Negotiating Advice - Used Cruiser

[BrownBear]

Thank you Peter for your insight. I read the agreement very carefully, and I read it through several times. I did not retain an attorney as I can walk away post survey for any number of reasons. In either case I did retain my own broker though as I thought that having someone represent my best interests would be appropriate in this circumstance.

[lo2jones]

If it’s a long, expensive plane ride away, find a surveyor that will take ~ $300 to look the boat over for an hour and send a report before you buy your ticket. Never offer more that you’re happy paying for the boat. If you average sold/listing price, it comes out to ~ 8% so if you don’t ask ~ 10% below, you’re not doing your job...Unless it is truly your dream boat (which is a dangerous proposition!)

[merrydolphin]

In the end, just remember, a boat is worth exactly what someone is willing to pay for it. So indeed do negotiate. Regardless of what the broker, owner or surveyor says it’s worth.

[Cheechako]

Originally Posted by BrownBear

I searched the forum and while I believe this question / topic may have been brought up before I was unable to find.

My question is I am looking to purchase a sail boat through a broker and the price they are asking is $151,000. How does the typical negotiations on price work? I am planning on having an surveyor meet me as I would be flying in from out of state. Any advice on how this process works, best practice and etiquette protocols, and general information would be helpful.

A) Negotiate BEFORE you hire a surveyor. Make sure you have a good contract. Make sure you can walk away by rejecting the inspection/survey for any reason. No broker fee due.
B) once price is agreed "subject to survey and inspection", You will be asked for a deposit. Your deposit does not need to be as much as most brokers ask for! I have bought 300k boats with a few thousand deposit.
C) your first offer should be anywhere from 40% off asking to 10% off asking price. It really depends on how long the boat has been listed without selling, how popular a boat it is, etc. Seller's start to come to reality after a year with no purchase. An example: I had a Hans Christian 38 for sale in good shape and many cruising extras. Every one listed in the US was about $135k and the broker suggested I should get that. Mine listed at that price. 1.5 years later I sold the boat for $90k. That's 34% less

[BrownBear]

Thank you Cheechako! I appreciate all of this very much. I did put the 10% down but I looked at the contract carefully and the price is agreed per survey / inspection and I can walk away for just about any reason.



The boat has been on the market for about 5 months now so not too long. Looking at comparable boats, this one seems like a good deal. Time will tell with the survey.

[john manning]

Negotiation is very distinct from survey and valuation. Do not mix them up.

In my opinion you should never criticize a boat when talking to the owner or the owners broker. You are better off commenting on things you think are good about it.

Always be ready to say "sorry but I cannot afford your price, but I wish I could". Then say the most you can afford is what you think its worth.

[BrownBear]

Thank you John, that makes a lot of sense. And I wouldn't ever criticize someones boat, you know that it is their pride and joy

[sv Stella Maris]

Surveyors can do a lot, but they CAN NOT BE:

-representing both you and your broker, or the seller's broker
-be simultaneously a diesel mechanic, outboard mechanic, marine electrician, rigging expert, sailmaker, boatbuilder, systems engineer, market savvy, expert sailor or powerboat capitan
-They don't know what boat is right for you
--they need to keep the brokers happy to gain referral business in the future (again, not working for you anymore)

If you don't know a local surveyor, at least fly a competent friend or mechanic that can assist to see things for the nightmare they likely are versus your inflated dreams of what they could be.

Also, THIS FORUM is full of full time boaters all over the world that are likely a dinghy ride away from this boat that would be more than happy to make $100usd to come spend a few hours making a list of all the potential pitfalls of ANY vessels from a 'Cruiser' or 'Racer' point of view.

BRING YOUR OWN ADVOCATE !!! If you can afford it, hire a local expert in the various trades to get aboard and inspect their particular area of expertise.

Good luck. Don't trust the broker outright...at best, they are extremely honest and want the best for you; but they must at some point be part of a transaction to survive. If you don't align with the vessels they think are fitting, they will bend to your 'needs' and get a boat sold.

[BrownBear]

Originally Posted by CarlF

Your comment that you think the boat is currently a fair price is a good mental place to start. Too many people make getting a great price more important than getting a great boat. Sales happen when it's a win-win.

I always tell the surveyor that I want him to focus on "walk away" items instead of seeing if every light bulb turns on. If it's less than $100 to fix, I'm not going to worry about it. The important things to me are - sign of serious collision, partial sinking, rot in the core, delamination, other structural problems. Right behind that are the $5000+ things to fix - bad tanks, bad engine, bad standing rigging. These last three aren't deal killers - just big budget items.

Where did you find the surveyor? Hopefully not one recommend by the broker. If it is, go get a different surveyor. Even when not recommended by a broker, most surveyors don't want to needlessly antagonize a broker because he's going to be seeing that broker again - he's unlikely to ever see you again. As you've found out, looking for a boat is expensive. Air flights, hotels, surveyors.

All surveyors know that they need to find enough things to reduce the price of the boat by at least their fee. And the buyer is expecting it - up to around 5% price reductions coming out of the survey. You might as well take it. If the survey finds more you might get a bigger discount - but most sellers have a price floor. And if bad stuff is found, I start to worry about what the surveyor missed. There's always some things.

Be aware that anything the surveyor writes in his report will be read by your future insurance company and they will likely insist on having it fixed by a boatyard before they will cover the boat. I always tag along with the surveyor who will give me lots of pointers of things that should be fixed "one of these days" - but not put it in the written report.

Remember that the price of the boat already reflects that it is a used boat. It's not a new boat with a warranty. No seller will fix everything just to get a sale. So don't lose a perfectly good boat because you'll have to spend some money after the sale. Regardless of the survey, most people buying this size boat spend $25K-$50K over the first 12 months of ownership in repairs and upgrades. New foam for the mattress because your back aches. New electronics because the old model isn't being updated anymore. It adds up. So don't let $1000 stop you from buying a well priced boat you otherwise love.

The broker has a conflict of interest. He is a business who only gets a paycheck when a sale closes. He obviously want to get paid so he wants to do the deal whether it's good for you or the seller. There's nothing wrong with that as long as you keep it in mind. Be prepared for the broker to get pushy right at the end. There may all of a sudden be demands like "wire the money today". Don't let it fluster you. He's likely been trying to sell this boat for six months. A few more days won't matter. You are the one with the money. You control the pace.

Since you haven't done this before, at $150k I would think about having an attorney review the final paperwork before you sign post survey. On your way to the boat just walk into some local law office. In a coastal town every attorney has some experience with boat sales. Agree on a fixed price to review the document of 1-2 hours. Being able to say "I have to run this by my lawyer" will help you manage the sales pressure from the broker and you never know - the lawyer might spot something really wrong.

Thank you, this is also very insightful. I do think the price is priced very fair. The surveyor was recommended by the broker (my “broker” also works or is affiliated with the sellers broker). I spoke to him by phone as I was concerned by a conflict of interest, and his response was that he stakes his reputation on providing quality work and “although he likes ‘the broker’ he would not give a bad report as it would jeopardize his standing in the community. Which I related to, however I see the point you are making and now I am second guessing my decision. Fortunately I still have some time on that.

Noted is the great advice on the survey and the document being furnished to the insurance company. I am planning on telling the surveyor not to spend any more time on the interior furnishings that he needs to satisfy his report. I can judge the interior myself.

A lawyer will definitely be utilized as I move forward because as you stated I feel like it’s good for negotiating as well as piece of mind.

[BrownBear]

Originally Posted by sv Stella Maris

Surveyors can do a lot, but they CAN NOT BE:



-representing both you and your broker, or the seller's broker

-be simultaneously a diesel mechanic, outboard mechanic, marine electrician, rigging expert, sailmaker, boatbuilder, systems engineer, market savvy, expert sailor or powerboat capitan

-They don't know what boat is right for you

--they need to keep the brokers happy to gain referral business in the future (again, not working for you anymore)



If you don't know a local surveyor, at least fly a competent friend or mechanic that can assist to see things for the nightmare they likely are versus your inflated dreams of what they could be.



Also, THIS FORUM is full of full time boaters all over the world that are likely a dinghy ride away from this boat that would be more than happy to make $100usd to come spend a few hours making a list of all the potential pitfalls of ANY vessels from a 'Cruiser' or 'Racer' point of view.



BRING YOUR OWN ADVOCATE !!! If you can afford it, hire a local expert in the various trades to get aboard and inspect their particular area of expertise.



Good luck. Don't trust the broker outright...at best, they are extremely honest and want the best for you; but they must at some point be part of a transaction to survive. If you don't align with the vessels they think are fitting, they will bend to your 'needs' and get a boat sold.

Although I am new to sailing, and I enjoy it very much, I have to say that the thoughtful, detailed, considerate replies that I have received on this forum makes me enjoy it even more so. This seems like a very tight nit community and I can respect and appreciate that.

I have received such good advice and you pointed out some things that I would not have thought of. Fortunately I have lots of knowledge on mechanical and electrical systems, however I will be posting in search of people in the trades aforementioned that I am less so. What a great idea to hire a few people to come out on the water for the day that has a passion for sailing and more knowledgeable than me. Why didn’t I think of that?!? Seems like money well spent.

This is a large purchase for me, and a life changing one at that and I am trying to do all my due diligence. At the same time it’s hard not to be excited and happy. Thank you kindly for your insight I will be sure to follow.

[Tom and Maje]

Originally Posted by BrownBear

I searched the forum and while I believe this question / topic may have been brought up before I was unable to find.

My question is I am looking to purchase a sail boat through a broker and the price they are asking is $151,000. How does the typical negotiations on price work? I am planning on having an surveyor meet me as I would be flying in from out of state. Any advice on how this process works, best practice and etiquette protocols, and general information would be helpful.

First, get your own broker. Have a clause in the initial contract that the price is based on the survey. Once the survey is done, you can usually negotiate the price down.

Maje

[carraigdog]

Interesting thread, I have just had an out of water survey done on a boat (no brokers involved) and due to the travel restrictions, I cant even go and see it, but Im quite sure I want it, would it be poor judgement to just agree a simple exchange contract, or does the transfer of ownership require a notarised contract ?

[BrownBear]

Well the sails are not up, and we are supposed to go for a trial run tomorrow and they are saying that the sea "trial" does not include flying the sails, that it only consists of a 45 minute engine test...

[boatpoker]

Originally Posted by goboatingnow

This is to ensure the surveyor doesn’t say something that triggers my insurance to demand something be fixed immediately even though what’s there is entirely adaquate. Most of the time the wording is fine a few sentences might need “ tweaking “

Any surveyor who allows his report to be "tweeked" is an unethical weakling.

[mvweebles]

BrownBear - others will chime in on how to best determine condition of sails, winches, and running rigging. My sense is that you get to define what is an acceptable sea trial for your purposes. If you're comfortable with 45 minutes (I would not be), great. But you should have some latitude on whether you move forward with the boat based on your experience in the sea trial. If you have any trepidation, do not move forward.

Doesn't sound like a good start to me, but maybe local custom wherever you are is different. I'll be interested how this thread develops.

Good luck

Peter