We finally sold our boat (so we thought.)

[ancora]

Buyer calls the broker and makes an offer. We accept the offer, sign all the paperwork while the buyer opens a 30 day escrow account. Other day buyer tells the broker to lower the price by two thirds. I tell the broker "no deal." Looks like we are back to square one.

 

[READY]

Sorry to hear that. Usually the buyer has a shorter window to clear any contingency such as survey. How many days after offer signing did this happen? Did the cite any reasons for the lower price?

Did the broker voice any concerns about the buyer? Was another broker involved? Likely their offer was never all that serious unless they found a lot of undisclosed problems.

Sadly until the money is in the bank boat deals are fragile.

Good luck! You have to kiss a few frogs!

 

[SteveK]

Buyer calls the broker and makes an offer. We accept the offer, sign all the paperwork while the buyer opens a 30 day escrow account. Other day buyer tells the broker to lower the price by two thirds. I tell the broker "no deal." Looks like we are back to square one.

Care to expand on this? No need to mention offer price. Was there a viewing, survey, sea trial or was the offer site unseen? Was there conditions to be met, a deposit received?
This may be a new buying strategy that we could all learn from in a buyers market. Maybe multiple boats papered and then renegotiate.

 

[Comodave]

Sorry to hear that the buyer flaked out. Hopefully you will find a real buyer soon.

 

[Delta Riverat]

Yeah, that sucks. Started out right, then went to caca with the extreme low ball.

Yeah, me thinks this is the "new buyer gambit", appear legit and then do the low ball just to test for weakness.

You counter, you are weak. You cancel and the guy moves on. Probably does this a dozen boats at a time.

Just waiting for the guy who has to sell. Sharp operator, I'll bet it's a cash deal too.

 

[Blissboat]

Regret that your deal blew up. But, some details are missing here. Did the buyer conduct any due diligence at all? Or did they just order dinner and then get up and walk out without dining?

 

[mvweebles]

......Just waiting for the guy who has to sell. Sharp operator, I'll bet it's a cash deal too.

Perhaps the first business book I read was Getting to Yes by the Harvard Negotiation Project. It describes how negotiators often value aspects of the relationship beyond the dollar and cents of the deal. To a young mind, it made zero sense. But it planted a seed that became fertile ground looking for examples of win-win negotiations which have been abundant in my life. 1+1=3 value creation isn't hard to do if your heart is in the right place.

Contrast that with the hard core transactionalist who views the world as a zero-sum-game with a finite amount of chits - 1+1=2. For him to win, the other guy must lose. @ancora unfortunately stumbled across this type as a buyer.

Best of luck with the next potential buyer. Boating seems to draw respectful people. This experience was hopefully an outlier.

Peter

 

[Don L]

Buyer calls the broker and makes an offer. We accept the offer, sign all the paperwork while the buyer opens a 30 day escrow account. Other day buyer tells the broker to lower the price by two thirds. I tell the broker "no deal." Looks like we are back to square one.

More details would be interesting. I mean they changed the deal to 1/3 of the original. How much time and what if anything occurred in the time between accepted offer and the revised deal?

 

[Patemey]

No offer should be accepted without a deposit check for 10% of the sales price included with their offer. It shows their serious and will weed out the tire kickers and gamers. If default by the buyer due to non-performance to the offer, the deposit is forfeited (make sure the brokers don't get the forfeited deposit, it goes to you for loss of being taken off the market).

 

[DDW]

Forfeitures in a yacht transaction seem exceedingly rare. In almost all contracts, there are enough outs for the buyer to make the deposit and escrow process somewhat of a travesty.

 

[JackConnick]

Usually it's a two step process. Offer and deposit. Then survey, sea trial and whatever all else you've setup as due diligence. Renegoitation based on issues found in that secondary process is usual. Both parties can back out. At that point, you have to commit and potentially loose a deposit.
When i was looking during the height of the sellers' market, I had brokers that wouldn't even show the boat without a deposit. I told them to shove it.

 

[Blissboat]

Forfeitures in a yacht transaction seem exceedingly rare. In almost all contracts, there are enough outs for the buyer to make the deposit and escrow process somewhat of a travesty.

Well not so fast. Forfeitures may be rare, but any buyer who performs their due diligence and then withdraws is still out some dough. As one who recently went to contract, survey and sea trial and then withdrew my offer, having failed to come to terms with seller over the issues discovered, it's true that I recovered my 10% earnest money deposit from the broker's escrow account. However I still paid for my surveyor and myself to travel to the boat's home port, overnight accommodations for each of us, the surveyor's fee, the engine surveyor's fee and travel expense, and the local yard's fee to haul the vessel for the out-of-water portion of the survey. I invested at least four days out of my life, and also voluntarily kicked a thousand dollars to my broker, judging that he had earned it, and recognizing that he's unlikely to retire off of his share of the commission on any of the sub-$200K boats that I have been trying to buy. It's worth that much to me to keep him engaged and responsive.

Anyway, the point is that my deposit was never at risk unless and until I signed-off on my assessment results, but I'm still out a few thousand dollars. And by the way, I shared the survey that I had paid for with the seller at no expense to him, judging him to be a reasonably straight shooter. Not complaining - it's all part of the game.

 

[ancora]

The buyer had numerous viewings. No sea trial or survey. The price was well below comps. (The boat is an 86 Nova sundeck listed in Boats for Sale on this forum.) I think the buyer, being a sailboater, was overwhelmed by the complexity of a twin screw power boat, and wanted out.

 

[DDW]

The standard contract has some all-purpose contingencies, and usually no verbiage to cover their resolution. Until those contingencies are removed, the buyer can walk for virtually any reason. Once contingencies are removed, then in theory you have a binding contract. Sure you have the sea trial and survey expenses, not to mention the sales commission if you go through with it. Buying a boat is expensive, even discounting the strike price.

But how frequent are actual forfeitures in earnest money? While I'm sure it must happen, but never to me, or any of my friends and acquaintances, or anyone I've ever heard of.

 

[Patemey]

Forfeitures may be rare, but getting that deposit money will weed out the lookie-loo's. I've had buyers want to make an offer but balked at the deposit - aka, no commitment from them while I'm now tied up from selling it elsewhere - sorry, not happening. The deposit essentially obligates the buyer into spending money to clear contingencies (surveys, etc). I have no problem if they decide the boat isn't for them and they want their deposit back AFTER they've done their due diligence.

 

[deputybubba]

Well not so fast. Forfeitures may be rare, but any buyer who performs their due diligence and then withdraws is still out some dough. As one who recently went to contract, survey and sea trial and then withdrew my offer, having failed to come to terms with seller over the issues discovered, it's true that I recovered my 10% earnest money deposit from the broker's escrow account. However I still paid for my surveyor and myself to travel to the boat's home port, overnight accommodations for each of us, the surveyor's fee, the engine surveyor's fee and travel expense, and the local yard's fee to haul the vessel for the out-of-water portion of the survey. I invested at least four days out of my life, and also voluntarily kicked a thousand dollars to my broker, judging that he had earned it, and recognizing that he's unlikely to retire off of his share of the commission on any of the sub-$200K boats that I have been trying to buy. It's worth that much to me to keep him engaged and responsive.

Anyway, the point is that my deposit was never at risk unless and until I signed-off on my assessment results, but I'm still out a few thousand dollars. And by the way, I shared the survey that I had paid for with the seller at no expense to him, judging him to be a reasonably straight shooter. Not complaining - it's all part of the game.

This - I also went through the survey, sea trial, hotel, plane flight and broker expenses. Had to back out after no negotiation from the seller on what the survey found.
I'm better off in the end.

 

[SteveK]

This - I also went through the survey, sea trial, hotel, plane flight and broker expenses. Had to back out after no negotiation from the seller on what the survey found.
I'm better off in the end.

Did the seller disclose what the survey found? What did the survey find that you did not include in your offer?

 

[slowgoesit]

Yep, no need to even respond to anything except a legitimate offer. And if the "looker" isn't willing to submit a deposit with the "offer", than it's not a legitimate offer in my book. The "looker" is merely attempting to set the price bar lower for further negotiation, without any commitment. YMMV

 

[deputybubba]

Did the seller disclose what the survey found? What did the survey find that you did not include in your offer?

They did not. basically the seller bought the boat 5 years earlier and put 50 hrs. on the engines in that time.
both turbos were seized, the wet exhaust elbows on both engines had leaks. The water tank needed the inspection port cut out and replaced. there was water in the transmission oil, no salt so probably condensation.
It really surprised us, and it was obvious the seller hadn't run the boat much.

 

[SteveK]

They did not. basically the seller bought the boat 5 years earlier and put 50 hrs. on the engines in that time.
both turbos were seized, the wet exhaust elbows on both engines had leaks. The water tank needed the inspection port cut out and replaced. there was water in the transmission oil, no salt so probably condensation.
It really surprised us, and it was obvious the seller hadn't run the boat much.

This supports another post I made that sellers or their agents should prepare a sellers survey to show a buyer the surveyed condition. Buyer of course can then do their own survey if they want to proceed with an offer.

 

[deputybubba]

This supports another post I made that sellers or their agents should prepare a sellers survey to show a buyer the surveyed condition. Buyer of course can then do their own survey if they want to proceed with an offer.

Yes that would have reduced our expenses alot. I know that the seller has to disclose ( supposedly ) the survey findings to the next buyer, I'm not sure how that went.

 

[DDW]

I agree that no deposit = no offer.

One way to improve the chances of the purchase going through (if you are the buyer) is to survey the boat yourself. You can see everything the surveyor can, without spending a dime. If your expertise isn't sufficient, try to bring a friend who is. I think many times buyers walk through the boat for 15 minutes, discuss changes to the color of the curtains, then make an offer and start spending money. When I look at a boat I am really interested in, it is going to take 4 hours or more to go through it. Some boats after an hour I can see there are problems and my interest wains (some, after 10 minutes). If a later survey finds something significant I missed, I consider that a failure on my part, and a learning experience for next time.

The problem is the seller is at the mercy of the buyer looking at the color of the curtains.

 

[BruceK]

The buyer had numerous viewings. No sea trial or survey. The price was well below comps. (The boat is an 86 Nova sundeck listed in Boats for Sale on this forum.) I think the buyer, being a sailboater, was overwhelmed by the complexity of a twin screw power boat, and wanted out.

If so, he could have approached it differently.
On other posts:
I withdrew from a purchase following mechanical and hull surveys plus a follow up inspection. Down the expenses, and 2 interstate trips. But on balance, a lesser loss than proceeding.
In a real estate non "transaction", a buyer agreed a price. Then before contract, without explanation, proposed a lower price. No sale. IMO, that "buyer" was an ill motivated spiv.

 

[SteveK]

I usually know what you say, but translate "spiv" please

 

[Andy G]

I have bought and sold a few boats over the years over on our side of the pond. The procedure seems to be the buyer inspects the boat makes an offer to the owner.

If the offer is accepted the buyer puts down a 10% deposit to be held by the broker, subject to a satisfactory survey. The buyer can then use the survey to renegotiate the price. If the buyer & seller cannot agree to compromise on the works required either party can walk away and the broker refunds the buyers 10% deposit.

This happened to us with Sarawana. The survey showed she had osmosis, not uncommon for 1980's boats out of Asia. I was not overly concerned with the osmosis, however it was obvious that the owner knew of the issue and chose not to make it known to us or the broker.

To me this was a mistake on his part as it raised a few questions as to what else he may be witholding, thinking we would not do a full survey? At this stage we stopped 'looking at the curtains'.We told the broker that for the deal to go ahead we would require a quote from the boatyard to rectify the osmosis and the owner would arrange to fix the issue, or deduct the cost from the offer price.

No deal, said the owner,take it or leave it. We withdrew the offer and got the deposit refunded. Three months later the broker rang me and said were we still interested? The owner had 3 other offers in the meantime that all fell over due to his refusal to negotiate. That was 18 years ago and she still has a bumpy bottom.

If we ever come to sell the boat I would ensure that any prospective buyer was aware of Sarawana's osmosis,it's better we are up front than having the buyer surprised.

 

[BruceK]

I usually know what you say, but translate "spiv" please

British Informal. a petty criminal, especially a black marketeer, racetrack tout, or petty thief.