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Old 07-26-2020, 11:54 AM   #1
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Showing boat after deposit has already been made

After more than two years of looking, I at last found the boat that speaks to me. It's literally in Bristol condition. It's been on the market at an inflated price, reflecting its condition, for months. My buyer broker and the seller's broker negotiated a mutually acceptable price, reluctantly accepted by the seller. I made the deposit, it's in escrow and the P&S Agreement has been signed by both parties. Yesterday my broker and surveyor conducted a brief walk through and advised me to proceed with the survey and sea trial ASAP. COVID-19 is creating issues making the arrangements and securing an engine specialist, but this hasn't been an issue.

What may become an issue is that I learned the selling broker is continuing to make the boat available for viewing and there may be potential buyers willing to make a higher offer than our agreed price.

Now, I'm not thrilled with this, but I have no idea if this is an accepted practice. Perhaps it is, as it's a selling broker's duty to entertain all potential offers in the event this sale falls through. But it seems to me a signed P&A is valid until after the completion of the survey and sea trial and then, after X days, my final decision, based on the results. But until the actual binding purchase contract has been signed, there's nothing to prevent either party from backing out for no reason at all and merely refunding the deposit.

The buyer broker is very highly regarded in the broker community and with buyers and sellers who have used the brokerage. I trust my broker implicitly. But I'm loath to undertake the expenses associated with a full survey and sea trial that turns up no major issues only to have the seller balk and turn to another buyer with a more attractive offer, especially after confirming its a clean survey. I'm not going to get into a bidding contest.

Is this fair play or am I being unduly alarmed?
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Old 07-26-2020, 12:19 PM   #2
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My opinion, the agreement has been signed, it is in the process of being sold and off the market, subject to a successful survey.
Call the seller's broker and tell him you are not happy that he is still showing the boat.
IF during the showing damage happens, who's going to pay to correct the damage?
IF after the successful survey, he continues to show the boat, I would be VERY upset and let both your broker and the seller's broker know. Plus depending upon how I felt that particular day, walk away from the sale.
Of course if the seller's broker is letting folks walk through it and not move it away from the dock, I might be a bit lenient.
IF the seller's broker accepts a higher offer after your offer has been accepted, "Hello judge."
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Old 07-26-2020, 12:26 PM   #3
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Read your P&S agreement. It almost surely says that you the buyer can back out due to anything you find on the survey, but the seller must close the sale at the agreed price if you are satisfied with the survery.

Most seller stop showing after a P&S is agreed. But nothing stops them from doing so. The only problem you might have is if there are serious survey problems and the seller has a potential offer from another buyer. That will probably make them less willing to accept a price adjustment due to survey defects. But it has nothing to do with your ability to force a sale at the agreed price.

During my short tenure as a boat broker one of my colleagues had a seller try to not honor a P&S agreement. The buyer filed suit and blocked any other sale from occurring and to force closing. The seller finally came to his senses and closed the deal.

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Old 07-26-2020, 12:28 PM   #4
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There were multiple parties that toured our boat after we signed an agreement. The seller's broker notified them it was under contract but there were already travel arrangements made and they wanted to see the boat in case our deal fell through during sea trial/survey etc. At least where we are, once signed agreement in place, the seller can't back out for a better deal. I know several situations like this here in Seattle including one where I tagged along with a friend to view a vessel that was under contract. That broker wanted my friend to see that model and get an impression as he had a similar boat in a different location and the one we viewed was local. Personally I wouldn't sweat it.
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Old 07-26-2020, 12:33 PM   #5
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You have engaged a buyer's broker for a reason - what does he say?
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Old 07-26-2020, 12:34 PM   #6
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I see no reason why anyone cannot show a boat after a contract has been agreed to but before the closing - anything can happen in between.
Any deposits we accepted on our boats were always subject to some closing contingencies by a purchaser and until they were cleared and the deposit became non refundable we certainly accommodated other potential purchasers.
As another example we just put a backup offer on a home that is in contract but not closed - maybe it will close and maybe not.
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Old 07-26-2020, 12:38 PM   #7
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Thanks for the responses. The selling broker had advised my broker of the continuing viewings and prospective offers. Walk throughs, nothing more. But I must wonder why even bring it up unless the owner is looking to nudge the price up. We already agreed to his contingency that it's AS IS, no adjustments on his part if any issues come up. It's take it or leave it. I'm inclined to add a contingency of my own: if he balks after the survey he will reimburse all of my expenses associated with travel, lodging, survey and sea trial. If he's reluctant to do that, it signals to me he may very well be considering withdrawing it. If he wants to to it prior to survey, that's one thing. But to do it afterward is another thing altogether.
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Old 07-26-2020, 12:41 PM   #8
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Quote:
Originally Posted by menzies View Post
You have engaged a buyer's broker for a reason - what does he say?
We're going to have a conversation this afternoon.
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Old 07-26-2020, 12:42 PM   #9
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Originally Posted by salishpaddler View Post
Thanks for the responses. The selling broker had advised my broker of the continuing viewings and prospective offers. Walk throughs, nothing more. But I must wonder why even bring it up unless the owner is looking to nudge the price up. We already agreed to his contingency that it's AS IS, no adjustments on his part if any issues come up. It's take it or leave it. I'm inclined to add a contingency of my own: if he balks after the survey he will reimburse all of my expenses associated with travel, lodging, survey and sea trial. If he's reluctant to do that, it signals to me he may very well be considering withdrawing it. If he wants to to it prior to survey, that's one thing. But to do it afterward is another thing altogether.
You really should leave this up to your buyers broker to sort out for you in your best interest.
He is the one that worked with you up to this point and helped to construct your current agreement.
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Old 07-26-2020, 01:03 PM   #10
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Unless specified in the sales agreement, pretty sure the boat can be shown (common) as it is still in play....your survey will determine what is what and if anything changes between now and the survey/your acceptance...then you can renegotiate, specifying what changed.


Then again I haven't bought in 10 years so I might be out of date.
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Old 07-26-2020, 01:12 PM   #11
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Originally Posted by smitty477 View Post
You really should leave this up to your buyers broker to sort out for you in your best interest.
He is the one that worked with you up to this point and helped to construct your current agreement.
Excellent advice. Thanks.
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Old 07-26-2020, 01:39 PM   #12
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In the single boat I sold via a broker, I asked/required the broker to continue showing it while it was under contract -- with full disclosure to those who might want to view it.

I wasn't looking for a 'better' offer but wanted to keep my options open if the deal went south.

The deal concluded smoothly so no issue.
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Old 07-26-2020, 01:46 PM   #13
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Really just a matter of what your contract says. If properly drafted, your seller is committed no matter what -- even if he gets a higher offer, you should not have to worry about the seller "balking" at the deal he made with you, and you should be safe in spending time and money on surveys, etc. In commercial real estate transactions, it is common for the seller to continue to entertain other offers, and to accept back up offers (ie, sign a second PSA that is contingent on the first sale not closing).
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Old 07-26-2020, 01:51 PM   #14
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Brokers never stop showing and taking back up offers until all contingencies are removed. You are worrying about nothing. You have a contract, the ball is in your court. What you don’t have is any room to renegotiate should the survey turn up something that you don’t like but you still have the right to walk.
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Old 07-26-2020, 01:55 PM   #15
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All good and thoughtful responses. Many thanks!
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Old 07-26-2020, 02:07 PM   #16
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My view of the situation is this...

If you choose to honor your offer and buy the boat, the seller can't sell to a higher bidder (at least without doing something tortious).

If you choose to exercise your right to back out and circle back to the negotiating phase -- the seller is free to do so as well, including with other buyers.

Until you buy the boat, it isnt your boat. The seller can have anyone aboard for any reason, including to negotiate back-up offers

If buyers can continue to look at YachtWorld or BoatTrader until the deal is done, just in case it isn't -- sellers can entertain backup buyers.

As a buyer, you actually have more power than the seller. You can walk away from the boat and keep your deposit. But, the seller can't accept a higher bid until the time window has passed.

I'm not sure of your intentions or situation, so this comment is absolutely not about you or your situation, but I find sellers who lack forthrightness and buyers who never expect to honor their offer because they know in advance the types of things that a surveyor will find truly disgusting. I hope they find each other.
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Old 07-26-2020, 02:17 PM   #17
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[QUOTE I'm not sure of your intentions or situation, so this comment is absolutely not about you or your situation, but I find sellers who lack forthrightness and buyers who never expect to honor their offer because they know in advance the types of things that a surveyor will find truly disgusting. I hope they find each other.[/QUOTE]

No offense taken at all. It's a fair observation. FWIW, I was diagnosed in February with idiopathic pulmonary fibrosis and I have a calendar now. At 72, this will be my one and only and I want to share it with my son's family>Granddaughter while I can, until I'm compelled to hang it up, so I'm certain it will be this boat or none at all. I have no time for anything that realistically needs anything other than routine maintenance, even if it's been deferred.
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Old 07-26-2020, 02:24 PM   #18
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You have a P&S contract so you are covered by the T&C's of that contract. But be careful trying to change it - even verbally. General contract law says if you reopen any element of the deal, ALL elements of the contract become subject to re-negotiations by either party. (Some States are different). Seller is within his rights to continue to solicit additional offers until the sale closes (You get the title or BoS.) You are number one on the list, but if you don't comply strictly with the signed deal, he can kill the whole deal. The "as is" clause makes your acceptance upon survey and sea trial pretty much a "go" or "no go" situation.

Take it or leave it!

(PS - My#1 Rule - never sign the other guys P&S contract - write you own with the help of an Attorney.(assuming real money is on the table) Make sure you have included any an all special terms and conditions you want! - Seller can always say no. Never accept "AS IS" if you have any expectation of trying to get price concessions after survey and sea trial )
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Old 07-26-2020, 02:26 PM   #19
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In the last 3 yrs I was shown 2 boats that were under escrow. 1st time the buyer had to arrange financing. Had he failed I would have been able to move forward. 2nd time was pre survey. Both times the brokers were honest with me. As a seller I would have been pleased with my broker showing the boat until survey accepted and closing scheduled.
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Old 07-26-2020, 02:27 PM   #20
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Hey Salishpaddler,

I know IPF is no fun -- but can be unpredictable. So. I wish you, and your family,, many, many, many years of enjoyment.

-Greg
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