Want To Buy: Safe to send a 'refundable' deposit to a broker, so they'll hold it...

[n13L5]

...till you can get a flight there?


- Are you likely to have trouble getting your refund, if you don't like something, or if your surveyor finds something you don't like?

- What percentage of the total price would you be willing to pay as a deposit? Should it be a nominal few hundred or a more substantial chunk?

- Does paying a refundable deposit mess up your position for negotiation?

- Are there other issues with deposits?

[wayne.b]

Originally Posted by n13L5

...till you can get a flight there?


- Are you likely to have trouble getting your refund, if you don't like something, or if your surveyor finds something you don't like?

- What percentage of the total price would you be willing to pay as a deposit? Should it be a nominal few hundred or a more substantial chunk?

- Does paying a refundable deposit mess up your position for negotiation?

- Are there other issues with deposits?

===

Before sending a deposit you should have a signed copy of a purchase offer/contract which spells out the conditions of sale. The selling broker should be licensed in the state where they are doing business. Normally the written offer will be subject to inspection, survey, sea trial and sometimes financing; and will have an end-date, sometimes called the acceptance date. Prior to that date you should have the option to reject the vessel (in writing) for any reason, with a full refund of your deposit minus any outstanding expenses (for things like a haul out or the survey fee).

You should try to do some due diligence of the selling broker, and his firm, before sending any money. Your check should have wording to the effect that it is a deposit subject to the conditions of the purchase contract. Most ethical brokers will not even cash the check until the deal is ready to close.

[Terra Nova]

Originally Posted by n13L5

...Does paying a refundable deposit mess up your position for negotiation?...

Your deposit is submitted with your offer. If it is accepted, there are no further negotiations, unless surveys or sea trial turn up some shortcoming.

[Pelagic]

Originally Posted by Terra Nova

Your deposit is submitted with your offer. If it is accepted, there are no further negotiations, unless surveys or sea trial turn up some shortcoming.

No true...much as Wayne b explained about due diligence on the Broker.

Unseen....I put up 10‰ of an initially negotiated price with a reputable seller's broker.
This to hold the boat for one month and with the usual subjects..

Luckily the boat was already drydocked so after my own detailed inspection I revised my offer still subject to sea trials and survey.

I held my price so just prior to expiry, Owner accepted and trials were done , purchase made......

The named 10% had been held in an Escrow Account in the BROKER and my Name.

I had to sign to release for Escrow to be used as part of the purchase price.

It is a fair and good system to buy, especially if coming from overseas.

I had no doubt that my full deposit would have been returned if I declined to buy

[UNCIVILIZED]

If you're speaking of doing this prior to finding a flight there to see the boat, then what information do you have which has you confident enough to put forth a tenative offer? As without seeing her, live, you really have very little info on the boat. And I'd not want to pay for a haul & survey based on pictures on a boat from Yachtworld.com

Usually you can get a reasonably priced flight within 48-72hrs (or less), & the same day if it's crucial. Any of which will cost you less than goofing on any part of the buying process. And it's rarely wise to rush said process to begin with. Especially as there are a lot of boats out there, in addition to it being a buyer's market in a big way currently.

As to the original question, you'll likely find a generous amount of info on it if you use the word escrow in a search. Ditto on variations on this, & other phrases used when purchasing a yacht.

[Terra Nova]

Quote:
Originally Posted by Terra Nova View Post
Your deposit is submitted with your offer. If it is accepted, there are no further negotiations, unless surveys or sea trial turn up some shortcoming.

Originally Posted by Pelagic

No true...much as Wayne b explained about due diligence on the Broker.

Unseen....I put up 10‰ of an initially negotiated price with a reputable seller's broker.
This to hold the boat for one month and with the usual subjects..

Luckily the boat was already drydocked so after my own detailed inspection I revised my offer still subject to sea trials and survey.

I held my price so just prior to expiry, Owner accepted and trials were done , purchase made......

The named 10% had been held in an Escrow Account in the BROKER and my Name.

I had to sign to release for Escrow to be used as part of the purchase price.

It is a fair and good system to buy, especially if coming from overseas.

I had no doubt that my full deposit would have been returned if I declined to buy

Though you said "No true", what you described is precisely what I said. After you surveyed the boat you revised your offer.

[Pelagic]

Sorry Terra Nova, my mistake!....I read your post to mean that you need an official survey rather than inspection.

With a reputable broker, I felt comfortable "reserving " a boat sight unseen, for a month....if I knew the builder and history beforehand

I was also prepared to holiday for up to a month, while negotiating as it put me in a strong position.

After turning down many counter offers, I got a price that was fair and I remain comfortable with.

I could easily have reduced my price further during negotiations, if I so chose....which was my point.

[Orion Jim]

Hire a local lawyer to hold it in escrow. The broker is the sellers representative so your best interests are not his priority. Your lawyer can issue a notorized letter indicating he has your funds in his escrow account. A legitimate seller and broker will find this acceptable. There are many shyster brokers. My apologies to the honest brokers.

[smj]

Originally Posted by Orion Jim

Hire a local lawyer to hold it in escrow. The broker is the sellers representative so your best interests are not his priority. Your lawyer can issue a notorized letter indicating he has your funds in his escrow account. A legitimate seller and broker will find this acceptable. There are many shyster brokers. My apologies to the honest brokers.

This is good advice. The chances of losing your deposit through a broker are slim but not impossible.

[Scaramanga F25]

Originally Posted by Orion Jim

Hire a local lawyer to hold it in escrow. The broker is the sellers representative so your best interests are not his priority. Your lawyer can issue a notorized letter indicating he has your funds in his escrow account. A legitimate seller and broker will find this acceptable. There are many shyster brokers. My apologies to the honest brokers.

Otherwise a definite...NO!

[jrbogie]

engage a broker to represent you. he'll split the commission which the seller pays so to you it's free representation. have him draw up a sales agreement with 10% of offer price deposit, assuming you're sure this is the boat for you from whatever information you have. set an expiration of 72 hours or you could be waiting forever while the seller seeks other buyers. offer contingent on YOUR acceptance of sea trials and marine survey but if you get their and decide you just don't like the boat and don't want to hire a surveyor you'll loose the deposit. you'll pay for the survey which from my experience goes for about 18 bucks a foot. so there is nothing cheap about an offer, unless it is rejected outright without a counter offer, and you haven't even bought your airline ticket yet.

[Dave22q]

Posting a deposit overseas is very high risk. Their laws and mores may differ from ours and you might have little or no recourse if the deal goes south. The idea of hiring a local m lawyer and his creating an escro account seems far safer to me.

[buzzstar]

Does it not all depend in large part on three factors, none of which are clear, at least to me.
1. Depends upon where "there" might be [thus what the law or its absence might be]
2. The broker [record, reputation etc., etc.]
3. What the deposit is for [and under what conditions will it be refunded... or not]

Good luck -meant seriously, but can be taken as a warning.

[Covey]

I am a boat broker. An "Offer to Purchase" contract should be made when the buyer/seller agrees on a selling price. A normal 10 percent deposit is normal and these funds should go into the broker's escrow account. If the buyers contingencies are not met, then the funds should be sent back to the buyer within 3 business days. Good luck with your purchase.

[buzzstar]

Originally Posted by Covey

I am a boat broker. An "Offer to Purchase" contract should be made when the buyer/seller agrees on a selling price. A normal 10 percent deposit is normal and these funds should go into the broker's escrow account. If the buyers contingencies are not met, then the funds should be sent back to the buyer within 3 business days. Good luck with your purchase.

Are you in the same state or nation as the subject broker? "Should be" is not the same everywhere.