Question: signing buyers agreement prior to survey

[Kato]

I engaged a surveyor to inspect a boat being sold by a broker. When the surveyor contacted the broker to arrange for an inspection date, the broker said that I would have to sign a buyers agreement plus 10% cash down before he would allow the surveyor to inspect the boat. Is this common practice when buying a boat from a broker? I have always bought boats from private individuals and don't know if this is SOP or just a high pressure sales (sails?) tactic by hungry brokers.

Thanks for any light you can shine on this.

[Joe CD MS 300]

I have only been through it once but I believe that it is the standard practice. The agreement should be the standard (AYB ?) agreement of sale which is contingent on an adequate or acceptable survey and gives the buyer an out if he and the seller can't agree on an adjustment to the price to correct items uncovered in the survey. The deposit should be held by the broker not the seller. Sorry but I don't have much time here otherwise I would attach a copy of the standard agreement. I'm sure you can find one online.

[volker]

Yup that's standard procedure.. it propably shows you are dealing with a decent yacht broker. That deposit should go into an escrow account though. Bear in mind that deposit pretty much is a commitment to buy pending survey and you should have a good reason if you expect to get it back.

[Stan W.]

Just make sure the p&s is contingent on the survey. In that case, you are not taking much risk because the survey almost always will turn up something that would serve as grounds to back out if you get cold feet. Just be careful about the deadlines. Usually the survey must be done within a certain number of days and then there is a short window of time to cancel based on the survey.

[Ron M.]

Keep in mind you will pay the survey cost either way,which can run 5 or 6 hundred or more depending.
________
XR80

[Neil Gordon]

Keep in mind you will pay the survey cost either way,which can run 5 or 6 hundred or more depending.

Not that Ron was suggesting otherwise, but the survey is well worth it. If the surveyor finds nothing (which is unlikely), you know you have a boat that's safe and sound. Otherwise you get (i) a list of fixemup projects, (ii) some bargaining power for a lower price if there are more major items or (iii) the bargain of the century if it cost you $500 or so to avoid buying a really bad boat. (You might see if you can negotiate a deal with the surveyor in that case and maybe get a bargain on the next boat you try to buy.)

[tartansailor]

You are the customer! You set the terms. What ever happened to the Golden Rule of Marketing: Satisfy the Customer???
What about telling the broker "I'm paying for the survey,"
"No Deposit! "
"Take it or leave it!"
Dick

[Neil Gordon]

What about telling the broker "I'm paying for the survey,"
"No Deposit! "
"Take it or leave it!"
Dick

You'll be paying for a survey while you have no right to buy the boat. Post $500 survey you come back to the buyer and he says he's changed his mind or sold it to someone else. Then what?

Serious buyers have cash in hand and are ready to buy. All talk makes you a tire kicker. There may be exceptions, but the norms of boat buying are there for a reason.

[George Shaunfield]

This is normal practice. At first it seems strange to me too, but that is how it works. You look over a boat, negotiate a price with the seller contingent upon the survey, make an escrow deposit with the broker, and then get the survey done. Any problems that the surveyor finds (I think even minor one) are grounds for you to withdraw from the agreement AND get your full deposit refunded. Of course, you can use the findings to negotiate a lower price, or require that the seller repair or replace the problem item.

George

[Kato]

My point is that a boat should be no different from a car or a house. If I want to kick the tires or tap on the foundation, I shoudn't have to agree to buy the thing before I check it out. Agreed, if any damage is done during the tire kicking or foundation tapping, this would require a damage deposit. I have no problem with "earnest money", but an "agreement of sale" is different and puts the legal onus on the buyer, not the seller where it should be.

[Joe CD MS 300]

A survey is more akin to a home inspection or at least it should be and home sellers do not normally permit a home inspection without an agreement of sale. My survey spanned two days and took far longer than any home inspection I had done. Neil is correct, without an agreement you could find yourself having paid for a survey for a boat you can't buy. The agreement of sale doesn't put an"onus" on anyone. Its just two people agreeing to do something and spells out the terms. You can adjust the agreement to include any terms that you and the potential seller agree to.

[tartansailor]

I respect everyone's opinion, which of course you are entitled to, and it would be nice if someone respected mine.
I stand by what I said. The Golden Rule; The man with the gold rules.
Dick

[Neil Gordon]

I have no problem with "earnest money", but an "agreement of sale" is different and puts the legal onus on the buyer, not the seller where it should be.

Contract aren't about "legal onus." They're about defining the transaction and the relative obligations of the parties. In effect, they define the handshake.

The legal onus in a purchase and sale agreement for a boat (or a house) is really on the seller, not the buyer, altough both have obligations as defined in the contract. The buyer can get out of the deal if he's not satisfied with the inspection or if he can't get financing. Meanwhile, the seller has already set the price and can't sell the boat to anyone else (or decide to keep it) even if they offer a higher price. Given that they have to take the boat off the market, why wouldn't the seller demand a deposit?

As for inspection, the seller needs the protection of a contract. Without a signed agreement, a sea trial is just a chance for a casual looker to go sailing.

[Neil Gordon]

I respect everyone's opinion, which of course you are entitled to, and it would be nice if someone respected mine.
I stand by what I said. The Golden Rule; The man with the gold rules.
Dick

Dick,

There's no lack of respect, just difference of opinion.

There's truth to the golden rule. But...

When there's gold in the form of a boat and gold in the form of multiple potential buyers, the market rules. Some markets are more efficient than others but they're markets nonetheless. Try taking a pocket full of "gold" to the New York Stock Exchange and demanding that they sell you 100 shares of whatever on your terms.

[Joe CD MS 300]

Dick,

Both the buyer and seller have "gold". The seller's gold is the boat. The Buyer's gold is the cash. It just depends on who wants the other guy's "gold" most. That guy has the leverage or"makes the rules". Its also a question of degree, when you are near a fair price, there is give and take on both sides.

I don't think it is a question of respecting an opinion. Everyone is free to conduct business as they like but Kat was asking about the standard process of buying a boat. It may differ with smaller boats but when the boats get to a certain size the use of an agreement of sale prior to a survey is SOP. Kat is free to take your advice and ask to do a survey with out signing an agreement. The seller may say yes but he may also sell the boat out from Kat after he pays for the survey.

I'll try to find a book I have that details all the legal aspects of buying and owning a boat and post the title.