Deposit to Make an Offer 'Valid?'

[tackdriver]

Originally Posted by RigelKent

Does anybody from Australia know what they call an escrow account in Australia? I'm getting nowhere googling this for results in Australia. There is probably a local term for this I don't know.

Yeah. Its called a Bank Guarantee. You put the money in an account and register an agreement between you and whoever that someone can call on the money. The rights to call on the money aren't policed by the bank, that's done with a contract between the parties. These are used in construction to secure an amount that can be clawed back by the building owner from the building contractor if they make a mess of the job.
It's a bit overblown for this kind of transaction, and more typically in Aus you'd use a Solicitors Trust Account arrangement. This is pretty safe, but occasionally the solly goes bust and raids his own trust account.

Good thread BTW - I'm now getting down to tin tacks on my purchase, and I need to sort this stuff out.
cheers
James

[RigelKent]

Thanks James, now I know what it's called I can get the arrangement I want (if I don't go through a broker that is).

I don't have a set plan (broker or no broker) its just a matter of which way the owner is trying to sell the configuration I want. My two top choices right both have the owner selling without a broker. Thanks to all you cruisers, I'm nearly ready now to get serious.

[Norm]

Originally Posted by Norm

I think CarlF mentioned it first in this thread, but what yacht brokers commonly refer to as an escrow account is only a client trust account. The broker has complete control of that account.

Escrow should be a completely neutral party, not buyer, seller, or broker.

I would like to make an all cash offer on a $50k boat at the moment accompanied by a bank account statement showing sufficient funds to complete the transaction.

The broker is insisting on a 10% deposit to be placed in his psuedo "escrow" account and won't present an offer without it.

I know the seller really needs to sell this boat and he's going to lose a serious buyer who could close the deal quickly. I think I'll send him copies of all my emails with his broker and let him decide what's in his best interest.

I did write to the out-of-state seller with proof of funds and an offer to make a 10% deposit to any third party escrow aceptable to both of us.

No Response.

I asked his friend on the same dock to find out why I didn't get a response. He said the owner didn't want to get involved and wanted his broker to handle everything.

Four months later his broker made the news:
Marin yacht brokers jailed in embezzlement case - Lamar Ledger

A BROKER'S TRUST ACCOUNT is NOT an ESCROW ACCOUNT!