Tendering an offer ?

[redbreast]

Ok here goes im not sure on the awnser on this one as the "log haired general" has raised the question i had better make sure i know the awnser : we have sea trialed a boat and are presently preparing to make an offer "subject to survey" how do we stand officially IE if the seller accepts and we see a better boat or cheaper within a couple of weeks. I presume we just pull out etc.?

[svcattales]

It would depend on the contracts you sign. Normally, you need to pay a deposit when you make an offer and sign a purchase agreement. If the owner accepts, you are bound by the offer and the owner can keep your deposit if you "pull out." If you are not happy with the survey, however, that would allow you "pull out" without losing your deposit. Be aware that the survey may turn up problems which allows you to negotiate repairs or to ask for a reduced price on the boat as compensation for the defects. Good luck with your boat purchase.

[redbreast]

We are mearly offering a certain price on a boat (by email), no further then that the question should also be asked are there any further complications if the boat happens to be in France (ie french law) ?

[Jacana]

You will be executed at dawn and your entrails will be hand fed to the pigeons in the village square if you default.So listen very carefully as I can only say this once .Do not buy a boat you havent seen yourself.You can make the seller an offer to see if its in your price range then if it is a very good price go over and check it out tell the seller the price is subject to passing a survey by whomever you choose.Good luck.

[Pblais]

An offer is made with a down payment. 10% is traditional. Many sellers will blow you off otherwise. I know I would. The idea is you will honor the contract subject to sea trail and survey. Normally you don't get to sea trial a boat before the survey. If you follow through you can indeed pull out without penalty, but you pay for the survey and the haul out 100%. If you don't feel serious enough to follow through then you are wasting not only the sellers time but your own plus your own money.

If you are still looking at other boats then you are not ready to make an offer. The process is quite difficult as it is and you don't need multiple offers going at one time. There is always a cheaper boat out there, but how many of them would you prefer to own and how many will survey properly? You need to pick with caution.

[hellosailor]

Redbreast, if you have to ask that question--speak to a lawyer, and then to the broker. (Since you paid the lawyer he works for you, the broker doesn't and his answers may be less than what you need to hear.)

Everything depends on the CONTRACT and contract law varies by state and sometimes by county as well, even though there are federal standards. Get the sample contract that you plan to use, pay a lawyer $100 to review it. A lawyer who deals in admiralty or at least "boat" issues, so they know what the norms are.

Usually you are making the "offer" and the seller is only making the "acceptance" which puts you exactly opposite the places you might think. If your contract doesn't provide clearly the times and reasons why each of you can walk away, and what the penalties or damages may or may not be...You can get hurt. Sometimes it pays to get a lawyer, if you don't want to spend a week reading up on the subjects.

[redbreast]

We have sea trialed the boat. There is no broker . We are not putting offers on other boats. We are trying to find out if he is in our price range.

[hellosailor]

Sea trials before the price and deposit are arranged? Most unusual, unless you're trying to buy one coming out of charter service that you've chartered, perhaps?

Could still be time to see a lawyer and look over some contracts FIRST. Since once you agree on a price, assuming you do, that's a verbal contract and again, you are going to be bound by contract laws whether you go forward or back out.

Unless you're willing to say "Here's a bag of money, gimme the keys. Bye bye."
[g]

[David_Old_Jersey]

Originally Posted by redbreast

We have sea trialed the boat. There is no broker . We are not putting offers on other boats. We are trying to find out if he is in our price range.

If you just want to find out if you are in the same ballpark, then you can talk figures without making an actual offer to buy.

If you are talking UK then an accepted offer is a binding contract, whether verbal or written - however in practice the verbal is worth the paper it is (not!) written on. But if the Vendor is a lawyer........

Usual procedure is to use a written contract (the RYA have one that can be downloaded and amended as required) - Although many folk do like the 10% deposit down approach, I would never do that either with a Broker or direct to a Vendor - appreciate that attitudes vary on this. But for me a buyer is serious enuf if willing to put a deposit down of £500 or £1000 and to pay the haulout costs for a survey. I figure if someone is willing to pay for these costs they are a serious buyer, and the deposit is just icing on the cake to concentrate minds.....after all if the deal does fall through I will have lost some time, but won't be out of pocket....so why do I need 10%?

[Pblais]

We are trying to find out if he is in our price range.

Maybe you should make an offer? It might get things going. Might be good to talk about terms. Cash works well under most situations. Maybe they will let you make payments?

Given you have no written contract I would say officially you don't stand any place at all. What are they going to do? Do you like the boat or not? There really are no unwritten rules. Traditionally this seller does not know what they are doing so the two of you can work out whatever works. It's that easy. If everyone is happy I'm sure we all would love to see the pictures. I always like to see other peoples boats.

so why do I need 10%?

Sorry Dave but there really are a lot of nuts out there. We have stories here in the forum. You should find Sean's NYC story for a real Halloween tale. The 10% down is to steer clear of the loons. There really are people that run around and pretend to buy boats just like there are folks that pretend to buy houses. It's a game with them. Fantasy can be a great place to cruise and it's cheaper.

[TaoJones]

An offer is made with a down payment. 10% is traditional.

An offer is made with a down payment. Ten percent is traditional. In the United States. In a brokered sale.

Those last two parts are important to add, I think, because, as I've stated here before, it is no coincidence that the "traditional" down payment in the US and the broker's commission are both 10%. Why not? Simple: If a sale would have been consummated but for the buyer's breach, the brokerage(s) still get paid.

redbreast also asked, ". . . are there any further complications if the boat happens to be in France (ie french law)?" If, as I infer from the question, redbreast is not French, then yes, this adds a complicating factor. Not an insurmountable one, however. People from different cultures have been conducting trade for centuries.

Most exchanges go off the rails because the interested parties have differing understandings of what they each think they have agreed to. It can even happen within the same family, so the different nationalities of the parties in itself isn't necessarily a deal-killer, but yes, it can complicate things.

Originally Posted by David_Old_Jersey

If you just want to find out if you are in the same ballpark, then you can talk figures without making an actual offer to buy.

If you are talking UK then an accepted offer is a binding contract, whether verbal or written - however in practice the verbal is worth the paper it is (not!) written on. But if the Vendor is a lawyer........

Usual procedure is to use a written contract (the RYA have one that can be downloaded and amended as required) - Although many folk do like the 10% deposit down approach, I would never do that either with a Broker or direct to a Vendor - appreciate that attitudes vary on this. But for me a buyer is serious enuf if willing to put a deposit down of £500 or £1000 and to pay the haulout costs for a survey. I figure if someone is willing to pay for these costs they are a serious buyer, and the deposit is just icing on the cake to concentrate minds.....after all if the deal does fall through I will have lost some time, but won't be out of pocket....so why do I need 10%?

I whole-heartedly agree with DOJ on this, particularly in a non-brokered sale. Ten percent is not some magical threshold that "proves" a potential buyer's serious interest.

TaoJones

[Ex-Calif]

Don't ever hand anyone any money without a written contract specifying what all the parties are responsible for and when and how money gets returned, or not.

We did a down payment before the sea trial with a preliminary agreed price. The contract stipulated what would happen if items were uncovered on the sea trial or survey. It also specified what would consider default on our part.

In our case the monies were small so we didn't escrow the money. For a large purchase and a large downpayment escrowing the money is a good practice.

I would NOT let the seller's broker be the escrow agent even though that is their business. They don't work for me. They work for teh seller and themselves. A neutral bank is fine...