Boat purchase during Northern winter

[Boaterdan278michigan]

We are going to make an offer on a boat. The boat is currently in heated storage and inaccessible for three months. The broker wants me to make an offer which is contingent on the boat passing mechanical and structural survey, a step I agree with. In the offer I agree to purchase boat if it passes surveys. I pay for the boat, own the boat and the broker holds a percentage in escrow until after sea trial. This is what I cannot wrap my head around. I'll own the boat, but sea trial won't happen for three months. What happens if I don't accept sea trial? I suppose I could pay to have the boat removed from storage during a thaw period, if that is even a possibility. The other possibility is I wait until spring. I'd hate to miss out on the opportunity. Any creative ideas?

 

[airshot]

Broker wants to be sure he gets his cut ! If it were me, and yes I have done this before, is to have a written agreement with a healthy deposit. In the agreement, you need to decide what is passable and what is not as this is where any disagreement will come to be after the sea trial. You could also add in an inspection by a marine surveyor. Guess it all comes down to how big a gamble this is, and only you and your pocketbook can decide that. If you own the boat and paperwork is in your name, getting a refund might be an issue in three months time.

 

[MikeSchinlaub]

Hard pass in my opinion. They want you to buy the boat and won't even let you look at it first. It could pass the inspections, but there is a lot of stuff that you just can't see with the boat together. It could have rotten stringers, stringers seperated from the hull, stress cracks that could be just cosmetic or structural or a bad previous repair.

This is just a bad deal, and you're the one that will get the consequences, either with losing the deposit if you reject or getting stuck with thousand or tens of thousands of repair work if you take it.

 

[Ifishmuskie2]

Every time you buy a boat it’s a gamble.
But you want to give money without seeing the boat ? That’s nuts.
I just bought a boat with one hour of inspection by me and no sea trial. Didn’t run the engine. Once my inspection showed the value matched the price I paid I didn’t care about anything else.
You need to inspect the boat.
If you’re paying a lot of money you need to sea trial before money changes hands.

 

[alldodge]

I'm with airshot, offer deposit with written offer which is prepared by an attorney that is located in the state where the boat is at.

Attorney, Surveys and other things will be paid by you.

 

[tphoyt]

I agree with all of the above so I’m no help.
But that said if they really want to sell the boat I would think they need to rearrange the storage so it can be viewed and inspected.
Best of luck to ya.

 

[Boaterdan278michigan]

Hard pass in my opinion. They want you to buy the boat and won't even let you look at it first. It could pass the inspections, but there is a lot of stuff that you just can't see with the boat together. It could have rotten stringers, stringers seperated from the hull, stress cracks that could be just cosmetic or structural or a bad previous repair.

This is just a bad deal, and you're the one that will get the consequences, either with losing the deposit if you reject or getting stuck with thousand or tens of thousands of repair work if you take it.

Thank you for your response. I should have been more clear. They will let me see it and survey it (at my expense of course). But they won't agree to taking it off the market unless I buy it. I want a deal contingent on mechanical and structural survey and sea trial. I pay 10% down, sign a purchase agreement, but it is contingent on satisfactory results of all three or I get my deposit back.

 

[aspeck]

Edit: you answered my questions in the above comment. Okay, yes, this is clearer now. I would agree to the 10% down and purchase agreement contingent on the surveys and sea trial. I would not be willing to pay for it all before that was done.

 

[Boaterdan278michigan]

Can you SEE the boat now, just not get it out of storage for sea trial and inspections until spring, or are you unable to SEE, feel, touch the boat currently? That will go a long way towards my answer.

I can see the boat now. Before it

Can you SEE the boat now, just not get it out of storage for sea trial and inspections until spring, or are you unable to SEE, feel, touch the boat currently? That will go a long way towards my answer.

I can see the boat. It is in heated storage.

 

[MikeSchinlaub]

Thank you for your response. I should have been more clear. They will let me see it and survey it (at my expense of course). But they won't agree to taking it off the market unless I buy it. I want a deal contingent on mechanical and structural survey and sea trial. I pay 10% down, sign a purchase agreement, but it is contingent on satisfactory results of all three or I get my deposit back.

Ok, that makes more sense. Knowing this, I would say go ahead. It sounds like you have a good plan. The only problem might be that now they know you're really interested, so it gives them some more leverage on price.

Would you mind posting the year, make, model, and price? Some people on here are really knowledgeable about that stuff, and can tell you common issues to look for and if the price seems reasonable.

 

[Boaterdan278michigan]

Edit: you answered my questions in the above comment. Okay, yes, this is clearer now. I would agree to the 10% down and purchase agreement contingent on the surveys and sea trial. I would not be willing to pay for it all before that was done.

That's exactly how I feel. Two different brokers, on two different boats, suggested buying the boat after viewing and survey, then purchase with 10% of purchase held in escrow until after sea trial. BUT, it's my boat weather the sea trial is good or bad and apparently we negotiate the ten percent to off set sea trial deficiencies.

 

[tpenfield]

What would be better is if you make an offer contingent on acceptable survey, mechanical inspection, AND sea trial. It could also be stipulated in the offer that the sea trial would be done when weather and water conditions permit, but also have a reasonable end date.

If/when the seller accepts the offer, the boat is under agreement awaiting contingencies. They could take back-up offers, but the boat is yours to accept or decline.

That may not be agreeable to the seller/broker, but it is not unusual for buying a boat over the winter.

What the broker wants you to do is buy the boat based on 2 of the 3 contingencies, and the 10% hold-back would be your only remedy on the 3rd contingency. . . i.e. if there is something about the sea trial that is unacceptable (vessel and/or mechanical problems). Your judgement on ride quality may not be an acceptable criteria though . . . Regardless, the most you would get is the 10% hold-back.

Depending on which way you go, make sure the agreement is clearly stated in writing (usually the actual sales contract). Also, is the seller offering to pay for the entire winter season of storage? (would be nice if you take possession before the sea trial).

 

[alldodge]

The guys have it laid out petty well, but I would want one additional point that all monies is held in escrow. If sea trial doesn't check out (something real bad like motor, drive, structure) you get all the money back. The owner want's to most likely buy another boat so 90% of the money is gone. The 10% is the broker fee

 

[Boaterdan278michigan]

What would be better is if you make an offer contingent on acceptable survey, mechanical inspection, AND sea trial. It could also be stipulated in the offer that the sea trial would be done when weather and water conditions permit, but also have a reasonable end date.

If/when the seller accepts the offer, the boat is under agreement awaiting contingencies. They could take back-up offers, but the boat is yours to accept or decline.

That may not be agreeable to the seller/broker, but it is not unusual for buying a boat over the winter.

What the broker wants you to do is buy the boat based on 2 of the 3 contingencies, and the 10% hold-back would be your only remedy on the 3rd contingency. . . i.e. if there is something about the sea trial that is unacceptable (vessel and/or mechanical problems). Your judgement on ride quality may not be an acceptable criteria though . . . Regardless, the most you would get is the 10% hold-back.

Depending on which way you go, make sure the agreement is clearly stated in writing (usually the actual sales contract). Also, is the seller offering to pay for the entire winter season of storage? (would be nice if you take possession before the sea trial).

That is exactly how I will do it. I wrote a similar offer on another boat, in that case I lost out to a cash offer, no contingencies. You cannot compete with that unless money doesn't matter. I just wanted opinions on what the broker offered. I was just flabbergasted.