closing the deal!

[Phoenix of Hamble]

As my plans to use up all my disposable income, and some of my non disposable income through buying a boat come together, I find myself facing a series of new learning points....

The latest, is how I conclude the contract....

I have researched the subject, and still have a number of questions..

So question 1....

Do I form a contract with the seller, even if a broker is in the loop, and then leave it to the seller to manage brokerage fees in the background, or is my contract with the broker?

question 2...

Does anyone have a sample contract they could send me... I intend to buy the RYA book thats contains a sample contract that several have recommended in previous posts, but I am 90 Miles from nearest decent chandlery, and would like to understand contract prior to looking at boats again at the weekend....

question 3.....

Should I be expected to place a deposit prior to survey, an if so, what is the 'normal' deposit?

 

[DaveNTL]

I'm more familiar with the american buying system - if it's different i'm sure someone will point out where.

If the boat is through a broker his fees are included in the sale and therefore factored into the price. His fees are therefore to the seller.

In the states the brokers will often share a brokerage fee in which case you can have a broker acting on your behalf to find a boat and will act on your behalf to make sure you're contractually covered in the transaction. If it is a 'sole brokerage' the contract states that the broker represents both buyer and seller but the fees are still paid by the seller.

Your contract is with the seller with the document provided by the broker. His fees are (say) 10% and your deposit will probably be 10% - hence the brokers fees are paid 'up front'.

You then have an 'acceptance date' and a 'closing date'.

Assuming you make an offer and it is accepted by the seller you will then be sent a contract and the acceptance date will be, say, one month from the date of the selling contract.

At this stage the boat is 'sold' to you 'subject to contract'.

You then have that month to get the boat surveyed etc (at your cost) and accept the boat. If at any time during that month you want to pull out you can - even with a good survey - you don't have to have a reason to pull out. Once accepted you have the closing date which is normally ten days after acceptance.

You then pay the remainder of the cost of the boat direct to the seller.

You may find there are other costs down to you which would not be recoverable should you pull out, for example, if the boat has been out of commission for winter you would need to recommission it before a sea trial.

I have a standard US brokers contract if it's of any use to you but maybe you'd be better off with the RYA contract for the UK.

Dave

 

[salamicollie]

1. If you are buying through a broker, the contract is formed direct with the seller but the broker will raise the paperwork and the sellers brokerage fees etc is a seperate contract with the broker (just like dealing with an estate agent). If the boat sis stock i.e. owned by the brokers you will contract with them.

2. Not got one to hand but could scan one for you if no other offers (got both one conditional on a survey and one unconditional).

3. Yes - typically 10%

 

[Evadne]

I can recommend the RYA contract from a friend's experience as a buyer. It covers your deposit: if the seller doesn't like the survey and withdraws, he/she has to stump up for the survey. Almost worth joining the RYA for.

 

[Lizzie_B]

The British 'system' is very different from US, in as much as we don't have a 'system' as well defined as the US. It is pretty much up to individuals to go about it their own way. The RYA specimen contract is a good guide, and from a buyer's point of view better than some broker's contracts.Try asking the broker to complete the sale using the RYA contract!!!! You can order it on line from the RYA website. You can also print off the standard MCA Bill of Sale from the MCA website. If going through a broker you should bear in mind three things:
1. The broker is involved in the sale to make money. Although they will tell you different, their first instinct will be to look after their own interests, hence the ridiculously high brokerage fees some charge and the extremely punitive contracts some brokerages make their vendors sign.
2. After looking after their own interests, the broker is acting on behalf of the vendor and will look after his interests. Your interests are of no consequence to the broker.
3.Remember that in spite of all the stuff they say to justify their fees, a broker will not warrant any detail of the boat's description as being accurate, and the vast majority have a disclaimer to that effect on the bottom of each page they give you about the boat.It firmly places the onus on you to verify any 'facts' about the boat for yourself.
On the last two occassions that I have bought a boat I didn't find one broker's specification sheet that was more then 70% accurate, and many seemed to bear little relation to reality.

Remember that although the vendor engages the broker, it is in fact you who pay his fee indirectly as the vendor will adjust his price upwards to take into account brokerage charges. Basically, you are paying for the convenience of having the details of a lot of boats in one place.

 

[wooslehunter]

The survey is something you do. You don't have to and therefore unless specifically in the contract, it is something you pay for. Unless you are lucky/or not depends on how you look at it, the survey will come up with something you can use as a negotiating point. Some boats are advertised with a recent survey but it's best to get your own.

Deposits show good will. You put up the deposit to show your intention to purchase and stop the seller selling to someone else. If the seller pulls out, you can get it back & sue for losses. If you pull out for any reason not covered in the contract then the seller can keep the deposit.

Check the inventory thoroughly. It forms part of the contract. Bear in mind that the inventory on the brokerage sheet may not be contractual though.

1. Decide you like the boat & make an offer "Subject to survey" and if you want "Subject to sea trial". Cough up the deposit - 10% is normal. Any costs for the survey and trial are yours unless the seller agrees to pay - highly unlikely. i.e. if it's afloat you have to pay for the lift for survey. Or if it's on th ehard then you have to pay for the lift for the sea trial.

2. Following survey and/or trial, negotiate bairing in mind the survey findings. Even the small things can add up. My boat needed a new tiller, new sea cocks, etc.

If you can't negotiate far enough or find something unacceptable - a "material defect", you can pull out and get your deposit back. It's highly unlikely you'll get the cost of the survey or any lift fees back. If you pull out for a stupid reason like you decide you just don't want the boat becauuse you found a better one, you could lose the deposit.

3. Pay up, enjoy the boat and be broke for ever.

 

[jh001ace]

Join teh RYA and you can download the contract and other useful item from there web site.

 

[TonyD]

PM me your e-mail address and I'll send you a copy of the RYA contract /forums/images/graemlins/laugh.gif

Tony