The etiquette of buying a boat - surveys and offers...

[Kukri]

I haven't bought many boats. I have sailed for almost half a century but I have kept boats for longish spells.

Now I am about to buy another, but I am wondering about the question of haggling over the price. Some guidance will be very welcome!

I particularly dislike using a survey to get the price down, but I do think that brokers usually add to the price, perhaps expecting a buyer to haggle.

I think it is nicer to make an offer, subject to survey, and to make it clear that the survey will simply be to decide "yes" or "no", with no further arguments about the price. This also makes the surveyor's job easier.

What do people think?

 

[FullCircle]

I haven't bought many boats. I have sailed for almost half a century but I have kept boats for longish spells.

Now I am about to buy another, but I am wondering about the question of haggling over the price. Some guidance will be very welcome!

I particularly dislike using a survey to get the price down, but I do think that brokers usually add to the price, perhaps expecting a buyer to haggle.

I think it is nicer to make an offer, subject to survey, and to make it clear that the survey will simply be to decide "yes" or "no", with no further arguments about the price. This also makes the surveyor's job easier.

What do people think?

An honourable principle that will allow you to sleep easy in bed at night.

 

[TQA]

I think that once you have agreed a price subject to survey then unless something major turns up on survey then further negotiation is not good etiquette.

But if something does turn up and it is more than a missing jubilee clip then it is quite acceptable to reopen negotiations.

On my last purchase a major item too wit 200 ft of 3/8th galvanized anchor chain described on the inventory as being in good condition was missing on the survey day and could not be located. A suitable adjustment to the price to be paid was negotiated and both sides accepted that as a reasonable outcome.

 

[Poecheng]

The other way is to test the water in respect of price but decline to put an offer in.

Have the survey and then, having considered the survey, put your offer in based on knowing exactly what you are buying.

Downside is that brokers will not like it and the standard contract for a boat purchase is not set up this way.

However, you are in what is very much a buyer's market and it is a perfectly reasonable and acceptable suggestion which they can, if they wish, decline. You could agree to indemnify for costs of hauling out and other expenses or damage to the boat (as you would with a standard contract) but leave it at that.

Like you, I do not feel comfortable bargaining once and then having another go (unless, of course, there are real problems with the boat or inventory). Seems like chiselling to me.

A couple of boats ago, I was buying a nice boat and did all the bargaining first but specified exactly what I wanted to buy: what price for a fully fuelled, freshly antifouled, fully watered, fully rigged, boat with the advertised inventory placed in the marina with a week's berthing paid. Absolute turnkey condition and circumstances. We bought it after survey and it was great to turn up, start her up and off we went.

 

[jac]

I haven't bought many boats. I have sailed for almost half a century but I have kept boats for longish spells.

Now I am about to buy another, but I am wondering about the question of haggling over the price. Some guidance will be very welcome!

I particularly dislike using a survey to get the price down, but I do think that brokers usually add to the price, perhaps expecting a buyer to haggle.

I think it is nicer to make an offer, subject to survey, and to make it clear that the survey will simply be to decide "yes" or "no", with no further arguments about the price. This also makes the surveyor's job easier.

What do people think?

The Yes / No bit might need some clarity.

The survey should only really be there to confirm the condition and to reveal anything hidden ( i.e. expensive) that you might not reasonably have known when putting in the offer.

If the survey picks up a few minor points which make you then think no - even though they are minor and cheap to fix then you might struggle getting your deposit back.

Also i'm not sure how it would make the surveyors job easier. He may be able to give a ball park figure for what a repair might cost but realistically you would need to get a pro in to give a quote on a job,

IMHO - don't try and re-invent the wheel.

By all means - put in a fair offer subject to survey but make it clear that if anything major comes up then you will reject boat and expect the return of your deposit.

You should be prepared for the owner / broker to say that of the seller fixes it as the sellers expense then you should buy as that could be hard to argue against.

 

[Tranona]

I haven't bought many boats. I have sailed for almost half a century but I have kept boats for longish spells.

Now I am about to buy another, but I am wondering about the question of haggling over the price. Some guidance will be very welcome!

I particularly dislike using a survey to get the price down, but I do think that brokers usually add to the price, perhaps expecting a buyer to haggle.

I think it is nicer to make an offer, subject to survey, and to make it clear that the survey will simply be to decide "yes" or "no", with no further arguments about the price. This also makes the surveyor's job easier.

What do people think?

No, brokers do not add "haggling" room, although owners may insist on an asking price that is unrealistic.

View the boat, digest the written particulars, ask questions. When you get to the point that you think the boat is for you make an offer of what you think it is worth to you. You may use other similar boats for sale or recently sold as comparators bearing in mind differences in kit, condition etc of each. Not always easy, particularly if the boat is unusual. However, you have to recognise that unlike buying something new the asking price is not based on cost plus a profit, but on what the seller would like to get to part with it, and what you would be prepared to pay to own it. So, inevitably some negotiation is expected as these two figures are unlikely to be exactly the same!

It is important that the offer is made subject to survey, and that further negotiation on price is likely after survey. This is for 2 reasons - firstly once you have paid you have no comeback and secondly, the description and your own assessment may not reveal significant faults that affect the value of the boat, or even change your decision to buy.

You can, of course if you are confident in your assessment, forgo the survey, but would not be a good idea to have a survey and then ignore the findings. Equally having a survey before you have made an offer is not a good idea. Neither you, nor the seller have made any commitment so you could be wasting your money if the seller accepts an offer from elsewhere or withdraws. A seller might also refuse access to the boat unless you are committed to buy.

The recognised process is as it is because on balance it works, and more importantly it is fair to both buyers and sellers, so best to follow it.

 

[sailor211]

When we bought our current boat, we spent a some time looking in detail, with list of known possible faults of the brand.
Offer was subject to survey, which was very much decide to buy or not. Only major fault not disclosed or known about would have stopped the sale. I felt confident to take a view on most things and the owner was honest and open. A few minor costs would appear anyway.

Selling the pervious boat we gave a full inventory of what was being sold and a list of gear on the boat that was not included. Surveyor spent a long time listing everything on the boat including towels , named life jackets even phone charger inspite of having our inventory. I told the buyer to stick to the inventory he was given not to ask for extras.

 

[[70521]]

What do people think?

Sounds like a plan.

I've bough two boats and only ever us a survey to confirm the state of the vessel from somebody who is not emotionally involved in the transaction.

 

[ex-Gladys]

I had a boat surveyed once that was for sail at around £6k. The surveyor found things that were not blindingly obvious such as soggy decks and a botched inboard engine removal (not obvious until out of water). Estimate for cost of works... £3k... Walked away

 

[duncan99210]

When we bought Rampage we followed the usual pattern of a detailed assessment by us of the boat, leading to us concluding firstly that she was the boat we wanted and secondly that we should make an offer some 20% below the asking price, based on the fact that the broker had told us the seller was open to offers as well as what we thought the boat was worth. We were prepared for the need for bargaining but in the event our offer was accepted straight away. We then paid a deposit and had a survey which highlighted a few minor points which we passed to the seller: he chose to rectify them rather than adjust the price. We then had a sea trial (where we paid for the lift in, the seller paid for berthing) and at the end of that, which satisfactorily demonstrated that the major systems on board worked as expected, we made the final payment and the boat was ours.

So, to my mind, the bargaining takes place first so you come to an agreed price, with the opportunity to either walk away, have the seller do rectification work or adjust price if the survey reveals significant problems. I walked away from a boat once after the survey revealed problems with the gas system and outdrive for which the seller was not prepared to either make a price adjustment or to have the work carried out. The broker wasn't happy but he had a copy of the survey which showed the problems and agreed they were costly enough to justify the return of my deposit.

 

[Doineann]

We recently bought a new boat in Holland. I really like their system, you negotiate a price subject to Survey, then have the survey done. The Broker holds the deposit money in a client account. The surveyor who is registered as such with their Marine Trades people, then list items of significance. The Vendor then has the choice of reducing the price to cover the cost of repair or replacement, or getting the work done himself. I think if the overall cost was more than 5% of the total then either side can elect to walk away and the deposit is returned by the agent who holds it in Escrow.

As to negotiation, I always think you want your first offer turned down. If it is accepted you will always wonder how much lower they would have gone.

 

[AntarcticPilot]

I think that once you have agreed a price subject to survey then unless something major turns up on survey then further negotiation is not good etiquette.

But if something does turn up and it is more than a missing jubilee clip then it is quite acceptable to reopen negotiations.

On my last purchase a major item too wit 200 ft of 3/8th galvanized anchor chain described on the inventory as being in good condition was missing on the survey day and could not be located. A suitable adjustment to the price to be paid was negotiated and both sides accepted that as a reasonable outcome.

Yes, I agree. On my Moody there was an issue with the attachment of one of the bulkheads to the hull; not a major structural matter, but definitely something that needed attending to. We negotiated a reduction in price based on this. It was a matter which I had not detected myself, and which realistically only a surveyor could state whether it was a deal-breaker or not. As the surveyor stated it was repairable and not an indication of other structural issues, we went ahead with an appropriate price adjustment.

 

[ip485]

I agree. I think a good approach is to agree there will be no further negotiation if the issues arising from survey dont result in costs to rectify of more than £X, with x obvioulsy being related to the overall cost. That instills the seller with a great deal of confidence, and after all if you are happy with the price you negotiate, you should only want to renegotiate if there is rectification work that was not anticipated and is material. The more complex the vessel, and the less experience you have, the greater the risk that the survey will reveal substantial defects which will prove costly to put right.

 

[Uricanejack]

No, brokers do not add "haggling" room, although owners may insist on an asking price that is unrealistic.

View the boat, digest the written particulars, ask questions. When you get to the point that you think the boat is for you make an offer of what you think it is worth to you. You may use other similar boats for sale or recently sold as comparators bearing in mind differences in kit, condition etc of each. Not always easy, particularly if the boat is unusual. However, you have to recognise that unlike buying something new the asking price is not based on cost plus a profit, but on what the seller would like to get to part with it, and what you would be prepared to pay to own it. So, inevitably some negotiation is expected as these two figures are unlikely to be exactly the same!

It is important that the offer is made subject to survey, and that further negotiation on price is likely after survey. This is for 2 reasons - firstly once you have paid you have no comeback and secondly, the description and your own assessment may not reveal significant faults that affect the value of the boat, or even change your decision to buy.

You can, of course if you are confident in your assessment, forgo the survey, but would not be a good idea to have a survey and then ignore the findings. Equally having a survey before you have made an offer is not a good idea. Neither you, nor the seller have made any commitment so you could be wasting your money if the seller accepts an offer from elsewhere or withdraws. A seller might also refuse access to the boat unless you are committed to buy.

The recognised process is as it is because on balance it works, and more importantly it is fair to both buyers and sellers, so best to follow it.

Pretty much the process I experienced. end result we were both happy.

Saw boat for sale a reduced asking price open to offers.
Made enquiry, asked about how open. broker said make an offer it would be looked at.
I made an offer subject to the usual survey, Unusual boat was seen on internet only I had subject to my own inspection.
offer accepted.
Arranged for haul out, survey, on same day I first saw boat.
survey was very thorough
As expected some minor issues.
Some bigger ones, almost a walk. talked to surveyor, decided it was an ok if fixed.
Discussion re if fixed.
Owner offered to drop price significantly.
discussion with broker and surveyor and boat yard. advantage with me organising fix its done to a standard I choose rather than cheapest.
disadvantage fix could be more than expected.

Fix turned out to be more than expected but I do know it is fixed properly.

all happy

 

[Tranona]

We recently bought a new boat in Holland. I really like their system, you negotiate a price subject to Survey, then have the survey done. The Broker holds the deposit money in a client account. The surveyor who is registered as such with their Marine Trades people, then list items of significance. The Vendor then has the choice of reducing the price to cover the cost of repair or replacement, or getting the work done himself. I think if the overall cost was more than 5% of the total then either side can elect to walk away and the deposit is returned by the agent who holds it in Escrow.

As to negotiation, I always think you want your first offer turned down. If it is accepted you will always wonder how much lower they would have gone.

Pretty much the same as the UK except the trigger point of a %age of value to rectify faults. There are arguments for and against this clause as it leads to the possibility of "rigging" the rectification costs to keep within this figure - as happened to a forum member here some years ago.

Our legal system tends to be less prescriptive than the Dutch (and other European countries) and leaves more to negotiation and judgement.

 

[JumbleDuck]

Can anyone think of any other expensive purchase for which you are not permitted to have any professional assessment carried out before signing a contract to buy?

 

[Tranona]

Can anyone think of any other expensive purchase for which you are not permitted to have any professional assessment carried out before signing a contract to buy?

There is nothing to stop you from having a survey before you commit - provided the vendor agrees. However, unless you commit with a contract the vendor can accept an offer elsewhere or withdraw the boat from sale, leaving you with typically over £1000 of cost.

 

[JumbleDuck]

There is nothing to stop you from having a survey before you commit - provided the vendor agrees.

And that "providing" is the issue. When I viewed a boat like mine on the Clyde I was worried by something and said I would like to get a professional along to check it. The broker reacted as if I had farted in his face. Completely out of the question. No contract, no inspection. Reader, I bought elsewhere.

From reading here it seems that my experience was not atypical; while in theory one could get a survey first if one wanted, in practice brokers simply will not agree. Private vendors may be more accommodating, but that's often true of the whole process and naturally so; a private vendor's target is to sell one particular boat while a broker's target is to make the maximum hourly profit.

However, unless you commit with a contract the vendor can accept an offer elsewhere or withdraw the boat from sale, leaving you with typically over £1000 of cost.

True, and that was big problem with the Scottish survey-then-offer model of housebuying. It was far from uncommon for people to pay for five or ten surveys before having an offer accepted. Nowadays house have to be marketed with a basic survey. There is no reason, of course, why yacht brokers could not do the same ...

 

[jwilson]

Can anyone think of any other expensive purchase for which you are not permitted to have any professional assessment carried out before signing a contract to buy?

An old argument. There are valid reasons why it is GOOD for the buyer and seller to sign a contract before survey - it lays down who does what when and is a major disincentive to the seller selling to someone else in the meantime, perhaps just after you have paid for haulout and survey.

There is nothing to stop you getting a surveyor to accompany you on a VIEWING and advising you. When potential buyers are a really long way away from a boat we ( http://www.yachtsnet.co.uk/ ) often suggest they pay a local surveyor for an hour of his time to view the boat on their behalf and report by phone.

 

[Koeketiene]

I think it is nicer to make an offer, subject to survey, and to make it clear that the survey will simply be to decide "yes" or "no", with no further arguments about the price. This also makes the surveyor's job easier.

I've only bought 3 boats, and I did try to live by those same principles.
However, I have found that surveyors don't always provide black & white answers which make a yes or no decision easy.

Example:
Before we settled on our current boat, we put in an offer on another boat.
It was made clear to us that she had been treated for osmosis two years prior.
When I asked for proof (invoice) I was told that it was a DIY job.
Looking over the hull I noticed a difference in hull thickness above and below the waterline.

I asked the surveyor to pay particular attention to this.
When I got the survey report it read: The hull probably remains adequately strong.
This, to me, read like: She might float, but don't hold me to it.

We walked away from that one.