Purchase Process - Private Seller

[5teve]

Hi Guys

Looking for a bit of info - not sure if me being Aus based has any bearing on this.. but I am looking for guidance on the process of buying a used boat privately - from what I can gather -

1, Initial viewing
1a, additional viewings if required - we took this option on both shortlisted boats - glad we did as preference moved to the 'other' boat.
2, make an offer - subject to whatever condition are thought to be necessary, such as sea trail engine appraisal, hull inspection ect.. I have some concerns - but no show stoppers - just items that I deem necessary to repair / replace that will reduce the offer - but not including nice to haves (such as better electronics etc)
3, If offer is accepted - have above inspections / sea trial carried out - find out results - also carry out check on finance - owner says none
4, adjust offer if issues are found or ask seller to rectify at their expense - or walk away and carry on looking
5, if offer accepted organise money - transfer of registration ect
6, motor boat to its new home

I understand when a broker is involved a deposit is usually requested and held with the broker - i'm not so happy to do this with a private buyer - thoughts?

I am debating if I should lift the boat and inspect that way - or dive it (I am a diver - but not an inspector!). Will definitely have engine inspection by local dealer. Sea trial I am happy to pay for (fuel etc) is this normal? If co-ordinated correctly - would it be normal to have sea trial / engine appraisal - drive to lifter - lift and inspect then return to water all on the same day?

Any other advice to help us on our way to multi boat ownership would be appreciated (an old friend says you can never have too many tools, sheds and boats - SWMBO does no agree to any of that sentiment )

Steve

 

[Greg2]

You have identified the key steps, at least as far as the UK is concerned. We sold all three of our previous boats privately and it was fairly straightforward. We used a standard Bill of Sale (think it might have been from the RYA - we recorded the sale price as £1 and other considerations. This is common and avoids revealing the purchase price e.g. When you sell. Shares in the boat are also recorded in 64ths IIRC). Don't think we worried too much about a deposit (although I think one was paid on one of our boats) but if you do go down that route make sure that it is covered by an approroiate contract (seem to recall we used the standard contract from the British Marine Federation).

Survey costs (including lifts etc) are down to the buyer and my advice would be to have the boat lifted so that a surveyor can do the job properly. Entirely doable to do lift, survey and return to water the same day. Might even be able to squeeze in the sea trial if you start early!

Good luck!

 

[oldgit]

It can depend on the money being paid for the boat.
If the cost of the boat is low due to being old or small then the practice is to satisfy yourself the boat is what it appears to be and also belongs to the seller.
A small deposit is made to show good faith and the balance paid before you take the thing away.
On bigger more complicated stuff on private sale ,you would not normally hand over any money until all your checks have been sorted including the sea trial.
Once you have paid, thats it, no refund unless something major occurs,ie. not his boat etc.
The sea trial business could well be down to how long the boat has been up for sale.Initially the seller may be keen to demonstrate his pride and joy to all and sundry but as time goes on,he my get get fed up with time wasters and want some cash proof of your intent to purchase.
It could all boil down to your own confidence to buy,some just get on with it and take chances,some need to cover every last tiny chance of a problem before spending a farthing.

 

[5teve]

Thanks Greg / OG

The boat is up for just short of $100k so not a small figure - I cant say its been well looked after as it doesnt appear to have been, but its 14 years old and its also not been abused either from what I can see. Kind of middle of the road. It has been standing a lot recently though.. with very little use.. which in itself has caused some issues.

I have been for a small run in it to help the owner back to their swing mooring from the Jetty that he met us on, but in Western Australia we get "a lot of sea" so want to try it in some weather also as that is primarily when we use the boats here - very rare to get a calm day. The small run was not enough.. as it was a clam day too and the boat is in a protected bay. But as normal boating friendly swells are 2-3m in the winter and 1-2m in the summer and we have a prevailing southwester all summer of 15-25 knots pretty much every afternoon - the boats have to handle the weather well.. and we manage in our 6m ally.

Due to the market being pretty depressed here - there seems very little interest in the larger boats and as this one is a locally built boat - which means there is even less interest (not sure why!) from what we can gather.

I'm pretty mechanical and think I have noticed most of the potential issues - there are a few, but I am realistic that a 14 year old boat will not be perfect - but will need a once over by someone that knows what they are doing - hence the survey and am happy to make an offer subject to:-
-Engine Appraisal - at my cost
-Hull / rest of boat survey - at my cost
-Finance Check - my cost
-Sea trail being satisfactory. (happy to pay for fuel and time)

If all ok - Offer paid - if not - reduce offer accordingly or owner gets fixed correctly.

I have also been a boat owner (albeit a 6m aluminium boat) for 8 years and have many varied boats within our friends, so have been exposed to many variable and problems along the way.

I have also been thinking of putting in a double offer.. an offer sold as is (will be a low ball offer around 25% under asking) no survey or anything and assume all risks myself - plus a higher offer subject to the above.. not quite sure how that will go down tho.. and the last thing I want to do is insult / upset anyone (which I know there are many threads on)

Would it also be wrong to consider the resaleability in the initial offer - if anything happens and I need to sell? - The engine has 5300 hours on it - apparently reconditioned at 4000 prior to being put into the boat - so would potentially put a good number of buyers that buy purely on hours used. A bit like a car that has been written off but put back on the road - its likely to be as good as new but will never attract the same pricing..

Sorry for the questions and random thoughts - I always overthink everything - especially when its involving what we consider to be a significant investment!

Steve

 

[Stats007]

I wouldn't worry about upsetting anyone. Boats often sell for 20 - 40% less than asking price - in fact most boats seems to be listed at an artificially high price to take this into consideration. I've bought and sold 7 boats in the last 8 years privately in the UK and have always paid at least 25% less than asking on boats costing between £20k & £45k.

5300 hours on a marine engine would make me think a repower is due - also how do you rack up that many hours in 14 years unless it's a charter vessel? The average in the UK is about 50 hours a year for private use - though I appreciate our weather isn't ideal for boating all year round!

 

[Tranona]

not sure about your double offer suggestion - although making an unconditional offer on its own may result in a lower price.

Overall you have described the process well, assuming it is the same in Australia as in UK, although normally the purpose of the sea trial is to ensure the boat is as described and all systems work, not about how it performs in a variety of conditions. However the seller may offer to give a demonstration if he thinks that this will persuade you to buy. The assumption once you make your offer is that you have decided that the boat is suitable for your use and the survey/sea trial process is about the condition of the boat against the description.

You may well find it useful to look on www.rys.org.uk where there is a lot of information on buying and selling boats including shared ownership, establishing title, setting up contracts etc. If you are nervous about handling the financial and legal side you may well find a local broker will do this for you for a fee.

 

[Alan ashore]

Re the "double offer" idea - a couple of times when selling I have encouraged buyers to consider making an "as seen" offer and would have been happy to accept around 20% less for that. Neither buyer went down that route, although in one case having accepted what I considered to be a relatively low offer, I made it clear that no price renegotiation (or remediation at my cost) would take place post survey - it was a simple go/no go decision for the buyer at that point.

 

[5teve]

I wouldn't worry about upsetting anyone. Boats often sell for 20 - 40% less than asking price - in fact most boats seems to be listed at an artificially high price to take this into consideration. I've bought and sold 7 boats in the last 8 years privately in the UK and have always paid at least 25% less than asking on boats costing between £20k & £45k.

5300 hours on a marine engine would make me think a repower is due - also how do you rack up that many hours in 14 years unless it's a charter vessel? The average in the UK is about 50 hours a year for private use - though I appreciate our weather isn't ideal for boating all year round!

Thanks Stats - I think the tendancy here is to over price too... due to many people going over the top in the good times here (they were very good) and now trying to claw some money back to pay of the debt. The 5300 hours is in reality 1300 hours (as mentioned previously) in 14 years... as it was overhauled at around 4000 prior to being put in the boat new - the engine is a commercial spec engine still readily available freshly rec'd here (for 28k installed). But according to the good people here.. good for 3k hours a year and 15k hours to mid life overhaul.. probably being stood with no use does it more damage! we manage about 200 hours a year on our 6m ally.. average use here is hard to pinpoint - some do hundreds of hours (in somewhat crappy seas) and others do a handful - I think 100-150 would be about 'average'. In Western Australia the main destination is Rottnest Island - about 1-1.5hours hours away - and lots of bays around.. then the rivers - plus coastal / club destinations. An average day run for us would be about 4-6 hours of motor use.. the Weather is awesome for boating - but the winds and seas are not so good most of the time - good we have rivers to go at too We will be keeping our trailer boat too as we like the option of trailing it to various places up to 6-800 miles away!

not sure about your double offer suggestion - although making an unconditional offer on its own may result in a lower price.

Overall you have described the process well, assuming it is the same in Australia as in UK, although normally the purpose of the sea trial is to ensure the boat is as described and all systems work, not about how it performs in a variety of conditions. However the seller may offer to give a demonstration if he thinks that this will persuade you to buy. The assumption once you make your offer is that you have decided that the boat is suitable for your use and the survey/sea trial process is about the condition of the boat against the description.

You may well find it useful to look on www.rys.org.uk where there is a lot of information on buying and selling boats including shared ownership, establishing title, setting up contracts etc. If you are nervous about handling the financial and legal side you may well find a local broker will do this for you for a fee.

Thanks Trarona - I think the process over here must work the same - but the sea trail is very much a see how the boat handles too (as well as what you mentioned) - not all boats handle the weather so well unfortunately and it results in a lot of 'american style' lake boats being used a lot less than they should be due to not being very nice in the swells and chop we get here - I think alot of people like the idea of having a boat - just cant get used to the reality and knowledge required - We get a lot of American imports - of which most are really nice and generally hold up well to the weather - but with this one being locally produced i'm fairly confident in the ability of the boat, and being around 7.5-8t in weight (weight is good here to smash through stuff) it should be fairly heavily built and strong (classed as 33' but in reality 35ft and 11.5ft beam single engine) but need to confirm that, having only been introduced to boating here (originally from UK) I have no Idea what kind of seas you have there.. only based on what I read - Will check out the link you mentioned... thank you again. Brokers I don't see as an option as generally they would want a good slice of the pie here.. but something to consider.

Re the "double offer" idea - a couple of times when selling I have encouraged buyers to consider making an "as seen" offer and would have been happy to accept around 20% less for that. Neither buyer went down that route, although in one case having accepted what I considered to be a relatively low offer, I made it clear that no price renegotiation (or remediation at my cost) would take place post survey - it was a simple go/no go decision for the buyer at that point.

Thanks Alan - it seemed to make sense to me - assume the risk myself at this price - or seller takes the risk at that price.. i'm fairly confident in my knowledge - but its just determining the $ value to that confidence good to hear that its been used before tho... makes me think I'm not too mad!

Steve

 

[adey]

If you were selling a boat and someone came along and offered to pay your fuel to take them out to see if they liked how your boat handled a rough see would you take them? I probably wouldn't.
A deposit prior to survey/sea trial is normal even for a private sale. All things are negotiable but don't be surprised it the owner wants a deposit prior to sea trial.
You also have to consider how you'd feel if the seller pulls out after you've paid for a survey?
A small deposit and contract protects both parties. The RYA do one over here. Not sure how applicable that is in Oz though?

 

[Stats007]

I have given sea trials before in rough weather - that's exactly what a sea trial is about.

I normally ask for a refundable deposit before a sea trial and a fuel contribution if they decide they don't want the boat. Once a handshake has been made the deposit becomes non-refundable unless some serious issue occurs with the boat. If they just change their mind that's their problem.

 

[superheat6k]

This idea that an offer is somehow a % of the AP is complete nonsense. The offer should be what you think the boat is worth and are prepared to pay for it. This reflects the price you would want to get if you were selling it.

I appreciate that in a place with fewer buyers and sellers the market choice might be more limited, so as a buyer you are in the strongest position.

Establish the ceiling price for the boat if in A1 condition e.g. the price someone would realistically pay. From this deduct the assessed cost to get the boat there assuming all works done professionally. IMHO this gives you its value, and this can for some boats be a negative. There is nothing romantic about buying a boat from a financial perspective - remove rose tinted specs and get real with the valuation.

If I were the seller selling privately on a #100 k boat I would pay a professional to handle the transaction process, but ultimately it is for the seller to offer the contract of purchase to you, but if he wants a private sale what does he think he is saving. I would want a deposit as a seller pre sea trial. But as a buyer I would want a 'walk if dissatisfied for any reason' clause (broker's do not like this)..

Brokers want you to follow their 'standard' contract, but you do not have to, after all you are still the buyer, but you do have to be reasonable whilst protecting your interests.

One thing I am very clear on is it is silly for any seller to expect a 'you cannot walk away contract' based solely upon visual inspections, but still all standard purchase contracts insist upon this. Therefore the right to reject after sea trial is an essential protection - you might just decide you hate the boat after all.

 

[5teve]

Some good discussion here.. thanks to all

If you were selling a boat and someone came along and offered to pay your fuel to take them out to see if they liked how your boat handled a rough see would you take them? I probably wouldn't.
A deposit prior to survey/sea trial is normal even for a private sale. All things are negotiable but don't be surprised it the owner wants a deposit prior to sea trial.
You also have to consider how you'd feel if the seller pulls out after you've paid for a survey?
A small deposit and contract protects both parties. The RYA do one over here. Not sure how applicable that is in Oz though?

Re your first statement - I understand what you say but we have travelled for an hour each way twice to see the boat - have communicated with the seller a lot too.. so are serious - and yes I would take them in our current boat - its not so much rough seas its just typical seas rather than a protected bay - again it may be local to here (Western Australia) but the boat handling is deemed as important if not more so that various items that happen to not work.. as they can be fixed - A hull that doesnt like the conditions cannot.

I also said that all costs would be on me - survey / fuel / time etc - the seller would not be expected to pay for anything - only making the boat accessible for assessment.

My only issue with the deposit is where it is held - a broker has a trust account - the seller does not. Thanks for your input

I have given sea trials before in rough weather - that's exactly what a sea trial is about.

I normally ask for a refundable deposit before a sea trial and a fuel contribution if they decide they don't want the boat. Once a handshake has been made the deposit becomes non-refundable unless some serious issue occurs with the boat. If they just change their mind that's their problem.

Thanks Stats - I'd actually provide a fuel contribution regardless of whether we went ahead or not... and as the offer would be subject to conditions - if the conditions are met - there is no backing out.

This idea that an offer is somehow a % of the AP is complete nonsense. The offer should be what you think the boat is worth and are prepared to pay for it. This reflects the price you would want to get if you were selling it.

I appreciate that in a place with fewer buyers and sellers the market choice might be more limited, so as a buyer you are in the strongest position.

Establish the ceiling price for the boat if in A1 condition e.g. the price someone would realistically pay. From this deduct the assessed cost to get the boat there assuming all works done professionally. IMHO this gives you its value, and this can for some boats be a negative. There is nothing romantic about buying a boat from a financial perspective - remove rose tinted specs and get real with the valuation. - Our offer price is just easier to state as a percentage on here so no specific numbers are bandied about - We have a budget and a top end we are willing to pay and we have identified some fairly important issues that could cost some $$ to rectify - we have valued what the boat is worth to us if it was 100% and then deducted what we think it will cost to repair based on what we have identified - we consider ourselves to be fair - and not just screwing the seller down as far as we can. Re establishing pricing - its a hard one - the market has some skewed pricing some very high, some very low, and the fact that there are only a small handful of these boats around and only 2 for sale currently makes pinpointing the selling price / offer price quite tricky - fortunately for us they are not a niche / cult type boat that fetches lots of money probably the opposite - people are not so interested due to the locally built and so few of them around. For us we like them as they seem to suit our type of boating - are a bit newer than most similar boats and seem to be pretty well equipped

If I were the seller selling privately on a #100 k boat I would pay a professional to handle the transaction process, but ultimately it is for the seller to offer the contract of purchase to you, but if he wants a private sale what does he think he is saving. I would want a deposit as a seller pre sea trial. But as a buyer I would want a 'walk if dissatisfied for any reason' clause (broker's do not like this).. I'm not sure what brokers charge here... but would hazard a guess at between 5 and 10% depending on value - so I guess he thinks he is saving 5-10k

Brokers want you to follow their 'standard' contract, but you do not have to, after all you are still the buyer, but you do have to be reasonable whilst protecting your interests.

One thing I am very clear on is it is silly for any seller to expect a 'you cannot walk away contract' based solely upon visual inspections, but still all standard purchase contracts insist upon this. Therefore the right to reject after sea trial is an essential protection - you might just decide you hate the boat after all.

Superheat - I have answered in your quote above to some..

We know we don't / wont hate the boat - so it would take a crappy sea trial or something fairly heavy to make us pull out - we research stuff to death ( I know more history of this boat than the owner now) and get to the 95% sure mark before we would even consider offering or trialing...

Thanks for the input - its giving me a good insight into peoples thoughts and experience so I can fine tune mine

Steve

 

[Greg2]

On the sea trial issue I think that you are quite right to want a 'proper' sea trial Steve. Personally I would be unlikely to buy a seagoing boat unless I have been able to take it for a full sea trial, not only to confirm that it has a sea kindly hull but also to confirm that everything works, the engines deliver what they should and don't overheat. On the first point on many makes reputation is sufficient to cover sea keeping e.g. our current boat is a Broom 41, which has a reputation for being a good sea boat so the main purpose of our sea trail was to make sure everything worked okay.

Interestingly, a lot of people don't insist on this but to me it is a bit of a no-brainer and if a seller/broker didn't want to play ball when I am obviously a serious buyer then I would probably walk.