negotiating advice for a first time buyer

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pilotsailor
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negotiating advice for a first time buyer

Hello all! 

I just recently became a member of this website/C36 int'l association and I must say - what a wonderful website you have all created! Job well done! My boyfriend and I have decided to get into sailing and after much research (both online and in person) we have decided that a C36 is the right boat for us. For months now we have been doing our homework on these boats - including much reading here on the forums of this website - and we are currently in the midst of negotiations in order to purchase a 1989 Catalina 36. We have completed both the engine and marine survey of which both have came back with several repair items in order to get the boat back into tip-top condition. My question to you all (especially those of you who have extensive experience in purchasing used boats and negotiating prices on them) is, What is industry "protocol" when it comes to negotiating the purchase price after the results of the surveys are in? We have already established a fair offer prior to completing the surveys - but now with the addition of approximately $7500 worth of major repairs (not including the "do-it-yourself” items that are assumed to be needed with all used boats) I wonder how much of that can be used in negotiating a better price for the boat because after all - we will need to make the repairs after purchase. 

I know each purchase is unique but I was hoping to gain some insight from those of you with experience in the industry on what is standard protocol when it comes to buying a boat and negotiating the price? Would it be reasonable to ask the seller to reduce their price by half of the repair bill? More? Less? I don't want to offend the seller however I do want to get the very best deal possible on the boat! Thank you in advance. I appreciate your time and look forward to your responses! 

Solla Sollew
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First of all, I don’t have extensive experience negotiating boat purchases.  Personally and professionally, real estate transactions are more my forte but I think they share some commonality.
 
My fist bit of advice – Don’t get too excited or impatient. If the deal does not seem right, walk away.  Be prepared to wait for another, and likely, better boat to come along.  Put the costs of the survey down to valuable experience.  (The old adage is true – He/she who cares the least wins.)
 
There are a few questions I’ll try to work around - Was the boat offered for sale “as-is” and priced accordingly?  Was it advertised as “cruising ready”?  You did not say if you are working with/through a broker or if you’ve signed a “standard” P&S agreement.
 
I'd say “industry protocol” concerning negotiations, offer/acceptance, terms, etc. is specified in the purchase and sale agreement, assuming you have one.  Typical purchase/sale agreements contain a clause that says your offer is subject to your obtaining satisfactory survey and sea trial – that’s to your satisfaction.  You probably already know this.  Typically, there’s also a condition that says you have so many days to obtain a survey and sea trail or you are deemed to accept the boat as-is.  Assuming time hasn’t run out, my advice is to reject the boat.
 
Why?  Well it seems to me, based on what 25 yr. old 36’s are selling for; a $7500 repair tab is, in my opinion, too high a percentage of the overall purchase price.  I’m assuming an asking price is the $50-60k neighborhood.  Depending on if the terms of your agreement/offer allow it, I’d reject the boat (withdraw my offer) and present a new offer for more/less the same amount less all expected repairs needed to get the boat in a safe and operable condition – not as good as new, but safe and operable.  That means it’s mechanically functional and structurally sound.  That does not mean things that normally wear out are made good as new.  To elaborate, if your surveyor says electronics, fire extinguishers, bottom paint, dinghy, etc. aren’t functioning or should be replaced, I probably wouldn’t adjust my offer significantly because, as you seem to know, most owners expect to pay some of their own “move-in” expenses.  If you were told there’s no compression in one of the engine cylinders, or the rudder is waterlogged, yes you should factor those repairs into your revised offer.
 
My 2c are based on the information provided and my own personal experiences and prejudices.  Others may disagree me, perhaps vociferously.  If you tell us more about the issues the surveyor turned up, whether or not you have a “standard” agreement, the overall condition of the boat, and (generally) where you are located, then perhaps me and others may be able to provide better advice.
 

Marc & Susan Garcia
"Solla Sollew" #1473, Mk.II
 San Buenaventura, Ca.

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rbrooks
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Posts: 46

I purchased my boat last year, and my advice is to remember that your are dealing with a used car salesmen.  As soon as you hand over the check, you inherit all the problems, don't expect help.  At a minimum offer 10% less than the asking price, plus all the known "major" issues issues.  Tip top to you, may not be tip top to others. 

There are so many variables that can go wrong, expect to put in an additional 5% to 10% of the purchase price to to cover the unknowns.  I offered 10% less and got it, however I had to put in an additional 10% in unknown repairs. However, you have made the right choice.. the Catalina 36 is worth it! 
Good Luck... 

 

Bob & Maggie B. Hobby Time 1999 C36 MK II TM/Wing Hull #1796 Warwick, RI

Solla Sollew
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And another thing…(in a nice way)
 
You said “I don’t want to offend the seller”. I wouldn't be concerned unless they're a personal friend, relative, or acquaintance.  Are you worried he’ll take his boat and go home and you’ll lose the boat you’ve got your heart set on?  If so, don’t worry. These emotions are normal for a first –time buyer.  Just remember: you are handing over a lot of your hard earned money to a stranger and in all likelihood, he’s only looking to unload his boat on the first person he can.  Guess what - you just happened to come along first.
 
Don’t be afraid of insulting the seller. If they are honest, they’ll agree to an adjustment without any qualms.  If they throw a big fit, act insulted and threaten to break off negotiations, I’d suspect they are knowingly playing on the emotions of a first-time buyer.  Remember, he probably needs to sell a whole lot more than you need to buy.  That puts you in a strong position.  Again, just my 2c worth.
 

Marc & Susan Garcia
"Solla Sollew" #1473, Mk.II
 San Buenaventura, Ca.

pilotsailor
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Thank you all for the replies; they are very helpful. We came directly to the listing broker to see the boat when we were first interested & as things moved along we wrote up our offer with him as well (using a standard P&S agreement which has all the clauses you mentioned + one last big catch all, "the buyers final inspection" so we can easily walk away if needed) So yes we are using a broker, but it's also the seller's broker as well & therefore the broker's interest are probably aligned slightly more with him than us. With that said we are paying cash & it is my understanding that two previous sale's of the boat have already fallen through (one couldn't secure financing & the other got cold feet prior to doing a survey) So in my opinion we are the first serious buyers who have come along. I know emotions have their part in boat sales & we ready to walk away if needed, however we do feel that the boat is a good buy - especially if we can go into the final round of negotiating educated & armed with good reason for the price to be adjusted. 
As for the condition of the boat, it is very solid for a 1989. Although a lot of the major components are original to the boat, hence the higher repair costs. The PO has owned the boat since '06 & from what I can tell has put in minimal upkeep since his purchase (especially since deciding to sell it). Prior to that it looks like the original owner(?) had put a lot of care into it. We found documentation that the boat won awards such as the  "best kept boat in the harbor" up until 2006 & ironically none since then. The boat definitely needs a good scrub down & replacement of routine maintenance items (oil change/engine service, cleaning out the bilge, chain plates need reefed/recaulked, secondary jib halyard needs replacement, along with various shackles, anchor chain etc.) There are quite a long list of these type items however I probably would not factor them into the asking price of the boat - because like you have indicated all used boats need some TLC. However the bigger items (or rather, the items that are probably beyond our scope of work at this point) that came back from the survey include replacement of the sea strainer, primary water pump (both are leaking quite severely ), re-packing of the prop shaft/log packing gland, replacement of the fuel tank & water heater (which is inoperative), frozen Y-valve & frozen head overboard discharge valve (rendering the head inop until fixed) & in the near future replacement of the prop shaft strut. There are also some other advisory items including epoxy injection into a few "voids" in the forward portion of the upper deck. I am still waiting on a break down of repair costs for each individual item however I was quoted around $7500 to complete everything on the survey which I cannot do myself.

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Chachere
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[quote=pilotsailor]

 However the bigger items (or rather, the items that are probably beyond our scope of work at this point) that came back from the survey include replacement of the sea strainer, primary water pump (both are leaking quite severely ), re-packing of the prop shaft/log packing gland, replacement of the fuel tank & water heater (which is inoperative), frozen Y-valve & frozen head overboard discharge valve (rendering the head inop until fixed) & in the near future replacement of the prop shaft strut. There are also some other advisory items including epoxy injection into a few "voids" in the forward portion of the upper deck. I am still waiting on a break down of repair costs for each individual item however I was quoted around $7500 to complete everything on the survey which I cannot do myself.
[/quote]
Some of these items on your list are -- from my experience with our '85 Mk I that we've owned for 4 years now -- relatively small jobs and not mechanically/technically sophisticated, all of which we've done ourselves along the way. These would include:
- Replacement of the sea strainer (couple of bolts and hose clamps to deal with)
- Primary water pump (same; and its a good idea to carry a spare anyway)
- Re-packing of the prop shaft/log packing gland (you will need to do this every few years, depending on engine use) (for a good set of instructions, go here: http://www.pbase.com/mainecruising/stuffing_box )
- Frozen Y-valve & frozen head overboard discharge valve (sanitation Y valves tend to get quickly frozen if not "exercised" fairly often; I rebuilt ours and it froze again a year later because we would never have reason to use it unless we were well offshore for a lengthy period of time)
Not that these costs shouldn't be included in your negotiations, but they are not -- in my view -- big ticket items.

Matthew Chachère
s/v ¡Que Chévere!
(Formerly 1985 C36 MKI #466 tall rig fin keel M25)
2006 Catalina Morgan 440 #30.
Homeported in eastern Long Island, NY

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BrentF
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Posts: 52

I am guessing the broker has come back and said he has a second offer waiting.  That is sort of standard used car tactics.  The blue book for boats is pretty exaggerated in my opinion.  The pricing is so thin on used boats that the rating agencies are not using reality.  In addition you have to factor in the prices are really driven off of well equipped boats on the coast.  If you are not on the coast and the boat is not decked out with expensive equipment then discount the prices substantially.

$7500 is a steep repair bill.  I would adjust your offer down if the boat was not already marked down to reflect the needed repairs.  Now that the survey is done the broker and owner are going to be in a position of knowing the issues exist and either accepting the boat needs repair or looking for a sucker. There are not that many marine surveyors in any given town and all are going to catch major issues - as much as brokers may tell you that it is a surveyor's opinion they are more fact driven especially when it comes to repairs.

In addition you can't just ignore the repairs.  You will get a letter from your insurance company asking for proof that any repairs required by the survey are completed (unless they are cosmetic).

I have an '87 C36 and have replaced light fixtures, cabin floor, windows, sails and lifelines (not to mention regular replacement of lines, bottom paint, and batteries).  I could still spend more on cushions, drapes refrigerator, etc.)  Fortunately being in fresh water I don't have the corrosion issues with my rigging.  I would look for others to chime in but consider these intangibles when pricing a 26 year old boat:
    in salt or fresh water?  - matters to the rigging and other corrosion sensitive systems
    year round in the water or hauled out for winter?  - northern boats often get only 4 months of use
    engine hours - they are not like cars, I am guessing around 5k hours you are looking at overhaul/replacement
    deck integrity -  these decks have coring and if it fails it is and expensive repair that must be done
    sail condition - this is a significant cost to replace the sails, how old are they?

Your timing is good as boat sales are slow during winter.  Used sailboats are a buyers market.

That said the 36 is a very good boat to buy (IMHO).  It is comfortable and easy to sail. 

Brent and Janie Farler
"Salsa Caliente"
1987 Catalina 36 Hull #719
Lake Texoma, TX

pilotsailor
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Also, the boat is in coastal Southern California and its in the water year round. It was last hauled out in 2012 for new bottom paint and mast repainting. That's the major(ish) work the PO put into it. 

neilroach
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Posts: 126

Five years ago I purchase a 92 and like you I was a novice sailor/owner. Some one told me to spend 70% of my budget on the boat and save 30% for known and unknown stuff. This may be less true of a much newer boat but has turned out to be exactly correct for me.  Even if you get relief from a seller with the "gotta haves" you will have known and unknown "wanna haves" as you settle into your boat. 
All the above advice is well thought out and sound and you will find a Catalina 36 a joy to own and sail.

Neil Roach
"Crewless"
1992 36, Mark I
Hull # 1174
Seattle

Solla Sollew
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Posts: 74

There was only one boat on Yachtworld with your criteria. If the pictures are current, it looks like the boat is (or was) in my marina (VIM), maybe H or I dock. Sorry, I cant say I know anything about the boat or owner.  Price doesn't seems out of line.  If the two of you buy it and have questions, drop by G32 and say hello. Also, the people at Ventura Harbor Boatyard have always been fair and square with me.  I plan on using them again when needed. Good luck.

Marc & Susan Garcia
"Solla Sollew" #1473, Mk.II
 San Buenaventura, Ca.

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newguy
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Posts: 408

The NADA guide is a good place to establish what the boat should go for in "fair" condition.  I think repair costs can be broken down into three categories:

  1. Routine.  Oil change, packing glands, cutlass bearing, surface finish, cleaning, etc.
  2. Worn but serviceable:  Cushions, running rigging, sails, batteries, etc.
  3. Fit for sea duty:  Plumbing, wiring, standing rigging, hull, deck, engine, etc.

The things in #1 you don't generally negotiate into the price because they are DIY and/or minimal cost.  The things in item #2 you do generally make consideration and factor this mentally into your pre-survey offer.  The things in item #3 you negotiate post-survey/sea trial because they are documented and demonstrable out-of-pocket expenses that someone has to bear.  Sails might be included here if they are beyond fit for duty.

I don't know if injecting epoxy into deck voids is normal for a 25-year old Catalina.  Make sure the underlying reason for this is accounted for and factor in any expenses this might incur beyond the recommendation to fill the known voids.

It took us 2 years to find Whimsea.  Not being our first rodeo, we took a "pass" on about 20 boats.  Survey and sea trial is a time to be thorough and factual.  If the owner does not want you to go full throttle and hard-over for example, then ask why.  If you have reasonable doubt, walk.  You have to have a balance of sailing vs. the cost of sailing, and maintenance cost is a significant consideration.

Nick Caballero
Retired C36/375IA Mk II Technical Editor

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clennox
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Sounds like the boat next me in Ventura. H dock? It has been on the market for some time. I haven't seen it leave the slip in a long while. Does look like a good boat. I think the owner told me his kids are grown and he just doesn't use the boat.
The one thing I found when buying Island girl was having a nice relationship with the seller was a good thing. My seller left a ton of extras on the boat that he could have taken and sold at a swap meet. My seller was straight fwd and honest before the any inspections. I paid the price we had already agreed to. He was asking 77500 and we agreed to 72500. I wanted this boat, It had been loved.

Chuck Lennox
97 MKii Ventura Ca
Island Girl Hull #1611

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Phil L
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Posts: 104

If you are in Southern California (as am I) and the boat has significant repairs needed, I would discount my offer.  There are countless C36 MKI's always available up and down the coast, and many are in very good condition, so you should get the discount or walk away.  Wait for the right boat.

Phil L 
Southern Cross
Channel Islands, CA
C36MKI #400

pilotsailor
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I just wanted to say Thank You for all of your input on negotiating a fair price on a C-36. It has been very helpful. After many weeks, we have finally purchased a 1987 C-36; and while it is not the original one we were looking at (we feel that this one is better!) we think it's going to be a great boat and are very excited to begin our boat ownership. This website has already been very helpful and I look forward to referencing it more as we get underway. Thanks again - everyone! 

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Pgutierrez
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I sail on "west coast of Wisconsin", aka port of Pepin, WI  on Upper Mississipii River,   When I bought my first big boat, 1897 Catalina 30 in Milwaukee, I had boat surveyed.  Yes, $400-$500 but money well spent. Since I needed to dismantle boat and have it trucked across state, and then put it together myself, I put in contract clause that seller would meet me at my marina in early summer and review set up, to answer questions, clear up any assembly mistakes.  For his troubles, there was $1000 to be paid at time of his summer trip.  He agreed to it.  He showed up, cleared up some of my assembly mistakes.  Both buyer & seller were happy.
When I bought current boat, put in contract clause that seller would agree to take phone calls to answer similar misgivings until End of August (4th month of sailing season).   Also clause "buyer agrees to research thoroughly subject at hand so as to not inconvenience seller  with repeated phone calls".  Helped clear up a few frustrating things (darn pilot light on stove won't work - didn't realize there was a solenoid switch on electrical panel!!!!).   
Hope this helps.   Repeat:  spend the money on survey unless you really know what you are doing.

peter g

2000 C36, MK2, Hull. #1897
wonderful, wonderful, wonderful ! ! !.   5 th Catalina

 

 

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