I've been looking for a boat and may have found one that is 'the boat.' This will be my first boat and the particular boat is for sale by owner. I believe it may be a desirable deal and thus want to be well prepared to make sure things go smoothly (don't want to lose the boat to someone else). Since there is no broker involved I am looking for advice on contracts, how one might deal with 'earnest money' deposits, etc. in such a situation. If there are resources, sample contracts on line or for purchase, etc. - it would be greatly appreciated. thanks! philippe
Pointer to purchase process
- Thread starter philippe-nw
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Just went thru this
My mistake was thinking that because I loved the boat so much, someone else did too. So I agreed to the asking price and it went downhill from there. Almost entirely my fault, I hasten to add. 10% is the going downpayment, but make it contingent on "satisfactory sea trials" and perhaps a survey, albeit expensive. Absent a survey, ask someone knowlegable about sailboats to go kick the tires with you. Godspeed.
My mistake was thinking that because I loved the boat so much, someone else did too. So I agreed to the asking price and it went downhill from there. Almost entirely my fault, I hasten to add. 10% is the going downpayment, but make it contingent on "satisfactory sea trials" and perhaps a survey, albeit expensive. Absent a survey, ask someone knowlegable about sailboats to go kick the tires with you. Godspeed.
Pretty simple
Stuff to have in writing: You agree to buy and he agrees to sell X boat under the following conditions: 10% refundable deposit completion of satisfactory sea trial and satisfactory survey Sale is cancelled and Deposit is refunded in full if you are displeased with the results of either sea trial or survey. You might also want to consider putting a time frame on these things too, like closing within 10 days of successful sea trial and survey. As a practical matter, you or your surveyor will find something that you don't like. You can use that as bargaining chips to further lower the price or to cancel the sale. The advantage you have with a broker is that he would hold the deposit and act as a third party. Without him there, you will have to rely on the honesty of the seller to return your deposit. If we are talking about a significant sum of money, I would investigate finding someone (such as a local bank) to act as an escrow agent for the transaction. Many banks provide this service for a small fee.
Stuff to have in writing: You agree to buy and he agrees to sell X boat under the following conditions: 10% refundable deposit completion of satisfactory sea trial and satisfactory survey Sale is cancelled and Deposit is refunded in full if you are displeased with the results of either sea trial or survey. You might also want to consider putting a time frame on these things too, like closing within 10 days of successful sea trial and survey. As a practical matter, you or your surveyor will find something that you don't like. You can use that as bargaining chips to further lower the price or to cancel the sale. The advantage you have with a broker is that he would hold the deposit and act as a third party. Without him there, you will have to rely on the honesty of the seller to return your deposit. If we are talking about a significant sum of money, I would investigate finding someone (such as a local bank) to act as an escrow agent for the transaction. Many banks provide this service for a small fee.
THink about this
What good are contracts if the seller spends the downpayment on an emergency and you want your money back? Get a lawyer? That will cost more than the 10% you will forfeit. What if you decide you want out because of a bad survey? Same thing, we are back to a lawyer again. you have 2 practical choices. 1). Find a close friend that knows alot about boats, check it out and buy it. Depending on the cost of the boat and potential problem areas this can be a costly mistake. 2). When i bought my current boat, it too was for sale by owner. No way was i going to give $1500 deposit to a stranger. If he didnt want to break the deal, i would not be able to either, so now i could be stuck with a boat i didnt want. What i did was , i went to a broker that i had used on a prior occasion to buy a boat, asked him how much he wanted to handle the transaction. He charged me an extremely reasonable fee. I gave him the deposit, he called the seller and handled the whole deal. All went well. If for some reason, i had a legitimate reason to back out (bad survey, bad paperwork, etc), the broker had my check in escrow and i was safe. Good luck and above all, DONT PLAY LAWYER, or you will really need one if all goes south. remember, a contract can work against you also.
What good are contracts if the seller spends the downpayment on an emergency and you want your money back? Get a lawyer? That will cost more than the 10% you will forfeit. What if you decide you want out because of a bad survey? Same thing, we are back to a lawyer again. you have 2 practical choices. 1). Find a close friend that knows alot about boats, check it out and buy it. Depending on the cost of the boat and potential problem areas this can be a costly mistake. 2). When i bought my current boat, it too was for sale by owner. No way was i going to give $1500 deposit to a stranger. If he didnt want to break the deal, i would not be able to either, so now i could be stuck with a boat i didnt want. What i did was , i went to a broker that i had used on a prior occasion to buy a boat, asked him how much he wanted to handle the transaction. He charged me an extremely reasonable fee. I gave him the deposit, he called the seller and handled the whole deal. All went well. If for some reason, i had a legitimate reason to back out (bad survey, bad paperwork, etc), the broker had my check in escrow and i was safe. Good luck and above all, DONT PLAY LAWYER, or you will really need one if all goes south. remember, a contract can work against you also.
survey
First boat. Absolutely get a survey. You'll need it for insurance anyway. Ask around about a good surveyor because they vary. There have also been threads on this site about surveyors. Do not let that keep you from poking about yourself. Per one of the threads, you don't want a big beefy guy or gal, you want someone who'll crawl into tight spaces.
First boat. Absolutely get a survey. You'll need it for insurance anyway. Ask around about a good surveyor because they vary. There have also been threads on this site about surveyors. Do not let that keep you from poking about yourself. Per one of the threads, you don't want a big beefy guy or gal, you want someone who'll crawl into tight spaces.
Approx. Cost?
Actually, its hard to recommend a course of action without knowing the approximate cost of the boat. I certainly wouldnt get a surveyor for a boat of $3,000.00. nor would I go through a lot of other things, like deposits, i would just make the purchase as soon as i tried out the boat. With an approximate value, we may be of more help. Also the type of boat etc.Boat repairs are relatively easy. PROPER and safe repairs are a different story. I have made many upgrades and repairs on my own boat as well as many other boats. I used to have a woodworking shop, a boat repair buss., etc. Point being...project boats are rarely ever worth it.
Actually, its hard to recommend a course of action without knowing the approximate cost of the boat. I certainly wouldnt get a surveyor for a boat of $3,000.00. nor would I go through a lot of other things, like deposits, i would just make the purchase as soon as i tried out the boat. With an approximate value, we may be of more help. Also the type of boat etc.Boat repairs are relatively easy. PROPER and safe repairs are a different story. I have made many upgrades and repairs on my own boat as well as many other boats. I used to have a woodworking shop, a boat repair buss., etc. Point being...project boats are rarely ever worth it.
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