Negotiations following survey

[cindersailor]

I have just received the survey report on a GRP boat I have put a deposit on. There is some rot in the main bulkhead (plywood), and a new mast compression post is needed. I have asked a shipwright to estimate the cost of putting it right. The broker suggests that it is normal to split the cost of this sort of work 50/50 with the seller, is this the case or should I hang out for a reduction in price to cover the full cost?

 

[Gargleblaster]

When I bought my last boat my surveyor suggested that I ask for all the costs of fixing the problems be taken off the asking price. I felt I had already negotiated a good deal and only asked for half which was immediately accepted.
It really depends how anxious the buyer is to sell. Trying asking for the lot but be prepared to negoiate up to half if the buyer won't move.

 

[Lakesailor]

Depends how much he wants to sell and how much you want to buy. If the work was not pointed out by the vendor or wasn't obvious I wouldn't be keen on paying for it.
As you've put down a deposit and paid for a survey, he knows you're hooked, so will be expecting you to cave in on the repairs.
Try suprising him. Insist he pays. You can always go back afterwards and negotiate if he doesn't bite.

 

[tcm]

maybe, maybe not

no, it isn't "normally 50-50". It depends. I mean, on the one hand if the entire boat was made of rotten cheese and all equipment actually found to be bustified you still have to pay half the asking price instead of nothing at all!

HOWEVER, if rectification would result in "betterment" then some allowance is reasonable. So frexample, if an 8000hour engine was found to be seized and a new engine is needed, then some allowance should be made against the new cost cos your offer and his advert was for a boat with the olde engine not a brand spanking new one.

You wil have to decide - perhaps with advice from shipwright- how much of the work would indeed constitute "betterment" and how long you wd imagine these items to last anyway. Were you anticipating some work (cos the boat is quite old, say) , or none at all (cos it's less than five years old, for example) ? Do these boats eventually need these items eventually, so the work is eventually inevitable- like paint or that engine or plastic windows going a bit crackified, frinstance? Or is it like (say, tho not a great example) an anchor or a winch handle - which really should never need replacement if they work ok?

Note also - anyone who starts negotiations at "50% off" is effectively fully expecting to lose the argument. It "sounds fair", but he's actually let you start at half way towards his touchline. From here, the maximum you should agree to is to pay 25%. But your starting offer could be to contribuite nothing at all, really. He could half and half again. Or cave in.

 

[cindersailor]

Re: maybe, maybe not

Thanks for this. There was no mention of any rot in the sales particulars (nor mast step/coachroof depression), and bulkheads should not be rotten. So once the work has been done the boat will be in the condition anyone would normally expect it to be in and effectively as described, by ommission, in the particulars. So, as you suggest the burden should rightly fall with the vendor I suppose. We will see how the negotiations go.

 

[youngwrinkley]

Re: maybe, maybe not

The other alternative is to get the vendor to put it right at his expense. I.e supply the boat that you thought you were buying.

 

[Lakesailor]

Re: maybe, maybe not

Or bodge the boat so it looks like the one you were expecting.
Get the money off and do it yourself.
I've done that with a tiddler recently, same thing, coach roof sagging. Installed a mast compression strut.
Got the boat at a nice price. However at the age and money I'm talking you do expect a bit of work. Sounds like you're spending a bit more and would expect it to be right.

 

[Lizzie_B]

Re: maybe, maybe not

Remember - the broker has a vested interest in getting you to pay as much as possible as he will be payed a direct percentage of what ever you pay for the boat, so the more of the repairs you 'pay' for the more money he gets.

If you negotiate it off the price and do it your self he gets paid less.

I would talk to the vendor direct - I think it totally unreasonable for you to contribute anything to the cost of making good the structural items you mention - these are not cosmetic like a paint job. I would think with structural issues like this, the vendor himself would just be keen to get it off his hands.

When we bought Lizzie B, we agreed with the vendor that any 'structural' issues would be repaired at their cost in a mutually agreed yard ( as it happens they were happy with the yard we had chosen to do our repaint and other up grades).

They paid for the one structural problem and the lift out, we paid for the lift in.

There is no way I would consider paying anything towards making the boat structurally sound.

When you buy something - secondhand or not- it should be fit for the purpose it is built for- and this clearly is not, as you will find when you try to insure it.

The insurance company will insist that such items are made good before they take it on cover for sailing. This is a useful thing to point out to the vendor in negotiations.

I think the broker has a dose of wishful thinking , and it's time to negotiate details with the vendor direct.

 

[Blueboatman]

Re: maybe, maybe not

Just to add my halfpenny's worth.
Question. Is this a boat with a CORED cabin top?Is it definitely solid grp under the mast step? Because if it isn't-and I don't care how competent your surveyor may be-you need to go have a very careful looksee with a big f-off (ie 1million candlepower plus) flashlight and a little hammer. Oldest trick in the book,you get a fair 'deal' on one repair and then discover that the water has been getting in for a very long time and there's a lot more decayed coring to sort out. Just asking.

 

[Birdseye]

Its entirely up to you - the surveyor is talking rot. You can ask for a reduction of twice the cost if you feel like it, since you have to cover your own time etc.

The best negotiating tactic is always being willing to walk away.

 

[Wansworth]

I know a proffessional yacht deliver/mecanic who got a very good deal;not through luck but really assessing what needed to be done,how much it would cost etc and making his bid within his financial possibilities,they took his offer,but he was prepared to walk away.

 

[sailorman]

you cant "walk away " by giving a deposit "subject to survey" you have a binding contract.
you must negotiate even if both parties go to arbitration to settle the dispute.
/forums/images/graemlins/blush.gif

 

[Its_Only_Money]

Does your contract specify who pays for defects found in the survey? In the same vein as above does it specify under what conditions you can walk away???

 

[Lizzie_B]

The whole point of 'subject to survey' is the concept that if the survey is unsatisfactory ( as this one is) - then the whole deal is up for renegotiation or cancellation, other wise you would be forced to buy a pig in a poke and there would be no point in having a survey.

The faults as reported in the survey actually could be argued to make the item for sale unfit for the purpose for which it is designed, so yes , you can walk away and demand your deposit back.

You only lose your deposit if you walk away when the survey is satisfactory.

If it could be shown that they really knew about the problems and failed to disclose them prior to survey, you might even have a case for them to reimburse you the cost of the survey.

 

[cindersailor]

The contract allows me to walk away with my returned deposit if the survey is unsatisfactory (i.e. finds structural problems) as in this case. Since there was no indication of the problems prior to the survey, my line will be that the vendor bears the expense of the repairs, and that these will need to be completed to the satisfaction of my surveyor, otherwise my insurance company will not be happy.

The vendor will hopfully realise that any other buyer will also find these problems at survey and 'bite the bullet' on this first occassion. We will see!

 

[Its_Only_Money]

...and make the point that any subsequent buyer should have the problem declared to them as the seller is now very aware of the problem.

You really need to get a cost to fully fix the problem from a yard of your choosing and put to the seller that this figure comes off the price. Then you get the protection of having control over the work but the seller effectively pays for the repairs.

Good luck with the negotiations....

 

[Lakesailor]

If you can walk away, I would consider that option. As has already been said, there may be underlying reasons for the coachroof sag and rotten bulkhead. The boat I bought had a similar symptom, but I knew it didn't have any underlying fault, just that the rigging had been overtightened on a long-term basis.
If going ahead I would make an offer on the basis that you may have still more work to do and reduce the price accordingly.
There is no "correct" value for anything, just opinions, and if yours is that it's worth a lot less than the owner wants. He has to deal with that. If he's sticky, you could suggest that any buyer's survey will show up the same fault.
Above all you don't want to buy a boat, have all the hassle of a repair and still pay more than you would have for a fault-free boat. Logic says go and buy a fault-free boat and enjoy it from day one.

 

[LeonF]

I believe the problems having been uncovered the broker has an obligation to revela these defects to any new purchaser should you walk away....can anyone confirm or negate this ?? I know when trying to buy a boat that had a disastrous survey some years ago the broker said he would have nothing more to do with the boat.

 

[Its_Only_Money]

A brokers normal "defence" is that he is only repeating what the seller tells him in good faith. If the broker knows (by virtue of a previous survey) of problems then surely he could no longer rely on this defence.

I guess a sensible question early on in discussions is "when was she last surveyed?"

 

[RupertW]

I've heard this line about 50/50 from brokers before, most notably when I was selling my last but one boat. It was 18 years old, had never had any osmosis treatment and I'd had it in the water continuously for 3 years - all facts known by potential buyers.

I was in meetings on the day of the day a serious buyer surveyed it and came out to find a voicemail from the broker saying, "Couldn't get hold of you, but there were some wet patches which we estimate as costing 1500 to put right, so we have reduced your agreed price by 750, the buyers happy. Deal done and bill of sale handed over - your boat is sold".

I phoned him back to congratulate him for the sale, and particularly for taking 750 off his commission as I still expected the same price to me. The broker seemed a little miffed but didn't have a lot of choice but to go along with it.

Should I have felt guilty?