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Old 20-10-2021, 04:06   #1
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Escrow or or sellers broker service

I am in the early talkings of a Boat purchase.

The sellers brooker is very open and communicative, answering all my questions fast and complete. Overall i do have a good feeling about the Boat, the Brooker and the possible purchase.

This will be my first Boat purchase, so i get most of my knowledge of what to do pre purchase on the forum or other web sites...

When talking about money transfer, i was thinking an escrow service would be the choice of most deals.
However, the sellers brooker adviced that deposite and further payments would be made using their "Yachts clients account".

So basically he would act as an escrow service.

Is that a common process? I do understand the issues that could come up with that way. However, if everything is fixed in a contract, any additional risks showing up here?

According the Sellers brooker, the Boat does not have any loans and is in private possesion.

Thanks!!!

John
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Old 20-10-2021, 04:12   #2
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Re: Escrow or or sellers brooker service

Yes a client account approach is very typical.

Seek proof of no liens , if nothing suggest a sellers personal indemnity
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Old 20-10-2021, 05:23   #3
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Re: Escrow or or sellers brooker service

Its common practice and it is how the broker gets his commission first. Because it is not a legally defined escrow or trust account I have always avoided this like the plague. Depending on the amount you might want to use a lawyers in trust account and pay a fee.
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Old 20-10-2021, 05:33   #4
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Re: Escrow or or sellers brooker service

Thank you guys!
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Old 20-10-2021, 07:05   #5
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Re: Escrow or or sellers brooker service

+1 Mara Mae. The broker from whom I bought my first boat, some 10 years later, disappeared one night with, among other things, over $600k in "escrowed" funds. Since he wasn’t a bonded escrow company, the clients were screwed. Look at the number of lawyers convicted and disbarred for stealing from the clients escrow accounts. The fee you pay to a real escrow company is the insurance that if your money ends up in Belize or the Cayman Islands that there’s somebody left to recover from. If you’re really paranoid, or it’s a lot of money, ask the escrow company who carries their bond. You don’t want the bonding company to be in the Ukraine with business offices in Spain.
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Old 20-10-2021, 09:49   #6
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Re: Escrow or or sellers broker service

Based on my experience buying manyh power and sailboats in the U.S.:

Is that a common process? Yes

I do understand the issues that could come up with that way. What issues are your referring to?

However, if everything is fixed in a contract, any additional risks showing up here? None I am aware of.
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Old 20-10-2021, 11:02   #7
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Re: Escrow or or sellers broker service

As my contract law professor said , "Put not your faith in contracts." The basic presumption to a contract is to document the understanding between the two parties. You can write the most iron-clad agreement in the world, but if the other party decides to take your money and have a long vacation in the tropics, the contract won’t do do much good. His advice essentially was "If you wouldn’t do the deal on a handshake, don’t do it. The contract just documents the understanding. It doesn’t force performance."
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Old 20-10-2021, 16:07   #8
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Re: Escrow or or sellers broker service

Quote:
Originally Posted by sail sfbay View Post

I do understand the issues that could come up with that way. What issues are your referring to?
Basically what Bycrick mentioned in his post.

Thanks guys!
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Old 24-10-2021, 10:45   #9
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Re: Escrow or or sellers broker service

Quote:
Originally Posted by Bycrick View Post
As my contract law professor said , "Put not your faith in contracts." The basic presumption to a contract is to document the understanding between the two parties. You can write the most iron-clad agreement in the world, but if the other party decides to take your money and have a long vacation in the tropics, the contract won’t do do much good. His advice essentially was "If you wouldn’t do the deal on a handshake, don’t do it. The contract just documents the understanding. It doesn’t force performance."
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Old 24-10-2021, 11:33   #10
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Re: Escrow or or sellers broker service

He wasn’t an academic law professor, thank God. He was a sitting federal judge and taught only night classes. I gave up a lot of evenings to take his classes, even though other day classes were available. The difference between theory and practice.
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