Unusual Boat Sell Proposal

[PetrichorKev]

Hello,
There is more detail for this query but the summary is:

• Boat is currently on the hard in Greece
• Potential buyer is from a nearby island
• Wants to take the boat upon initial payment of deposit
• Proposes to pay 50% of price within 3 months
• Outstanding amount to be paid the following year
• Ownership of boat transfer to be made after total payment is received
• Buyer will likely use the boat over the coming year as a charter boat, with funds for final payment coming out of generated income

Buyer will need to obtain insurance for charter operation.

Is there additional items or concern or caveats that should be included in contract for sale?

Thanks

[skipperpete]

None of this sounds terrific. I have no clear idea about how anyone but the owner can be the insured, I guess it might be possible but, is the potential buyer legally qualified to captain a charter vessel? Is the vessel in any sort of survey category that allows charter? If the engine catastrophically fails or the mast gets broken in a storm during the 15 months after the handover, who pays for that (or is that the moment that the purchaser walks away from the boat?) it’s possible that only the deposit and the first payment will come your way. Given that Greece has a remarkably casual attitude towards debt (see IMF and EU bailouts), and the population has a similarly relaxed approach regarding taxation contributions, you’d be wise to take a long hard look at this proposition, you’re effectively giving someone an interest free loan, half the value of your boat…. for a year.
On the other hand, the buyer could be a genuine budding charter operator and it will all work out exactly as you describe, not everyone is to be regarded with mistrust.

[more]

Originally Posted by PetrichorKev

Hello,
There is more detail for this query but the summary is:

• Boat is currently on the hard in Greece
• Potential buyer is from a nearby island
• Wants to take the boat upon initial payment of deposit
• Proposes to pay 50% of price within 3 months
• Outstanding amount to be paid the following year
• Ownership of boat transfer to be made after total payment is received
• Buyer will likely use the boat over the coming year as a charter boat, with funds for final payment coming out of generated income

Buyer will need to obtain insurance for charter operation.

Is there additional items or concern or caveats that should be included in contract for sale?

Thanks

what are you crazy asking something like this.
no money no boat.what you want lose boat,this local have bank ,some goverment program.
what boat and price

also 99,99% this local need boat to transfer refuge from turkey to greec. if cost guard catch him he dont risk nothing becouse he dont pay boat

[DoubleD]

Since the boat is the collateral for the balance due after the deposit is paid, in other words the loan, how do you reposes the boat if they do not make the 50% or final payments, once they've sailed over the horizon?
D2

[PetrichorKev]

Thanks for all the replies so far.

Yes, all of the above mentioned concerns have been raised to date.

A Greek lawyer has been engaged by the buyer with a separate contract drawn up highlighting these issues.

The buyer has sent through passport, driving licence etc. and appears to operate businesses on his home island.

Nothing has been signed, so no panic just yet. It was more understanding the risk and hearing if this thing has been encountered before. Although it can feel like a scam I wondered whether anyone else has had a similar proposal.

[barnab]

I'm tempted to write a lot, but I'll keep it at 3 things:


1) There's got to be a reason nobody does this kind of contract


2) Ask any leasing company in Australia: You want to lease a car. It will be in Greece and stay there. If they decline, ask why. This should also be the answer for your question


3) save yourself all the troubles and sell to someone who has the money to pay right away

[5BTM]

Originally Posted by barnab

I'm tempted to write a lot, but I'll keep it at 3 things:


1) There's got to be a reason nobody does this kind of contract


2) Ask any leasing company in Australia: You want to lease a car. It will be in Greece and stay there. If they decline, ask why. This should also be the answer for your question


3) save yourself all the troubles and sell to someone who has the money to pay right away

I am tempted as well but will resist the temptation.

They must have had “How to buy real estate with no money down” seminars in Australia, sometimes known as OPM; Other Peoples Money.

Proof positive that it is a buyers market to even consider such an offer.

[Fore and Aft]

PK there's another thread where an American couple with a catamaran ended up losing their catamaran that was supposed to be chartered out by the buyer? I forget the details but it sounded a bad deal to an outsider looking in.
Cheers

[more]

Originally Posted by PetrichorKev

T

A Greek lawyer has been engaged by the buyer with a separate contract drawn up highlighting these issues.

The buyer has sent through passport, driving licence etc. and appears to operate businesses on his home island.

i pay douple and you can use 5 lawyer around world.deposit 10% now , 200% after 1 year
in all balcan country contract,court is only piece of paper. more east contract,court less valid. Bad deal for you.

for example in Croatia after you stop pay leasing for boat,car ,to court sale this boat ussualy time is 4-6 year . for house 15-45 year.
if you go to holiday weekend and sombody move in your house ,for remving this trespasing you need 10 to over 50 year if this have child never .

[leecea]

You are giving someone your boat but retaining ownership. It seems like the worst possible combination. Not only will you be unlikely to ever see any more money but you will retain some level of liability as the boat owner.

[leboyd]

I'll be the "other guy" here.

This isn't much different than buying a boat and putting it into charter with a charter company and expecting a monthly/quarterly/whatever check for the arrangement. It's also no different than being a loan company.

You have to decide if the risk of the guy sailing off into the sunset is low enough for you to take the deal.

In the US, tax laws would allow you to write-off the loss, if it was stolen, offsetting some of the risk.

It's simply a math question. You have to calculate what the probabilities are, based on on your due-diligence, that you'll get the second payment in 3 months and the third payment in a year. Once you decide on that probability, you can calculate what the risk costs are and compare that to what your expected value is. The more comfortable you are with the guy/company, the higher you would put on the probability of future payments.

Now, whether it's works legally in your country and appropriate insurance is available, is something you have to figure out. If it's not legal or appropriate insurance can't be found, then it's not a math a problem.

[mvweebles]

Originally Posted by PetrichorKev

Hello,
There is more detail for this query but the summary is:

• Boat is currently on the hard in Greece
• Potential buyer is from a nearby island
• Wants to take the boat upon initial payment of deposit
• Proposes to pay 50% of price within 3 months
• Outstanding amount to be paid the following year
• Ownership of boat transfer to be made after total payment is received
• Buyer will likely use the boat over the coming year as a charter boat, with funds for final payment coming out of generated income

Buyer will need to obtain insurance for charter operation.

Is there additional items or concern or caveats that should be included in contract for sale?

Thanks

Lemme understand this. Buyer gives you a deposit of, say 10%, then sails away with a promise that in 3-months, they will bring the balance to 50% paid. The boat will be put in charter and you will be paid with proceeds from the business in a year. In essence, you are providing capital funding for his oh-so-promising charter business. As far as "additional concerns or caveats," sorry - I cannot see past the bonfire-flames of neon red flags already on the table. But I do have to ask, if the boat is 'charter-able,' why not just place it in charter yourself with a reputable charter company?

On second thought, is the buyer an exiled Nigerian prince or something?

[wholybee]

If the two of you think this could work financially, then the buyer needs to get a business loan, and you need to be paid in full on delivery of the boat. If a bank is not willing to finance it, then don't do it. What you are proposing is that you extend a high risk (to you) loan, with a low or zero interest rate. The buyer has no risk, and you risk everything. Not only the boat, but should there be an accident, whoever is harmed can come after you for everything you own.

[wholybee]

Originally Posted by leboyd

It's simply a math question. You have to calculate what the probabilities are, based on on your due-diligence, that you'll get the second payment in 3 months and the third payment in a year.

Let me answer that. 50% chance of the second payment. 0% chance of the third. I might be generous on the second payment.

[Iron E]

Personally, I would do it. I've done these types of transactions before with cars.
You need a way to track the vessel and ensure the boat remains your legal property until the final payment.
I would also make sure financing charges were added.

The person is making the offer because they can't get a loan/financing. If the deal goes south, take the boat back.

You can make money from this deal if you're willing to do the work. Just cover your bases and make sure to add the additional fees

/my2¢