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The Boat Buying Process1. Final Inspection: This should be done carefully with the boat's listing sheet in hand and with a healthy amount of skepticism. Most of the information on the broker's listing sheet has come to the broker directly from the owner and its accuracy is not guaranteed. The great majority of owners are honestly presenting their boats, but there may exist problems that are not apparent except to a professional surveyor. We carefully inspect each listed boat, but we are not surveyors, and do this only to lessen the buyer's risk of paying for a flunked survey that shouldn't have happened in the first place. All gear listed should be checked for quantity and visual quality and notes made of missing items or things that appear to be of questionable value. Items that are onboard that are not listed may or may not be included in the sale. Ask your broker to question the owner as to whether these things are included or not. Look for evidence of good care and maintenance. But also be reasonable. You're looking at a used boat, not a new one. Stored boats are very often a mess with cushions and gear stacked here and there. You'll have to be able to look "through" all of this. Even if you know nothing about boats, your impressions and instincts are valuable. 2. Negotiating Price and Making an Offer: • Pricing: Unlike used cars, boat prices vary widely within the same year, make, and model where pricing is based on condition, maintenance, and added gear and upgrades. We list only boats whose prices we believe will be supported by a marine surveyor's estimate of fair market value. If the FMV estimate is below the offered price, the buyer can reject the sale totally. Overpricing serves nobody's interests. • Pricing Myths: 1. Myth: Every asking price is negotiable. Truth: Some are not. Some sellers have reduced their price to a point that is quite firm while others just don't like haggling. 2. Myth: Prices vary with the season. Fall prices are lower, Spring higher, Summer lower, etc. Truth: Prices are set by the seller where some seasonally change, and some do not. 3. Myth: New England prices are generally higher than Florida prices. Truth: Actual pricing may appear to be, but not when actually comparing boat to boat. The condition of northern boats is generally superior to their deep southern counterparts for a variety of reasons. 4. Myth: The broker always knows the seller's "bottom line". Truth: We do not know that figure. Our listing contract with the seller prohibits any disclosure of the bottom line. We present all offers to the seller regardless of the amount unless otherwise instructed. • Making an "Offer": An offer should not be conversational, but part of a legal contract between the buyer and seller and secured by a deposit check that is 10% of the offered amount. The 10% is not a figure out of thin air, but comes to us from British Common Law and is defined as "earnest money". The deposit is held by the broker in a separate bank account until the terms of the contract are fulfilled or the contract terminated by the buyer. In drawing up the contract, remember that the buyer defines the terms and conditions. Our contract is based on the contract provided by the Yacht Brokers Association of America that clearly serves in the best interests of both parties. The contract defines not only the financial issues, but other entities such as, the proposed closing date, time necessary for the marine survey, buyer's financing, any details regarding engine testing and sea trial, the seller's and buyer's responsibilities throughout the term of the contract, etc. 3. Offer Accepted/Rejected: The offered is accepted when the contract is signed by the seller. The seller may accept the contract, reject it flatly, or come back with a counter-offer. Negotiations continue until there is agreement, or the contract is terminated and the deposit money returned to the buyer. 4. The Marine Survey: In accepting the terms of the contract, the seller gives the buyer permission to have the boat inspected by a marine surveyor. Without this permission, a surveyor cannot inspect the vessel. The surveyor is paid by the buyer and serves only in the buyer's best interests. This is the buyer's primary protection and, in a sense, the cheapest insurance available. Many structural problems are not visible and are determined by the surveyor using a variety of low tech and high tech methods. In hiring a marine surveyor, the buyer should be aware that the most consistently competent surveyors are members of either NAMS (National Association of Marine Surveyors) or SAMS (the Society of Accredited Marine Surveyors). We believe in the value of a survey to the extent that, if the buyer declines to have the boat inspected, a document must be signed to that effect and attached to the contract. 5. Accept or reject: With the survey document in hand, the buyer has the right to accept or reject the boat. Rejection may result from the surveyor's estimate of FMV not supporting the contract price, or from the condition findings of the survey. In either case, the buyer can reject and terminate the contract and have the deposit returned in full. 6. The Closing: When all the terms of the contract have been met, it's time to transfer ownership. The buyer and broker do a final inventory of the vessel and her gear. The buyer should have insurance in effect and be ready to take full possession. The buyer receives a notarized bill of sale and a document showing the disbursement of funds and the transaction is complete.
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King's Cove Marina, LLC
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