Originally Posted by jacks88
I am being asked to send 10% of the anticipated purchase price for a catamaran
to a "buyer's broker". I understand the need for placing the funds in escrow and have no problem doing so. However, I have yet to be able to get anything in writing and signed detailing how and what the escrow fund can be used for, or who the escrow funds belong to. I am not in the habit of handing over chunks of cash without some type of executed agreement in place. Do any of you know of any such documentation that I should be getting? Is it normal to wire funds to unknown accounts without documentation in order to purchase a boat? I can see where the ownership
and use of the funds are addressed in the purchase agreement, but the purchase agreement will not be executed until I agree to purchase a specific boat.
The "buyer's broker" should be working for you. You may do well to have a broker in your corner - because if it isn't "your" broker he's working for the seller
, not you - this is an important distinction. Just like in real estate you can use a "buyer broker" that has YOUR financial interest at stake, not the seller - and they will work the commission split out amongst them. Your "buyer's broker" should be someone you know and have a relationship with and can and will arrange for you to see the boats you want to see. If you didn't talk to your own broker and have him contact the broker that is listing the boat...the selling broker is not your friend in this transaction. You should be able to trust him as much any professional, however his responsibility is to the seller.
If you called from an ad and got the seller's broker they won't want to let another broker in at this point.
I've never been asked to wire funds for the deposit
, I've always written a check - even with a $50K+ down payment it was a personal check.
The funds should go with a signed Purchase and Sale agreement. Your written offer includes the P&S, signed by you, with terms outlined including the survey, and a copy of the 10% check to show you've made it. If the seller doesn't agree to the contract
the check will not likely even be cashed. If it's an out of town deal with an out of town broker, he will usually accept a fax of the check and P&S to get the deal & negotiations going, then you can Fedex him the originals if it is accepted.
However...the way every boat I've bought has gone down has been with verbal negotiations (maybe with the initial P&S being filled out and sent in), but no one really signs anything or exchanges any money until you agree on the terms. THEN you send the final signed P&S in with the check. This is when you have two brokers talking to each other; on your own working with a seller's broker he should sent you a contract to sign and return with a check, though again faxing/e-mailing a copy to start the transaction then dropping it in Fedex is generally acceptable.
So when the P&S goes in "for real" with the check the seller isn't going to counter offer or continue to negotiate, this part is all done.
Your P&S should spell out among other things...
- Terms for acceptance based on a satisfactory survey. This should be intentionally vague and have a fair amount of wiggle room.
- Terms for the disposition of the Deposit in the event of a buyer default or a seller default.
- If you are financing the deal, a condition that the deal can only go through subject to your financing the boat. Otherwise if the financing doesn't work out you might not get your deposit back.
As far as the Survey related language goes - you shouldn't see any real specifics unless there are specific items the seller has disclosed to you already that are included in the pricing - e.g. if it is known a certain system does not work (in my case the forward looking sonar was known to be kaput) that is something that might be spelled out as known, accepted and accounted for in the deal already.