Sale My Sailboat

[obedone]

My old neighbor wants to buy my oday 30. He wants to make 12 monthly payments.
Is there any way this can be done safely, just in case something happens and not have the liability or loss being on my shoulders?

 

[jviss]

Not really a boat topic. Are you taking possession immediately, or only after the payments are made?

 

[Head Sail]

I'd wonder why he's not getting loan from a bank. If they won't lend to him, why would you?

 

[weinie]

My old neighbor wants to buy my oday 30. He wants to make 12 monthly payments.
Is there any way this can be done safely, just in case something happens and not have the liability or loss being on my shoulders?

Sure. Get a lawyer to draw up an agreement or download an installment sale agreement online (a little more risky). He doesn't own it unless you get all 12 payments. Have him pay the lawyer's fee. Of course if you don't get paid, the boat might not come back to you in the same condition, plus you will have to get a judgement for it to be repossessed. Better if you can get a larger down payment than just the first month's.
ETA... you also should enforce in the agreement that he agrees to keep it insured for a good amount. If he doesn't, he must get time to cure or you can repossess. You also need to be listed as additional insured and loss payee on his policy.

 

[jviss]

Whoops, I got it backwards. I thought you were the buyer. Sorry!

There are two transactions taking place with the deal you present: the sale of the boat, and the financing of the boat. Keep them separate! It's O.K. to use the boat as collateral for the loan, but it's important to keep the two transactions separate.

Just for context, are we talking about a lot of money here? There are six on Yachtworld, from about $11K to $20K. Nothing to sneeze at, I guess.

Would he be taking possession immediately, or only after the payments are complete? I suspect the former.

Good advice from @Head Sail and @weinie .

 

[jviss]

Thinking more about this, I would tell him to get a loan. If this deal goes south, you still live next door to the guy. That said, sell it to someone else! Every time something breaks, etc., he's in your hair.

 

[Justin_NSA]

Let him make 12 monthly payments to a bank and avoid the loan risk and loss of a friendship.

 

[Benny17441]

Don't lend money to family, friends, neighbors nor strangers. Leave the lending to the Banks or professional lenders. Just give him a small discount for being a neighbor and tell him you need all the money up front and suggest he goes to a Bank.

 

[Don S/V ILLusion]

While there are lots of experienced sailors here, many of whom gave you good suggestions, this isn't the place to get financial advice

 

[Joe]

The rule is this: Buyer's price, Seller's terms(i.e. cash)...... Buyer's terms(i.e. installments), Seller's price.

Negotiate on one or the other but not both. So only a full price offer will warrant a consideration for installments. Like a vehicle, you'd put your name and address as the lienholder on the registration. This allows you to repossess the vessel if he defaults. You can draw up a simple contract regarding payment dates, insurance, slip and maintenance fees, boat location, etc.

You can get a better price by offering installments.... I purchased a boat that way and spent the rest of my budget on improvements.... after payoff the boat become unencumbered, lienholder removed from title. I would not have defaulted after spending so much on new sails, motor etc. so my seller felt pretty secure that if he had to take the boat back he'd actually make money.

This purchase was for well under $10k.... for more expensive purchases I'd use a professional.

 

[dlochner]

If you are not in a hurry to unload the boat, sell him the right of first refusal for a small amount of money, say a couple hundred dollars. Then give him a year to exercise his right. He can make payments to his savings account and when he has the purchase price, he can exercise the right. Sort of like selling a warrant to buy more shares of stock in the future. If he doesn't exercise his right, then you can sell it on your own and keep his initial payment.

Talk to a friendly attorney for advice on how to write the contract.

 

[Meriachee]

obedone, I would like a new truck, would you buy it for me?

 

[shemandr]

Who's doing who a favor here? If you want to sell the boat just sell it to someone who can pay upfront. If you want your friend to have it, for whatever reason, then make him a deal. I'm generally against selling anything to family or friends or buying from same. Deals should be clean with no strings attached. If he's offering you more money than you think it's worth consider what it will be like when he discovers some defect. The sale should be "As is. No warrantee in reality or implied."

 

[FDL S2]

If you are not in a hurry to unload the boat, sell him the right of first refusal for a small amount of money, say a couple hundred dollars. Then give him a year to exercise his right. He can make payments to his savings account and when he has the purchase price, he can exercise the right. Sort of like selling a warrant to buy more shares of stock in the future. If he doesn't exercise his right, then you can sell it on your own and keep his initial payment.

Talk to a friendly attorney for advice on how to write the contract.

This is good advice. You could also throw in that you would let him use the boat occasionally during the year (you can write how often and the conditions in the contract). This would help him decide if he really wants the boat or not after a year.

 

[BigEasy]

An “old” neighbor or current neighbor? Tell him you need the total amount upfront. He will have to finance it or make a home equity loan (assuming he has a home). Don’t want to get involved with this because of the legal and financial ramifications. If he can’t get the cash; sell it to someone else.

 

[Joe]

My old neighbor wants to buy my oday 30. He wants to make 12 monthly payments.
Is there any way this can be done safely, just in case something happens and not have the liability or loss being on my shoulders?

To answer your question, YES, it can be done. You have not mentioned any specifics other than 12 payments, so I would insist that he give you a substantial down payment... say 35% or more. If he balks at that, he's not serious enough.

 

[sailnoproblem]

I guess is how well do you know your neighbor? How long have you been neighbors? I have sold things when I held the note and have never been burned. I once hade a deal were he couldn't make the payments, and just gave the item back. (yes it was in good shape)
I do have a tendency to trust people I know. Yes it is better for him to get his own financing, that way the deal is done. If you do it make sure he carries insurance. If you give him the title make sure you are a lien holder.

 

[Jacktar]

If it is a state that issues boat titles, hold it until he has paid it off, and have him purchase insurance with you as beneficiary and give it to you to hold also.

 

[Monterey385]

My uncle sold his Inn 3 or 4 times holding the note and got the Inn back each time ... but not to his neighbor ... think hard about this