Is 10% normal earnest money before contract accepted?

[Pete7]

Like a lot of things the deposit is negotiable. We were asked for 10% but as I explained to the broker I don't have that sort of money in a low interest current account, but he could have 3% now and a full payment in 7 days or once the survey and sea trial were completed. My offer was accepted and I paid 3% by card on the spot and later bought the boat.

Pete

[Capt Phil]

I have purchased about 6 vessels over 40 feet in the past and when asked for a deposit ( which usually happened ) I refused and started to walk away. In every case the broker ran me down and told me a deposit was not required!
Phil

[Capt Phil]

Originally Posted by john61ct

The contract rules.

Some sellers may be persuaded to accept a token $1 deposit just to make it legal.

I’ve done that a couple of times, but never 10% of the selling price!
Phil

[Mike OReilly]

Originally Posted by denverd0n

You're not going to be leaving deposits on several boats. You don't leave a deposit until you have made a legally-binding offer on a boat, and signed a contract to that effect. That legally-binding offer is going to be subject to certain contingencies (probably survey and sea-trial), but it is still a legal contract. You only do that once you've found the boat that you are 99% sure you want to buy, and have settled on a price with the seller.


The deposit is what makes it legally-binding. It is binding on you, and it is binding on the seller. Once he has accepted your deposit, the seller cannot sell it to someone else.

This is my understanding, and my experience. You don’t leave a deposit till you’ve decided, pending any new information from survey or sea trial, that THIS is the boat you want.

You can survey boats outside of an agreement to buy, but most people proceed to formal survey following this point. Of course you are surveying the boats as you visit them.

The 10% number is standard in my experience (both as buyer and as seller), but everything is negotiable. As someone said, the 10% amount is the typical broker fee, so they’re really just covering their own financial hinny — which I understand.

If you don’t want to put down 10%, then try and negotiate something else. No harm in offering, but you may not get it.

[Cheechako]

Originally Posted by StuM

Nope, the deposit is the buyers security that the seller won't sell it to someone else until the buyer either completes to deal of pulls out.


If you don't put down a deposit you don't have a legal agreement. They can sell to someone else at any time, even if you have paid for a survey, haulage in and out of the water, your travel costs to inspect the boat etc, etc etc. And they are not obliged to accept your offer price after all that either.

Good point ....a deposit has some advantage to the buyer too! It doesn't have to be 10% though. Details matter.
I was once selling a boat (through a Broker) and one buyer was goofing around with offers. My last counteroffer my Broker neglected to put an expiration date on the counteroffer. A week + later I got a full price offer from a different buyer. The boat went to survey and the first potential buyer was miffed. He actually followed the boat thru survey with the surveyor. He then took legal action to try to prevent the sale. All because he had been playing sly by trying to wait it out... and the boat sold out from under him. In the end, myself and my Broker paid $500 legal fees to make him go away.
You can't rely on a Broker to do things right either. Read and watch everything!

[sailjumanji]

Originally Posted by flyingfin

The market for used boats is soft and financing hard to come by, so you are driving this train

Be careful with that statement, not true for all boats. I sold a 16 year old, very good condition Seawind cat earlier this year for almost $180k. Had a full price offer after listed for four weeks. It surveyed very well and surveyors market value came in around purchase price. We also had a second couple with a same-price backup offer if first couple fell thru.

For very good condition cats under $200k, i don't think the market is soft. In the US.