Buying a boat without a broker

[Mike Sibley]

I am talking with the owner of a boat that I like and I may make an offer on it. The seller has indicated that he would expect a deposit if my offer is accepted. No boat broker is involved. So, how is the deposit (say $10,000) handled? Is it necessary to set up an escrow account at a bank for the deposit? Are there alternatives? I trust the seller, but still ....

Mike

[Mexdon]

Mike, it you can get hold of a brokers contract so that you have a guide to work out one of your own. Make sure it is applicable to your state laws. The escrow should be with an attorney.

A deposit of 10K would indicate a 100K purchase price so you must have a survey. The contract if taken from a broker contract will have an out clause for an unsatisfactory survey report.

Hope this gives you something to go on.

[sailorboy1]

Boat US has a service for doing this.

[TeddyDiver]

Buyer's market.. no deposits IMO

[David_Old_Jersey]

Originally Posted by Mike Sibley

I am talking with the owner of a boat that I like and I may make an offer on it. The seller has indicated that he would expect a deposit if my offer is accepted. No boat broker is involved. So, how is the deposit (say $10,000) handled? Is it necessary to set up an escrow account at a bank for the deposit? Are there alternatives? I trust the seller, but still ....

Mike

In theory, if all goes well - you will never see the $10k again .

In practice, if all goes badly - you will never see the $10k again .....even though you may be entitled to it back.

Unless the Vendor has buyers queing up around the block, then I would "counter indicate" that a $500 deposit would be enough, with a signed contract (make sure you read it!) - on condition that both any haulout and any surveyor are booked (by you) within a week - with a short completion date. Vendor can continue to market / show the boat, you just have first dibs on the sale. Could also throw in that if the sale gets aborted he gets a copy of the Survey report (a very useful marketing tool for future buyers - even though they cannot rely on it)......if both sides willing and are acting in good faith, the transaction could easily be completed within a month, if not a few weeks.

A buyer willing to spend $1k (plus?) on Survey and haulout is (IMO) not a tyrekicker - doesn't guarantee that the sale will complete, but nothing does that.

Personally I don't see what the Vendor has to lose (apart from not being able to sign another sale Agreement for a few weeks or so) unless he wants (or needs?!) to have a Buyer by the short & curlies by holding onto the $10k to be argued over if things go badly (for him)....if the Vendor does not have at least some rights over the deposit, even in Escrow - then it serves no purpose whatsoever.....odds on that even if the deposit is refundable under the contract there will still be the possibility of an argument. He who holds the cash holds the whip hand.

Escrow upon completion is another matter. If the Vendor is local to you and boat - could do the paperwork and funds transfer same day in person....or use an Escrow service / lawyer.

My worry with a transaction like this is that the Vendor may not have given any thought to a Buyers likely (and valid) concerns by already having an agreement and terms sketched out, plus how to translate those into practice - especially covering the payments (deposit and balance).....unless he is just expecting a buyer to hand over cash on trust . Good luck with that one .....the danger is that you end up with a transaction where both parties expect different things - because they are "obvious". Good agreements make good transactions.


Anyway, so ends another longwinded post from DOJ - that just grew wayyyyy past the original intention .

[Therapy]

Originally Posted by TeddyDiver

Buyer's market.. no deposits IMO

HAHAHAHAHAHAHA!

[Doodles]

Originally Posted by Therapy

HAHAHAHAHAHAHA!

+1 ... My thought as well.

[Hotel L]

[QUOTE="David_Old_Jersey"]

In theory, if all goes well - you will never see the $10k again .

In practice, if all goes badly - you will never see the $10k again .....even though you may be entitled to it back.

Unless the Vendor has buyers queing up around the block, then I would "counter indicate" that a $500 deposit would be enough, with a signed contract (make sure you read it!) - on condition that both any haulout and any surveyor are booked (by you) within a week - with a short completion date. Vendor can continue to market / show the boat, you just have first dibs on the sale. Could also throw in that if the sale gets aborted he gets a copy of the Survey report (a very useful marketing tool for future buyers - even though they cannot rely on it)......if both sides willing and are acting in good faith, the transaction could easily be completed within a month, if not a few weeks.

A buyer willing to spend $1k (plus?) on Survey and haulout is (IMO) not a tyrekicker - doesn't guarantee that the sale will complete, but nothing does that.

Personally I don't see what the Vendor has to lose (apart from not being able to sign another sale Agreement for a few weeks or so) unless he wants (or needs?!) to have a Buyer by the short & curlies by holding onto the $10k to

[Richard Jordan]

I would hire a documentation agent to escrow funds and take care of paperwork.

Big reason for deposit is if deal goes sour the yard, surveyor, etc expenses will become liens on boat if buyer skips.

[Hotel L]

Originally Posted by David_Old_Jersey

In theory, if all goes well - you will never see the $10k again .

In practice, if all goes badly - you will never see the $10k again .....even though you may be entitled to it back.

Unless the Vendor has buyers queing up around the block, then I would "counter indicate" that a $500 deposit would be enough, with a signed contract (make sure you read it!) - on condition that both any haulout and any surveyor are booked (by you) within a week - with a short completion date. Vendor can continue to market / show the boat, you just have first dibs on the sale. Could also throw in that if the sale gets aborted he gets a copy of the Survey report (a very useful marketing tool for future buyers - even though they cannot rely on it)......if both sides willing and are acting in good faith, the transaction could easily be completed within a month, if not a few weeks.

A buyer willing to spend $1k (plus?) on Survey and haulout is (IMO) not a tyrekicker - doesn't guarantee that the sale will complete, but nothing does that.

Personally I don't see what the Vendor has to lose (apart from not being able to sign another sale Agreement for a few weeks or so) unless he wants (or needs?!) to have a Buyer by the short & curlies by holding onto the $10k to be argued over if things go badly (for him)....if the Vendor does not have at least some rights over the deposit, even in Escrow - then it serves no purpose whatsoever.....odds on that even if the deposit is refundable under the contract there will still be the possibility of an argument. He who holds the cash holds the whip hand.

Escrow upon completion is another matter. If the Vendor is local to you and boat - could do the paperwork and funds transfer same day in person....or use an Escrow service / lawyer.

My worry with a transaction like this is that the Vendor may not have given any thought to a Buyers likely (and valid) concerns by already having an agreement and terms sketched out, plus how to translate those into practice - especially covering the payments (deposit and balance).....unless he is just expecting a buyer to hand over cash on trust . Good luck with that one .....the danger is that you end up with a transaction where both parties expect different things - because they are "obvious". Good agreements make good transactions.

Anyway, so ends another longwinded post from DOJ - that just grew wayyyyy past the original intention .

+2 Oh that makes since......I think :confused

[Doodles]

Originally Posted by Don Lucas

Boat US has a service for doing this.

Since the OP seems fine with the deposit, this seems like the answer for him.