Would you buy without a contract?

[ranger58sb]

I don't find this to be completely accurate. Most insurance companies and banks require a copy of a recent survey. I get a survey to make sure there isn't a significant issue I want to be aware.

It's not all about attempting to negotiate a better price. Then again the asking and offer price are based on the assumption that all things are in working condition, and wear is commensurate with age. Once something is found to not be the case, why should the asking and offer price remain the same??

Yep. For example, expecting original 15-year-old (for whatever) air conditioners work at survey is one thing -- if the boat is presented as having working ACs -- but then again it would be also reasonable to assume they'll need replacing in the not-too-distant.

I don't agree at all with your premise. I require surveys on new boats. I would on a used boat, not to further negotiate price, but to insure everything is as represented by the seller. Most buyers are not going to invest in a haul and boat and mechanical surveys if they aren't serious. Most are not going to let something small break the deal. However, if the hull has water accumulation or the engine won't reach rated RPM then it's a serious matter.

Most who make offers really want it to work out and want the boat.

Agree. Much of the process is on the buyer -- to estimate cost (and timeline urgency) of expected repairs which are already factored into the agreed price. Example: those ACs again. Not working at survey, price adjustment. Working but old, already factored in.

Completely agree. I don't see listings with all the problems delineated. Usually 30 pictures of the salon and galley and 1 of the ER. If the generator doesn't start the offer should be contingent upon seller fixing the generator or discounting the price so the buyer can repair it.

Another good example.

What IF the seller has already priced it lower taking this into account. Should a buyer recognize that. Should a seller ask market price and then negotiate?

If a listing specifically states generator does not operate then I would assume seller has factored that into price. Burden now shifts to Buyer to estimate repairs and stay within the price range of similar boats and condition.

I don't see many listing that cover the problems.

I think the listing for our boat would have been another 4 pages long if the seller had voluntarily disclosed everything that didn't work, was broken, etc.

-Chris

 

[mvweebles]

I intend to sell it the same way. Buyers who drag a surveyor into the deal are typically looking for ways to dicker on the agreed price. If they want a surveyor for their own satisfaction, that's fine. But a proviso will be added to the contract that I won't negotiate further. Buy it or go away.

I've encountered a couple sellers with this type of attitude. They come across as total jerks. Zero-sum negotiators who see only winners and losers. Maybe in real life they are nice, reasonable people but probably not. I walk away wondering what circumstances led to such arrogance, disrespect, suspicion and anger. And I feel sorry for those people in their immediate orbit.

Peter

 

[Shrew]

What IF the seller has already priced it lower taking this into account. Should a buyer recognize that. Should a seller ask market price and then negotiate?

So I'm clear on the premise.....Seller advertising a vessel and lists equipment, including radar. Prices it based on...let's say 'radar' not functioning. Then claims he already priced the vessel accordingly? That seems shady, unless he denotes it in the listing to being with.

For example, I bought a boat in which the auto-pilot wasn't working. At the conclusion of the survey, I said "It looks like the auto-pilot isn't working". The sellers reply......"It wasn't working when I bought the boat, that's why I specifically didn't list it in the electronics section of the equipment".

 

[SteveK]

So I'm clear on the premise.....Seller advertising a vessel and lists equipment, including radar. Prices it based on...let's say 'radar' not functioning. Then claims he already priced the vessel accordingly? That seems shady, unless he denotes it in the listing to being with.

For example, I bought a boat in which the auto-pilot wasn't working. At the conclusion of the survey, I said "It looks like the auto-pilot isn't working". The sellers reply......"It wasn't working when I bought the boat, that's why I specifically didn't list it in the electronics section of the equipment".

One of the reasons people sell is they have become tired of fixing things and lost interest in that boat. Buyer beware.
Buyer has to have a good idea of boat market value +/- compared to others and pick the one that fits expectations the best.
I would like to see a sellers survey become mandatory, independent of the owner by a recognized surveyor. That way a buyer has an unbiased starting point.

 

[mvweebles]

So I'm clear on the premise.....Seller advertising a vessel and lists equipment, including radar. Prices it based on...let's say 'radar' not functioning. Then claims he already priced the vessel accordingly? That seems shady, unless he denotes it in the listing to being with.

For example, I bought a boat in which the auto-pilot wasn't working. At the conclusion of the survey, I said "It looks like the auto-pilot isn't working". The sellers reply......"It wasn't working when I bought the boat, that's why I specifically didn't list it in the electronics section of the equipment".

23-years ago when I bought Weebles, the listing didn't have a generator yet the boat had a generator aboard (an ancient Rube Goldberg 1-cylinder Yanmar belt-drive to an AC power unit). Seller said that while the boat technically has a generator, it wasn't really what most people thought of as a generator so was not calling it out as a value-add. Nice guy - was a pleasure to work with. Turns out the generator worked though power output was pretty erratic. Best part was it had a hand-crank starter option so I never worried about running my batteries down - could always start the generator to run the battery charger if needed.

Peter

 

[slowgoesit]

What IF the seller has already priced it lower taking this into account. Should a buyer recognize that. Should a seller ask market price and then negotiate?

Soo-valley, it depends on how the seller offered/advertised the boat.
If a discrepancy is noted in Survey that has already been noted/revealed by the seller, it's a non-issue, and not grounds for adjusting purchase price, as I already took that into account when I made my offer.

HOWEVER, if boat is not offered "As Is", then I am assuming everything functions/operates properly.
Small issues found during survey are expected . . . missing 2nd hose clamp on water supply line, battery cable attached with wingnuts, wire nuts used in a few locations, etc are non-issues, and frankly I would rather the surveyor not mention them in the survey, but rather point them out verbally so as not to confuse the insurance company. I'll apply corrective actions after purchasing the boat.

Finding soft decks, rotten stringers, leaking fuel tanks, engine not reaching full rated RPM, questionable oil/fluid samples, fresh water tank pours water into bilge when 1/2 or more full, to name a few, in my book are reasons to either walk, or discuss an adjustment to the purchase price.

 

[BandB]

I look at it in terms of percentage of price. If issues discovered during survey are only 1-2% of the purchase price then I would not let them stop the purchase. However, it they are 10% then that would call for negotiation. If buyer refuses, then seller has to decide if they're willing to pay more.

 

[SteveK]

HOWEVER, if boat is not offered "As Is", then I am assuming everything functions/operates properly.

Buyer Beware.
"As is", is an old phrase that everything is not working, you get what you get.

 

[guy with a boat]

Buyer Beware.
"As is", is an old phrase that everything is not working, you get what you get.

Its an old phrase that means seller doesn’t offer any warranties after the sale. Done correctly, the buyer does all investigation of the condition that they feel is needed prior to close. If they decide to close the deal, they have to live with the condition and can’t go back to the seller expecting compensation for any deficiencies. Many things are sold in excellent condition with “as is” part of the terms of sale.

 

[BruceK]

Hard to envisage how you can buy/sell a boat without a contract. A sub optimal contract yes, but no contract??
While some are slamming sellers, what of the buyer who sees some deficiencies and offers accordingly, gets a survey as he should, and then points to the survey seeking price reductions for things he already knew which had led to his downwards adjusted offer?
Ah, the joys of negotiation in the face of the broad range of ethical standards.

 

[ranger58sb]

"As is", is an old phrase that everything is not working, you get what you get.

Yes, but... an "As is" without much detail can mean the buyer doesn't have any quick insight into how much "As is" will cost to fix.

"As is" on a boat where most everything works and only a few minor details need attention... is a lot different from an

"As is" where several major system don't work, many (many, MANY) minor details are all hosed up...

And it's the not being able to differentiate that can beat a buyer up... not the "As is" per se. Your going to get what you get, but what is that, exactly?

I generally appreciate surveyors, but there's a lot of stuff that's easy to miss... or to mark as "working" when it's not, really... because a quick check seems to suggest the thing (whatever) works but further inspection finds it doesn't.

-Chris

 

[koliver]

Buyer Beware.
"As is", is an old phrase that everything is not working, you get what you get.

Don't attach assumptions to the phrase "as is".
It means exactly what it says, so merely restates the rule "buyer beware". Do your inspection thoroughly, maybe even with a survey, Find out what works, what doesn't, what is there, what is not, then make your offer based upon your own knowledge of what you are buying.
Could be stated "No Surprises".

 

[Choices]

When we sell our boat it will be, "as is where is".

It is buyer's responsibility to determine if he can afford it, take care of it, etc. I am not there to help them make life decisions and feel good.

We have extensive records of maintenance including a blog of our projects. They are welcome to review at length, and I will answer any and all questions.

But I am not going to go down the path of several negotiations after a survey for BS items.

I have listened to dock talk stories of, "how they stole the boat, or took them to the cleaners with the survey". We will save the hassle and make it really clear and simple.

 

[mvweebles]

When we sell our boat it will be, "as is where is".

It is buyer's responsibility to determine if he can afford it, take care of it, etc. I am not there to help them make life decisions and feel good.

We have extensive records of maintenance including a blog of our projects. They are welcome to review at length, and I will answer any and all questions.

But I am not going to go down the path of several negotiations after a survey for BS items.

I have listened to dock talk stories of, "how they stole the boat, or took them to the cleaners with the survey". We will save the hassle and make it really clear and simple.

These stories do indeed stand-out. We've all heard them - and I wonder if they are exagerated the way sea-state is. But my sense is they are the exception versus the rule. Let's be honest: by the time a boat gets surveyed, the buyer has some decent money into it and the seller has some leverage. No one forces the seller to accept unreasonable concessions. And frankly, just because you say you won't negotiate doesn't mean the buyer would be prevented from asking.

During a purchase and subsequent negotiation, we all size-up the other side. In my opinion, phrases like "As-is/Where-is" and "Won't negotiate" are warning flags telling the buyer "watch out - the seller (who knows the boat) is telling you there is risk here and is unwilling to share it." Also alerts the buyer that they are dealing with a difficult seller. You will chase-off decent buyers and, paradoxicaly, increase your chances of a troubled deal rather than decrease.

Almost 30-years ago I sold a 42-foot aft cabin motoryacht. It was an $80k boat at the time of mid-1970's vintage with twin beds in the aft stateroom. Typical buyers market at the time. I get a decent offer and the buyer makes it clear to my broker that the only defect is he wants a walk-around queen which he reckons is a $25k improvement. So the boat gets surveyed and - miraculously - he wants a $25k credit. Now, the guy was a moron so this wasn't a surprise. I said "no thanks" without a counter offer. The guy is now stuck with about $1k in survey/haul costs and no negotiation. So he starts waving his arms and yelling about how everyone was screwing him and threatens to sue everyone, including the yard.

In my mind, a better approach would be to share your last survey with a qualified buyer along with all corrective actions and improvements since then. That's the baseline underpinning the selling price, and the basis for the buyer's offer. Both parties should be open to a reasonable conversation if subsequent inspections reveal material deviations.

I more or less negotiate IT service contracts for a living these days. Have done a couple hundred over the last 20+ years. I used to be a hard-nosed negotiator because my clients were all Fortune 500 names and I had a ton of leverage. I now work for a small company where I have to coax suppliers to do deals. You know what? The old saying about honey being better than vinegar is 100% true. I thought I did some amazing deals back in the day - I wish I could re-do them being a more savvy/mature negotiator.

Regardless, good luck with whatever approach you use.

Peter

 

[SteveK]

Anyone ever buy a brand new car? as is where is applies. Expectation is there are no problems, right. Then why all the warranty recalls, so far so good, just an inconvenience.
Did Tesla just say all cars recalled for a re programming?

New boats, the same, things can still go wrong.
Both are purchased with the built in curb depreciation to allow warranty to fix the little things that are unknown at the time of sale but will occur.

Buying a used boat is an educated guess relying on what info is made available, what you as buyer can find, the abilities of the surveyor or mechanic to find for you.
In the end you are wiling to pay X and if the buyer is willing to sell for X then you have a sale.
Would you sign a contract to be responsible for any costs after selling the boat? As a buyer what are your expectations that the contract will satisfy. Mostly that the boat is the same as it was when the deal was made.

 

[guy with a boat]

Anyone ever buy a brand new car? as is where is applies. Expectation is there are no problems, right. Then why all the warranty recalls, so far so good, just an inconvenience.

A new car is a good example of where “As Is” does not apply. The seller/mfr clearly provides warranties for known and unknown defects, and even for defects that didn’t exist at time of sale but appear later and within the warranty period. Exactly the opposite of “As is” , by intent.

“As is” doesn’t imply condition at time of sale, it’s intent is to end the seller’s obligations at the time of the sale closing.

 

[jleonard]

Yes, but... an "As is" without much detail can mean the buyer doesn't have any quick insight into how much "As is" will cost to fix.

"As is" on a boat where most everything works and only a few minor details need attention... is a lot different from an

"As is" where several major system don't work, many (many, MANY) minor details are all hosed up...

And it's the not being able to differentiate that can beat a buyer up... not the "As is" per se. Your going to get what you get, but what is that, exactly?

-Chris

The "as is where is" when I sold my boat was because I wasn't going to fix anything minor, such as cosmetics, gelcoat cracks, teak needing the annual Cetol, etc.
The buyer and his boat savvy wife looked at the boat the day prior to spring launch. They saw the bottom, with fresh paint, running gear, thru hulls etc.

We did a almost 6 hour cruise with them aboard from up the CT River to Mystic. We ran every system and showed that it worked. Ran the engine at various speeds and I pointed out the temp gage readings. Used the auto pilot, etc. I had nothing to hide.
He did need a survey and I agreed to it provided we did not do a sea trial since he already had done that. He was good with that. The surveyor didn't like that decision but he was hired by the buyer so be it.
Surveyor found a few minor things, but nothing safety related and having proper double clamped thru hulls with good clamps and things like that more than made up for a few minors.
Only bad thing that happened was he wanted to hear the engine start and idle. No problem except when I went to shut it down the solenoid wouldn't do it. The lever on the pump slipped a spline and put it out of adjustment.
I fixed that after they left. And all was good.

The "where is" was obvious. Boat was in my slip in Mystic and he needed to take the boat to Clayton, NY. I wasn't going to deliver (plus the canals were down until August that year if you remember that).

So it's not everyone that is trying to screw a buyer when they say "as is".
(plus he got a killer deal)

 

[sunchaser]

A few years ago we had a contract to sell our vessel to a party who would then sell his much more $$ vessel to us. Everything was a cash deal not subject to financing etc. He wanted to downsize.

Sea trial, survey, price all other stuff was finalized. At the 11th hour the "buyer" decided he did not like the helm chair and TV in our vessel and demanded $80,000 in compensation.

This was a 7 figure deal. We decided then and there that boats are toys and not worth the aggravation of dealing with a$$e$. So we took that money and invested it in real estate, appreciating 3X in the intervening years. Sellers and buyers are human, faults and all.

 

[BandB]

I have listened to dock talk stories of, "how they stole the boat, or took them to the cleaners with the survey". We will save the hassle and make it really clear and simple.

Total BS dock talk. They didn't steal the boat. They bought it at a negotiated price agreed on by both parties. Seller didn't have to agree. People listen to way too many dock stories just like too many forum stories.

 

[Pete Meisinger]

You don't have a deal. You have a negotiation. Walk away. However, you might warn the seller that you are walking in two days without a contract.

pete

 

[MYTraveler]

You don't have a deal. You have a negotiation. Walk away. However, you might warn the seller that you are walking in two days without a contract.

pete

I agree, you have a negotiation, not a deal. But contrary to the advice of many above, I wouldn't walk, but I also wouldn't give a warning or any other kind of ultimatum. People don't like to be bullied. The last thing you want to do is make the negotiation more difficult by getting egos involved. Instead, explain your reasoning, and do it in a way that reflects your desire to meet his needs. In that regard, point out to the seller that a contract would also protect him. Some of my best deals have been made with tough sellers (and buyers).

Also, you don't really need a contract, except to protect you against the seller selling to someone else after you spend money on a survey, etc. So, maybe all you need is a contract to cover that. Something that says "Seller acknowledges that buyer is going to spend $5K on due diligence, but reserves the right to sell to a higher bidder, provided that in such event the seller will reimburse the buyer's due diligence costs". The buyer may consider that fair and your problem is largely solved. Making good deals in difficult circumstances requires creativity and patience.

 

[BruceK]

Think about it, the ubiquitous "subject to survey/sea trial", depending how it`s phrased, really makes the P & S Agreement a free option in favour of the Buyer.

 

[MYTraveler]

Think about it, the ubiquitous "subject to survey/sea trial", depending how it`s phrased, really makes the P & S Agreement a free option in favour of the Buyer.

It certainly does, but as a practical matter, that is about unavoidable. It is worse in real estate transactions, where a buyer can fairly expect 30-90 days to conduct a wide variety of investigations which, as a practical matter, must be subjectively acceptable to the buyer. That "optionality" is even worse when a buyer needs zoning or other discretionary governmental entitlements to be able to develop the land for his intended use. Usually, a seller will be pragmantic and trust that a buyer, with a good track record, will close if everything checks out. One thing a seller can do to keep a buyer honest is to have a backup buyer (and in the right market conditions, that can work). Last year I sold I very unique / well located property without any contingencies by requiring the buyer to do its due diligence up front. He didn't have a contract until he was ready to "go hard". He closed and paid top dollar.

 

[BruceK]

Except that in real estate, here at least, there is usually a non refundable option fee paid. With boats, you get your deposit back.
I`ve often thought there should be some fetter on a boat Buyer making a capricious objection or reduction demand but thinking is,it`s too hard and there`s always a way. And as a buyer, I want it as open as possible. In a large commercial transaction it might be worth a Seller seeking some qualifications, but with pleasure boat sales, and brokers doing the documents and admin, probably too much effort for doubtful return.

 

[guy with a boat]

Think about it, the ubiquitous "subject to survey/sea trial", depending how it`s phrased, really makes the P & S Agreement a free option in favour of the Buyer.

Almost true, but not free because the proposed buyer is spending money for survey etc., which he loses if he walks away. In most cases, both parties lose something if the deal falls apart.

 

[MYTraveler]

Except that in real estate, here at least, there is usually a non refundable option fee paid.

I am not sure where "here" is, but not in my experience in much of the US, at least not in straight real estate transactions. True in (some) acquisitions of public companies, and in stocking horse transactions, but not normal commercial or owner occupied residential, in my experience.

 

[koliver]

I am not sure where "here" is, but not in my experience in much of the US, at least not in straight real estate transactions. True in (some) acquisitions of public companies, and in stocking horse transactions, but not normal commercial or owner occupied residential, in my experience.

Bruce is in Australia, where the land transfer system is the same Torrens system as here in BC. (talk about thread drift!) In the US, where Torrens states are few, there are many more potholes to fall into before completion of a land transfer, so many more ways to slow the transaction while Due Diligence is pursued by purchasers.
As boats are moveable, different principles of contract govern than where land, a "fixed" asset cannot be removed from the jurisdiction.

 

[MYTraveler]

Bruce is in Australia, where the land transfer system is the same Torrens system as here in BC. (talk about thread drift!) In the US, where Torrens states are few, there are many more potholes to fall into before completion of a land transfer, so many more ways to slow the transaction while Due Diligence is pursued by purchasers.

Although most (or all, as far as I know) US states use grantor/grantee indexes, US title companies almost universally use a co-op run Torrens system. Survey issues aside, title can often be very quickly reviewed and any issues resolved. The real due diligence costs, delays and uncertainties relate to the possibility of hazardous waste contamination (and the potential need for invasive testing if a "Phase I" indicates Recognized Environmental Conditions or other cause for concern), geotechnical, building condition, etc. For those reasons, it is typical in the US for a buyer to get a "free" option. In that regard, boat due diligence is similar in that the evaluation of survey results, etc., is inherently subjective and entails more expense than the typical buyer would be willing to incur without confidence that the seller will complete the transaction if the buyer is willing.

 

[catalinajack]

I've encountered a couple sellers with this type of attitude. They come across as total jerks. Zero-sum negotiators who see only winners and losers. Maybe in real life they are nice, reasonable people but probably not. I walk away wondering what circumstances led to such arrogance, disrespect, suspicion and anger. And I feel sorry for those people in their immediate orbit.

Peter

Is it arrogance or confidence that their boat was fairly priced? Try buying a dirt house offering less than asking price in today's real estate market. With respect, Peter, the boat-buying paradigm of offering 10% less than asking price as a matter of course does not hold up well in today's market.

 

[mvweebles]

Is it arrogance or confidence that their boat was fairly priced? Try buying a dirt house offering less than asking price in today's real estate market. With respect, Peter, the boat-buying paradigm of offering 10% less than asking price as a matter of course does not hold up well in today's market.

While I understand your overall gist that the market gives sellers a strong position, my comments were not directed to pricing, but negotiation tactic of saying "I don't care what unknown problem the boat has......my price is my price." That is not confidence, but arrogance - lets not forget the person who posted said they would resist a buyer-survey and only accept if it was clear on the contract that he would not reduce price as a result. It has unintended consequence of alerting a buyer that they are dealing with a jerk who will fight them all the way. It's a dumb thing to say and risks painting themselves into a corner if there is a material defect that the seller is not willing to absorb and the buyer now has to return to market with known flaws.

I have first hand knowledge of one such "confident" seller who slow-rolled through 7+ years of listings with three different brokers and several survey/offers that fell apart due to unwillingness to negotiate on repairs. Motivated by declining health and aforementioned strong market, he only recently sold the boat at 70% of original ask.

Buyers in advancing markets often lag - they want to buy at last year's prices. I suspect we've seen the peak of the boat market. These "confident" sellers are at risk of a stale listing while looking for last year's buyer.

The approach is unecessarily confrontational chest-thumping. I'm not saying the buyer has to agree with discovered defects or even to negotiate, but to rule out the possibility before an offer is even made is an immature negotiation strategy.

Peter