Handling legal / money issues w/o a broker

[john61ct]

In purchasing a "cheap but good old" boat directly, no brokers involved at all, I have found most sellers are pretty informal, just gimme the money and get it outta here.

Understandable when they consider the amount small change, but to me it may be a lot, and I want to be careful and formalize things.

It seems to get what I want I may need to travel across the country, so when significant cost is involved for that,

and so many such "bargain" boats are in just such sad a condition,

I want to be proactive and try to prevent too much of my budget getting wasted just looking.

This is not the sort of transaction a decent broker would even want to touch, don't even want to ask them to waste their time.

So, I want to offer to put down a deposit, even if higher than the usual 10% no problem,

to show the seller I am serious and "hold" the boat so it doesn't get sold out from under me

ideally in escrow

and get a contract signed of course, so the final sale

is subject to my inspection, then a (perhaps a quicker less formal than usual) survey and finally a sea trial, perhaps those last two combined if possible.

I would want a more experienced person on my side here, not going to just rely on myself at this stage.

For a seller without a contract ready, I will want to present my own sales contract to start with; obviously the seller may want to modify some terms they think are too much in my favour.

There may well be boilerplate examples out there,

(#1) I'd be grateful for any links to known good templates,

but any real-life ones that you members have used in the past, (#2) I'd really appreciate your sharing, contact me via PM if necessary.

Also (#3) please post suggestions for good lawyers to review it once I'm done, but of course I would rather try to keep that expense to a minimum.

Next would be the concept of a "marine closing company". Title, lien search, maybe escrow the deposit? Anything else required for transfer, tax, registration, presumably routine stuff, no lawyer needed.

Would that need to be an outfit local to the boat?

If (what seems to be) a tremendous bargain appears, ideally I would get the contract signed, make the escrowed deposit as quickly as possible,

maybe could even pay, if not a surveyor but maybe just a recommended boatyard guy (or forum member!) from the area, to do a brief "pre-survey"

before I incurred the cost of travel.

So, (#4) suggestions as to such marine closing companies or something similar would be appreciated.

If they don't handle escrowing the deposit, then (#5) ideas about that as well please, I've been told even a bank officer in the seller's town may be able to handle that part, I doubt if the seller would just accept my lawyer doing so.

PS for those who feel this is all just too much trouble and don't have any constructive and relevant suggestions, please just refrain, ignore the thread and move on

TIA

[GuyFromTheNorth]

I'm curious:

1)Your general home location, and your shopping location.
2)Your rough price range.

Both of those can make a difference. I just spent over a year shopping for our recent purchase. I made offers and lost boats through brokers (once bought out from under me, and the others due to failures to meet my offer contract details). I was dealing in what you (may) be considering bargain boats considering my budget was sub 40k Canadian funds. I can send you copies of my contracts used to hold boats, one was drawn up through a private sale (for the boat we ended up buying). Another was drawn up by a broker. Others were done to similar format but via e-mail. Only once did I have a broker take a deposit, which he promptly refunded me when the boat failed to meet the requirements of my contact (found structural damage to an un-acceptable level to complete the sale).

[Wood]

Use the seller's attorney for escrow at seller's cost. It would be minimal. An attorney can hold escrow in the IOTA account. As escrow agent they follow the contract and if there is a dispute continue to hold the funds until settled. USCG has a standard Bill of Sale on their website which you can add to. I will PM you about purchase offer.

[hellosailor]

john-
I'm sure this will vary in each state, but AFAIK every bank can set up an escrow account, if they choose to offer that. And every attorney should be able to let you "use" their escrow account. If they're doing estates or various contract law, they've got arrangements for that. (Divorce lawyer, less likely.(G) Similarly, any broker can let you use their account.
The catch being that everyone is going to want some payment for their time--including the bank. And AFAIK there are no set rates for that do you are left to shop around. If you can find a broker or other party who is familiar with the laws in the selling venue, and they are willing to make you a reasonable offer for a title search, escrow, whatever other paperwork will be involved...it might well be worth the convenience.
If you already are a customer of a credit union or national bank (Citi, Chase, Wells Fargo, BoA) that is likely to have a presence in the seller's venue as well as your own, you might ask them about escrow services. You'll also save some transfer fees or Fedex charges if you can make long distance transfers "local" that way.

[john61ct]

Great ideas there, thanks.

The broker taking a limited role like that, no %commission? Just a flat rate?

I suppose I could ask the seller to ask their own bank(s), assume the contract spells out the terms for the money being held vs released.

[Suijin]

I would be hesitant to put any money down sight unseen. Pictures, descriptions, voice conversations are not substitutes for an in person visual inspection. Everyone had a different definition of “excellent” or even good. And once they have your money getting it back if you disagree could be difficult, to say the least.

[Tellie]

You don't want to use a broker, you don't want to spend the money on a full survey before you see the boat and you don't want to travel half way across the country to see a dud. I get it. I would think there is a small business opportunity for a savvy person to start a pre- inspection business. For a much smaller fee $200-$300 you could get someone to take a two hour look see, send you some fast photos, and give their opinion on the boat and look for anything in particular you might specify. Just thinking out loud.

[Lepke]

Many people selling bargain boats often are looking for the first cash money. They aren't going to wait for your surveyor if someone else has the money. Many bargain boats won't pass a survey. If the boat won't pass a survey, they probably can't be financed unless you have other collateral. If you're going to finance, you should find out how much you can borrow and what the terms are (survey needed, etc.).

I've bought many bargain boats, commercial and private. Dozens. Usually to repair and resell. Especially when I had a yard and used the boats to keep my crew together in slow times. I do my own surveys, I've only used a surveyor twice in 55 years of boat ownership.

You should find someone to travel with you if you can't do your own evaluation of the bargain boat. But, not knowing boats, how you would pick someone from all the BSers out there, I don't know. It would be like me hiring a rocket scientist.


If you have the money and you're looking at good boats, maybe a buyers broker would work for you.

[john61ct]

Well getting the money in place quickly for the seller is the objective, but with some security for me.

Not talking about a full survey, nor am I looking for everything to be good, just the "bones", want to ensure the base platform is sound.

Certainly no "financing" involved, not looking for anything I can't pay cash for, no broker's going to be interested.

Please let's stick to the questions in the OP?

Thanks

[john61ct]

Originally Posted by Suijin

And once they have your money getting it back if you disagree could be difficult, to say the least.

Who they? Whole point of escrow right?

[Wood]

^^^

That!


If there is a dispute funds will not be released to anyone until that dispute is settled.

[atkinsoa]

Hi John,

I bought a boat in Seatle Washington 7 years ago. I used a Title company and paid them $500.00 . They held the money in Escrow, cancelled my USCG registration (I'm a Canadian) and helped me avoid the Washington State tax if I removed the boat in 30 days. I thought the money was well spent, cheaper than a Broker. Here's their home page:
Pacific Maritime Title
Al