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**Pete7** · 09-10-2010, 06:27

Quote:

Originally Posted by roverhi

To make an offer, you need an earnest money deposit. Typically it is a check that is held by the broker. It's up to the broker if he keeps it uncashed or deposits into his client trust account. Without the deposit, there are thousands of ******** who will make an offer with out any intention of completing the transaction. These slimey creatures get their jollies needlessly getting the seller's hopes up and making the brokers work for nothing. It's a pain if you have to take the loss of converting currency but it should be a one time expense that will hopefully be part of the cost of buying a boat. You can roll the deposit into the next offer until you get a successful deal.

Fairly standard practise in the UK too for all the reasons stated above. However we did have the chance to view first and the offer was accepted providing we paid 10%. I couldn't because I don't keep that much in a current account so offered 3%, plus payment for the cost of the lift out for the survey. This was accepted by the broker and we bought our boat

I appreciate the problem of being in another country but how does the broker differentiate you from some muppet in Nigeria?

Have to say though, no way would I offer without seeing the boat. We viewed several that looked good in the photos only to be really disappointed when viewed. Needless to say we didn't offer.

Pete

SailFastTri · 09-10-2010, 07:02

Quote:

Originally Posted by daddle

Yup, it's a negotiation, You can take it, leave it, or propose something else. A reasonable thing to do is post the deposit to cover the haul and survey ... probably less than 10% ... This is handy if it's a cross-border sale as the selling broker can handle the pain of paying the yard and surveyor ... which you hire. They of course refund the balance if the deal falls thru. Make sure it's written down. 99% of brokers are basically honest...well...not totally dishonest ... make sure .. with a document and a personal conversation that the money is NOT going to be in the hands of the seller.

The seller's broker works for the seller. There are honorable brokers, maybe even a majority -- the trouble is you don't know who will screw you until it's already done.

I've had a broker tell me on the phone that a boat was "pristine" and "well maintained" -- needed nothing. When I drove 6 hours (each way) I discovered it had an issue brewing with EVERYTHING.

Canvas was worn and faded (obviously his listing pictures weren't recent) standing and running rigging needed replacement, mast had bubbling and flaking paint everywhere, lifelines deeply rusted at bulging swedges, stained roof liners and bulkheads showing evidence of major long-term leaks, engines had over 1200 hours (these were outboards on a Seawind 1000 cat, and a friendly Yamaha dealer told me an outboard with 1000 hours is a re-power candidate). Sealant at hull-section joins had opened. Main sail left uncovered on the boom looking so weathered it must have been sitting there for several years, and every compartment was full of the owners old crap and garbage (he was obviously a guy who hated to throw things out). It needed a dumpster and total refit!

Bottom line -- don't trust a seller or seller's broker. Don't trust pictures. You've got to have your own representative to some leg work before you do this deal. Others are giving you good advice here.

chadlaroche · 09-10-2010, 07:17

I had looked for over 7 months( and spent several thousand) before I finally felt comfortable making an offer on a boat. What I found out is brokers as nice as they may seem are marginally better then used car salesmen. After spending countless hours driving I finally came to the conclusion it was a better use of my time and money to call a surveyor in the area of the boat and ask them to do a walkthru survey. Basically 100-150 $ they would go to the boat do a walk through and tell me what the real condition of the vessel was and if it was a deal or not or whether to proceed further. Not a single listing I ever looked at was accurate,all photos were out of date and left out many details. And as much as everyone says its a buyers market, wish someone would have pointed me in the direction of that market ! All in all the search and process was a good thing.I know far more about the construction methods and historical trends in american yacht building, what to look for , where each type has its issues etc. And made a couple good acquaintances along the way

"Finding a boat is like finding love, when you have looked and looked and are ready to give up , it falls in your lap"

Good luck !

MarkJ · 09-10-2010, 09:08

It sux. Its just not the Aussie way where the offer is put and accepted BEFORE any deposit is paid.

They just do it their way in the USA because its an unfair advantage thats close to fraud.

Exacibated by the loss you will incur with commission fee on exchange of the money for AUD to USD and those little escrow companies charge a small fee if you want the money back $250.

So basically $250 + Bank commish for every offer!!!!!!

**Dockhead** · 09-10-2010, 09:16

Quote:

Originally Posted by roverhi

I'm not a boat broker but spent years as a real estate broker. A contract is not a binding contract without earnest money.

Um, sorry, a contract is not a binding contract without consideration, that is, without value given for the thing which is supposed to be handed over. Earnest money is not required.

MarkJ · 09-10-2010, 11:11

Quote:

Originally Posted by Dockhead

Um, sorry, a contract is not a binding contract without consideration, that is, without value given for the thing which is supposed to be handed over. Earnest money is not required.

Thats certainly correct in Ausrtralia, but then our law is slightly different. Contract law here still goes basically by english common law with a few modern bits to keep agents under control

So Offer and Acceptance is legally done and binding contract with consideration. That can be $10.
Then the deposit later (I would asume on proof of ownership and survey)

Mike43 · 09-10-2010, 11:19

Gudday mate,
I'm in the same boat as you, only i live in Northern California and have been vigorously looking for a boat for the past 6 months. Just waiting for a divorce cleanup before I'm allowed to spend anything.
The best advice I've seen above is to get a buyers broker-they split commissions anyway. I've toyed with using one especially if it is worth my while buying to save a bit of tax with an offshore sail (I've been here 30 years). I have met a couple I would use (with a bit more chat. a good bedside manner doesn't necessarily make a good doctor)
If you would like to PM me with what you are looking for or have something to see let me know. It's what I'm doing anyway. I've looked from San Diego to SFO and missed on a few good deals. They keep turning up.
cheers
mike

PS a grand or 2 is enough to show intent.

SaltyMonkey · 09-10-2010, 11:21

Sorry, I'm not quite following the full issue of this thread but typically in US:

- A verbal offer is made, and there is some back and forth done before an offer is accepted.
- An agreement and 10% deposit is then made contingent upon survey. The deposit is held in escrow. It can also be used in negotiations if the survey comes back poorly to reduce price for repairs etc if problems are seen in the survey.
- Depending on the survey, an adjusted offer can be made, or you can walk away from the deal - deposit returned.

The purpose of the deposit is to cover any opportunity costs for the seller given that the boat is off market and the closing can take quite a bit of time. Imagine, potential buyer bails after 3-4 weeks without completing survey. Poor seller may have had some other buyers lined up whom he/she had to turn away.

Houses aren't much different.

capt_douglas · 09-10-2010, 12:37

I've been told that here in Florida, there's no law specifying what a down payment is supposed to be (money or %). I know of boats being locked in for $100 or less. My feeling is that 15% is designed to lock you in tighter than offering less. I'd suggest contacting the state where you're interested in buying for their laws, talking to another broker to get their understanding, or working through another broker who can do what you want. It's still a buyers market, at least in the southeast and gulf.

IdoraKeeper · 09-10-2010, 13:50

Everything I have read here makes alot of sense however you are leaving out an important factor that is relevant. Even in this ecomony the market is focused on the good boats. Most boats are quite tired by the time a negligent owner even remembers to put it up for sale. The well maintained boats will be bid up. That is the purpose of the excessive up front deposit, to weed out the low bidders.
Beware of the non obvious factors involved in being in the yard for a survey. You are a target when you are on the hard. I never imagined the amount of trouble I would have just dealing with the relations between the broker and surveyor (who knew they hated each other???) I had people walking into the yard trying to buy Idora out from under me while she was out and I was paying for the survey!! I dearly love my boat but the purchase was a trial by fire.

Moral? The good boats are hard to buy.

Todd

Stillraining · 09-10-2010, 14:09

Well not to flog a dead horse as this has been discussed many times in other threads so a search could have given you like arguments for or against the practice.

But my .02 is i always put myself in the other persons shoes and try to imagine what it is like from their prospective.

That perspective is 180 degrees from your usually.

I as a seller do not want to hear about verbal offers unless some one is willing to put some money where there mouth is..This money is 100% refundable for any reason noted on the offer conditions of sale...I don't even believe the foreign currency exchange fees mentioned would apply to this deposit as the check in never even cashed! buy a reputable brokerage...just held.

As a buyer..I WANT a deposit tendered as its acceptance virtually locks the boat up as first right of refusal until an answer is received...more or less the Sellers Brokerage will say "Offer Pending" to any other suitors once you have posted a deposit of 10% ( Standard percentage in the states) this give you a few extra days of breathing room where the boat can not be sold out from under you with out notification... Without that deposit acceptance, its still fair game and on the market so to speak for another buyer to walk with the boat right out from under you without any notification at all...

If your OK with that risk as a buyer then in my opinion your not dead set about this being the boat you really want in the first place...and as a seller I would not want my boat subject to possible damage ( Yes it happens) with a survey, sea trial and haul out.

If you are really concerned about any individual brokerage as being trust worthy...its a simple matter to arrange an escrow account at any bank to hold the marked funds yourself.

In regards to the boat not being what it is advertised...that has no relevance on the practice of requiring a deposit to present an offer...its still a buyer beware purchase and personal inspection is always recommended with any deal...any decision to make an offer sight unseen is not the sellers problem to wave any deposit protocol to entertain such offer and has just as much risk for the seller as the buyer as truth in disclosure issues.

**Boracay** · 09-10-2010, 14:50

I don't think there can be any substitute for face to face contact in any major transaction.

I seem to recall one member arriving unannounced where the boat was being sold and asking a bystander what was happening with the boat only to be told that they were waiting for some sucker to fly in and buy it!

So, do your homework and consider the comments here carefully but I wouldn't put any serious money on the table without putting foot on the boat and without looking the other party in the eye.

David_Old_Jersey · 09-10-2010, 15:03

Never been a fan of sending strangers on the internet 1'000's. Even with the comfort of legally being entitled to a refund.

But everyone's approach differs...........

............Therefore as a Professional Yacht Broker* if anyone wants to send me 10% of this:-

then e-mail me at I'M NOT_AN INSOLVENT CHANCER (HONEST) @DOJ.COM

and I will consider passing on your offer to the Vendor.

* in these parts that statement is enough to mean I am appropriately licenced (i.e. nadda ) to take your money

IdoraKeeper · 09-10-2010, 15:38

I completely agree with Rain on this. That is how Idora was purchased. In fact the broker was instrumental through those exact methods in seeing my transaction through. He even helped me dispose of my old boat which needed a good home.
On re reading my post I realized that I had not given him credit where it was due. In fact I like the guy and he did a good job. I just wanted to shed some light on the fact that a sizeable deposit/guarantee during the purchase of a yacht is necessary and likely will be the least of one's problems.

Todd

(DOJ) My check is in the mail.