Jump to content

What is the typical process when buying from a private seller?


OTL

Featured Posts

43 minutes ago, Mike Tee said:

When buying from either a private seller or broker, I am totally against this process of handing over a large deposit before having a survey unless you are totally committed to buy regardless of the survey outcome. As mrsmelly says above, if the deposit is to hold the boat while getting the balance organised, that is totally different. I might grudgingly hand over a nominal £500 before the survey, just to stop the boat being sold, but no way would I be handing over the thousands that other buyers seem to feel happy doing.

I've seen some brokers stating that basically if you have handed over the deposit you have committed to buying the boat. The survey might show that, for example, £5000 is needed for overplating. The brokers standpoint is that as long as the seller has the work done you cannot back out of the purchase. My point is that, until I had seen the survey, I had no idea the boat I was thinking of buying needed overplating. I do not want a boat that has either had overplating done, or needs it doing. Also, with work of that importance being done for the seller, the legal ramifications of subsequently claiming for shoddy work done for a previous owner, by me as the present owner, don't bear thinking about.

I could not agree more with every word of this. I think this practice should not be permitted. When buying a house you only pay a binding deposit at exchange of contracts, which is AFTER the buyer has had time to carry out due diligence, not before. I have no problem with deposits being paid after survey.

Link to comment
Share on other sites

39 minutes ago, MrsM said:

 

PS I would be very wary of paying a deposit through a broker unless I was absolutely sure I could get my money back if the boat didn't fair well at survey. A fee people have had problems with this and at least one broker has refused to accept the survey findings and repay a deposit, which I find disgusting behaviour.

Theres usually 2 sides to every story.

Link to comment
Share on other sites

43 minutes ago, MrsM said:

Hi there. I haven't read through all of the thread but you've had great advice above. We bought our first NB privately last year so I'll share my experience. Our situation was slightly unusual because the previous owner had sadly died not long after getting the boat and his son was selling it. Fortuitously the boat had been purchased in the son's name and he had proof of ownership, so this made things less complicated as he had clear right to sell (ie no complicated probate issues). The manager of the small marina where it was moored acted as point of contact between us and the seller but he was not acting as a broker per se. 

The boat was advertised on the Duck and we were first to see it. We put in an offer subject to survey, which was accepted, and arranged a survey at nearby yard where the boat could be lifted out. We also arranged to have the boat blacked if the survey was ok, but if not it was going straight back into the water. We neither offered nor were not asked to pay a deposit. The seller organised for a local sea dog to take us and the boat to the lift-out yard. This was a 6-7 hour journey and it gave us a great opportunity to steer the boat and thoroughly test all systems. It was during this cruise we identified a number of issues such as fried batteries, badly neglected water tank, broken fridge and loo etc. We stayed in a local B&B so we could be on hand for the survey. Structurally the boat was in good order so we negotiated the price with the seller to take into account the issues we had uncovered. We had access to a file of paperwork about the boat so I had chance to check the RCD, previous bills of sale and surveys, engine servicing etc. On agreeing terms we paid in full by bank transfer and the boat was ours. (As a period property restorer I'm used to paying large sums by transfer so I always send a test payment of a small random amount first then ask the recipient to confirm the amount in person or over the phone. The seller was known to the marina manager so I knew I was speaking to the real person and not a scammer). I used the most recent ABNB bill of sale as a template for our transaction. We stayed on in the marina (White Mills - what a great place it was) for a few weeks to carry out essential work on the boat; water tank, loo etc, and then brought her home. More than doubled the engine hours last year and have loved every minute. Good luck and welcome. 

PS I would be very wary of paying a deposit through a broker unless I was absolutely sure I could get my money back if the boat didn't fair well at survey. A fee people have had problems with this and at least one broker has refused to accept the survey findings and repay a deposit, which I find disgusting behaviour.

A good summary of how a normal boat purchase should go through.

Link to comment
Share on other sites

1 hour ago, Mike Tee said:

Any seller that was convinced his boat was sound and worth the agreed price should be happy to accept it going through subject to survey without a deposit. If the survey subsequently found a problem, the potential buyer would be well in his rights to walk away - bit difficult if the seller has already banked £6000 of the buyers hard earned.

The subject of a buyer just frivolously making  multiple offers on a variety of boats is another thing. Its not protected when buying a house which kinda grates with me, but that's the way of things - I consider boat buying to be similar. If a potential buyer has paid for a survey and paid for the boat to be taken out of the water, that shows a reasonable level of commitment in the region of £1000 - £1500.

 

I think you need to read my post and the posting it referred to. The seller did agree to a survey and  no deposit, the purchaser then changed their mind and bought another boat without having the first surveyed after the first seller had agreed to  take his off the market.

Link to comment
Share on other sites

2 hours ago, mrsmelly said:

...Normaly when you place a deposit on an item including a boat as with mine it is a binding contract in that the deposit you pay states you intend buying the product and are then liable to pay the balance, much the same as a deposit on exchange of contracts on a house you are then liable to buy the house or are in breach of contract.

The difference in some circumstances being say buying either through a broker or a private seller in that a deposit is given subject to a suitable survey to both parties so the deposit isnt initialy a notice of intent to purchase but purchase after survey, this can be subject again to terms and conditions in the deposit contract. So when my buyer gave me his 5k deposit if he changed his mind I could have kept it and indeed persued re the rest of the purchase price as he would have been in breach of contract. ...

If this is intended to suggest that simply paying a deposit establishes a binding contract, then much as I respect mrsmelly's knowledge of and buying/selling of boats, I am not sure it is correct.  With a house it is the paperwork (together with the deposit) that establishes the contract and sets out the consequences (loss of that deposit) of not following though with the purchase.  A deposit with simply a handshake but no paperwork is at best a "gentle(wo)man's agreement", that a true gentle(wo)man will honour but others may not!

Link to comment
Share on other sites

5 minutes ago, Cheese said:

If this is intended to suggest that simply paying a deposit establishes a binding contract, then much as I respect mrsmelly's knowledge of and buying/selling of boats, I am not sure it is correct.  With a house it is the paperwork (together with the deposit) that establishes the contract and sets out the consequences (loss of that deposit) of not following though with the purchase.  A deposit with simply a handshake but no paperwork is at best a "gentle(wo)man's agreement", that a true gentle(wo)man will honour but others may not!

I think you will find that if you agree a price on an object be it boat etc etc ( not a house ) then pay a deposit you have entered into a binding agreement. If someone could just change their mind any time before completing the sale it would make a mockery of taking the deposit in the first place. The deposit is part of the price of the object. If you google you will see that is correct. So offer made and accepted and deposit taken and thats the deal, totaly different to just a holding deposit prior to survey.

  • Greenie 1
Link to comment
Share on other sites

 

If you use one of the standard purchase contracts available the you may be in a position to rengotiate the price, walk away with your deposit returned, or, walk away and lose your money.

 

Post Survey Price Reductions

 

The [5%] referred to is a negotaible figure, it could be 1% ir 10% that is for discussion betwwen the buyer and the seller. 5% is the normally 'meet in the middle' figure

 

A standard BMF/RYA approved contract states -

5.Defects
5.1.If the inspection, survey or sea trial reveals any defect in the Vessel, its machinery, gear or equipment which was not disclosed to the Purchaser in writing prior to the signing of this Agreement, or if there are any deficiencies in the inventory prepared and attached to this Agreement, for which the aggregate cost of rectification by a competent and reputable shipyard or replacements (on a like for like basis, discounted to second hand prices) is collectively equal to or exceeds [5]% of the purchase price then the Purchaser may give written notice to the Seller or the Broker within 7 days of completion of the inspection, survey and sea trial, whichever is the later, specifying the defects and/or deficiencies and including a copy of all relevant extracts from a surveyor’s or adviser’s report, and either:
5.1.1.reject the Vessel, or
5.1.2.require the Seller to make good the defects and/or deficiencies or make a sufficient reduction in the purchase price to enable the Purchaser to do so. In this case all agreed items of work shall be completed without undue delay and shall be carried out to the express requirements contained in the Notice served by the Purchaser.
For the purposes of this Clause 5.1 and Clause 6.1.2 "completion of survey" shall mean the date of receipt by the Purchaser of a written or emailed survey report.

Link to comment
Share on other sites

4 hours ago, mrsmelly said:

Agreed. Thing is we all are different to what we will personaly accept as a risk. I never survey, I am buying a house at present without any form of survey. It looks square to me and its been there since 1890 and I like it so I am buying it. If I had a survey the surveyer would doubtless find faults as its 131 years old lol.  The only reason I had surveys on houses years ago was that I had to ask poxy banks for a loan and we all know what a con that system is but we are at their mercy until we can buy with cash. I have been a motorcyclist in the past wheras many would not get on one. Ive done jobs with a degree of danger that a hell of a lot of people would steer clear of. We are all different and one size doesnt fit all and there is no right or wrong way.

My wife insisted on having a survey of our new house. The main points of the survey was that he didn't like the decoration, the way the rooms were laid out and the fact there was a council estate half a mile a way across the road. He missed the damp under the roof, various cracks in the wall and anything else of use.

I took an experienced boating friend with me to see the Maggot, liked it, he hit the hull with a hammer and I gave the bloke some money. Never regretted it in 30 years.

  • Happy 1
Link to comment
Share on other sites

2 hours ago, ditchcrawler said:

I think you need to read my post and the posting it referred to. The seller did agree to a survey and  no deposit, the purchaser then changed their mind and bought another boat without having the first surveyed after the first seller had agreed to  take his off the market.

I did read your post but have no idea of the other post you refer to.

I did say that a potential buyer making multiple offers etc was just 'one of those things' similar to buying a house. In both transactions there  is a commitment made by the buyer in that they spend a considerable amount of money in surveys (and with a house, legal fees and costs) thereby showing that they are serious - the seller, even if a broker, risks no major cost taking the boat off the market temporarily. There is nothing that can be done about tyre kickers in either scenario. There is also no reason why the seller cannot accept the offer, accept the deposit, and then return the deposit after the buyer has spent on a survey, just because he has been 'gazumped'. There are arses on both sides.

Somebody (think it was mrsmelly) mentioned that a lot of this boat purchase / sale relies on good faith from both parties (I do know brokers use agreements etc which I assume are legally binding and are designed to remove the good faith risk - don't know by how much though).

 

eta - OK, found the post you referred to, that well describes the (I hope) exception to normal boat buyers - I also hope that the buyer contacted the seller the same day, in which case, all he lost was a sale. In any event, neither party was really out serious money, travel and time for the buyer, time for the seller.

Edited by Mike Tee
  • Greenie 1
Link to comment
Share on other sites

4 hours ago, matty40s said:

Theres usually 2 sides to every story.

I would certainly hope so, Matty, as otherwise I cannot understand how such practice would be anything other than entirely indefensible. 

I hold my hands up to being rather cynical/biased when it comes to most salespeople. I've come across plenty of sharp practice in my time and have a tendency to become a bit Mary Whitehouse when I hear or read about, what I perceive to be, examples of people being badly treated. I am sure there are many good and honourable sales people out there and I fully accept my opinion is not very balanced. Likewise I am aware that not all buyers behave decently. Presumably you have some inside knowledge about brokerage practices so I would love to hear a possible justification for broker behaviour in the following scenario: buyer finds and falls in love with dream boat; boat is being sold as free from significant faults; buyer makes successful offer and pays deposit of X £1000s; buyer pays to have boat lifted and surveyed; surveyor finds numerous faults with boat; buyer obtains aggregate costings to remedy boat; buyer decides to reject boat as it was not as described & would be too costly to repair issues identified during the survey; broker refutes survey & repair estimate & re-advertises boat; broker/owner pockets deposit; broker sells boat to new buyer. Please tell me how this could possibly be fair to the original buyer - I am very open to hearing both sides of a story such as this. In the meantime I shall remain sceptical of car/boat/house salespeople.

Edited by MrsM
Typo(')
Link to comment
Share on other sites

21 minutes ago, MrsM said:

I would certainly hope so, Matty, as otherwise I cannot understand how such practice would be anything other than entirely indefensible. 

I hold my hands up to being rather cynical/biased when it comes to most salespeople. I've come across plenty of sharp practice in my time and have a tendency to become a bit Mary Whitehouse when I hear or read about, what I perceive to be, examples of people being badly treated. I am sure there are many good and honourable sales people out there and I fully accept my opinion is not very balanced. Likewise I am aware that not all buyers behave decently. Presumably you have some inside knowledge about brokerage practices so I would love to hear a possible justification for broker behaviour in the following scenario: buyer finds and falls in love with dream boat; boat is being sold as free from significant faults; buyer makes successful offer and pays deposit of X £1000s; buyer pays to have boat lifted and surveyed; surveyor finds numerous faults with boat; buyer obtains aggregate costings to remedy boat; buyer decides to reject boat as it was not as described & would be too costly to repair issues identified during the survey; broker refutes survey & repair estimate & re-advertises boat; broker/owner pockets deposit; broker sells boat to new buyer. Please tell me how this could possibly be fair to the original buyer - I am very open to hearing both sides of a story such as this. In the meantime I shall remain sceptical of car/boat/house salespeople.

 

 

Maybe MATTY will PM you the 'other side of the story'

 

There are so many variances between the two sides it not only appears to be different people, a different boat, but a different country and different time period,

 

Summary from the 'other side' was the Surveyor did not find any faults and the alleged cost of repairs were never quoted for, just a figment of the imagination of the buyer. The buyer just changed his mind and tried to get out of the contract.

 

Where the truth actualy lies remains questionable.

Edited by Alan de Enfield
Link to comment
Share on other sites

1 minute ago, Alan de Enfield said:

 

 

Maybe MATTY will PM you the 'other side of the story'

 

There are so many variances between the two sides it not only appears to be different people, a different boat, but a different country and different time period,

 

Summary from the 'other side' was the Surveyor did not find any faults and the alleged cost of repairs were never quoted for, just a figment of the imagination of the buyer.

 

Where the truth actualy is remains questionable.

At the end of the day it is absolutely none of my business but if, and it's a big if, this is how some people are being treated then it is not good.

  • Greenie 1
Link to comment
Share on other sites

So just to be sure I am understanding this ^^^^ correctly - first buyer makes offer and pays deposit, gets survey but then changes his mind (no reason given), broker sells to subsequent buyer and owner and broker pocket sales proceeds AND first buyers deposit.

Link to comment
Share on other sites

31 minutes ago, Mike Tee said:

So just to be sure I am understanding this ^^^^ correctly - first buyer makes offer and pays deposit, gets survey but then changes his mind (no reason given), broker sells to subsequent buyer and owner and broker pocket sales proceeds AND first buyers deposit.

The change of mind buyers deposit is usually split 50/50 between the seller for wasted time and the broker for wasted time/relisting costs

  • Happy 1
Link to comment
Share on other sites

10 minutes ago, Mike Tee said:

So just to be sure I am understanding this ^^^^ correctly - first buyer makes offer and pays deposit, gets survey but then changes his mind (no reason given), broker sells to subsequent buyer and owner and broker pocket sales proceeds AND first buyers deposit.

No, Mike, in my example above the first buyer had a survey which found numerous faults including a serious safety issue. Buyer took report to a reputable repair yard to get an overall estimate of putting the boat right. Estimate came to more than 10% of cost of boat, which in itself was an issue. Buyer was also unhappy that the boat was not the ready-to-go, good order boat they believed it was and reluctantly decided to right off the survey and lift-out costs and reject the boat. Broker refuted survey and repair estimate and immediately re-advertised boat. Broker refused to refund deposit and sold boat to new seller within a couple of days. First buyer lost survey and deposit. As Matty pointed out there is clearly another side to this. I'd be fascinated to know what it is.

Link to comment
Share on other sites

9 hours ago, ditchcrawler said:

Surly this shows why a seller would want a deposit. You asked the vendor to take it off the market to which they agreed because you wanted to buy it subject to survey and then you changed your mind and bought a different boat.

No, I asked a hypothetical question and got a hypothetical answer. We didn't even discuss price.

 

If I'd booked a surveyor he'd have known about it. 

Link to comment
Share on other sites

8 hours ago, matty40s said:

Theres usually 2 sides to every story.

I do know of at least one broker (Alvecote) which told  me they had  a policy of retaining a portion of a deposit (in addition to slipway fees I'd expect them to keep) as "admin" even in the event of the surveyor raising serious issues that the owner couldn't or wouldn't address.

 

(Yes, I ask a lot of hypothetical questions about buying processes)

Link to comment
Share on other sites

14 hours ago, mrsmelly said:

I think we need to clarify a subject, that of the word Deposit.

Normaly when you place a deposit on an item including a boat as with mine it is a binding contract in that the deposit you pay states you intend buying the product and are then liable to pay the balance, much the same as a deposit on exchange of contracts on a house you are then liable to buy the house or are in breach of contract.

The difference in some circumstances being say buying either through a broker or a private seller in that a deposit is given subject to a suitable survey to both parties so the deposit isnt initialy a notice of intent to purchase but purchase after survey, this can be subject again to terms and conditions in the deposit contract. So when my buyer gave me his 5k deposit if he changed his mind I could have kept it and indeed persued re the rest of the purchase price as he would have been in breach of contract. A deposit subject to survey just to hold the boat is a different matter.

Depends on the contract, before I paid the agreed deposit, which was indeed the first payment, I wrote a contract agreeing to purchase the boat for the agreed price on agreed date, but should abnormal circumstances intervene, ie not trivial as in I changed my mind, I reserved the right to walk away, forfeiting the deposit. 

Just as well I did because the sale of my flat was not secured (due to incompetence by my original solicitor), so worse case scenario I would have defaulted. 

Link to comment
Share on other sites

3 hours ago, LadyG said:

but should abnormal circumstances intervene, ie not trivial as in I changed my mind,

 

 

It is called 'Force majeure' which is quite normally built into the contracts.

My Son was buying a boat in 2015, after he had paid the deposit and organised a surveyor he was involved in a serious car accident, whilst in A&E he complained of a headache and was given a scan where they found he had a Brain tumour.

 

We invoked Force Majeure and all monies were returned with 'best wishes'.

After 3 years of brain surgey, Chemo and Radiotherapy, we went out and bought another boat for him. He has just been granted the return of his Driving Licence by DVLA, almost 6 years after diagnosis, and 3 full years, after treatment, of quarterly scans showing no signs of return.

 

force majeure
  1. 1.
    LAW
    unforeseeable circumstances that prevent someone from fulfilling a contract.
     
     
     
     
    This was the clause in the boat purchase contract which we invoked :
     
     

    Force Majeure.

    A Party shall not be deemed in default of this Agreement, nor shall it hold the other Party responsible for, any cessation, interruption or delay in the performance of its obligations due to earthquake, flood, fire, storm, natural disaster, act of God, war, terrorism, armed conflict, labor strike, lockout, boycott, unavoidable casualty or other similar events beyond the reasonable control of the Party, provided that the Party relying upon this provision:

    ·         gives prompt written notice thereof, and

    ·         takes all steps reasonably necessary to mitigate the effects of the force majeure event.

    ·         If a force majeure event extends for a period in excess of 30 days in the aggregate, either Party may immediately terminate this Agreement upon written notice.

Link to comment
Share on other sites

4 hours ago, LadyG said:

Depends on the contract, before I paid the agreed deposit, which was indeed the first payment, I wrote a contract agreeing to purchase the boat for the agreed price on agreed date, but should abnormal circumstances intervene, ie not trivial as in I changed my mind, I reserved the right to walk away, forfeiting the deposit. 

Just as well I did because the sale of my flat was not secured (due to incompetence by my original solicitor), so worse case scenario I would have defaulted. 

Correct. As I said it depends on the terms of the contract. ;)

  • Greenie 1
Link to comment
Share on other sites

13 hours ago, MrsM said:

No, Mike, in my example above the first buyer had a survey which found numerous faults including a serious safety issue. Buyer took report to a reputable repair yard to get an overall estimate of putting the boat right. Estimate came to more than 10% of cost of boat, which in itself was an issue. Buyer was also unhappy that the boat was not the ready-to-go, good order boat they believed it was and reluctantly decided to right off the survey and lift-out costs and reject the boat. Broker refuted survey and repair estimate and immediately re-advertised boat. Broker refused to refund deposit and sold boat to new seller within a couple of days. First buyer lost survey and deposit. As Matty pointed out there is clearly another side to this. I'd be fascinated to know what it is.

Fair enough, but I was really directing the question at Matty for the brokers side, which he has since answered and I thank him for it. It was also more of a 'what is the usual process' question.

Back to your side, I'm surprised the buyer didn't go down the legal route, or maybe he did - but that choice or result really has nothing to do with us.

Link to comment
Share on other sites

2 hours ago, Mike Tee said:

Fair enough, but I was really directing the question at Matty for the brokers side, which he has since answered and I thank him for it. It was also more of a 'what is the usual process' question.

Back to your side, I'm surprised the buyer didn't go down the legal route, or maybe he did - but that choice or result really has nothing to do with us.

Indeed and I defer to the greater knowledge and experience of others.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.