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Old 06-26-2020, 03:06 PM   #1
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Money upon closing

Sorry I need a separate thread to keep track of one thing. What to expect and ask for upon closing.

Again, it's a 1987 CHB 42' Ponderosa Tri-Cabin

After you completed the, Marine Survey, Mechanical and Survey Haulout.... And if you found problems.....


1. What did everyone here get back upon closing, (be the owner fixed it or cash back)? How much did you get back?

2. Was it a huge tug o war? Or is it expected the owner pays for a few "broken" things? I'm not willing to lose the deal over a few hundred, thousands yes.

3. Have you ever walked away from the deal. If yes, about how much $ was it over?

Thank you all again! Brian
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Old 06-26-2020, 03:15 PM   #2
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If you are using a broker you should be furnished a pre closing statement detailing where every penny goes, buying or selling.

There really should be no deviation from the statement.

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Old 06-26-2020, 03:24 PM   #3
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The answer to your question depends on the circumstances and the nature of the buyer, seller and broker. There are no pat answers.

But the general understanding is that when you sign the contract, it is based on the premise that all systems work. They may be old, may be worn, but they are serviceable. The buyer and the seller agree to this when the contract is signed.

But after the survey you may find thousands of dollars of stuff that doesn't work or just as likely the surveyor tells you that you need to spend thousand of dollars to make the boat safe and serviceable which isn't really the same thing. It is the surveyors opinion and not an absolute. I once sold a boat where the surveyor priced everything necessary to bring the boat up to current ABYC standards. No boat ever built meets ALL ABYC standards, not Hinkleys nor MJMs nor Nordhavns. And meeting current ABYC standards is not the definition of serviceable.

So then you negotiate. Sometimes the seller is reasonable and understands that what he thought was a serviceable boat was not and will come to a reasonable agreement. Other times the seller doesn't care, he just wants the contract price and the deal falls apart. You often never know which it will be in advance.

Brokers can play a valuable part in this. I once signed a contract and surveyed and sea trialed a sailboat. The engine excessively vibrated. When we hauled it out it was obvious that the folding prop was bent. So I told the broker that I wanted the prop fixed or a $1,500 price reduction (so I could put on a Maxprop in its place). The broker called up the seller and the seller told him the prop was fine and the broker believed him or at least said he did so I walked away. The seller also cancelled the listing agreement in a huff.

As I was driving back to Newport Beach from San Diego the owner of the brokerage called me on my cell and asked what went wrong with the deal. Turns out he had conversed with the office assistant who told him his broker and the seller were being an ass. The owner offered to put on a new MaxProp at his expense which was going to cost about $3,500.

So I agreed to his offer, bought the boat, put on the MaxProp and enjoyed a beautiful J/32 in SoCal. The brokerage made $10,000 net of the MaxProp which was better than nothing. Buyer and broker made out fine and the seller got more than he deserved.

You never know how a deal will turn out.

David
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Old 06-26-2020, 03:55 PM   #4
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A lot depends on how the boats condition was presented.
If As-Is, what you see is what you get that's one thing.
If it was everything is in good working order and nothing broken inoperable that's another story.
During the purchase of our current boat after inspection I noted a list of items not working, significant issues, and the negotiations began. What I found after a lot of discussions and give & take was the owner had s bottom line $# he would take and would not go below that no matter what the item / issue was. We finally agreed on a $ concession beyond the previously agreed $ price that we both could live with.
Some items needed replacement, some I did DIY and the $ covered my out of pocket $ and could live with it. Deal was done!
They are all different and no one right way. In the end both parties have to be comfortable to make a deal
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Old 06-26-2020, 04:50 PM   #5
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What Brian doesn't want to hear is that a survey with no exceptions doesn't mean he won't have to spend 40 grand on the boat next week. It only notes whether or not a system works as expected considering the system is 33 years old. It's not like a certified preowned warranty on a 2 year old BMW. Most sellers will give up what it takes for the new owner to get the boat safely away from the dock. Beyond that it is a crap shoot.
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Old 06-26-2020, 04:56 PM   #6
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A survey should include a current market value based on the condition of the vessel under agreement compared to recent comps from the same model/condition. In some cases you may also get a value if everything on the survey remediation list was complete (basically everything fixed).

You don't need to share this data with the selling broker or the seller - however it can be valuable to share if after the survey you're agreement price and the survey value are really far apart.

For a real world example, our first trawler was listed at $115K (a 1980 Bluewater, 40' Pilot House). It was priced based on a recent sale of the same model from the same broker. We offered $90K (78% of list) as the boat was mechanically in great shape but we knew the decks and a few other areas needed attention. The sellers were relocating and motivated so they accepted.

We went to survey and found more deferred maintenance and established a survey value of $73K.

Rather than ask for repairs we shared the survey and renegotiated at survey value (now at 63% of asking) and they accepted. We took delivery and enjoyed that boat for three years, fixed everything and recently sold it for $60K. (Yes, we bought it for $73K, put another $15K into it and sold it three years later for $60K. Welcome to boating!)

You also need to consider what your "walk away" threshold is for final negotiations.

Our current vessel was overpriced for years, sat on the market for a very long time, had a lot of deferred maintenance, etc but we didn't negotiate nearly as much of a percentage off asking for a few reasons:

1. This vessel's capabilities were exactly what we wanted
2. They only made 8 Kadey Krogen 54s and they rarely come up for sale
3. Historical sales data shows they aren't losing value and haven't been for years (condition vs age)
4. The survey value was above our initial offer
5. The seller didn't really want to sell (which was a huge thing to overcome in finalizing the sale)

So in this case, despite the long survey list leveraging a deeper discount, we weren't nearly as aggressive with the final negotiations (we landed at 78% of asking) because we knew blowing up the deal would mean another year or more to find the right vessel and we wanted to sell the house, get on with this lifestyle change, etc.
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Old 06-26-2020, 05:04 PM   #7
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I should add...you typically won't close until you accept the vessel after a sea trial and survey. This is the time to re-negotiate or walk away.

The closing itself is simple: money has transferred, there aren't any liens on the boat, the taxes have been paid, commissions have been paid, licensing is complete, etc.

Here in Seattle most brokers us Pacific Maritime for this and they are excellent.
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Old 06-26-2020, 06:45 PM   #8
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Think of your offer and acceptance as an option to purchase. it gives you the right to purchase at the agreed price by accepting after the survey. Or you have the option to not accept or counter.

You need to weigh several factors including having more in the boat than you wish due to deficiencies and including losing the boat altogether because you demand too much.

Here are the things that can happen.

1. You agree to make the purchase as is at the contract price. I think you should have a figure in mind going in of what you'll just let go and say, "it's minor, I'm fine."

2. Issues are found, you make a new offer which involves either a price reduction or repair. Seller agrees and sale happens after repair or based on adjusted price. Sometimes repair even requires a resurvey.

3. Issues are found, you and seller can't reach agreement. You get your deposit back and move on.

4. You decide the issues are too great for you to have any interest and walk away without further negotiation.

Understand that once you say no to the original deal then all bets are off. Some sellers may be very willing to negotiate but others may believe it's worth the original price, you're trying to take advantage, they have other buyers, or there's nothing wrong beyond normal expectatations for a boat that age and at that price.

I know buyers who prefer shopping to buying and walk away from deal after deal over minor amounts. I've seen $2 million deals fail to close over $25,000. Other buyers don't want to put the deal at risk, know it's still a good deal, would rather make their own repairs so accept a certain amount of issues.
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Old 06-26-2020, 07:55 PM   #9
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As mentioned in the previous thread we waked away from a boat due to survey. It was an 8 year old Mainship 390 with only 48 (red flag) hours on the cat engine. The owners wife took ill and the boat became a summer cottage.

The boat was on land so that part of the survey went first. If it passed we were going to take it from Mystic, CT to our dock so I painted the bottom on my own dime as we fully expected to buy the boat. Land part went well.

On sea trial the turbo would not kick in. No big deal I thought given the hours. However when we got back to the dock water started dripping out of the cockpit overhead. The owner had screwed cooler mounting feet to the fly bridge and not sealed the holes. Large part of the fly bridge was saturated. Freeze thaw cycles had worked their magic leaving cracks in the overhead.

This was a much bigger concern than the turbo. The owner was not willing to budge on the price or do the repairs. We walked. One day labor and about $150.00 in bottom paint. Surveyor gave me a discount that more than covered the paint. I still think it was some of the best money I ever spent.

Rob

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Old 06-26-2020, 10:39 PM   #10
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I do have a broker. Robert Fiala.

A few more things.

The boat is listed higher than boats in this "CHB" year and length. The boat has a general appearance of a "turn key" as the price reflects.

I discovered 4 windows that will not open upon my inspection.

My broker Robert Fiala said, "that will be taken care of in the survey". As if I should not worry as problems will be taken care of?

Should I be worried about this answer or perhaps he knows the owner will negotiate?
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Old 06-26-2020, 11:20 PM   #11
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Originally Posted by Ducatihottie View Post
I do have a broker. Robert Fiala.

A few more things.

The boat is listed higher than boats in this "CHB" year and length. The boat has a general appearance of a "turn key" as the price reflects.

I discovered 4 windows that will not open upon my inspection.

My broker Robert Fiala said, "that will be taken care of in the survey". As if I should not worry as problems will be taken care of?

Should I be worried about this answer or perhaps he knows the owner will negotiate?
I think what he's really saying is there may be other issues in the survey plus this one and then that will be the time to ask for compensation or repair. No point negotiating on those windows by themselves.
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Old 06-27-2020, 02:19 AM   #12
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Should I assume he knows that the owner is willing to make repairs or compensate me, (windows have to be fixed). This before I spend thousands on the survey, engine and pull out?
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Old 06-27-2020, 02:51 AM   #13
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It`s a reasonable assumption the owner will repair or negotiate to keep the sale alive but that`s all, an assumption. He`s your broker, not the seller`s, who might know.
You are under contract, without seeing it you don`t have much alternative than to perform survey and then decide to walk or negotiate. Whether negotiation is pleasant and polite or a fist fight is partly in your hands, you can be assertive and persistent but courteous and pleasant at the same time.
Most owners are a little embarrassed at previously unknown defects which they learn about post survey, and will make amends. Wait and see. Hold the anxiety. Don`t jump at shadows. Am I detecting some buyers remorse? On balance it`s likely to work itself out if you let the process run its course.
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Old 06-27-2020, 03:34 AM   #14
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Thanks. Not buyer's remorse. Just new buyer. If I was selling my boat I'd feel embarrassed to upon problems I didn't fix.

When you day he's my broker. Aren't the brokers working for the seller?
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Old 06-27-2020, 06:33 AM   #15
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Not entirely on point, but maybe close...

Were it me, I'd prefer to do (or have done) some repairs myself after purchase. Negotiate a likely discount, proceed. Especially true when a needed repair is well-diagnosed...

And then when problems are less easily pinpointed, when diagnosis isn't easy or complete or when many factors could be the "cause" of the problem but it's not obvious which of those factors might be at play currently... seems better to require the seller to fix all that first.

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Old 06-27-2020, 10:39 AM   #16
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Thanks. Not buyer's remorse. Just new buyer. If I was selling my boat I'd feel embarrassed to upon problems I didn't fix.

When you day he's my broker. Aren't the brokers working for the seller?
If Robert is the listing broker for the boat then he is the sellers broker. If you engaged Robert to find you a boat then he is the buyer’s broker. If you engaged Robert to find you a boat and he shows you a boat that he has listed then he is the seller’s broker and not trust worthy. Now if he just happens to have the perfect boat listed and asks you if you would like to be handed off to a different broker in his office for this opportunity then he should be trustworthy.
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Old 06-27-2020, 10:46 AM   #17
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Originally Posted by Ducatihottie View Post
I do have a broker. Robert Fiala.

A few more things.

The boat is listed higher than boats in this "CHB" year and length. The boat has a general appearance of a "turn key" as the price reflects.

I discovered 4 windows that will not open upon my inspection.

My broker Robert Fiala said, "that will be taken care of in the survey". As if I should not worry as problems will be taken care of?

Should I be worried about this answer or perhaps he knows the owner will negotiate?
"The boat is listed higher than boats in this "CHB" year and length. The boat has a general appearance of a "turn key" as the price reflects."
Does the advertising or the communications with the owner or broker say that all the boat systems are in 'turn key' condition?

"I discovered 4 windows that will not open upon my inspection."
I would ask the owner or the broker who will be fixing these before spending any money and get a clear answer in writing unless they are not important to you. Similar with any other conditions on the boat.

"My broker Robert Fiala said, "that will be taken care of in the survey". As if I should not worry as problems will be taken care of?"
This is unclear and has no value either way in your transaction.

"Should I be worried about this answer or perhaps he knows the owner will negotiate?"
Based on your inputs here you have no indication who may or may not fix this. If this worries you then you would need to secure a clear response.
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Old 06-27-2020, 10:47 AM   #18
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Should I assume he knows that the owner is willing to make repairs or compensate me, (windows have to be fixed). This before I spend thousands on the survey, engine and pull out?
No - there is never a reason to assume anything in a sale of any sorts.
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Old 06-27-2020, 12:28 PM   #19
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Thanks. Not buyer's remorse. Just new buyer. If I was selling my boat I'd feel embarrassed to upon problems I didn't fix.

When you day he's my broker. Aren't the brokers working for the seller?
The majority of deals don't close. Nothing wrong with that. The best deals in your life are often the ones not made. However, you can't nickel and dime yourself out of deals. If you closed today and those windows were the only problem, then so what and if you're making them into a big deal that's your problem. You'll get a list of issues and must determine those truly important to you. I'm not sure the surveyor will catch the windows but what I hope they catch is the water in the hull and the shafts that need replacing and the engine about to need a rebuild and the generator that's dead and needs to be buried.

You're buying a boat. You're about to start spending big dollars. Notice I said "start spending" because it's a lifetime path of spending. I'm worried a bit about your preparation and ability to handle that as you're worried about the windows and about the cost of surveying all the same day. I hope you know that even after the best surveyors you'll find more things that cost you. I hope you consider paying for a survey that keeps you from a mistake is a worthwhile insurance policy.

I know you're nervous with this being your first boat, but you must be comfortable with the fact you'll pay for surveys of boats you don't buy and you'll have expenses after the purchase. The surveyors don't have the luxury of using the boat for a year and during that first year other things will happen. And during the second year, more.

I'm not saying that wanting to spend reasonable amounts or catching the windows isn't important, just that you need to be sure you have perspective of what is ahead.
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Old 06-28-2020, 02:30 PM   #20
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Thanks BandB.

Others: My broker Robert Fiala he is the boat owners broker and he is using Pacific Maritime.

My surveyor is Cale Mather's

Some say take the money and save by doing my own repairs. While I plan to learn simple repairs, simple engine maintenance and staining wod, buffing and polishing items:
I won't be able to to most items, (clueless with tools).
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