Pursuant to the Purchase & Sale Agreement
Often the search is far and wide, similar to an online dating service, for a new boat. After all, the boat must meet all the predetermined requisites as set forth by the owner-to-be. Every hiding place for fine boats and, as it sometimes turns out, derelict boats will be sought. On land and by sea, and often through the air, the buyer will not quit until that buying urge has been satisfied. And along the way, oh wise one will have learned that nothing is ever as it seems, and that is so ever true with boats.
Recently, my search led me to an online site often used by brokerage houses. As with dating services, the personality, specifications, and featured benefits, must be condensed into a finite number of words which never seem to satisfy the reader’s curiosity. The listing contains whatever is required to pique the buyer’s interest. The listing only scratches the surface of what you actually might be getting yourself into. Usually, brokers will submit a positive personal opinion in the description – be sure to separate fact from opinion. If the boat described generates any interest at all, prepare specific questions for the broker based on the listing.
To uncover the truth about the condition of the boat, an inspection must first be arranged. It is preferable to view the boat out of water; however, during the nice weather, the boats are being used by their present owners and features below the waterline will have to be inspected during the haul out. Whether boarding the boat from a dock or from a ladder, take a stroll down the side decks; look around on the foredeck; sit at the wheel. The boat must feel right for handling lines, long hours at the wheel, anchoring, and moving fore and aft on the boat. How about the accommodation? Is there sufficient headroom? Will the layout work for captain and mate? Is the motor(s) accessible for routine maintenance? Is there enough storage space and tankage to suit your cruising needs? These questions are subjective and can only be answered by the skipper and crew. Questions pertaining to the condition of the yacht are normally determined by a qualified surveyor or journeyman boatbuilder. Boarding a yacht in obvious disrepair is risky from a liability standpoint as damages might be incurred during the inspection and the potential client could be put in harms way by merely boarding the boat. These “death row” boats are best left for the do-it-yourselfer with marine experience in structural and mechanical repair.
Once the initial inspection has been completed, more research must be undertaken by the buyer. Find the manufacturer’s website; study the builder’s original specifications; look for an owner’s group website for the particular brand as owners will often post problems experienced with a particular model. Plan on doing the research on the high ticket items – the motor, electronics, generator, and so on. Many buyers rely on the broker for information; this is a mistake. It is up to the buyer to do the research so there can be no mistake interpreting the information. The broker will assist in coordinating the showing, seatrial, and survey, providing a Purchase and Sale Contract, holding monies (deposits) in escrow, registering and documenting the vessel and, most importantly, providing the communications link between buyer and seller. For the buyer this means that the bulk of the work; ie, knowing and understanding the boat in question, will be up to the purchaser.
In most cases, the broker will submit offers to the buyer. Depending on the broker/seller relationship, the broker may not submit a low ball offer to the owner; this can sometimes become a sticking point. Yet, an offensively low offer may not be worth the trouble for the buyer. Better results may be achieved by submitting what the broker defines as a reasonable offer. Later in the buying process the seller will often submit a new, lower offer based on the results of the pre-purchase survey. All sales are driven by this mutually agreed upon number. Nevertheless, the buyer never knows for sure what motivates the seller. Depending on the personal circumstances of the seller and how long a boat has been on the market, all “reasonable offers” can be very difficult to determine. Once an offer is presented to the owner, a counteroffer by the seller might be a clue as to how low they might be willing to go. A middle ground can usually be found by both parties compromising and lowering their respective expectations.
At the point when both parties agree to the purchase price, and any and all contingencies, the survey and seatrial are scheduled. Very few boats will come away with a spotless pre-purchase survey. If the recommendations exceeds a tolerable number of repairs, the purchaser is likely to walk away with the deposit. If not, an estimate of the cost of the repairs per the surveyor’s recommendations will be sought out and the purchase price will no doubt be re-negotiated.
The object of the exercise is to get to the truth about a particular boat. Every boatowner will treat a boat differently and the results of this attention or lack thereof influences the purchase price of a boat. A potential buyer will sense immediately how well a boat has been cared for. A broker’s listing usually won’t give a clue as to what problems a boat might have. A lengthy inspection by the purchaser and a thoroughly technical pre-purchase survey and seatrial, will determine if the boat is worth pursuing.
