Offers to purchase

Hi folks !! The Driller here, Well I'm closer than I ever have been to owning a BEAUTIFUL MONK 40 footer out of Washington state. I'm at present attempting to write up an offer to purchase. do any of you have any experience with these types of documents or feedback you can give a lubber?
Many thanks and I look forward to seeing you on the cruising grounds!!!
Peace

Congrats on getting a new boat. Can't wait to see photos of it when you get her.

I've done my own offers a couple of times and can offer these....

1 Make the offer contingent on a successful survey of the hull (which includes all electronics, electrical systems, plumbing systems, etc.) and engines/trannies and genset.
2 Offer to split the cost of all deficiencies found, and specify that you get the choice of where you get it fixed. Essentially what you're doing is getting the seller to lower the cost of the boat by half the amount of the defects.

If any REAL serious deficiencies are found, reserve the right to back out and get a refund of your deposit (if any).

Make the offer for the boat to have full fuel tanks. (it probably won't happen but it's worth a try!)

Good luck

driller66 said:

Hi folks !! The Driller here, Well I'm closer than I ever have been to owning a BEAUTIFUL MONK 40 footer out of Washington state. I'm at present attempting to write up an offer to purchase. do any of you have any experience with these types of documents or feedback you can give a lubber?
Many thanks and I look forward to seeing you on the cruising grounds!!!
Peace

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Questions:

Are you doing the purchase on your own, or thru a broker? Are you having a hull and mechanical survey done?

I've attached a generic purchase agreement- it may or may not fit your specific needs as is, but you can modify it as necessary.

Basically, the Agreement to Purchase must spell out all the duties of each party, in plain language, with as little wiggle room as possible. Also, the agreement is flexible, as each transaction is unique to the situation.

If you're not familiar with the details of a vessel purchase, I heartily recommend you enlist the services of a broker. As you're importing the vessel for the States to Canada, you can run into a bunch of snags.

It's money well spent, and headaches avoided.

"Make the offer contingent on a successful survey of the hull".
Not bad advice, but as an attorney here in WA., you do not want to have to ever litigate the meaning of "successful". Survey needs to be satisfactory to the buyer. Gives you wiggle room. Good luck

Having just gone through the process myself (took ownership at 11:15 this morning), I can offer a couple of thoughts.

Firstly, and probably most importantly, it is a buyer's market, and don't feel embarrassed by offering what you might consider a lowball offer. There are lots of boats wanting to be sold, and so you should feel free to negotiate every aspect of the deal, from purchase price, surveys, needed repairs, fuel, etc.

If you are using a broker, which I would recommend, I would look for a buyer's broker, as he or she will look after your interests much better than the listing broker. (Not that listing brokers are bad people.) Keep in mind though that if you have a buyer's broker you cannot use him if you have already approached the listing broker.

Typical subjects:

Sea trial acceptable to purchaser.

Mechanical survey acceptable to purchaser.

Hull/out of the water survey acceptable to purchaser.



Good luck on your quest! Will you be keeping it in Courtenay/Comox?

I would also use a marine title company especial if you have to put down a deposit. I would not trust the seller broker/owner to hold the money. The marine tiele compnay wii also hande the title, title insurance, documnetaion and payment of funds. Money well spent! If you are finacining they will make you use an title compnay.

driller66 said:

Do any of you have any experience with these types of documents or feedback you can give a lubber?

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If the boat is presently represented by a broker, (1) get another broker and go through him. (The commission is the same but you will have someone in your court. Besides, you're not paying it, the seller is.)

(2) Make your offer subject to an engine survey, a hull survey (In & out of the water) and a sea trial that ends with your complete satisfaction. (If you get cold feet at this point, the sea trial is your way out. (Your not satisfied)

(3) Put a decent amount of money down with your offer. (10%?) (This tells the seller that you are a serious buyer.)

(4) By all means put a deadline date on the offer. (You don't want your offer hanging out there forever.) Example: This offer expires at 5:00 PM, March 20, 2013. Don't give the seller weeks to make up his mind. 48 hours from the time the seller sees your offer is more than enough time for him to make up his mind.

(5) Don't complicate your offer with a lot of "conditions." These can be brought up during the surveys & sea trial. To have "conditions" in your offer only serves to muddy the water and make the seller uneasy. (Don't agree to split anything with your initial offer as that is a potential negotiating point later on.)

(6) Remember, you are trying to get the seller to accept your offer. (Price)
Don't spook him with a lot of meaningless demands.

Note: I am not a broker. Just a guy who has bought a lot of boats since 1995. The above items have served me well over the years and I have bought & sold boats at the lowest and highest prices, respectively.

Good luck!

Phil Fill said:

I would also use a marine title company especial if you have to put down a deposit. I would not trust the seller broker/owner to hold the money. The marine tiele compnay wii also hande the title, title insurance, documnetaion and payment of funds. Money well spent! If you are finacining they will make you use an title compnay.

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Absolutely agree; they make the filthy lucre exchange quite painless.

I bought my boat out of US a couple years ago and used the following services

SCOTT-MONCRIEFF AND COMPANY » BRYAN SCOTT-MONCRIEFF

Marine Documentation Service, Inc.


In the US, they did lien searches and deleted from US registries, as well as handled the transfer of funds. The Canadian Lawyer took care of registering and licensing in Canada....and answered all my paranoid questions about importing, which went better than expected. I had a buying broker based in Anacortes. I bought the boat out of San Francisco, and my broker flew down and met me there to view and sea trial the boat.

Conrad said:

Having just gone through the process myself (took ownership at 11:15 this morning), I can offer a couple of thoughts.

Firstly, and probably most importantly, it is a buyer's market, and don't feel embarrassed by offering what you might consider a lowball offer. There are lots of boats wanting to be sold, and so you should feel free to negotiate every aspect of the deal, from purchase price, surveys, needed repairs, fuel, etc.

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Sorry Conrad, but I disagree. It is no longer a buyer's market, at least not from my personal experience. I'm living aboard in Brunswick GA and boats are selling like hotcakes if reasonably priced. While it's true that it has been a buyer's market for the past few years, and while it's true that there is a large inventory of unsold boats, those boats are being snapped up quickly now.

I put my boat on Craig's List a month ago, and in that time have gotten a couple of dozen serious inquiries and a half dozen visits to the boat. I've gotten two offers that I've turned down.

If you're in the market for a boat, this is a good time to buy because the pendulum is about to swing the other way. But keep in mind that the number of desperate sellers is dwindling.

DaveGibson said:

Sorry Conrad, but I disagree. It is no longer a buyer's market, at least not from my personal experience. I'm living aboard in Brunswick GA and boats are selling like hotcakes if reasonably priced. While it's true that it has been a buyer's market for the past few years, and while it's true that there is a large inventory of unsold boats, those boats are being snapped up quickly now.

I put my boat on Craig's List a month ago, and in that time have gotten a couple of dozen serious inquiries and a half dozen visits to the boat. I've gotten two offers that I've turned down.

If you're in the market for a boat, this is a good time to buy because the pendulum is about to swing the other way. But keep in mind that the number of desperate sellers is dwindling.

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Hi Dave,

You may well be right, although I suppose that to some degree it depends on your location. I certainly know that in the Washington State BC coast region it has been a buyer's market for the last year or so, although there are some signs of a change. The broker selling (or trying to) my boat is having great luck selling boats in the 20-30' range but larger boats are languishing.

When in 1998 we made an offer on the boat we own today it was (on the advice of our broker) contingent on three things:

1. That the boat was what we thought it would be. In other words it was a Grand Banks 36 with all the features and design and configuration attributes we expected a GB36 to have. This meant that if we inspected the boat and found it had been modified or changed in some way we did not like, we could walk away with no penalty or obligation.

2. That the boat would satisfactorily meet our expectations and requirements upon our own inspection and sea trial.

3. The boat was given satisfactory reports in both a complete hull/structural/systems survey and an engine/driveline/generator survey. Both surveyors to be chosen and hired by us.

To help us make sure the boat met these three requirements we took (at no cost to us) our broker to California with us to inspect and sea trial the boat, and even more important, took along a good friend who'd been thirty-plus years in the marine diesel and generator manufacturing industry and was intimately familiar with GBs. We paid his airfare and expenses and it was the smartest money we've ever spent.

Totally use a marine title company. I'm still waiting for a lien to be removed before I take ownership. And yes, it is a buyers market hands down. In the SF Bay Area it is.

The comment above from the lawyer was predictable. Don't worry about splitting hairs on the definition of the word "success." Brokers contracts are toothless. You go on the sea trial and all you need to say is "nope" and the sales agreement is off.

To that point, make lots of offers. During my process of buying I had 2 offers going a few times. Basically it would cost me 2% to 5% downpayment to see what the owner was willing to bend on. If I didn't like the number I didn't go to sea trial. And got my money back. It certainly is a buyers market. I would look at a price on yacht world and make an offer 30 or 40% lower and the owners would play ball. Except for one lawyer who refused to negotiate. Seriously. Strong armed me. I walked. It's now listed on yacht world 5k above my offer.

What good insurance advice do you have offer? Many companies have gotten out of the boating coveerage. BoatU.S is on the high-er side. Are there some very good middle of road insurance agencies ?

Midshipman said:

Are there some very good middle of road insurance agencies ?

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My insurance is through Travelers.


https://www.travelers.com/business-insurance/specialized-industries/ocean-marine/luxury-yacht.aspx

Midshipman said:

What good insurance advice do you have offer? Many companies have gotten out of the boating coveerage. BoatU.S is on the high-er side. Are there some very good middle of road insurance agencies ?

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As I mentioned in another thread, we have used Anchor Marine in Seattle since acquiring our GB in 1998. They are an insurance broker so they shop for the best policy to meet the individual's needs. While their offices are in Seattle and Anchorage I believe they broker policies for customers throughout the US. We have a yacht policy and have been very happy with their service for the last 14+ years.

Midshipman said:

What good insurance advice do you have offer? Many companies have gotten out of the boating coveerage. BoatU.S is on the high-er side. Are there some very good middle of road insurance agencies ?

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Excellent questions!

I wrote this piece some time ago on vessel insurance- this is a good place to start:

Vessel insurance 101 (Very simplified!!!)!!!)

A policy should be an Agreed Value/All Risk yacht policy, and have coverages specific to maritime risks.

At my seminars, I talk about the points in bold on the above referenced link (Agreed Value, Pollution, wreck removal, etc), and ask the audience to do 4 simple things:

• Read your policy- not many people do.
• Highlight the confusing bits- It's a legal document, and it's a good bet you'll be confused. Highlight the confusing bits,and go to the next step.
• Ask your agent if you have the coverages discussed previously- Things like agreed valuation, all risk coverage, pollution, salvage wreck removal, Jones Act (hired worker) coverage, etc. The agent should be the subject matter expert, and know what they are representing. When the agent tells you you are covered-
• Have the agent SHOW you in the policy wording where said coverages are-

This is where the rubber meets the road.The policy document, declarations, and endorsements constitute a legal contract that is the insurance policy. Only that which in in those documents is covered, and the agent should be able to show you in said policy where specific coverages are. Anything the agent/broker relays to you must be referenced in the policy document, and he/she should always refer to that document.


With regards to cost vs coverages- each policy is tailored to the individual, based on a number of factors, including:

1. Owner experience (operational & sizes of vessels previously owned), or lack thereof
2. The vessel itself (hull construction, fuel type, sail or power, age)
3. Navigation area
4. Owner credit history
5. The insuring company's risk portfolio (Does the insuring company have a heavy presence in hurricane exposure areas? Does the insuring company have a heavy exposure in freeze damage areas? etc)
6. Loss history, if any
7. and more

There are a number of excellent companies that offer coverage for reasonable premiums. As Marin inferred, a broker can match the specifics of your application with a company that offers sound coverages at great prices. A marine insurance broker is also able to foster a relationship with underwriters, and help the underwriter "see" the entire picture of the risk- which often means lower premiums.

Marin said:

As I mentioned in another thread, we have used Anchor Marine in Seattle since acquiring our GB in 1998. They are an insurance broker so they shop for the best policy to meet the individual's needs. While their offices are in Seattle and Anchorage I believe they broker policies for customers throughout the US. We have a yacht policy and have been very happy with their service for the last 14+ years.

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Thank you for the kind words, Marin. Yes, we are licensed nationwide, and have outstanding relationships with a host of insurance markets that offer nationwide and offshore/worldwide coverages.

Peter
VP, Anchor Marine Underwriters

This has to be the 40' Monk thread on the unmentionable mail server. Too many coincidences. Is the seller from Switzerland per chance?

No comments yet from the original poster, The Driller, who asked about writing a purchase agreement/offer.
BOAT US has a settlement service for buyers and seller not working with a broker with forms available such as a purchase agreement, go to the BOAT US website and click on BOAT BUYING/ LOANS.
Since you are not working with a broker you better investiagte with a customs agent importing the boat into Canada and how much custom duty you will pay. Since the boat you mention is a Monk design it is most likely built in Taiwan (but maybe not) and there will be a duty. If the boat was built in the US then the NAFTA agreement might apply and there will not be any duty due. Check with the seller if the boat was ever owned previously by a Canadian who might have paid duty in the past.
A note about acceptance after survey and sea trial. The standard purchase form of the Florida Yacht Brokers Association states that after survey the buyer must accept the boat in writing, and that if the buyer does not do that in writing rejection is automatic. This protects the buyer so that he need not give any resason for rejection.

Everyone here has been so helpful...the preceding threads of offers to purchase and about insurance coverage will go a long ways helping me and others through the many layers of vessel ownership. The tip about contacting Annie Gray, I took no hesitation and did just that - she is a wealth of knowlege and a real stand up person, she welcomed me to call her back with any questions and was gracious to start helping me in my boating search...Thank you all! A buyers agent, who would of known?