Would you buy without a contract?

As several of our colleagues have said above, WALK. Both the broker and the owner are behaving inappropriately, so you can't trust them. Who knows whether the owner will be able to deliver good title to the boat.


Jim

I'm agin it.

The OP has done the best thing by walking. I understand the frustration though. Sellers can be idiosyncratic and, if they please, downright impossible. At least this seller is candid in admitting that they are the kind who go through life terrified of leaving a dime on the table. Okay for them, I guess, but not for anyone doing business them. No one needs a boat that bad. Moving on is the only play.

It's surprising that any experienced broker would waste time representing such a seller. As Moon pointed out, a contract protects all parties, including the broker. Even with a contract, a deal can still find ways to blow up. Without a contract, there simply is no deal, and things can become a free-for-all brawl, right down to the closing table - if they get that far.

In its simplest form a contract is made by offer and its acceptance, sealed by the passing of a deposit. All of the terms of the contract may be verbal, or in writing, depending on the knowledge, attitude, knowledge, etc, of the parties. So to buy a boat in your situation, you already have a contract, which, if you have given a deposit, will be binding on both parties, subject many things. On your part you know which things will allow you to walk. Only once you walk will the seller be able to move ahead on a backup offer. If he does so while still under contract with you, he is in breach.
Pretty basic stuff, but to ensure that the seller sells to you, a deposit that is more than trivial would normally be in place. The old days of a handshake being enough are but a distant memory. You haven't said what deposit, if any, is in place in your present case.

in the midst right now

At least you know they want to sell it at a higher price if one comes in. I would walk and rescind my offer and why. We are sending the seller of a boat we have agreed upon price, with a contingencies list of survey, sea trial and the sale of our boat. All have communicated verbally and are in agreement, and seller has explicitly said he is not interested in getting into a bidding war to sell his boat. On the other end, I did the same. Had two people show up to see my boat. I told both I feel honor bound to sell to the first person who contacted me. The other one said he would offer more with no conditions required (ie no survey.) The first buyer said if the purchase of the trawler goes through he will buy our sailboat without a survey. Although, to be fair, the two transactions are not comparable. (selling our sailboat at the best price of this vintage and model in the entire US (50k) and the trawler is 235k.

bowball said:

You should also pay a deposit. A contract needs consideration from both parties in order to be deemed valid. The sellers consideration us an agreement not to sell it to someone else during the time period. There is also estoppel through reliance, but that’s pretty weak.

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Making a refundable deposit doesn't provide any consideration. Promissory estoppel is a well established doctrine to either satisfy the requirement for consideration, or to excuse it (courts and scholars have viewed it both ways). I would talk to a lawyer licensed by the state whose law governs.

We had a broker in our community who had a great setup, with offices, showroom, and who sold a lot of boats without a contract, then left town.

Get a "Buyer's Broker" to handle the deal for you.

If it's a legit deal, the broker can find the buyers in a few minutes of search using the boat information.

The seller's broker probably couldn't produce a license (not all states require a boat broker to be licensed) and a code of ethics.

Your "buyer's broker" should write the deal up using a standard contract and submit it to the seller's broker. If rejected, reject the boat, reject the broker, reject the people selling it.

Aside from liking what BandB and koliver had to say, as I read through it all I kept thinking, wouldn't it be interesting to hear the other two sides of this triangle.

koliver said:

In its simplest form a contract is made by offer and its acceptance, sealed by the passing of a deposit. All of the terms of the contract may be verbal, or in writing, depending on the knowledge, attitude, knowledge, etc, of the parties. So to buy a boat in your situation, you already have a contract, which, if you have given a deposit, will be binding on both parties, subject many things. On your part you know which things will allow you to walk. Only once you walk will the seller be able to move ahead on a backup offer. If he does so while still under contract with you, he is in breach.
Pretty basic stuff, but to ensure that the seller sells to you, a deposit that is more than trivial would normally be in place. The old days of a handshake being enough are but a distant memory. You haven't said what deposit, if any, is in place in your present case.

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We put 10% down - not a "trivial" amount on a $110K boat. However, even a boilerplate YBAA Purchase & Sale agreement has so much more protection (for all parties) built in than a series of emails and texts.

One example: what happens if the seller backs out after the survey and the buyer has spent several thousand dollars on surveys/diesel inspections/etc? The YBAA agreement has a provision for that case, which provides recourse to the buyer for their expenses. That was not part of our initial emails and texts. And that is just one example. (Possibly an example they were aware of and part of their unwillingness to sign.)

Yes, I wish we lived in a world where a person's good name and a handshake were enough, but I'm afraid there's not much of that left.

Thanks for your reply though!

soin2la said:

Aside from liking what BandB and koliver had to say, as I read through it all I kept thinking, wouldn't it be interesting to hear the other two sides of this triangle.

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Me too!! :lol: I want so bad to be able to reach out to the sellers and find out if any of what we were told by the broker regarding what they said was actually true!

MYTraveler said:

Making a refundable deposit doesn't provide any consideration. Promissory estoppel is a well established doctrine to either satisfy the requirement for consideration, or to excuse it (courts and scholars have viewed it both ways). I would talk to a lawyer licensed by the state whose law governs.

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The buyer didn't suffer any loss so the question is moot. An action for damages or performance would require a $15K retainer for an attorney to review the case, another $15K if case is filed, another $15K if trial is scheduled, etc. NO guarantees of outcome.

No guarantees with a written contract either but it is more likely than not the sale will proceed to completion when both broker and seller at least agree to have one.

SoWhat said:

The buyer didn't suffer any loss so the question is moot. An action for damages or performance would require a $15K retainer for an attorney to review the case, another $15K if case is filed, another $15K if trial is scheduled, etc. NO guarantees of outcome.

No guarantees with a written contract either but it is more likely than not the sale will proceed to completion when both broker and seller at least agree to have one.

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Our thoughts exactly! If things went bad - the only winners would have been attorneys!

We walked and got our deposit returned so everything worked out as best as could have been hoped for. Except we are now back looking again!!

To the OP, post the ad for the boat so others here that may be tempted to look at the boat can steer clear of it.
This thing stinks worse that a bucket of 2 week old shrimp!
Hollywood

Greetings all,


OK I just glanced at this thread and is my understanding is correct, you've made a sincere offer with money in escrow and the owner is saying that he want's to sit on it so he can screw you over in case a better offer comes along.



On top of my initial reaction of "Fark this guy" while I'm heading out the door, these are the kind of people that go to great lengths to hide problems their boat has instead of being honest as that might cost them money.



Anyway right now there seem to be more people selling boats than buying them especially used so I'd notify the broker ASAP you're rescinding your offer. Now, if you really want to find the actual owner you can try to find a sympathetic CG or Conservation officer to run the registration or look for a yacht club burgee/sticker and try to get a member list and track them down that way. Showing up at the slip and if the owner isn't there ask nearby slip owners if they know who it is, if you can get on the boat look through the windows to see if there's any mail or an address on a magazine. You used to be able to look up ship radio licenses on the FCC website but don't know if you can do that nowadays.


Anyway, I'm in agreement with the others here to walk away from this as it can turn into one of those things where there's a huge problem on the horizon, the seller covered it up and will later claim he knows nothing about it. Much better to deal with someone who thinks their boat is part of their family and want to see it in good hands rather than trying to squeeze every last penny out of their posession.

....suggest you read post #42...carefully. (Note that it's from the OP).

Well I did, but to be honest I only really processed it when I was halfway through writing up my comment so I decided to just finish it up as many prospective owners may not know ways of how to find the owner of a boat and also the phrase "Buyers are Liars, and Sellers are Worse!". Not to plant the seeds of skepticism in ones' fellow man but to let especially the new buyer be aware that a moderate amount of caution is appropriate on occasion.

slowgoesit said:

Krouth, am I correct in the broker submitted your offer to the seller's NOT USING a P & S agreement?
Also, is the broker the seller's broker, or a buyer's (your) broker?
Either way, a professional, ethical, and responsible broker would have used a P & S, with included provisions, such as "subject to inspection, survey, obtaining insurance, etc, to extend the offer to the seller's, and would NOT have told you, the perspective buyer that the offer was accepted until he had the P & S (signed by the seller's) physically in his hand.
Any other behavior on the part of the broker is neither professional, ethical, or responsible.

If the broker is your broker, fire him and find another broker.
If the broker is the seller's broker, fire him and find another broker, or walk on the deal.
Best of luck!

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I had a slight variation on this. I looked at the boat and asked the seller's broker if he thought the seller would accept a much lower, specific offer. He texted the seller and got an immediate response that they would. The broker drew up a P&S on the spot and I signed and gave him check for 10%. The formal offer was tendered in the P&S but we came to agreement via text. The seller was not under any obligation to honor a text but he was both motivated and an honorable person, so the deal worked out fine.

Purchase w/o a contract

The first thing I noticed is that there didn't seem to be any earnest money transfer.

A letter to purchase is nothing without a monetary deposit which the 'broker', if he actually is one, would ask for after the agreement was accepted. He would hold the money, or you could stipulate a bank with your & broker as co-signors could work.

The seller, under these circumstances is correct to standby and wait.

IF you are really serious, put your 10% down and have the document reflect that a valid survey and financing, both subject to your definition, is a requirement for the completion of the purchase.

Sorry if this has been covered.

Nepidae said:

The first thing I noticed is that there didn't seem to be any earnest money transfer.

A letter to purchase is nothing without a monetary deposit which the 'broker', if he actually is one, would ask for after the agreement was accepted. He would hold the money, or you could stipulate a bank with your & broker as co-signors could work.

The seller, under these circumstances is correct to standby and wait.

IF you are really serious, put your 10% down and have the document reflect that a valid survey and financing, both subject to your definition, is a requirement for the completion of the purchase.

Sorry if this has been covered.

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It's been covered. They provided a 10% deposit. Consider reading the entire thread.

Contract on a boat purchase

I must be missing something.

If a deposit was received and if the owner signed the contract for purchase, then it would seem that the deal is done.

IF the seller hasn't signed the contract, waiting for a better deal, then there is no contract, and the buyer should get his money back and find another boat.

Maybe that action would move the seller to sign, IF this is really the boat the buyer wants.

Sorry for any duplication.

Nepidae said:

I must be missing something.

If a deposit was received and if the owner signed the contract for purchase, then it would seem that the deal is done.

IF the seller hasn't signed the contract, waiting for a better deal, then there is no contract, and the buyer should get his money back and find another boat.

Maybe that action would move the seller to sign, IF this is really the boat the buyer wants.

Sorry for any duplication.

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There was never a signed contract, just a letter of intent for lack of better terminology but no signed contract. You have a lot of he said, she said, but when all is said and done, you have either a broker or owner or both playing games. I find the broker suspect and don't know if the owner was involved in the misleading and lack of ethical behavior or not.

I sold my last boat without a broker. You guys would laugh at the "contract" which was 3 sentences I wrote on a steno pad. It covered the deposit, selling price, hull number, and when it would be finalized. Seller and buyer's signatures.
That was after a 5 hour "sea trial" which was the shakedown trip from our storage marina to our summer slip (everything worked perfectly).

krouth said:

We are in a dilemma and need advice.

We put an offer on a boat, which was accepted. The offer letter was basically just that - a one-page form that had our names (the buyers) and the brokerage, but nothing about the sellers. It had our offer price and basic stipulations that it was pending a survey/sea trial/etc. Again, just a one-page, pretty plain document.

After negotiation on price, we arrived at an agreement with the seller (via the broker) but we have nothing in writing, other than a string of texts between us and the broker with our final offer price and a reply that it was accepted.

As such, I contacted the broker this morning asking for a contract to be drawn up using a standard industry Purchase & Sale agreement but the broker was hesitant. The broker reached out to the sellers who responded that they would not sign a contract because if a better offer came along they wanted to be able to take that instead of ours.

Any thoughts or experiences you can share would be greatly appreciated!

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I read all the posts. IMO the broker did not have a listing on the boat, the seller was selling on their own. You negotiated a price with the broker at what he thought should be accepted. Your deposit was held in trust by the broker and easily returned, which is a good thing.
The seller may not even know you made an offer while refusing to sign a listing.
I suspect this as I sold a boat through a broker who said exactly he had a buyer and all he needs is a listing to present an offer. I added the commission and sold the boat.

jleonard said:

I sold my last boat without a broker. You guys would laugh at the "contract" which was 3 sentences I wrote on a steno pad. It covered the deposit, selling price, hull number, and when it would be finalized. Seller and buyer's signatures.
That was after a 5 hour "sea trial" which was the shakedown trip from our storage marina to our summer slip (everything worked perfectly).

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Not at all. That's roughly how we purchased our boat, but with just a 20 minute autopilot checkout and a quick burst of speed to check that it was propped correctly, followed by a quick look for drivetrain leaks. 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.

Rufus said:

Not at all. That's roughly how we purchased our boat, but with just a 20 minute autopilot checkout and a quick burst of speed to check that it was propped correctly, followed by a quick look for drivetrain leaks. 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.

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I did have a "as is where is" statement included.

Rufus said:

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.

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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. There are countless reasons why I would voluntarily walk away from a purchase. You couldn't give a boat for free with rotten stringers.

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??

For example, you present the boat with the assumption that the electronics work (after all it was advertised with radar). What happens when it turns out that the Radar isn't working during the sea trial?? My offer was based on functioning radar. Your position is that you're going to hold your ground.

Expect a lot of folks to walk. This is why people hire brokers. To remove the personal nature and 'personalities' from the sale. Nothing submarines a good sale like a seller.

Rufus said:

Not at all. That's roughly how we purchased our boat, but with just a 20 minute autopilot checkout and a quick burst of speed to check that it was propped correctly, followed by a quick look for drivetrain leaks. 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.

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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.

I've only known one buyer who always dickered over small amounts. I don't think it was his intent going in, but boating wasn't something he was in love with (wife was and he loved marinas and resorts but not the actual boating) and he loved looking and hated pulling the trigger to buy. He was an otherwise very nice man, but I would not have sold him a boat. He was almost as bad on looking for a waterfront home, took years looking and got right on the ICW so not a good place for keeping a boat at home. I guess the $3-5000 each time was the price of entertainment, but he's the very rare exception. Most who make offers really want it to work out and want the boat.

Shrew said:

For example, you present the boat with the assumption that the electronics work (after all it was advertised with radar). What happens when it turns out that the Radar isn't working during the sea trial?? My offer was based on functioning radar. Your position is that you're going to hold your ground

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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.

I am sure there are buyers who try to lower the price based upon a stiff sea cock or an unfused battery but I think they are the exception.

SoWhat said:

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.

I am sure there are buyers who try to lower the price based upon a stiff sea cock or an unfused battery but I think they are the exception.

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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 said:

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?

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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. Seller could have lost 3 sales due to bad surveys. Next starry eyed buyer will start fresh at the mercy of the fourth survey.