Super bargain on a 1995 70ft Canados, what is the catch ?

[MapisM]

Are you sure that is not the total remaining to settle the lease including VAT rather than just the VAT?

My thought exactly.
But if given the choice between a take over of the residual leasing or a full prepayment, it's not just the interest rate to consider.
More often than not, there's a prepayment penalty which covers the bank for the missing income.
In fact, the golden rule in finance is that asking anything to a bank is like gambling at the casino - the house always wins....

@ OddvarH: glad to help if you need a translation.
I dealt with all sort of contracts in IT for most of my working life, so hopefully I can still understand also the small prints...

 

[OddvarH]

The broker should be able to give you a term sheet describing the lease, and then the lease document (in Italian...)

...I got a leas sheet from the brooker, but there is no info on VAT...must assume it is included...

Are you sure that is not the total remaining to settle the lease including VAT rather than just the VAT?

..it cant be, the lease is ending 07/2015 with monthly payment of 7744E according to the above sheet....

 

[OddvarH]

@ OddvarH: glad to help if you need a translation.
I dealt with all sort of contracts in IT for most of my working life, so hopefully I can still understand also the small prints...

Thanks MapisM, that could be needed, the small letters can be tricky, so I contact you if we get a solution here

 

[Deleted User YDKXO]

.
..it cant be, the lease is ending 07/2015 with monthly payment of 7744E according to the above sheet....

Actually its not really material how much VAT is left in the remaining payments because what matters is that someone, either the existing owner or the purchaser, must complete the remaining payments or settle the lease. IMHO if you buy this boat, you have to ensure that you retain a proportion of the purchase price to settle the lease directly with the bank because you couldn't trust the existing owner to do it

 

[Deleted User YDKXO]

My thought exactly.
But if given the choice between a take over of the residual leasing or a full prepayment, it's not just the interest rate to consider.
More often than not, there's a prepayment penalty which covers the bank for the missing income.

Yes there is usually a penalty for early settlement in most leasing schemes unless it is negotiated otherwise at the beginning. In the UK that penalty is often governed by law I think although I don't know how it works in Italy. In the case of the boat that I was looking at though, the settlement balance was still considerably less than the total of the outstanding payments so I would definitely have been better off settling the lease early even accounting for the loss of interest on the cash

 

[BartW]

...I got a leas sheet from the brooker, but there is no info on VAT...must assume it is included

..it cant be, the lease is ending 07/2015 with monthly payment of 7744E according to the above sheet....

confusing info all together,
I understood earlyer that the lease finishes this year, and that there is a remaining amount due of about 150K
now this 150K could be correct if you count 7744E x 19 months (from now)
but I don't know where that 20K figure of VAT comes from.
The broker should give a clear breackdown of the remaining price to pay, and make clear all details about the leasing.

If you go ahead with this project, the broker should make this all clear to you,
and the surveyor should be able to check all the details.

I would also insist the payment is only done when the "unregistration"in Italy is finished,
this is all very "official" in Italy, so that discrepancy's in the paperwork would show up during the unregistration process.
make also clear that you don't expect any charges related to the admistrative procedures,
perhaps just a share in paying the notary, for keeping the funds untill all party's involved give a go.

or formulated differently:
the only charges you accept to pay during the sales process are:
-the lift out for the survey
-the survey
-the notary (or part of it)
and agree until when mooring cost is covered by the seller
all this and much more should be defined in the sales contract....

 

[MapisM]

The broker should give a clear breackdown of the remaining price to pay, and make clear all details about the leasing.

B, I would think that this isn't actually so important for the buyer, at this stage.
If as I understand he does NOT want to take over the leasing, all he needs is an official declaration from the bank confirming that whatever was still due for the financing has been settled in full, before the final closing of the transaction.
And "before" could actually mean at the same time - i.e., if the seller doesn't want to (or can't) pay the bank before he gets the price agreed, it's perfectly feasible to arrange the closing involving also the bank, together with the seller and the buyer.
This way, it all happens virtually at the same time: the payment of the agreed price, a part of which is used for the financing prepayment (thus freeing the boat from any encumbrances), and the transfer of ownership - so everyone is happy.
In fact, it should be considered that the seller has very good reasons for not willing to prepay the leasing and complete the un-registration process, unless he has some sort of guarantee that he will get the agreed price.
The obvious reason being that both the un-registration and the prepayment involve costs for him - particularly the latter.

Btw, on the VAT matter, I don't think there is the option to buy the boat VAT-unpaid anymore - not that it would make sense, but just saying.
If the buyer buys the boat free from any obligation, it would mean that the leasing has to be prepaid in full (including whatever is left of VAT in the installments), so she would become VAT paid there and then.
But also if he would prefer to take over the existing leasing, it would just reach its completion eventually, and by that time the boat will become VAT paid, eventually.

 

[Nick_H]

I know nothing about these leasing schemes, but obviously the VAT advantage must come from the different VAT treatment between a lease and a purchase. I'm guessing here, but if the owner wants to pay off the balance early, then in effect he wants to make the lease smaller, and the balloon payment bigger, and VAT will be charged at full rate on the balloon payment, because that's the purchase bit? Could this explain the 20k VAT?

 

[OddvarH]

....end of story, whats the catch?????

Well, I'm not sure if I'm in the right mood to write something sensible here, but I am both disappointed and surprised with my experiences with the Italian broker. Maybe I asked too many wrong questions, I'm not sure, but I have certainly learned not to trust anyone without having everything documented in writing...

The boat is now under offer, and its not me!!

 

[vas]

the only thing for sure is that it's not over!

however, if it's on offer and then they came back to you, I'd be more worried
keep on hunting

cheers

V.

 

[rustybarge]

the only thing for sure is that it's not over!

however, if it's on offer and then they came back to you, I'd be more worried
keep on hunting

cheers

V.

Its weird the way there's suddenly another offer when you get interested, although sometimes it really does happen.

 

[Nick_H]

Oddvar, sorry it didn't work out, but you surely can't be that surprised given the information in Bart's first post:

"The asking price was 350K, but after some haggling Oddvar got a agreement on a price a little higher then the cost of the two new engines (He has seen the invoice). Not a lot more then half the asking price"

 

[rafiki_]

....end of story, whats the catch?????

Well, I'm not sure if I'm in the right mood to write something sensible here, but I am both disappointed and surprised with my experiences with the Italian broker. Maybe I asked too many wrong questions, I'm not sure, but I have certainly learned not to trust anyone without having everything documented in writing...

The boat is now under offer, and its not me!!

Hi Oddvar. Very disappointing for you, but it is not over yet, and there are other fish in the sea too?

 

[MapisM]

I am both disappointed and surprised with my experiences with the Italian broker.

Sorry to hear that, but at risk of playing devil's advocate, you shouldn't be so surprised.
I mean, since as I understand your offer had not been (yet) accepted in written and you didn't pay any deposit, it's normal that the broker jumps on any better deal he can find.
You would want him to do so, if you were the seller.
Btw, I personally know the owner of the brokerage firm you were dealing with (Mr.G.P.), and he has one of the best reputations in this industry, though I don't know if you dealt with him or with one of his partners.
Anyway, if you are tempted to associate what happened to the fact that he was an Italian broker, don't.
I guess I might sound biased, being Italian myself, but I also dealt with British and French brokers, not to mention the Americans, and for all of them, bar none, there's only one rule of the game, and it's money.

Regardless, that's not the crucial point.
I'm now just guessing, but when you make an offer significantly lower than the asking price, and it's accepted, even the broker might be surprised that the seller is willing to reduce his expectations that much.
Which means that he might have other clients in his phonebook, which he knows that at such steal price might also be interested, so he starts making a few phone calls.
And the rest is history.

Mind, in your boots, I wouldn't change one iota of what you did.
At this point in time, for the type/age of boats you are looking at, there are surely other fantastic occasions around, which you can grab for not much money.
And most of their owners are probably willing to accept much less than their asking price.
Bottom line, just keep looking ahead. I'm sure there's a great boat somewhere, waiting for a new owner to take care of her.

The only couple of suggestions I can think of are:
1. As Vas said, if they would offer you the same boat again, be VERY careful. I wouldn't necessarily walk away, though. There are many reasons why the "other" deal might fail, regardless of how good or bad the boat is.
2. Since you also have the excuse of a somewhat expensive trip to come to the Med and check out the boat, in your boots I would ask for some sort of written confirmation from the broker before jumping on a plane. But I would still NOT send any deposit, at least not before having seen the boat. Mind, this is somewhat tricky, because without a formally accepted offer AND a somewhat substantial deposit, you are still at risk of overbid, so to speak. But I'd rather risk to miss one deal than give my money to someone I (possibly) know nothing about.

Good luck!

 

[BartW]

Sorry to hear Oddvar,
but this is what I tried to explain when we met,
instead of haggling about the last 1000 euro, you'd better show some engagement.
The final price you had the agreement on, was "nothing" in the total context of 70ft boat ownership.
and as far as I know, the broker didn't see any engagement from your side. (I'm not talking about paying a deposit !)

I still believe that even at asking price this is a good boat for someone who's in for such a project.
almost completely new machinery, I would buy her if I had more time

I do appreciate that you hesitated a lot stepping in to this world.
good luck with your search, and keep me informed,
if its a Canados, (or a few other Italians) you now I'm much interested

 

[MapisM]

I would by her if I had more time

Oi B, are you thinking to build up a "rainbow fleet", with enough C70s to cover all the possible angel colours?
Mind, you can count on myself and S for skippering one of them anytime!
I'd pick the red one if given a choice, thanks in advance.

 

[OddvarH]

...I'd pick the red one if given a choice, thanks in advance.

...good idea, what about the blue one?? ...

 

[MapisM]

Naah, she would be the fleet flagship, I very much doubt that B would leave her to anyone else!

 

[OddvarH]

...thanks a lot for constructive feedback...there is a lot of info here for anybody looking for this kind of deal....thats the positive side of it


@ BartW it was 15.000 E ...I´ll keep you informed...I might have been more aggressive about this, but was unsure after the inspection that revaled the wood condition..however, I did plan to go on with a survey...

@ MapisM ..sorry, it could of cause be any broker...and I did ask for written documentation, but did never got it...so anyway, we had a nice stay in Italy...and some wonderfull days in Rapallo, Lavanga, Siena, and finaly Roma ...oh, I´ll almost forgot..we also had a daytrip to beautifull Portofino, and managed to drive by Pisa...just to have a pic of the tower...

@ vas..I´ll be more carefull if they comes back...however this was in fact the second time, long story..

 

[MapisM]

@ MapisM ..sorry, it could of cause be any broker

No worries, all understood. Glad to hear that you had a nice time around here, anyway.
Btw, B maybe told you that he asked me if I was around when you came to Lavagna, but unfortunately (well, not exactly, but you see what I mean ) I was still onboard in Sardinia at that time.
If you would find some other interesting boat around Italy, more than happy to join you and possibly B in your next hunting trip!