Buying a boat, need some help with negotiations!

[Dave22q]

Fortunately you are getting your pwn survey and not relying on the seller. Any reasonable contract makes the sale contingent on YOUR survey so either the broker is misleading you or he wrote an awful contract. On the financing, my experience with boat US has been good but only as an insurer. I just fail to understand a dinghy value having a meaningful impact. A couple of thousand difference in the totals on a 90k purchase should not impact your loan unless your equity is very low. In addition to checking out other lenders including local banks I would contact a Boat US supervisor to discuss your treatment. It sounds like you have been in the care of a novice employee..

[duefocena]

Did you sign the " final acceptance" on the boat sales contract? If so then you have,"bought the boat". However if not you have every right to: walk away with no reason, re-negotiate the sales price. My other question is what Boats US is using for the valuation? NADA guide is typical. Have you looked up the boat to see what the guide allows? Obviously you can "pay down" the balance to meet the loan amount but I assume you aren't comfortable with putting more of your cash down on the boat. Not counting the dinghy is typical and in keeping with all loan company's. It would be a separate loan as it is a separate vessel.

[jrbogie]

Originally Posted by MrNoSmiles

Hey all, I am in the process of buying a nice 40ft boat for sailing adventures.

The seller had it surveyed when he put it up for sale, and that surveyor valued the boat at about $120,000. The seller listed the boat for sale for $99,900.

I offered the seller $85,000, and we met in the middle at $90,000.

My financing company (BoatUS) is valuing the boat at $86,450, stating that they cannot finance the value of the Dinghy that the boat is currently equipped with.

Do finance companies normally refuse to finance dinghies?
Should I renegotiate the sell price with the seller based on this? Can I just negotiate what I am willing to pay out of pocket for the dinghy?

Please advise if anyone has any experience in these matters. Thanks!

in my opinion you blew it. first by placing any trust whatsoever in what a surveyor has to say that you did not hire yourself. second by thinking that a marine surveyor's opinion on the value of a vessel is worth squat. have you ever seen a home inspector offer an appraisal on a home?

most boat transactions involve a buyer's deposit after agreeing on the sales price, ten percent is customary, then a survey of the boat by a marine surveyor hired by the buyer and finally sea trials. the buyer can back out or renegotiate the sales price when something undisclosed pops up during the survey or sea trials. you're simply sol. you've already settled on a sales price based on a survey that the seller paid for. now you want to renegotiate the price basing the negotiations not on unknown defects but on the simple fact that you are having trouble coming up with the 90 large that you agreed to pay for the boat.

if i'm the seller, the negotiating has already taken place. i've got your deposit which to be refunded is contingent upon any surprises showing up in the survey or sea trials. not upon your having trouble financing the amount you already agreed to pay. i'll let you sweat until the agreed upon close date when i'll either pocket your remaining eighty grand due on the purchase or your deposit as i put my boat back on the market. it's precisely **** like this that we all have to put up with contracts and brokers and lawyers AND SUBSTANTIAL DEPOSITS in order to do something seemingly so simple as selling or buying a frigging boat.

[exMaggieDrum]

Whether it is right or wrong, every survey I have had from multiple surveyors has included a $$ value of the boat. I don't think you can compare home inspectors with boat surveyors since surveyors seem to have that as part of their charge (i.e. expectations not fees). May be that is different in other states?

[jrbogie]

by all means, rely on a surveyors assessment of value as you wish. in this case the surveyor's price fell short of what the bank is willing to finance by more than thirty thousand dollars but sure, value your surveyors, 'expertise' is such areas as you see fit.

[skwanderer]

If you are a member of USAA, try them. I just financed my first boat with them, and they were awesome. A very high interest rate, mind you, but it meets my monthly cash flow goals for now. Also, I had my loan within an hour on a phone call. I was going to use Marin FCU, but they were flaky and slow to respond, then ultimately backed out of their pre-approval after I had my survay and decided to move ahead with the sale. Stressful! But USAA came thru in spades.

[Gteall]

So, did you have a contingency written into the contract which allows you to withdraw if the survey does not meet your expectations? If not, who drew up the contract? The broker (who might benefit by not putting any contingency in the contract and this has a conflict of interest). Maybe, given these facts and a desire on all parties part to close the deal, everyone could bite the bullet a little.

[hamburking]

First, most survey's have two "values"...replacement and market. Be sure you are looking at the "market" value. That said, in my experience, most boats sell for about HALF of survey market value. I've bought a few boats that came with surveys, new and old, and half seems to hold true. Its a buyers market. Yes, the boat is "worth" that much, but no one is going to pay that much. Survey's are often used for insurance purposes, and surveyor's are catering to the insurance companies. Also, surveyors often use historical, published data to establish the value...and this is really just a guess in the end.

That said, if you like the boat and feel the price is fair, don't let me stop you. However, why not go to a reputable bank instead of BoatUS. Also, ask for a line of credit rather than a mortgage or loan...lower rates, lower fees, more flexibility.

And finally, most lenders will not finance 100%...thats trouble. If you don't have 20%-30% down, you should not be buying a boat. If you have a house, use that for an equity backed line of credit...you'll get a terrific rate.

FWIW, HELOC rates in Canada for good customers are about 2% at the canadian banks right now. Makes it very attractive to borrow to buy a boat. But interest rates will go up one day...

[pparksjr]

I understand how you are feeling. You are getting some great advice from the group. The only thing that I might add is that everything is negotiable. If you are not happy walk away. I will not buy a boat unless I can talk to the owner. If they will not talk I will walk away. You can find a lot out buy speaking with the owner. Good luck stay strong and stand your ground.

[Jeanneau 45.2]

I financed a boat this summer for well into six figures, so I shopped around and ended up using a loan broker (cost nothing since the bank pays the referral). My broker reached out to his various finance sources and had them bid for my loan ... not just the APR but also things like 'loan to value'. I am very happy with both the financial specifics and the customer services ... and don't underestimate the value of good service and support (working with the brokers to get the right paperwork for bill of sale and registration, USCG documentation, etc). Contacting a call center versus directly contacting your personal broker makes all the difference in conducting a smooth transaction.

I don't have any financial or other interests making this recommendation, other than my firm belief that excellence in customer service should be rewarded. Call Jason Fox at Coastal Finance at 616.494.2628.

As to surveyors, be sure to go with an accredited surveyor, for example one certified by SAMS, and ask to see a sample survey before hiring them. Any reputable surveyor would be happy to share a recent survey that they conducted with the customer's name, HIN, etc redacted.

[valhalla360]

If there are legitimate issues, you can back out of the purchase based on your survey. Of course, since it sounds like the owner showed you his survey, anything in that survey would not be justification for a price reduction or to walk away.

If you just up and walk away without justification, the seller usually has a right to keep the deposit.

But as someone else said, if you put 10% down, you only need a loan for around $81k and it shouldn't be an issue.

[SeaSon]

My gosh, a lot of highly moral ethical boaters. Screw that. Negotiating is a game but using real money. You can play it well, or not.

Your boat us valuation is an event deserving renegotiation. 'if the experts say it is too high, who am I to argue...'

IT DOES NOT MATTER WHAT THE CONTRACT SAYS - YOU, AND ONLY YOU HAVE THE MONEY. SWING YOUR BIG BALLS OF CASH AND GET THE PRICE DOWN.

The broker and the owner want your money and nothing else matters to them. Proof? A decent and caring broker would have put in a financing clause and counseled you to do so. But they did not, attempting to trap you by your ethics into the deal. You are now free to not be his friend since you know he is willing to screw you.

As you don't need to buy this boat, you have all of the power. Cast doubt, ask about other boats on the market, voice concern about your choice. You need to tighten the brokers anus so he will communicate to the seller that you could really walk. Blame your wife 'she's having serious second thoughts on this boat and is afraid we are paying too much, and I have to agree'.

You could have your wife survey the boat and give it the thumbs down tomorrow to get your money back if need be. You could ask for the sea trial prior to the survey, and fail it there.

When you do go to survey, look for things that are broken or not perfect and point them out to the surveyor for inclusion in the report. Don't split the difference in estimated prices to repair survey items - have the owner lower the price by the full amount, or they can supply an expert estimate that is binding, or fix it with your approval of the process and person. 'wow, there's a lot more work than I thought. You said it was turnkey.'

Have you negotiated for a full tank of fuel, or a hull waxing, or fresh bottom job, or new fenders or dock lines or a new shore power cord, or winter storage, or new running rigging... You should.

Negotiate at every step of the process. At sea trial, write down every concern, and don't appear happy and ready to commit. When the owner and broker are aboard, go through the listing line by line verifying everything is exactly as listed. It won't be, and that is yet another time to negotiate.

Do not appear eager, show doubt about your choice. They have to believe you would walk away.

30+ years in executive level sales and a couple years as a broker..

[valhalla360]

Originally Posted by SeaSon

My gosh, a lot of highly moral ethical boaters. Screw that. Negotiating is a game but using real money. You can play it well, or not.

Your boat us valuation is an event deserving renegotiation. 'if the experts say it is too high, who am I to argue...'

IT DOES NOT MATTER WHAT THE CONTRACT SAYS - YOU, AND ONLY YOU HAVE THE MONEY. SWING YOUR BIG BALLS OF CASH AND GET THE PRICE DOWN.

The broker and the owner want your money and nothing else matters to them. Proof? A decent and caring broker would have put in a financing clause and counseled you to do so. But they did not, attempting to trap you by your ethics into the deal. You are now free to not be his friend since you know he is willing to screw you.

As you don't need to buy this boat, you have all of the power. Cast doubt, ask about other boats on the market, voice concern about your choice. You need to tighten the brokers anus so he will communicate to the seller that you could really walk. Blame your wife 'she's having serious second thoughts on this boat and is afraid we are paying too much, and I have to agree'.

You could have your wife survey the boat and give it the thumbs down tomorrow to get your money back if need be. You could ask for the sea trial prior to the survey, and fail it there.

When you do go to survey, look for things that are broken or not perfect and point them out to the surveyor for inclusion in the report. Don't split the difference in estimated prices to repair survey items - have the owner lower the price by the full amount, or they can supply an expert estimate that is binding, or fix it with your approval of the process and person. 'wow, there's a lot more work than I thought. You said it was turnkey.'

Have you negotiated for a full tank of fuel, or a hull waxing, or fresh bottom job, or new fenders or dock lines or a new shore power cord, or winter storage, or new running rigging... You should.

Negotiate at every step of the process. At sea trial, write down every concern, and don't appear happy and ready to commit. When the owner and broker are aboard, go through the listing line by line verifying everything is exactly as listed. It won't be, and that is yet another time to negotiate.

Do not appear eager, show doubt about your choice. They have to believe you would walk away.

30+ years in executive level sales and a couple years as a broker..

Reality is most people are reasonably honest (even most salesmen I've met). It's one thing to position yourself for the best deal. It's another to lie and cheat.

If there is a legitimate issue that comes up, they may use that as a reason to cancel the deal but if the survey only comes up with items already covered in the sellers survey, you don't have much of a leg to stand on as the deal was set with full knowledge of those issues. Likewise if financing and sea trial were not called out in the contract, those aren't justificaitons.

What is unusual in this situation is the owner has provided access to a survey. If it's reasonably up to date and covers all the issues, at best the buyer stands to lose his deposit if he doesn't follow thru.

[SeaSon]

Agreed - Never lie, never cheat. Be aggressive.

Sent from my SAMSUNG-SGH-I537 using Cruisers Sailing Forum mobile app

[skipmac]

Originally Posted by SeaSon

IT DOES NOT MATTER WHAT THE CONTRACT SAYS - YOU, AND ONLY YOU HAVE THE MONEY. SWING YOUR BIG BALLS OF CASH AND GET THE PRICE DOWN.

Well actually it matters a lot what the contract says if the buyer has signed it. It's a legally binding agreement and may allow additional negotiations depending on the stage of the process and terms of the contract.

Of course every contract I ever used as a broker allowed the buyer to accept, reject or renegotiate based on survey and sea trial so the buyer in this case probably still has options.