Procedures for making an offer..

[OldFrog75]

When a potential buyer makes an offer "pending survey" what is the typical deposit required and how is the agreement structured to guarantee getting the deposit back if the prospect doesn't like the survey results?

Is the "contract" generally open ended giving the buyer a lot of leeway to back out or is it very detailed specifically listing numerous stipulations that must be satisfied in order for the sale to go through or be cancelled?

I assume if there is a broker involved there are standardized escrow agreements but what about with boats listed as "for sale by owner?"

[Davidhoy]

Typical deposit is 10% of your offer price. You need to put some dates on the contract, say that the survey contingency will expire on such-and-such day. Basically you can walk away for almost any reason before that date, but after that you are subject to loss of deposit. I recently went through this and can share some of the documents with you to use as templates. Just realize I'm not a lawyer, so just take that into consideration.

David


Sent from my iPhone using Cruisers Sailing Forum

[OldFrog75]

Originally Posted by Davidhoy

Typical deposit is 10% of your offer price. You need to put some dates on the contract, say that the survey contingency will expire on such-and-such day. Basically you can walk away for almost any reason before that date, but after that you are subject to loss of deposit. I recently went through this and can share some of the documents with you to use as templates. Just realize I'm not a lawyer, so just take that into consideration.

David


Sent from my iPhone using Cruisers Sailing Forum

And what guarantees the return of the deposit or the sale of the boat - threat of a small claims lawsuit?

[Davidhoy]

Originally Posted by OldFrog75

And what guarantees the return of the deposit or the sale of the boat - threat of a small claims lawsuit?

One advantage of using a broker is that they can hold the deposit in escrow. There are also independent escrow services, as long as you and the seller agree.

-David

[zeehag]

nothing guarantees return of your nonrefundable deposit.
go from there onward. is how i was able to lose 5000 usd in one week. uh oh.
treat like buying a used car. only you are buying your next wife..ha ha ha h aha

[denverd0n]

If you hand the seller a check, then nothing guarantees its return other than the threat of a lawsuit. That is why you use an escrow service. I would NEVER just give the seller a check as a down payment--I want a third-party holding the money.

Things may work different in California than in Florida, but here the usual contract says that the sale is contingent on a survey and sea trial that are "acceptable" to the buyer. That's all. That leaves it entirely up to the buyer to decide what is, and is not, "acceptable" to him. I would NEVER sign a contract (as a buyer) that gave the seller any say whatsoever in the acceptability of the survey and sea trial.

Good luck.

[Davidhoy]

Originally Posted by denverd0n

If you hand the seller a check, then nothing guarantees its return other than the threat of a lawsuit. That is why you use an escrow service. I would NEVER just give the seller a check as a down payment--I want a third-party holding the money.

Things may work different in California than in Florida, but here the usual contract says that the sale is contingent on a survey and sea trial that are "acceptable" to the buyer. That's all. That leaves it entirely up to the buyer to decide what is, and is not, "acceptable" to him. I would NEVER sign a contract (as a buyer) that gave the seller any say whatsoever in the acceptability of the survey and sea trial.

Good luck.

What he said...

[tuffr2]

I would not put down 10%. Try to put down as little as possible as it is negotiable. Maybe as little as $500 or $1,000. One time the salesman wanted $1,000 deposit...I ended up putting only $250 on a $12,000 boat.

I did end up buying this boat so no need to worry about getting my money back.

I like the idea of an escrow middle man.

Sent from my SM-G360V using Cruisers Sailing Forum mobile app

[Cheechako]

-You don't need 10%. People are eager to sell. I bought a $330k boat at a broker and only deposited $5k. On many boats $500 or $1000 will be enough. I've bought boats with the deposit simply being a faxed copy of the deposit check also.
- Remember. YOU are the buyer , do whatever you like.
-Most contracts specify subject to inspection and/or Survey. Most allow you to walk away for any reason you want and have a time limit for you to accept the boat. That means you don't even have to say what you don't like, just wait it out if you want.
-Be careful, everyone has a contract, know what it says. Some brokers may try to get part commission if you walk away. At least I've heard that, not seen it .
-Do not assume a brokerage knows what they are doing. I sold a boat once and they had no time limit in their contract for a buyer to accept a sellers counteroffer. It ended up costing me some legal advice.
-If this is a private sale, I may have an old contract blank you can use, (at your own risk!) pm me.

[barnakiel]

Where we live it is 10 to 15% and is lost if the buyer withdraws while the survey comes out fine.

b.

[Capt Phil]

I think a lot depends upon what is usual and customary in your part of the world.
Certainly in SoCal around 10% is usual by many brokers subject to the survey being 'acceptable' to the buyer. However, size of deposit and wording of the offer agreement with all of the 'subject to...' Clauses are negotiable. The selling broker or owner will want the highest deposit they can wangle and the most restrictive subject to clause a potential buyer will be willing to sign while the prudent buyer wants the least restrictive 'subject to' language and the smallest earnest money down they can get. Let the negotiations begin...!
There aren't any hard and fast rules... Just hammer out the best deal you can IMHO. Phil

[DsquareD]

I was on my way to buy a boat and the broker told me all I needed was my checkbook and could write an offer with a 10% deposit.

Funny thing happened, I stopped at the marina where I hoped to keep the boat. I said the boat was about the same size as "that one right there." He said, "That one is for sale." I met the broker with my wife the next morning (a Saturday) and made a cash offer with ZERO deposit. On Monday we closed the deal.

I've done similar things with cars and houses. The guidelines are meant to rope you in and keep you tied.

My next boat purchase may go completely different, but I felt comfortable with this one. Also, this is my first boat over 19 feet, so take that for what it's worth. I'm simply sharing my life experiences, not necessarily specific to boating.

[Kokanee]

I'm sure that the accepted method of doing business in private sales varies depending on area, but ultimately it is whatever the buyer & seller agree upon.

I bought privately without any brokers involved. We agreed on a $1000 deposit (about 2%) which was held by the surveyor. All worked out well.

[denverd0n]

Originally Posted by barnakiel

Where we live it is 10 to 15% and is lost if the buyer withdraws while the survey comes out fine.

What area are you in? Also, who gets to decide if the survey is "fine."

[tuffr2]

IMHO a boat can pass a survey but still fail owners acceptance.

An example - a go fast boat is always faster when the owner talks about it then it really is. What if I wanted a 80 mph boat and on GPS it only did 76 mph?

I just looked at a boat where the owner took me on smooth water and not the ocean. That was a kinda a waste of time as I need to see how the boat runs in rough water.

Some boats do not track well at slow speeds. That is extremely irritating always requiring steering correction but could be the nature of the boat.

So a boat could pass a survey but fail the sea trial.

Every boat I ever owned had a quirk to it. And these were only small runabout type boats. Two boats were new. Current boat does not turn as sharp as other boats that I have owned. It is a real PITA around docks. One new boat (single I/O) tracked like crap at slow speed.

So to me it is truly buyer beware and try to buy a boat where you can live with the quirks.









Sent from my SM-G360V using Cruisers Sailing Forum mobile app