Advice on purchase required

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Simon054

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I am in the process of purchasing a second hand 19 years old Yacht. I started the proceedings by making an offer to the Broker (who is also the owner having accepted the Yacht as px on another Yacht) subject to survey and seatrial of course, the offer was less than the asking price. I have had a survey carried out and whilst that has returned a generally very good report on the condition it has identified a number of faults that require repair. Some are minor issues however the main one is the standing rigging. The reports concludes this should be replaced. My question is how should I now proceed?
Do I try and reduce the purchase price further having already offered less than the asking price.
Do I request the broker to rectify all the faults.
As this will be the first Yacht I have purchased I am unsure what to do next. Any sane advice will be greatly appreciated.
 
Depends on how amazingly cheap it is already I would say.

However it's totally acceptable to renegociate the deal due to the results of the survey.

I'd make the request that they rectify the faults or make a reasonable reduction in the price due to the work being required and see what they say.
They can stand firm and then it's up to you if you want to play 'hard ball' or not.
It's always going to be a judgement call and the deal has got to be reasonable to all parties.

Do you know how much the job will cost to do? Maybe you could settle on 50/50.
 
A lot will depend on whether the issues the surveyor raised are "obvious" or not. If it is an issue that is clear without specialist knowledge then you might reasonably have been to take that into account when you made an offer. Similarly if it is was known to the broker then he may have already factored that into the asking price.

Standing rigging is interesting - does it say it should be replaced because there is a problem or is that based purely on the age? Many surveyors will automatically say that any standing rigging more than 10 years old, or of unknown age, should be replaced.

However at the end of the day a fair price is one agreed between you and the broker, and if you cannot agree a price then you are both entitled to walk away. Technically your offer is probably legally binding, where the broker to rectify all the faults at his expense, but no one is going to try to enforce that.

As a first move why don't you talk through the list of issues with the broker and let him make the first suggestion? In general meeting half way on the costs would be reasonable
 
The surveyor has suggested that the standing rigging be changed because the lower swages are bent slightly and he feels this is a manufacturing defect not something caused while on the boat, also there is no evidence that the rigging has been changed within the last 10 years.
 
Simon054 said:
The offer was approx 10% less than the asking price which was accepted by the broker, the works to replace all the standing rigging would cost around £1500.
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My first boat I knocked em down from £59k to £55k subject to survey, the survey picked up several smallish faults, he said they would look at them and see if they might fix them. I said I would fix em if they took £53500, he agreed the deal immediately.
Stu
 
If you bought it, would you change the rigging? If so, you need some help with the cost. If not, you are looking to put a bit back in your bank account. The broker will have a "Price" it "owes" him which he is unlikely to go below.

As already recommended, ask for the work to be done for you. This will be cheaper for the broker than knocking £1500 off the price. If he refuses, ask for a significant contribution to the cost.

At the end of the day, it is his choice how much (if any) he is prepared to reduce the price by & your choice to buy or walk away. That £100 or whatever spent on the lift & survey could be the best money you ever spent if you walk away from a boat that is effectively £1500 overpriced now, or if it saves you half or more) of the cost of rerigging.

Do you play poker? Good luck & keep a straight face. :cool: And hope the broker isn't a member of this forum!:eek:
 
A couple of points which may help: -

1. If the boat is not a fast seller then the current owner faces continual charges for storing the boat.

2. There are 2 risks here on an old boat: The seller risks loosing a sale which will cost him berthing charges as time goes on, especially as we are nearing the end of season and people are thinking about Christmas money and spring time house moves for example i.e. sales opportunities may be thin on the ground hence is the money in his hand will be less if a sale is next spring and he may have to lower the price; the risk to the buyer that he buys something and it costs a lot to fix.

3. Its the perception of the seller loosing money that you have to use in your negotiation. Reduce the price by the amount you think is reasonable to make right the big ticket items. Convince him that that reduction in his sales price is cheeper than the loss of the sale by the extra time it will be on the market, plus he will be in the same position, risking a repeat of the same position.

4. Remember that he wants your money, you hold all the cards, tell him to take it or leave it in a nice way - not as direct as I have stated here.

5. The Broker has already sold a new boat and he is working to margins on the PX, the sales price he is offering is likely to have margin in it and will still be capable of reduction. If its not then he may just want it off his hands as well for cash flow purposes. It does sound as if he has used up some more margin though by accepting your lower than offer price.

6. Do your research on comparable boats and their sales prices to see where you stand.

7. Are you prepared to risk the £400 - £600 survey for a no sale. If you look at another boat and pay the same again for a survey, you have just lost as near as dammit the £1500 further reduction you are offering.

I think its worth asking for a further reduction, if the Broker firmly says no that's my final price, then take it. If you cant afford the £1500 to fix the rigging, then don't buy the boat at all.
 
Again agreeing with blowingoldboots;

Your in a good position where this boat is a part ex, he doesn't want to be lumbered with it so a quick sale maybe what he is after. If you haven't specified wether it was subject to survey then i would take it as so. It is the common practice unless you have said otherwise.

We made an offer subject to survey but as a ridiculously low offer was accepted we said that if the survey showed up little faults then we were happy to keep the price. If it was major faults then we would turn around and walk away.

If the survey shows up something completly unexpected then the broker has no rights to say you must buy it now. Obviously he is entitled to the deposit and you will have lost out on lifting and survey fees as previously mentio
 
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10% less than the asking price is not a lot of discount. I'm not surprised he accepted it. If it was me I would ask for the full cost of the rigging replacement. You did offer subject to survey the survey has raised some points so you are entitled to reduce your offer. iIt doesn't necessarily mean he has to accept though. If he doesn't then it's down to more negotiating. The problem being that he knows if a sale doesn't go through you are out of pocket for the survey. Hopefully he will do the decent thing and come good for the cost of the rigging.
Not sure how it works for him now that he knows the standing rigging needs replaced, does he have to tell future prospective buyers? I don't know.
 
Not sure how it works for him now that he knows the standing rigging needs replaced, does he have to tell future prospective buyers? I don't know.
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Why does he need to publicise the buyer's surveyor's opinion? He may not agree with it & believe it is simply a negotiating ploy. Caveat Emptor is still the underlying principle.


Bloomin' 'eck!! Are small boat surveys as dear as 5-600 squid nowadays?!!!
 
Couple of points, a broker I have dealt with on a couple of occasions told me she expects offers at 10% below asking price - so you have probably offered what they expected (perhaps even a bit more).

The purpose of a deposite prior to survey is so that te seller can make good any damage made by the surveyor. As an example, I saw a report where the surveyor required a sample to be cut out of a sandwich constructed hull that he suspected had delaminated. The yard made good the damage afterwards at the prospective buyer's expense. If no damage done, but the boat was found to have material faults that were not brought to your attention by the seller or broker you have the right to ask for your deposite back and walk away.
You should have been asked to sign a sale and purchase agreement that states all these clauses and the time scales for survey etc. See ABYA website, www.abya.co.uk/

Normally, you should be able to discuss the questions you raise with the broker (even though they are working for the seller), but as this broker is also the owner there may be a conflict of interest. Does the broker belong to a trade body that overseas standards (such as ABYA)? If so I would suggest that you use their standard terms and conditions as a guide to your action.

Hope this helps.
 
All,
Thanks for the advice it confirms I am thinking about it the right way, I like the boat but will not let my heart run my head in this one. I think the advice about losing the costs for the survey and lift out and then paying them again for another just cancels out the rigging cost. So I think I may try and do a 50/50 deal with the broker. After reading some of the advice on the RYA Website the Broker should inform any other prospective purchaser of any material defect he is aware of, however it does depend on the character of the broker.
Thanks again
 
monkfish24 said:
OOOO didn't know that! I always thought that whenever you make a deposit on something it's non refundable.
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English law does not recognise/allow penalty charges. Even if a binding contract existed in this case then the only compensation the broker could claim would be for provable losses - and he would he hard put to prove any. Note that this is almost irrespective of the wording on the contract.

Furthermore in this case given that the offer was "subject to survey" then it is highly unlikely that a binding contract existed.

The same law applies to many so called "cancellation charges" on holidays and the like - most of them are not enforceable.
 
Simon054 said:
All,
Thanks for the advice it confirms I am thinking about it the right way, I like the boat but will not let my heart run my head in this one. I think the advice about losing the costs for the survey and lift out and then paying them again for another just cancels out the rigging cost. So I think I may try and do a 50/50 deal with the broker. After reading some of the advice on the RYA Website the Broker should inform any other prospective purchaser of any material defect he is aware of, however it does depend on the character of the broker.
Thanks again
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You need to be clear about the nature of this transaction. If he owns the boat and is selling it by way of trade then he is bound by consumer law. This is very different from him acting as a broker for a private seller. If he is a broker (agent) then your contract is with the private owner and is governed by the terms and conditions of the contract.

If he is selling as a trader then he is bound by all the consumer legislation including Sale of Goods and Unfair Terms. The product (boat) he is selling must be fit for purpose. Therefore if the rigging is not fit and he had not declared it as a known fault he is bound to make it good. Of course there may be a difference of opinion between your surveyor and him, but the starting point is that he has to put it right. Ignore all the nonsense about whether the 10% "discount" on his asking price is reasonable - completely irrelevant. You have agreed a price and subsequently found that the boat has an undeclared defect.

So, I think you will find him receptive to a compromise to complete the sale. To me anything better than a 50/50 split would be a bonus if you really want the boat. Remember even if he does not declare the defect to another purchaser, a surveyor will find it, so he has every incentive to meet you part way - or even 100% which should be your starting point. Remember also that he does not have to consult with an owner and can make his own decision.

It is probably best to get him to pay for the repair rather than reduce the price. Then the onus is on him to get it done properly - and he can probably get it done at a lower price than you can.

Good luck!
 
Simon054 said:
... I may try and do a 50/50 deal with the broker ...
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IMHO reqest that the seller 'rectifies the defect', or knocks the cost of doing so off the price. He can probably get it done "through the trade" a lot cheaper than it would cost you. Accept nothing less. (S)he will be a wiley negotiator - it's how they make a living. So (generally) you will be at a disadvantage unless you are also a professional negotiator - sales, purchasing, etc.

In their hand they hold the fact that you want the boat, and have forked out for a survey.

In your hand you hold the cash, and the desire to do a deal. IMHO You have the stronger hand.

Is the rigging the only defect? Or are you accepting other items - if so, make it part of the deal.

Be ready for (mock) surprise that you should expect these defects rectified, and the argument that items are a wear and tear consumable, or that as you, as the new owner, will benefit from the 'improvements' that you should contribute. Unless stated or agreed otherwise, you've agreed a price based on the boat being in usable condition (hence "subject to survey" by an expert to verify this). Your survey has thrown up a few issues - there shouldn't be any drama: seller gets them sorted, or you adjust price to account for them. Why deviate from that?

You shouldn't lose your deposit if you walk, but lift-out / launch & yard costs for the survey may have been paid out of it which you won't get back. Remember: don't issue ultimatums unless you really mean them :)

0.02p

Andy
 
You are happy with the boat and the survey apart from the standing rigging, so I would go 50/50 but I would get this knocked off the price and get it done yourself.
50/50 is the norm for this type of issue.......you weren't buying it with new standing rigging, but you will have new standing rigging afterwards.
[cynic_mode] The broker is likely to get the standing rigging done as cheaply as possible......if it were me I would rather (possibly) pay a bit more and be reassured that it's been done properly. [cynic_mode/]

Where did you get the figure of £1500 from, the surveyor or a rigger or the broker? I would get this figure confirmed by a competent rigger. If it turns out that you can get it done for less, then still stick to the £1500 (£750) figure for you haggling.......if it'll cost more then use the riggers new figure ;)

Good luck.
 
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