Buying from a broker, what's at risk ?

[Morpheous]

I still stand by the fundamentally wrong.

Dealers own cars - true. Estate agents don't own the house they sell, hold where this going, looking for a different analagy! My ex-wife was a yacht broker so know a little about the game. Its the brokers job to find the buyer and to negotiate the agreement. Not do sea trials, that is the owners responsibility. I wouldn't expect to do a sea trial without a reasonable notice period. When I buy my next boat if the owner won't sea trial I shall assume there is something wrong with the boat and walk. When I sell mine, ask me for a sea trial!

The point about trying boats and gaining experience is not relevant. Here I am in my first mobo and like everyone I'm thinking it would be nice if it had ... (insert from the following list: another cabin, more headroom, a generator, shafts, all of the above)

And of course scour the magazines for that next bargain. But lets say I select a bigger Sunseeker how does me as mere employed mortal gain experience of bigger sunseekers. Its not a case of inexperience, its a case of availability.

Surveys, as with houses should be a buyers choice. I'm glad I had mine surveyed and took a marine engineer along with me. I would have had no chance to find the things the engineer found.

I just think the whole boat buying process could be simplified. I gather places like EBY are going down this route?

 

[boatmaster]

I reckon surveyors are over rated, i have used them in the past several times over as i've traded up each time, in fact used the same surveyer. After a few reports i noticed some similarity. being a stickler for paperwork i keep copies of everything, on the last survey a few years ago i flicked back through reports of previously owned craft and low and behold theyre nearly all the same with little imagination to re word a standard template. i came to a swift conclusion that i could do a better job myself. now true that was only one person, but being died in the wall boating nutter, i've met some dedicated veterans along the way who share my criticism in varied surveyers and also do the job themselves, its not rocket science and any established boater could do it. of course, for older craft where finance or insurance is an issue, none of us have a choice.

 

[Morpheous]

Yes the surveyor I used didn't wow me, the marine engineers though were well worth it. I used to do a bit of boat building so I thought I would have reasonable eye for structural stuff. Didn't have a clue about engines though. Learning fast.

 

[Tranona]

I just think the whole boat buying process could be simplified. I gather places like EBY are going down this route?

What is the simplification you require? You have just described a complex process - which it can be but, like many people who seem to be disenchanted have no practical suggestions as to how it could be "simplified".

A dealer can make the process easier as he does this for a living, but there is a cost in that he needs to make a profit from assuming the financial risk he is taking and the commitment under consumer law to deal with post purchase issues.

None of these apply to private sales - otherwise nobody would ever sell anything. The law establishes the balance between buyer and seller. The seller is expected to describe what he is selling accurately (otherwise he and/or his agent) may be guilty of misrepresentation and the buyer is required to satisfy himself that the item meets his needs and is as described. The "rules" that govern this exchange is the contract. Once the contract is complete the buyer acquires the right to the item - along with the risks attached to it.

How could it be otherwise? - and if you are not prepared to accept your responsibility in this transaction between two equals, don't get involved - and don't complain. If you want to have an assymetrical relationship with the seller where hisrights are subservient to yours, only buy from a dealer. The law then recognises the assymetry because he is assumed to have more knowledge than you and is entering the contract to gain financial advantage. The trade off for this is that he retains some responsibility for the satisfactory performance of the item he sold. Unsurprisingly very few boats change hands in this way.

 

[Morpheous]

The relationship is asymetric now. All costs are on the buyer - if you follow the brokers advice and don't play hardball as per earlier post. I've only bought one boat of significant value so am not experienced enough to have the answer to the boat buying process. I can only report on the experience I had. And for what its worth I think the broker did an excellent job holding the sale together with a difficult seller and a novice purchaser. My feeling after having been though it was that it was the hardest thing I had ever done purchase wise. Harder than buying a house.

How would I like it to work?
I turn up a brokerage/dealer etc with an idea of what I want having done research, probably booked an appointment to see a boat. Broker takes me round, I say maybe how about a test drive. Broker contacts seller, test drive arranged for + 1 week. Test drive good, offer made. Surveys/sea trial booked Broker asks for signature & hands over keys. hang on that is almost what happened, except for test drive. So why did it feel difficult? Don't know, just did. The thought of moving on fills me with dread.

 

[Tranona]

No, it is not assymetric. You as buyer are buying something and that includes taking the risks that go with it. Caveat emptor means that you have to satisfy yourself that you are prepared for this. Not unreasonable that you should carry the cost as it is you that has the benefit. There is no obligation for you to have a survey and no benefit to the seller so why should he pay?

The issue of trials is always difficult. However, the same principle applies. The seller is not in the least bit interested in whether you like the boat or not. It is your responsibility to determine that. The trial to confirm that the boat is as described is different, but just a variation on what is described above, and therefore you have to bear the cost.

Of course with a dealer sale a demonstration is more likely as this is part of the cost of selling in trade, and on the other hand many owners are quite happy to give a demonstration. But there is no obligation. Similarly if any seller was to offer to pay the buyer's costs, I would walk away as he is taking responsibility for something he does not need to. He can simply agree a lower price but still leave the responsibility with the buyer.

Just to re-inforce the point that buying a boat privately is different from buying from a trader. The item and the process are both complex. The law assumes that neither buyer nor seller are experts in either the product or the process so expects both parties to protect their own interests. Hardly surprising that it makes it more complex than buying a TV from Currys!

 

[gjgm]

No, it is not assymetric. You as buyer are buying something and that includes taking the risks that go with it. Caveat emptor means that you have to satisfy yourself that you are prepared for this. Not unreasonable that you should carry the cost as it is you that has the benefit. There is no obligation for you to have a survey and no benefit to the seller so why should he pay?

The issue of trials is always difficult. However, the same principle applies. The seller is not in the least bit interested in whether you like the boat or not. It is your responsibility to determine that. The trial to confirm that the boat is as described is different, but just a variation on what is described above, and therefore you have to bear the cost.

Of course with a dealer sale a demonstration is more likely as this is part of the cost of selling in trade, and on the other hand many owners are quite happy to give a demonstration. But there is no obligation. Similarly if any seller was to offer to pay the buyer's costs, I would walk away as he is taking responsibility for something he does not need to. He can simply agree a lower price but still leave the responsibility with the buyer.

Just to re-inforce the point that buying a boat privately is different from buying from a trader. The item and the process are both complex. The law assumes that neither buyer nor seller are experts in either the product or the process so expects both parties to protect their own interests. Hardly surprising that it makes it more complex than buying a TV from Currys!

Whole heartedly agree with you on this.
W/Mischief.. lets say you dont know what boat to buy. You feel that private/bokerage boats should therefore be available for you to test trial,free of any obligation, to see which one you like? I m selling my boat, not providing you with a demo boat. If you want to test drive boats, go to a dealer and ask them.

 

[PaulGooch]

Whole heartedly agree with you on this.
W/Mischief.. lets say you dont know what boat to buy. You feel that private/bokerage boats should therefore be available for you to test trial,free of any obligation, to see which one you like? I m selling my boat, not providing you with a demo boat. If you want to test drive boats, go to a dealer and ask them.

So you have your boat for sale and WhiteMischief likes the look of it and has the cash to pay for it. He asks you for a quick spin in the boat, if he likes it, he'll buy it. He doesn't want to part with his money without, in case it's not what he wants.

You'll refuse and lose all chance of a sale to him ?

It's expected of a buyer to front the money for a lift out, survey (OK it's optional) and sea trial, after paying a deposit on a boat he's not even been out on, risking the loss of a few hundred pounds. Yet, a seller doesn't want to risk a bit of time and a few quids worth of diesel to secure a sale.

 

[ari]

In my experience most brokers are happy to do the sea trial on the basis that if the buyer simply genuinely doesn't like the boat (too noisy, too harsh riding, can't see over the front once on the plane, whatever) then the deposit is returned. After all, it is a tad unreasonable to force someone to commit to a purchase of something that they find that they simply do not like when they drive it.

However it is entirely reasonable that this is on the basis of an accepted offer and a 10% deposit placed because, as has been said, brokerage boats are not there for people to just have jollys on.

It's perfectly reasonable to expect a commitment from the buyer in terms of agreeing the price and paying the deposit in my view, but I'd want it done on the basis that I can reject the boat for (valid) personal reasons, not just material defects.

It's also entirely fair that any expense is down to the owner. When I've sold my boat the owner is quite welcome to check whatever he wants as I had complete confidence in it. Sea trial, survey, whatever. But any associated costs are down to him not me, obviously.

 

[Nautibusiness]

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

That's nice John!
It makes it look like I have done something awfully wrong or I am liable for some big issue that has befallen a purchaser over on "the other forum".

I just happen to be the only broker over on that one that you lot like to get your claws into!

 

[Nautibusiness]

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.

Yes you can... Subject to "satisfactory" sea trial.
If the sea trial is not satisfactory then you don't need to go ahead. It may be polite to give a proper reason, but nobody is going to force you.

 

[PaulGooch]

That's nice John!
It makes it look like I have done something awfully wrong or I am liable for some big issue that has befallen a purchaser over on "the other forum".

I just happen to be the only broker over on that one that you lot like to get your claws into!

Absolutely not a dig at you on either forum Tom, or for that matter brokers in general.

Purely a debate about how the "system" works. Although it seems to have become a debate about test drives.

 

[gjgm]

So you have your boat for sale and WhiteMischief likes the look of it and has the cash to pay for it. He asks you for a quick spin in the boat, if he likes it, he'll buy it. He doesn't want to part with his money without, in case it's not what he wants.

You'll refuse and lose all chance of a sale to him ?

It's expected of a buyer to front the money for a lift out, survey (OK it's optional) and sea trial, after paying a deposit on a boat he's not even been out on, risking the loss of a few hundred pounds. Yet, a seller doesn't want to risk a bit of time and a few quids worth of diesel to secure a sale.

As I have said, I would need to be convinced, but no, generally I would not.
All this "he likes the look of the boat, has the money and will buy it" counts for nothing.
Putting some money on the table shows commitment, and certainly entitles you to a seatrial. If there was something very specific he wanted to check, we could discuss. If he just wants to see what the boat is like,with no upfront commitment then, no, I m not interested.
Miss a genuine sale..? I doubt it.
And if you have a mass production boat, now he just wanders off to look at ten more courtesy of you.

 

[PaulGooch]

Yes you can... Subject to "satisfactory" sea trial.
If the sea trial is not satisfactory then you don't need to go ahead. It may be polite to give a proper reason, but nobody is going to force you.

That was one of my initial questions Tom.

What would a standard contract say regarding the reasons a buyer could reject the boat after the sea trial ?

 

[PaulGooch]

As I have said, I would need to be convinced, but no, generally I would not.
All this "he likes the look of the boat, has the money and will buy it" counts for nothing.
Putting some money on the table shows commitment, and certainly entitles you to a seatrial. If there was something very specific he wanted to check, we could discuss. If he just wants to see what the boat is like,with no upfront commitment then, no, I m not interested.
Miss a genuine sale..? I doubt it.
And if you have a mass production boat, now he just wanders off to look at ten more courtesy of you.

OK, so i'm interested in your boat. I'd also like a sea trial. I'm happy to give you a 10% deposit up front and won't worry about surveys and such until after the sea trial.

Under what conditions will you give me back my deposit ?

Say i think the boat is underpowered ? I don't like the way it handles ? It makes me feel sea sick ? Too bow up for my liking ? Far too noisy, in my opinion ?

 

[Nautibusiness]

This forum is a pleasure to be part of.
Debate is great.
Tearing to shreds isn't.

YBW does on the whole have good quality debate with sensible, reasoned, answers.
Can't quite be said for some other locations.

In this particular thread there is a balanced view with a number of individuals representing good cases for both sides.

As for the original question Paul, our own Brokerage Sales & Purchase Agreement has a section that allows us to put any "subject to" the purchaser wishes.
We encourage careful wording like, "Subject to SATISFACTORY sea trial" to allow the purchaser some protection too.

 

[gjgm]

OK, so i'm interested in your boat. I'd also like a sea trial. I'm happy to give you a 10% deposit up front and won't worry about surveys and such until after the sea trial.

Under what conditions will you give me back my deposit ?

Say i think the boat is underpowered ? I don't like the way it handles ? It makes me feel sea sick ? Too bow up for my liking ? Far too noisy, in my opinion ?

Ok, so a totally different scenario than just saying that you really are jolly interested and can I take you for a spin? Which is where we were, I think?
So,we are being specific now, yes?
Underpowered; 550 hp on a pretty light boat, so underpowered sounds unlikely
Handling- give Mr HJ Johnsen a call Or any mobo journalist
Sea sick- go back to playing COD 4
Bow up- you dont know how to handle the boat then
Noisy.. eh , its a powerboat with two big diesels behind you !

I am not providing you with a trip that is totally subjective to your whims.
If you have a specific concern that you raise in advance,we can discuss.
What would I keep you back from your deposit? Read the contract- you signed it. Oh, you dont want to be held to that?
Come on Paul.. its up to every buyer/seller to find a way, and every instance might be different. I am simply saying that I disagree with approach that a buyer is entitled to a free spin, and a totally subjective get out of jail card.
There is a legal process to clarify the situation for all parties; that legal process doesnt work too well if one party doesnt want to be held to it.
Maybe I would give all the deposit back; if i thought the guy was a total *** and joyriding, I might not be so charitable.

 

[jonic]

In my experience most brokers are happy to do the sea trial on the basis that if the buyer simply genuinely doesn't like the boat (too noisy, too harsh riding, can't see over the front once on the plane, whatever) then the deposit is returned. After all, it is a tad unreasonable to force someone to commit to a purchase of something that they find that they simply do not like when they drive it.

However it is entirely reasonable that this is on the basis of an accepted offer and a 10% deposit placed because, as has been said, brokerage boats are not there for people to just have jollys on.

It's perfectly reasonable to expect a commitment from the buyer in terms of agreeing the price and paying the deposit in my view, but I'd want it done on the basis that I can reject the boat for (valid) personal reasons, not just material defects.

It's also entirely fair that any expense is down to the owner. When I've sold my boat the owner is quite welcome to check whatever he wants as I had complete confidence in it. Sea trial, survey, whatever. But any associated costs are down to him not me, obviously.

Ok I am a yacht broker from the other bit of the forum (the one with white flappy things to power the boat) but the principle is the same so here is how and why I do it.

You absolutely cannot offer free sea trials to anyone with no commitment. For a start as a broker it is not your boat, and if you did do it you would be doing nothing else.

You have to assess the situation. There are two types of seatrial. One is to check the condition of the boat. The other is to see if you like that model of boat. The problem with the second one, just like car test drives, is some people would spend every weekend all summer "testing" various models. With a good chance of buying someone else's anyway once they have decided they like your model. As brokers selling on behalf of owners that is not what we should be doing.

But sometimes there is a legitimate need to provide a trial to some purchasers before going the usual route of offer, deposit, boat off the market and survey.

In that case there must be a deposit in place to protect the interest of the owner in case of damage or unpaid costs but also because it stops the casual test driver who may not want to buy your boat but wants a run out on one before choosing someone else's.

There is a clause in the contract I use that allows for this with terms that can mutually be agreed between the owner and the buyer. Any costs must be paid by the buyer.

16 SEATRIAL (optional clause)
Completion of this Agreement shall be subject to a satisfactory seatrial to be carried out after the survey, or at such other time and terms as are mutually agreeable to both Vendor and Purchaser and provided that such seatrial shall only operate so as to permit rejection of the vessel

(a) on grounds of Performance, Handling or Seaworthiness;
OR
(b) on grounds of matters which would not reasonably become apparent on inspection/survey.

If, as a result of the seatrial, the Purchaser wishes to reject the vessel, he shall within 48 hours from completion of such seatrial notify the Vendor and/or the Vendor’s Broker in writing of the grounds on which he wishes to reject the vessel and the Agreement shall be rescinded.

As long as all parties know where they stand at the beginning thats fine. I had one just like it a few months ago. The owner was happy to provide a trial with no offer as the buyer was in a strong position to buy, but had no experience of the boat model. He tried it, it wasn't for him so deposit returned.

What you also have to bear in mind is that you may not be able to get the seller to take the boat off the market in this situation. (And really I don't believe he should at this stage.)


I hope that helps, and also here is a summary of the process I use that I posted once before on the Yachting forum.

The boat is offered for sale at a certain price and this price is based on the condition the boat is known or thought to be in.

An offer is received "subject to survey" and accepted.

A 10% deposit is taken and held in an independent account. The deposit protects the seller if his boat is damaged by the buyer or his surveyor, and also protects against any lift out yard/bills not being paid by the buyer. The buyer is protected as It shows real intent and gives justification for the seller to now remove the boat from the market and not entertain any ideas of gazumping the buyer.

The seller and buyer enter into a contract. The seller agreeing to sell to that buyer, and not to change his mind or sell to another higher bidder whilst the buyer is spending money on a survey within a pre-agreed timeframe.

The buyer is agreeing to buy "subject to survey". As we are dealing with second hand goods between two private individuals that are not warranted, this gives the buyer independent knowledge of what he is buying, and the contract allows him to re-negotiate the price or have his deposit refunded in full if the survey shows the boat to significantly not be in the condition that both he and the seller thought she was in.

After survey the boat is sold at the original offer price, or if unknown problems are found, the seller makes repairs or reduces the price. If no agreement can be reached the buyer has his deposit refunded in full and the boat is free to be re-marketed.

It works very well for both parties. The seller knows he has a committed buyer and financial protection against any damage or unpaid bills. The buyer has time to find out exactly what he is buying and the knowledge that any money he spends will not be wasted by the boat being sold elsewhere whilst he is in that process. There is also a written framework and a third party to administer it all.

 

[Tranona]

So you have your boat for sale and WhiteMischief likes the look of it and has the cash to pay for it. He asks you for a quick spin in the boat, if he likes it, he'll buy it. He doesn't want to part with his money without, in case it's not what he wants.

You'll refuse and lose all chance of a sale to him ?

It's expected of a buyer to front the money for a lift out, survey (OK it's optional) and sea trial, after paying a deposit on a boat he's not even been out on, risking the loss of a few hundred pounds. Yet, a seller doesn't want to risk a bit of time and a few quids worth of diesel to secure a sale.

Thats the whole point. A private seller is not expected to "sell" his boat in the same way as somebody doing it as a business. It is up to him to judge whether it is in his interests to offer a demonstration. If refusal stops the sale then that is his problem - the buyer can't force him.

You seem unable to accept that the seller has rights as much as the buyer and he can set conditions under which he is prepared to sell. If the buyer doesn't like it then he should move on. In reality I doubt such an impasse occurs very often as motivated buyers and sellers usually achieve a compromise satisfactory to both.

The seller is taking risks in just the same way as the buyer. They can string eachother along for some time with the seller desparate not to lose the potential buyer and the buyer unable to make up his mind whether he really wants the boat, or wants it at a lower price. At some point you have to move to a more formal position where the rules are governed by the contract. From then on the chances of success for both parties are much improved. Before that it is all shadow boxing!

 

[jonic]

In reality I doubt such an impasse occurs very often as motivated buyers and sellers usually achieve a compromise satisfactory to both.

This is completely true and is how 99% of transactions take place. The problem with the forum is that it can sometimes distort the reality and give the perception that every transaction has a difficulty. They don't. The contracts that are used by professional brokers work for all concerned and give rights to both seller and buyer. The important thing to remember is that these are used goods (all be it very expensive ones!) owned by private individuals that are more often than not out of manufactures warranty. So having a framework that allows independent assessment and inspection whilst giving protection to both parties during the transaction is key.