Private Selling Process and Risk Controls

[capn_billl]

I was able to do a property exchange through a lawyer for a fixed fee. $600.00 prenegotiated and agreed by both parties, $300.00 each.

[simonmd]

The advise about 'treat it like a car sale' sounds simplistic but is a good bit of advise.

If you're buying from a private individual, first off is to confirm their identity. Do the deal at their house and ask to see copies of ID, passport, driving licence, etc. Then, write out a proper reciept for the deposit. Put on it both parties details and exactly what conditions the deposit is paid. Obviously, both of you sign and if possible, get someone to witness it as well. Then at least if they go back on the deal or try to do a runner, you have proper legal evidence that will stand up in court.

For completing the deal, do the above and insist on seeing all the ORIGINAL paperwork for the vessel FIRST (before even a deposit is put down). I'm amazed at the amount of times i've heard people say that "we paid for the boat/car, etc. but are still waiting for the docs to come through". Then, write out a bill of sale, including your terms and the fact that the boat's title shall be handed over upon reciept of funds and exchange.

I would say however, that deals over £100k should really involve some sort of professional like a brooker or lawer for both parties piece of mind.

The simple rule is to get to KNOW the seller, his home address, meet his family, see his ID, etc. 99.9% of scammers will never put themselves in a possition where they can be easily identified. Just like you should never buy a car in a gas station, never buy a boat in a random public location.

[gr8trn]

Cash, how do you know it is not fake?
Cashier's Check, how do you know it is not fake?

How does the buyer know your Title is free of any liens?

I think you should require that closing (title search, transfer, money exchange, registration...) be handled by a Marine Title Service. Most major water side metro areas have them. Just tell the buyer that it is part of the deal. Buyer pays, seller pays, split the cost, whatever.

Is the Title held by a lender? How does the buyer know that you will pay off the loan and get the Title released and delivered to them?

I guess as Brokers, we deal with this all day, and I am feeling bummed about the reports of Brokers not following through and being seemingly unprofessional. It seems that lack of foresight and communication is the biggest problem in these deals.

This really is a good question and I wish you luck.

Greg

[daddle]

Originally Posted by gr8trn

Cash, how do you know it is not fake?
Cashier's Check, how do you know it is not fake?
How does the buyer know your Title is free of any liens?

Use a wire transfer of funds. Very low risk of fraud.
For the liens, if documented, the USCG will issue a title report on request.
Otherwise, whoever issues the registration can be checked with to see if the papers are legit and free of encumbrances.

Many brokers are good, I suppose, but many are only good for opening the marina gates. It's a sad state of affairs. Forewarned is forearmed.

[ausaviator]

I've got similar questions, except I can't tell if I can trust the dealer / broker or not, especially when he's in one country, I'm in another and the boat is in another.

[David_Old_Jersey]

Originally Posted by ausaviator

I've got similar questions, except I can't tell if I can trust the dealer / broker or not, especially when he's in one country, I'm in another and the boat is in another.

I think the usual way is to find someone you have never met before and give them 10's or 100's of thousands of dollars. Safe in the knowledge that you've managed your risk

[Pblais]

The handling of the money of course can be an issue but it may not be the biggest problem. Options outlined above are of course good ideas.

You can have any number of problems with "expectations". Things that exasperate one or the other party. You can have tire kickers that just want to pretend to buy boats. Traditions include the 10% refundable down payment in cash or certified check up to maybe $1000 just to separate the loons from the buyers. It's why brokers insist on it. You need to do this else get run around a tree by many peoiple before you close a deal.

A written contract is always a good thing. More important is to set dates and actions so the process is clear. Anything to be done needs a deadline and communication throughout the process avoids mistrust.

Either party can bail without harm if the deal looks bad. If you don't feel right it might be time to quit. Some deals can't be negotiated. You can get close to the end only to held hostage by one more demand two more times. A closing delayed is always a bad sign. Holding a deposit hostage and withholding the closing for a better deal are all very bad signs.

[Kettlewell]

I have lucked out and had no problems with boat brokers, but I have heard of and read of many broker-related issues. This is one reason parties pay brokers--to make sure everything is legal and secure. However, there is one huge advantage in not dealing through a broker--you meet the other party in person and get to judge their character. Exchange phone numbers. Google the person. Etc. To me that goes a really long way towards being able to judge if the situation is legitimate. I personally would be very wary of exchanging funds until I could see the actual CG document for a larger boat in the U.S. You can do a search through the C.G. for liens just with the documentation number. State titling is much less secure, which is why many lenders require CG documentation. I have personally found that if someone wants your boat they are usually more than willing to pay in cash, or a certified check, and then wait until your bank says the funds are there, or you can have them wire funds. If someone seems antsy about waiting for a few days I would be highly suspicious of the whole deal. As to paying $1000 up front if I am buying--I would never do that unless the broker can show me at least copies of the relevant paperwork, and no red flags have been raised to that point. When dealing direct with the owner ask for proof of ownership and ID before paying a deposit.