Buying from a broker, what's at risk ?

[PaulGooch]

This isn't a dig at anyone in particular, or brokers in general. But, it does seem the system favours the broker and vendors interest, without giving adequate protection to the buyer.

OK, so you've found the boat you want and you've made an offer, which has been accepted. The broker would now like a 10% deposit, at which time the boat will be removed from sale and you can arrange for your survey and a sea trial.

What would the typical contract say, at the point of the buyer making the deposit, regarding things like :

1) Under what conditions could the buyer withdraw ?

2) Under what conditions could the vendor withdraw ?

3) If faults are found, will the vendor fix them and the price of the boat remain the same ?

4) At what point would the cost of fixing the faults be so expensive that the vendor would/could pull out.

5) If the vendor could/did pull out, who would be responsible for any lift out and survey costs ?

You pay your deposit and you have a survey. You arrange to meet the surveyor at the yard on Saturday. You've already checked the boat over and think it looks OK, the surveyor picks up on a couple of piddly points, nothing to put you off and the seller agrees to fix them in the price.

You go ahead with a sea trial deposit. You pay for a lift in and off you go. The cam belt breaks and the engine is toast. The seller offers you your deposit back, as he's not prepared to fix/replace the engine and keep the price the same. He also give you the option of paying more money, after then engine is sorted.

What about the money for the survey and the lift in ?


It seems that the broker and vendor have both safeguarded themselves from out of pocket expenses that could be incurred as a result of a fender kicker.

It would seem fair that the buyer should also be protected from any out of pocket expenses incurred through no fault of his own.

 

[omega2]

Why bother PAUL, TOM will find you on here as well then the whole sorry story will be repeated.

 

[PaulGooch]

Why bother PAUL, TOM will find you on here as well then the whole sorry story will be repeated.

I know Tom comes here too. But at least over here i'll get some opinions from other brokers, not that i don't trust Tom

 

[gjgm]

Cant agree. You want to buy the boat; it is your cost to check it out to your satisfaction. You neednt spend anything if you so care- just buy it.
If faults become apparent, you renogiate, but the boat belongs to the seller still at this point- it is his to sell at whatever price he chooses. Look at it the other way.. fault appears and the buyer says that he wants 50pct off the price...why should the seller agree?
Surely in most cases for genuine problems, buyer and seller can agree what to do, but if either plays silly bu**ers, why should the other agree?
As to the cam-belt.. who do you want to blame? Its hardly the owners fault either. ****e happens...

 

[PaulGooch]

Cant agree.

<snip>

A buyer puts his boat on the market with a broker, knowing that it has a problem, the engine overheats after some time, but he hopes it will last for a short sea trial, or a seller will skip the sea trial. The broker doesn't even look at the boat, he just lists it with some pics the owner emailed him.

You go and look at the boat, on the hard, and it seems OK so you arrange a survey. The survey goes well, just a few small things to resolve with the seller. Over the next few days you come to an agreement with the seller and arrange for a sea trial. You book the surveyor again and arrange for a lift in. A short time into the sea trial, the engine overheats.

You've now paid for a survey, the surveyor for the sea trial and a lift in. None of these are any use, because the seller wants you to pay half the cost of a new engine, or he'll give you back your deposit.

The seller has tried to con someone and the broker has made no checks. The broker and seller have both ensured that they cannot be out of pocket, nothing is in place to prevent the buyer from losing out.

Not sure that's fair.

I'm interested in what the contract says too.

 

[oGaryo]

Paul, I think it's in the hands of how good the buyer can negotiate.. I feel I'm half decent at doing so and had the following agreed up front in writing before even coming down to see the boat as it was a 200 mile trip:

Seller pays for lift out (was already in the water)

Seller pays for 6 months winter storage up front should I require it, I get refund from yard if I dont

Seller pays for winterisation of the boat

Seller polishes topsides and scubs underside after lift out.

Seller takes full cost for sea trial

Seller gives me a heafty discount on asking price (turned out to be circa 20%)

Seller signs invoice stating there's no major defects with the boat.

I decided not to have a survey based on the paperwork that came with the boat showing it was well maintained and I was given numerous opportunities to look the boat over in advance of parting with the cash,

I guess what I'm saying is it's the buyers call as to how much risk they're willing to accept.. for me, it was the survey mitigated by getting the boat at a good price knowing I could fix a good number of things if they were faulty i.e. this issue I've had with water in the sterndrive, even if it required a new leg, the total cost of the boat would still be attractive.

I played hard ball on everthing else to ensure I came away with a deal I was comfortable with and I can't see what would prevent others from doing so.. walk away if not happy, everything is negotiable even if the rule book suggests otherwise

 

[Deleted User YDKXO]

Agree with gjgm. The seatrial is for the Buyer's benefit in that Buyer can use the seatrial to find any faults with the boat so the cost of the seatrial and any associated lift in should be borne by the Buyer. That is normally stated in any sale contract. In this case, it sounds like money very well spent.
In the event of a 'material defect' being found, the Buyer has a right to demand that the defect be repaired at the Seller's cost or an appropriate reduction in the purchase price be agreed. However, if the Seller doesnt agree to making good the defect or a price reduction cannot be agreed, then the contract can be considered void and the deposit has to be returned to the Buyer. Note that the Seller has the right to deduct any costs for fuel used during the seatrial.
I dont see this as biased in any way to the Seller or the Buyer, just a sensible way of proceeding with the sale. As I say, the seatrial is a method by which the Buyer checks whether the boat is as described and is only of benefit to the Buyer so all costs should be borne by the Buyer

 

[gjgm]

Ah, ok so in this case the seller is deliberately trying to sell a boat that has a fault ?
I dont have time to look up a standard contract, but I thought there was some clause in that on this subject. You would have to prove the fault was known, of course- ie from his service agent or something. I cant see how you can prove (either way, to be fair) the fault was known otherwise. So, how do you know that he knew...The engine is a bit noisy.. does that mean he is an engineer and knows a piston is damaged ?
Surely this is why people have surveys- to protect themselves. Protection from risk is the buyers cost. I really dont see why the seller should become part liable for that.
Not meaning to be rude, but surely a buyer has to be grown up here and face in buying a boat he assumes some financial risks.

 

[PCUK]

A sensible person will have the sea trial first to see if they like the boat and to find any engine type faults. Seems obvious to me!!!

 

[Morpheous]

It did feel odd buying my first motor boat that I was effectively paying for a test drive or equivalent of a house viewing.

Logistically I had to arrange things so that sea trial and survey were all done together on the same day to save money. Basically you have to be prepared to lose the cost of a survey/lift and walk away if it is not OK. I managed to come to a favourable arrangement. I new the boat was due for a service, the FO sorted the non service items raised.

 

[Leeloafer]

Done just that

Hi there, Just bought a similar boat and faced the same dilema. Can I suggest you check out www.abya.co.uk and click on Buying a Boat. It answers most, if not all of your queries.

Luck with your purchase, Leeloafer

 

[Renegade_Master]

A sensible person will have the sea trial first to see if they like the boat and to find any engine type faults. Seems obvious to me!!!

When you say a sea trial first ....... how do you mean first / before what?

 

[PaulGooch]

A sensible person will have the sea trial first to see if they like the boat and to find any engine type faults. Seems obvious to me!!!

A sea trial is generally not available until you have paid your 10% deposit though. Then, you cannot reject the boat because you don't like the way it rides. Unless you can get that into the contract.

 

[Morpheous]

There is something fundamentally wrong about this process. How are you supposed to work out what you want to buy if you can't try it out first. If you are buying a car you get to test drive it first and there is no obligation to purchase if you just don't like it. I recall test driving an A8 a few years ago and didn't like it cos the ride was too firm. Didn't buy it.

 

[Deleted User YDKXO]

There is something fundamentally wrong about this process. How are you supposed to work out what you want to buy if you can't try it out first. If you are buying a car you get to test drive it first and there is no obligation to purchase if you just don't like it. I recall test driving an A8 a few years ago and didn't like it cos the ride was too firm. Didn't buy it.

Did you try the air suspension on Comfort setting? Makes quite a difference

Yes this is an issue with boats being sold on brokerage but not usually with boats being sold by a dealer. I have walked away from a boat (Ocean Alexander) because the dealer wasn't willing to give me a seatrial before I decided whether to buy. There have been occasions when I've been selling a boat through a broker and I have had a request from a prospective buyer for a seatrial prior to offer and I've always said yes. At the very least, you've had a trip out on the water even if the prospective buyers walk away. But many sellers would say no and really the buyer then has to decide whether to move on to another boat

 

[gravygraham]

Dilemmas?

Maybe not a useful analogy, but when did you last sell a house and bear the cost of your buyer's survey? OK so we don't inhabit a perfect world but, (presumably?) the present system of private and brokerage boat sales has evolved to hurt the least number of participants.

 

[PaulGooch]

There is something fundamentally wrong about this process. How are you supposed to work out what you want to buy if you can't try it out first. If you are buying a car you get to test drive it first and there is no obligation to purchase if you just don't like it. I recall test driving an A8 a few years ago and didn't like it cos the ride was too firm. Didn't buy it.

Did you try the air suspension on Comfort setting? Makes quite a difference

Yes this is an issue with boats being sold on brokerage but not usually with boats being sold by a dealer. I have walked away from a boat (Ocean Alexander) because the dealer wasn't willing to give me a seatrial before I decided whether to buy. There have been occasions when I've been selling a boat through a broker and I have had a request from a prospective buyer for a seatrial prior to offer and I've always said yes. At the very least, you've had a trip out on the water even if the prospective buyers walk away. But many sellers would say no and really the buyer then has to decide whether to move on to another boat

I agree about the sea trial issue.

When we bought our current boat we had narrowed it down to 2 specific boats, both MF 805's, one VP powered, the other Nanni powered. The one with the Nanni was in Cardiff, we looked at that first (sadly the batteries were flat, you'd think the broker would have checked, as he and the vendor both lived in apartments over looking the marina). We then looked at an Antares in Swansea, with the same broker. They were happy to show us around both boats and were fully aware we were considering the two models, and another 805.

We decided on an 805 and stopped in a hotel, meeting the owner and the broker at the boat in the morning. The owner had brought along a battery and some jump leads. He was a pleasant and helpful chap and quickly offered a sea trial, there and then, no deposit, no messing.

On the way home (still 150 miles from home) we called at Walton Marines remote Upton branch on the Severn. They had the 805 with the VP engine and it was now a straight choice between this and the Cardiff 805. Nothing to choose between the boats, except the engines were different. We decided that we'd like to trial the boat and would buy which ever one we liked the engine most (hoping we could find a difference).

The sloth like sales woman at Upton couldn't even prise her lazy arse out of her seat to show us the boat. She handed us the door key and gestured us in the general direction of the boat. When we went back and asked for a trial she was adamant, we make an offer and if accepted, we pay a 10% deposit, take the trial and if the boat has no major faults, we're committed to buying it. I explained exactly what we wanted to do and why, pointing out that were were serious, as we were 150 miles from home.

She wouldn't budge, we left and called the broker in Cardiff (Network Yacht Brokers) and made an offer on the boat they were selling.

Two different brokers, two different experiences. Whether we would have got the sea trial if the owner hadn't been there, i can't say. Was disappointed and annoyed that they hadn't made sure the boat would start, they knew all week we were coming. Other than that, they were very easy to deal with.

The 805 at Walton Marine was still for sale 18 months later.

 

[Renegade_Master]

There is something fundamentally wrong about this process. How are you supposed to work out what you want to buy if you can't try it out first. If you are buying a car you get to test drive it first and there is no obligation to purchase if you just don't like it. I recall test driving an A8 a few years ago and didn't like it cos the ride was too firm. Didn't buy it.

Most cars are owned by the dealer so he makes the decision to take the buyer for a test drive, same with a private seller.

The broker on the other hand does not own the boat. Lets face it say a broker has a boat for sale value £200.000. Would it be right for him to carry out free sea trips on the owners expensive craft, using the owners expensive fuel and risking damaging the boat?
Believe me if brokers agreed to "sea trial" his for sale boats, you would get plenty of folks taking advantage of free trips, I mean you could do the trip and the guiy could say, "well we have three more to test I'll let you know"

I had a friend who worked for a south cost broker right in the marina and he said saturday mornings were full of follks asking "can we try such and such a boat"

If on the other hand the owner is happy for the broker to give sea trials then I guess thats different.

 

[gjgm]

There is something fundamentally wrong about this process. How are you supposed to work out what you want to buy if you can't try it out first.

Fundamentally wrong? No, I dont think so in the case of private sellers or brokerage. Its not the seller's fault or problem if you dont know what to buy,its yours. I dont see he has to provide you with the learning curve.
As has been said, you can ask to have the sea trial subject to,say,confirming engine power is sufficient for your needs, but most of this knowledge is available. Just ask the main dealer what engine spec was best, ask on the forum, make some common sense judgements- if its a six tonne sportscruiser, its isnt going to be too lively with a couple of 200hp engines, for example, even if it is cheaper. Similarly, dont expect a high volume hull to handle like a performance boat.
Of course you could go to the dealer,get a warranty,maybe trial the boat to find which engines..but guess what..someone has to pay for that service !
AH.. then suddenly the interest wanes perhaps !
But joking aside, a seller may agree if he believes you are serious. I had one enquiry on a boat I was selling some years back where the buyer asked about the amount of tread on the tyres...I dont think I offered him a seatrial.

 

[volvopaul]

If a buyer wants to scrimp on survey, trial costs etc think about your investment in the first place.

Every boat purchase is different , the boat, the broker, the seller all have different opinions on how to sell, present and buy a boat, wether in be on brokerage, new or a part ex owned by a dealer, in my opinion attitudes are also different towards the buyer depending on what the deals about.

I recently did an engine trial and inspection of a boat for a friend 145k boat so substantial amount.

We met the broker and immediatley I was annoyed as the engines were running, we specifically asked prior that the engines were not run up till I got there, which then made my job difficult as both engines were hot.

We set off on our sea trial as we had to travel to another marina for the lift out, I asked the skipper to open up the engines, he firstly refused as the bottom was dirty, I said both me and the buyer want to see if the motors overheat, and have crankcase compression, important part here is that if the motors are faulty whats the point in paying for a lift out at this time if the motors are u/s, I did wonder if there then was a link between the marina and the broker?.

All agreed, motors ok just 200 rpm down, clean hull and max 2800 rpm, clean bill of heath.

So take someone along that knows the specific engine model and make, its data figures and max speed the boat model should achieve.

As per the gist of this thread, be wise, expect the unexpected, what might look a good boat on the hardstanding may be a can of worms, one other thing is get history of the boat, service records, number of owners, title etc.

I have heard of cases where clients have paid for sea trials, lifts and surveyors to be told there is little or no paperwork which meant the buyer could not get the finance on the boat he dreamt off, and in that case id want my costs back for surveys, lifts from the owner of broker, id call that misrepresentation.