while, why bother with the survey?

 

[SoWhat]

I wouldn't need to do a pre-survey,survey. I have been around boats long enough to know if a survey is the next step. If I couldn't run it for a short while, why bother with the survey?

I've been around boats all my life so wouldn't do a survey unless insurance co. mandates it. I also have the mechanical and electrical expertise to know what I'm doing. For those who don't, I suggest a pre-survey is appropriate.

A survey for a 35' boat will be over $1000, launch and haul another $800. A pre-survey is $0.

I currently have a sailboat for sale. It's on the hard. I won't start the engine unless I have a warm fuzzy feeling about the buyer. There are a lot of starry eyed tire kickers out there. (Starting the engine means I have to round up a very long hose, disconnect the raw water intake, run water into 5 gal bucket, clean up the mess...I don't need a contract but don't just call and say you want to buy my boat)

 

[Sailor of Fortune]

I would still get a survey,after initial seatrial and accepted offer.

 

[f508]

So I have an update. We decided not to use a deposit because, as a for sale by owner, we couldn't figure out a way to escrow the money that wouldn't cost a lot of money. The best we could come up with was to jointly hire an attorney to monitor the compliance with the purchase agreement. It sounds like the deposit is more important in a brokered boat because it protects the broker, and also eliminates flakes.

Anyway we have the engine survey scheduled for this Tuesday, and the general survey for this Thursday. If everything looks good, we will close the following week, and I'll have a boat!

Thanks to all of you for your advice!

Frank

 

[BandB]

So I have an update. We decided not to use a deposit because, as a for sale by owner, we couldn't figure out a way to escrow the money that wouldn't cost a lot of money. The best we could come up with was to jointly hire an attorney to monitor the compliance with the purchase agreement. It sounds like the deposit is more important in a brokered boat because it protects the broker, and also eliminates flakes.

Anyway we have the engine survey scheduled for this Tuesday, and the general survey for this Thursday. If everything looks good, we will close the following week, and I'll have a boat!

Thanks to all of you for your advice!

Frank

Jointly hire an attorney? Oh, I want to hear how that effort goes. Attorney can't work for both sides. Did you find one that agreed to do that?

 

[Seevee]

Jointly hire an attorney? Oh, I want to hear how that effort goes. Attorney can't work for both sides. Did you find one that agreed to do that?

VERY good point, and same goes for the Broker!

 

[Seevee]

I've been around boats all my life so wouldn't do a survey unless insurance co. mandates it. I also have the mechanical and electrical expertise to know what I'm doing. For those who don't, I suggest a pre-survey is appropriate.

A survey for a 35' boat will be over $1000, launch and haul another $800. A pre-survey is $0.

I currently have a sailboat for sale. It's on the hard. I won't start the engine unless I have a warm fuzzy feeling about the buyer. There are a lot of starry eyed tire kickers out there. (Starting the engine means I have to round up a very long hose, disconnect the raw water intake, run water into 5 gal bucket, clean up the mess...I don't need a contract but don't just call and say you want to buy my boat)

SoWhat,

I'm in the same boat (pun intended). I like to do enough due diligence to make a decision to buy, and that most likely will include MY sea trial. Now, I have no problem paying for his expenses, so will have a little dollars into it. But 90% the guy won't take a thing. If I insist and the owner says no, I'll likely go to the next boat, but never had to do that. Most serious sellers WANT to sell their boat.

 

[BruceK]

Jointly retaining a lawyer to hold a deposit and attend to the transfer(if the deal goes through) might be ok, but beyond that, not a good idea. Even if the purpose for which the lawyer is retained seems straightforward, something contentious often arises in a simple transaction. The process of boat buying, especially once you get into survey issues and renegotiation,can be contentious.
I hope the Contract is fair. Do you have your own broker,if so he should be "on your side", despite the buyers broker getting paid out of the selling brokers commission, which effectively means the seller pays the buyers broker. Oh well,, that seems to be the USA/Canada practice , maybe sharing a lawyer is not so bad,as long as he realizes when/if a conflict arises and he needs to bail out.

 

[Seevee]

Sharing lawyers, brokers, etc.

I don't understand how ANYONE can expect to share a professional that is hire to look out for your best interests. When you hire the above, he not only has a fiduciary responsibility, he is YOUR agent to look out for your best interest. Your best interest in buying or selling is not always the best interest of the other party. The pro cannot represent you legally or as a fiduciary. It just doesn't work regardless of what people think. Period. Been thru this a thousand times in the past umpteen years.

Now, what you "can" do, if one want. One party hires the pro. The pro is still required to be honest on both sides and not cheat anyone. The parties agree that the one hiring the pro requests that the pro dispose ALL information given to him be disclosed to both parties. No one communicates without out all three being in the loop. However, the non hiring person still has to look out for their backside. But if all are honest with this, if the lawyer or broker thinks this is a lousy deal for his client, the other side will know. I've used that technique a few times and worked. But some pros won't agree to that.

Where things get sticky, if a deposit is contested for whatever reason. If the pro holding the deposit and gives it to his client wrongly, he can become liable (I've prevailed in that very situation). But can be disclaimers, too.

Overall, I feel a refundable deposit is worthless other that giving the buyer and his broker a warm fuzzy feeling. I only do them if absolutely necessary on my terms, if it's a good deal. Never had one forced on me.

Now, make it a small non refundable deposit that includes the sea trial... that could work out fine.

 

[f508]

Jointly hire an attorney? Oh, I want to hear how that effort goes. Attorney can't work for both sides. Did you find one that agreed to do that?

I think he would have been a trustee. But as I said, we decided not to go that route. So we never really figured out how it would have to work.

I am moving pretty quickly on getting the surveys done, and I'll be paying cash, so as long as we don't find any big problems with the surveys I expect we will close within 3 weeks of handshaking on the deal. We probably would still be setting up the appointment with lawyer if we went that way.

I think I am sweating the surveys almost as much as the seller. I really want this boat to be good... well, good enough anyway.

 

[alfamike]

Don't fall in Love yet !

Don't fall in love yet.

The survey is a key item.

There are very few perfect boats when they get older.

There may be some big time issues.

Or there can be a bunch of little issues.

So be prepared to walk away !

Just be careful & not in to big of a hurry.

The two happiest days in a boat owner's life are:

1. - the day he buys the boat

2. - the day he sells the boat

There is a reason for that.

Boat ownership can some times not be for the fait of heart

Hope it all works out for you.

Good luck.

Alfa Mike

 

[Seevee]

I think he would have been a trustee. But as I said, we decided not to go that route. So we never really figured out how it would have to work.

I am moving pretty quickly on getting the surveys done, and I'll be paying cash, so as long as we don't find any big problems with the surveys I expect we will close within 3 weeks of handshaking on the deal. We probably would still be setting up the appointment with lawyer if we went that way.

I think I am sweating the surveys almost as much as the seller. I really want this boat to be good... well, good enough anyway.

F508,

Great for you, sounds like you're on the right page and sounds like the seller is, too. So whatever is found, it will be a matter of adjusting things. And the seller will have to deal with it regardless of who he sells to.

You didn't mention the kind/year of boat you're buying. You may find a few here that are familiar with it to offer comments about goods/bads/solutions/ideas.

Keep us posted, we're excited for you.

 

[f508]

It is a 1982 DeFever 48. There are 2 others on the West Coast for sale that I know of, but from what I can tell by looking at the other 2 on the internet, and trading emails with the brokers, I prefer this one's problems to the problems that come with the other 2. The one in Seattle hasn't isn't in the water, and the one here is the Bay Area seems to have a purple stateroom.

The DeFever 48 looks like a great boat, well thought of, well thought out, and it has a configuration I like. A U shaped galley on the same level as the helm, a walk around stateroom bed, access to the deck from both sides of the helm, and a walk around deck. My favorite thing is the tall engine room. When I was a kid we had a 30' Chris Craft and I remember crawling around in the bilge of that thing to the far side of the engines - I hated that. The DeFever doesn't have room to stand up on your feet, but you can stand up on your knees.

You are right, the wrong problems, and I will walk, even with a price adjustment, I want a boat, not a renovation project. Of course a boat that is 35 years into it's useful life will be a sort of ongoing renovation.

One way or another, I'll have my answers this week.

 

[BandB]

I think he would have been a trustee. But as I said, we decided not to go that route. So we never really figured out how it would have to work.

I am moving pretty quickly on getting the surveys done, and I'll be paying cash, so as long as we don't find any big problems with the surveys I expect we will close within 3 weeks of handshaking on the deal. We probably would still be setting up the appointment with lawyer if we went that way.

I think I am sweating the surveys almost as much as the seller. I really want this boat to be good... well, good enough anyway.

Are you using a title/documentation company?

 

[f508]

Yes, we are using a Title company. The boat is CG registered, so I guess that helps to verify a clear title.

 

[BandB]

Yes, we are using a Title company. The boat is CG registered, so I guess that helps to verify a clear title.

Well, too late now, but they are the ones who could have been used to hold the deposit.

 

[f508]

I didn't think of that. Thanks. Eventually I will sell the boat, so that is good to know. Although I think I will use a broker when I eventually sell. I hired a broker to advise me and help me find the specialists for this process. I am doing all the logistics, but he helps me figure out what to do, solves problems when they come up, and most of all anticipate and avoid them to begin with.

As a seller, I think the wider advertising, and trained expertise that come with a broker will more than pay for itself. In this case, the seller made the choice to sell it himself.

I have been amazed at the boating community. The brokers, the technical professionals, the harbor masters and of course the community on this and other forums have been astonishingly helpful, kind, honest and straight forward.

It started out for me, being about the boat. But now it is as much about my desire to join and be a part of this community as it is the boat.

 

[f508]

We had most of the engine survey, and the entire haul out survey last week, and things are looking pretty good.

We couldn't do the sea trial because the starboard engine had 2 broken motor mounts that turned up in the initial part of the engine survey. Also the oil lines were old, so we decided to get those things taken care of, and to change the raw water impellers before loading up the engines. The owner is getting these items taken care of and then we will do the sea trial.

The main survey came out pretty well. I had noticed an odor on the boat, and the surveyor said that the head hoses were permeated. So we will be talking about that, but it doesn't look like it should be too expensive as long as the smell leaves with the old hoses. The owner says the boat has smelled like that for the 4 years he's owned it. Anyway, I'll need the smell gone before we close. If the hoses have been permeated for a long time can the fiberglass or the interior wood pick up that odor?

Thanks,

Frank

 

[mramoo]

I have been following this thread since the start, since we are also looking for a boat. What we have found is that a buyer could go broke paying survey fees, comparing very similar vessels, if the first, then the second, and maybe the third, fail survey. I have begun to not trust the owner or the broker to tell the truth, the whole truth and nothing but the truth. SO why should the buyer be responsible to pay to find out what is wrong with the sellers boat.

 

[BandB]

I have been following this thread since the start, since we are also looking for a boat. What we have found is that a buyer could go broke paying survey fees, comparing very similar vessels, if the first, then the second, and maybe the third, fail survey. I have begun to not trust the owner or the broker to tell the truth, the whole truth and nothing but the truth. SO why should the buyer be responsible to pay to find out what is wrong with the sellers boat.

Well, you have two choices. You either survey and sea trial and spend those dollars or you don't and risk the dollars that might come with that.

Now, have you ever used a buyer's broker in the process? One of the things the good ones do is cut down on the bad selections. If you're only dealing with the owner or seller's broker, you odds are diminished. A second thing is to improve your selection of the boats to make offers on. If you have three boats to fail surveys, then your choices of those to offer contracts on isn't good. You aren't doing a good initial job of pre-qualifying those boats. Either you or a buyer's broker or both have to do that.

The buyer pays for surveys because they are for the buyer at his request, for his benefit. The seller would be happy to proceed without one. You don't want to depend on a survey a seller previously got. They were the client, not you, and you don't know the circumstances nor did you select the surveyor.

 

[BruceK]

Your "loss of trust" is understandable, it might help you sharpen the "self survey" process to better sort the wheat from the chaff, and not go to survey unless really confident in the boat.
One move I have considered, if suspecting the boat has an issue the seller denies, is to try to have the seller accept responsibility for the haulout if his denial proves wrong. Getting him to agree to pay for the survey would be harder.
It may hurt, but paying for a survey that stops you buying is a good investment.

 

[mramoo]

BandB

I would be happy to pay for a survey that comes back with nothing that I was not informed of by the seller. But when the seller's claims that they did not know that their boat had so many things wrong is a joke. Then the seller can now, with this new information can get the items fixed, and did not have to pay for the inspection.

I feel that the seller should pay for the survey if it causes the sale to go south. Then the seller might be more up front with the buyer about the condition of their boat.

As we look at different boats, the brokers tell us that we can;t do the in-depth inspection I would like to do with out putting the money in the pot.

The last boat we looked at and paid for a survey, was a very nice looking boat. The outside, and interior were stunning. What we could no see turned out to be some very expensive things to get repaired. What we later found out was that the seller had only owned this boat for a few months, and was trying to sell it off to get rid of the problems he had found.

 

[BandB]

BandB

I would be happy to pay for a survey that comes back with nothing that I was not informed of by the seller. But when the seller's claims that they did not know that their boat had so many things wrong is a joke. Then the seller can now, with this new information can get the items fixed, and did not have to pay for the inspection.

I feel that the seller should pay for the survey if it causes the sale to go south. Then the seller might be more up front with the buyer about the condition of their boat.

As we look at different boats, the brokers tell us that we can;t do the in-depth inspection I would like to do with out putting the money in the pot.

The last boat we looked at and paid for a survey, was a very nice looking boat. The outside, and interior were stunning. What we could no see turned out to be some very expensive things to get repaired. What we later found out was that the seller had only owned this boat for a few months, and was trying to sell it off to get rid of the problems he had found.

You can't depend on the seller or the seller's broker. It's got to be a combination of you and a buyer's broker. The seller has no obligation to tell you what is wrong. You say the brokers tell you that you can't do an indepth inspection? You can't start taking the engine apart but you can do a thorough walk through and look at all the mechanicals. You can also request logs and maintenance records. When the seller has none, that gives you a clue. You can ask about ownership and how long the seller has owned the boat. Everything I'm saying a good buyer's broker would advise you and would also pursue. No, all aren't good so selection is important.

You can write anything you want into the contract, but you're not likely to get it accepted. For instance you could write that the seller pays half the survey cost and if they accept that, fine. I just don't see many doing so. The last thing they want is to put more money into it.

There are things you can do to reduce the survey cost. After the contract is accepted, I'd schedule the sea trial before the survey. It could tell you quickly, it's a no go. You could even schedule a more detailed inspection but not survey prior to the other. You can also ask the surveyor doing the survey to immediately tell you if he's seeing major issues and agree to end the survey at that point. Good idea to be there when the survey is taking place.

I don't know what price range you're working in but if you're looking for better than reasonable to expect for the price then what you're experiencing is more likely.

If you want the seller to tell you everything they know you could prepare a seller's representation list much like real estate sometimes uses in some states. Then if the seller misrepresented anything on it, you'd have legal recourse to recover your survey cost. However, not likely you'll get one to say much more than "I don't know". And if he does, not likely you'll recover the money in reality, but still it can reduce misrepresentation just from the threat of recourse.

You're an amateur dealing with professionals. That's not meant critically, just you're not a professional in buying and selling boats. The seller has an agent representing them. Representing only them. In fact, in 48 states that agent isn't even licensed nor required to live up to a code of ethics. The only defense I see is for you to have someone equal, representing you as a buyer's broker. The way you're doing it now isn't working.

Just because you feel like the seller should pay, doesn't mean that's going to happen. You can write anything you wish into the contract, but as most contracts are written, the seller has no obligation to pay and contract law prevails, not what one feels is right.

A buyer's broker knows how to ask better questions too. For instance, when the seller bought the boat, why he's selling, are their maintenance records or logs to look at, what work has been done in the last year, has the boat had any insurance claims made and, if so, for what and when. A buyer's broker is far more likely to be able to gather good information than you are. Also, a buyer's broker will do a better job of guiding you toward boats with a greater chance of success.

 

[ranger58sb]

I feel that the seller should pay for the survey if it causes the sale to go south. Then the seller might be more up front with the buyer about the condition of their boat.

Figure the odds.

Not suggesting all sellers may intentionally hide stuff; just that their prime motivation is to sell the boat.

The last boat we looked at and paid for a survey, was a very nice looking boat. The outside, and interior were stunning. What we could no see turned out to be some very expensive things to get repaired. What we later found out was that the seller had only owned this boat for a few months, and was trying to sell it off to get rid of the problems he had found.

Successful survey, it accomplished exactly what it was supposed to do: saved you a boatload of money.

-Chris

 

[f508]

So far my purchase has been pretty smooth. The seller has been honest about his boat within the limits of his knowledge. Some problems he disclosed to me were bigger than he thought, and some were smaller, and some the surveys found were a surprise.

I am buying an older boat, a 1982 Defever. There is a reason why my boat is 1/5 to 1/8 the price of a new boat. There is more than just wear and tear. In an item as complex as a boat, which is like buying a small house, and 2 cars, that can all sink. Over the years there will be an accumulation of repairs that were substandard. We hope most things were done at a professional level, but it is inevitable that many things will simply be made to work. Also the safety and reliability standards are constantly improving. So I am looking for a boat that strikes a balance between perfection and affordability.

If it were any better I couldn’t afford it, and if it were any worse I wouldn’t want it.

I am new to boating, so I spent quite a bit of money on the best and most comprehensive surveyors I could find. The engine survey was $1975 and the main survey was around $1100. The haul out was around $450, and the owner doesn’t drive the boat anymore so there was around $200 to hire a Captain to move the boat to and from the haul out, for a total of $3725.

We did the engine survey first, and as I have previously mentioned, found some problems that delayed the sea trial of the engines. So I will bring the engine surveyor back at a 3 hour minimum charge totaling $375, and the Captain at another $200, adding $575 to the $3725 for a projected total of $4300.

Now that seems like a lot to me, but if the sale goes through, I will have a lot more piece of mind from knowing the status of my boat, and having a prioritized list of items that need correction. More importantly, I will be much better prepared to manage and maintain my boat having had the advice and education that my surveyors provided. That knowledge will save me many times over what I paid.

If the sale fails, I will be far better informed and able to evaluate the next purchase candidate, so that my next set of surveys will probably be my last in this purchase cycle.

So while it seems very frustrating to enter this complex process, I have found the survey process to be worthwhile and educational.

Regarding brokers: This boat is a, “for sale by owner” and that places a heavier burden on a neophyte buyer. I was lucky in that I found a broker that I liked and is trustworthy. When I came across this “for sale by owner” boat, the broker I had been working with was willing to help guide me through the process, providing phone numbers, references, and suggestions that allowed me to navigate this complex process. But if this deal falls through I will only look at boats through my broker. The filtering process and legwork that a trustworthy broker provides is invaluable.

One note of caution, the seller was in exactly my position 4 years ago when he bought this boat and the boat was brokered, also, he lived up here in the San Francisco Bay Area, and the boat was in San Diego, so he relied upon the selling broker to arrange the surveys. The surveys he got were far less comprehensive than mine. He told me his surveys were less than half what I paid. But he spent far more on unexpected repairs than I did on the surveys.

Frank

 

[angus99]

So far my purchase has been pretty smooth. The seller has been honest about his boat within the limits of his knowledge. Some problems he disclosed to me were bigger than he thought, and some were smaller, and some the surveys found were a surprise.

I am buying an older boat, a 1982 Defever. There is a reason why my boat is 1/5 to 1/8 the price of a new boat. There is more than just wear and tear. In an item as complex as a boat, which is like buying a small house, and 2 cars, that can all sink. Over the years there will be an accumulation of repairs that were substandard. We hope most things were done at a professional level, but it is inevitable that many things will simply be made to work. Also the safety and reliability standards are constantly improving. So I am looking for a boat that strikes a balance between perfection and affordability.

If it were any better I couldn’t afford it, and if it were any worse I wouldn’t want it.

I am new to boating, so I spent quite a bit of money on the best and most comprehensive surveyors I could find. The engine survey was $1975 and the main survey was around $1100. The haul out was around $450, and the owner doesn’t drive the boat anymore so there was around $200 to hire a Captain to move the boat to and from the haul out, for a total of $3725.

We did the engine survey first, and as I have previously mentioned, found some problems that delayed the sea trial of the engines. So I will bring the engine surveyor back at a 3 hour minimum charge totaling $375, and the Captain at another $200, adding $575 to the $3725 for a projected total of $4300.

Now that seems like a lot to me, but if the sale goes through, I will have a lot more piece of mind from knowing the status of my boat, and having a prioritized list of items that need correction. More importantly, I will be much better prepared to manage and maintain my boat having had the advice and education that my surveyors provided. That knowledge will save me many times over what I paid.

If the sale fails, I will be far better informed and able to evaluate the next purchase candidate, so that my next set of surveys will probably be my last in this purchase cycle.

So while it seems very frustrating to enter this complex process, I have found the survey process to be worthwhile and educational.

Regarding brokers: This boat is a, “for sale by owner” and that places a heavier burden on a neophyte buyer. I was lucky in that I found a broker that I liked and is trustworthy. When I came across this “for sale by owner” boat, the broker I had been working with was willing to help guide me through the process, providing phone numbers, references, and suggestions that allowed me to navigate this complex process. But if this deal falls through I will only look at boats through my broker. The filtering process and legwork that a trustworthy broker provides is invaluable.

One note of caution, the seller was in exactly my position 4 years ago when he bought this boat and the boat was brokered, also, he lived up here in the San Francisco Bay Area, and the boat was in San Diego, so he relied upon the selling broker to arrange the surveys. The surveys he got were far less comprehensive than mine. He told me his surveys were less than half what I paid. But he spent far more on unexpected repairs than I did on the surveys.

Frank

Wow, what did the engine surveyor do to earn that much? Don't get me wrong--I totally support your decision to fully survey--but that charge seems exorbitant unless he did some dismantling.

Good luck with the purchase--it's a great boat. I was on one a couple of years ago in which the owner had effectively lowered the floor in the ER by modifying the grating. It yielded true standup headroom in the forward part of the ER.

 

[BandB]

Frank, thanks for reminding us of rule #1 and that is never to let the seller or selling broker select a surveyor and I'd generally say not to let the buying broker do so either.

Sounds like you're proceeding well though Frank. Either you'll buy the boat, perhaps with some additional discount based on the survey and things beyond those the seller know of or you won't buy it in which case the money spent saved you many times what you spent. Your engine surveys seemed exceptionally high to me but I don't know the engines or your location. Still sounds like you got a good survey which served it's purpose.