US Practice of Deposit with Boat Purchase

[Doodles]

Originally Posted by s/v Jedi

ahem... it is the US banks that charge those high correspondence charges... I guess, I wasn't the one who got that number of $500 for a $10k wire into the thread but I have seen crazy charges like that before.

So, it's actually the US broker who should get another bank.

But why do you find it normal that some have to wire transfer real money while others only have to mail a scanned copy of a check? Is that equal to you? Do you think a potential buyer who has to fly 7.000 miles at considerable cost to come and look at a boat is less serious than one who send a copy of a check?

ciao!
Nick.

Maybe what you seeing from the US bank is not just the "tranfer" fee but a "foreign currency exchange fee" as well. And that is usually a % and relative to the amount of deposit, so a large deposit could work up a big fee I suppose, e.g. $50,000 at 1% = $500.

I've only seen/experienced the scanned copy of a check work where both parties are local and using local banks; otherwise, there is more risk on the sellers part. As for a buyer that flies 7,000 mile to look at boats, sure I think he is serious but if you travel international and have ever tired to make a large purchase you know its not as easy as in your home country, and you need to plan accordingly. Remember is just business, nothing personal.

And as for brokers getting another bank, ...why its not their problem. If it was don't you think they would? If they are in danger of losing a sale over it maybe they make some adjustment; otherwise, that just the way it is heading West as they say.

[s/v Jedi]

Originally Posted by Doodles

Maybe what you seeing from the US bank is not just the "tranfer" fee but a "foreign currency exchange fee" as well. And that is usually a % and relative to the amount of deposit, so a large deposit could work up a big fee I suppose, e.g. $50,000 at 1% = $500.

yeah right, we Europeans just wire Euro's to wait and see which exchange rate and which conversion costs we get charged from a receiving US bank... in addition to the "correspondence" fees etc. that we are talking about here.

I've only seen/experienced the scanned copy of a check work where both parties are local and using local banks; otherwise, there is more risk on the sellers part.

?? excuse me? risk on the sellers part? A photocopy of a check is little risk? You must perceive the world so differently than I do

As for a buyer that flies 7,000 mile to look at boats, sure I think he is serious but if you travel international and have ever tired to make a large purchase you know its not as easy as in your home country, and you need to plan accordingly. Remember is just business, nothing personal.

I have done all you write about here, both for regular business and for buying a boat, did you? Most US companies that do international business understand that they need to adhere to international standards or US export would have been zilch long ago. It's not hard at all to do International business, as long as you can understand that International is different from national. They surely do not ask for scanned copies of checks, the whole issue is just too ridiculous to be seriously considered.

The cold fact is that many if not most US boat brokers know nothing about International trade and most do not even have a passport and couldn't point out Europe on a world map. They will not sell boats to "foreigners" because they are rejected by those foreign buyers, as demonstrated in this thread.

Like I wrote before, there are enough brokers that do understand International trade, who do have their passports and many even visited the big European boat shows etc. These brokers know how stupid it is to ask for scanned copies of checks from European buyers as show of goodwill and they do not make these mistakes. They do sell boats to "foreigners" and lots of them. That's how it is and how it should be.

Also, the phrase "it's just business, nothing personal" is not acceptable in many countries. Statements like that will make you fail in International trade, where they do not need offensive sellers at all
Don't try to explain international trade to a Dutchmen... we invented it... for real.

ciao!
Nick.

[JRM]

Originally Posted by s/v Jedi

But why do you find it normal that some have to wire transfer real money while others only have to mail a scanned copy of a check? Is that equal to you? Do you think a potential buyer who has to fly 7.000 miles at considerable cost to come and look at a boat is less serious than one who send a copy of a check?

ciao!
Nick.

I don't think it's equal. It isn't. Doesn't even depend on what the definition of is is.

But, as entertaining as these threads have been, this one has basically boiled down to, "I don't like how they sell boats over there." The irony of this is that we're usually the ones accused of being insensitive to local process (not without good reason, mind). The phrase "ugly Dutch" just doesn't have the same ring as "ugly American"

This is common practice here. If you want to play in our park, you gotta play by our rules... It isn't fair at all, that's why we call it "home field advantage." [I had something I thought was really funny here, but I removed it because the last two funnies I tried to drop were massively misconstrued over yonder and I'm probably pushing my luck with the ones above. Bummer, cause it was good.]

JRM

[Pelagic]

All over the world:

Step 1.... Do you first deposit 10% or any amount to find out if Seller would accept your offer?

Answer: No!

Step 2..... If accepted….Should you deposit 10% or any agreed amount to confirm sincere interest based on normal financial and legal safeguards of deposit, acceptable sales contract, subjects of sale including detail survey and inventory inspection, that will allow for further negotiation?

And a guarantee of full deposit refund less agreed charges for haul-out etc….?

Answer: Yes!

Where people get confused and some aggressive brokers try to manipulate is that the 10% is only put down once Buyer and Seller know they are close to a deal….

Step 1 costs you and the broker nothing but time.

Step 2 is where the broker earns his commission and you do your due diligence

[SaltyMonkey]

Dutchy, we take Citibank, HSBC, and deschebank checks - what more do you want?

[Doodles]

Originally Posted by s/v Jedi

Don't try to explain international trade to a Dutchmen... we invented it... for real.

ciao!
Nick.

And then what happened?

[savoir]

US ignorance of everything foreign is strange but true. George W Bush didn't have a passport when he became President.

Nick is also right about high bank fees. On my 3 failed offers in 2006 my bank charged me $30 + 3.5% on each for an electronic money transfer. I had to pay each broker 10% of my offer just so he would make a phone call to the owner who in each case said "No". I have not operated a check account in 15 years so that was out.

Ridiculous system ! It assumes that the buyer is a few miles away and can easily drop buy with a check. I still get them refusing to tell me about the boat and inviting me to drop by without even asking where I am. The last boat I inspected took me 4 planes with a total of 26 hours in the air, plus a day in a rented car to reach.

All the brokers who wanted the 10% up front insisted it was state law to pay a deposit before referring an offer to the owner. Maybe they were lying. Not sure.

[Doodles]

Jeez, the Europeans sure are whiny these days. Must be the Greece, Portugal, Ireland, Spain, Italy stuff that got them all hot and bothered.

[s/v Jedi]

@Pelagic: exactly!

Originally Posted by JRM

This is common practice here. If you want to play in our park, you gotta play by our rules... It isn't fair at all, that's why we call it "home field advantage."

This kind of wisdom is just... amazing. Play in your park? We're talking about "you" trying to sell "us" something... Your attitude would get you nothing, you would fail to complete one single international business transaction. Only if you're a good and nice boy and complement us with the looks of our babes, we might consider to allow you to sell us something and make some money in the process. How many trillions are needed over there?

Originally Posted by SaltyMonkey

Dutchy, we take Citibank, HSBC, and deschebank checks - what more do you want?

Citibank is US and chapter 11 I think? HSBC is Hong Kong / Singapore? I wouldn't even want to use an ATM from deschebank because I never even heard of them :-)

Dutch is International Paints, Unilever, Shell oil company, Rabo Bank etc. It's a very small country wedged in between the UK and Germany and France... who chopped off some parts in Napoleon's time which are now called Luxembourg (ah no, that happened because of lineage of the royal house went wrong :-) and Belgium. First multinational of the world, first stock exchange of the world, stopped using bank checks a long time ago and citizens do not use the banks you listed

ciao!
Nick.

[JRM]

Originally Posted by s/v Jedi

Like I wrote before, there are enough brokers that do understand International trade, who do have their passports and many even visited the big European boat shows etc. These brokers know how stupid it is to ask for scanned copies of checks from European buyers as show of goodwill and they do not make these mistakes. They do sell boats to "foreigners" and lots of them. That's how it is and how it should be.

Also, the phrase "it's just business, nothing personal" is not acceptable in many countries. Statements like that will make you fail in International trade, where they do not need offensive sellers at all
Don't try to explain international trade to a Dutchmen... we invented it... for real.

ciao!
Nick.

Our posts crossed in the night...

International? Like outside America? Oh. When you said foreign I thought you meant like from Kansas. I was wondering why someone from Kansas would want a boat, what with it being all corn and all...

JRM

-- we'll try this again

[s/v Jedi]

Originally Posted by Doodles

Jeez, the Europeans sure are whiny these days. Must be the Greece, Portugal, Ireland, Spain, Italy stuff that got them all hot and bothered.

Oh my... you still don't realize the US is right in that list too (didn't know Italy was on it?!) and for an amount that is too big for the EU heavyweights to send enough of their relief funds to save your butt. The Chinese own most of your business real estate already and soon your a$$ too When the time comes, I might make y'all an offer for the US Virgins (islands I mean) or something and even consider wiring 10% with the offer

ciao!
Nick.

[SaltyMonkey]

Originally Posted by Doodles

And then what happened?

Rofl!!!

[Capt Phil]

Sorry, I can't help but dive in here. Nick and others who have international experience are rightly baffled at the quirks of the transaction side of business in the US. It is borne out of the laissez faire capital mind set in the US which has worked marvelously well for about 150 years. The consumer laws in this country are mild when compared to other developed countries around the world.
One point that seems to have been passed over is the 10% earnest money 'standard' that is common in marine transactions. As it was explained to me by a broker who was in the business for over 50 years, not too many years ago, it was truly a sellers market. Many boats never even came on the listed market for sale, rather they were sold by word of mouth through yacht club members and other connected to the sailing and cruising community. Brokers were finding that boats were being sold out from under them and their listing agreements were being challeged constantly. To secure their commission in the event that a buyer sold their boat outside of the listing agreement, they got their 10% commission up front from the buyer. Listing agreements now have been wordsmithed to death by attorneys and run pages long instead of a single paragraph. But the "10%" earnest money is still in vogue. This IS negotiable, however.
On an international deal, while the US broker may desire to hold the earnest money in their escrow account, it does not mean that an account with a bonded third party in the sellers country of origin cannot hold the funds provided the selling broker agrees. The brokers bank no doubt has relations with other banks in the sellers country who could hold the escrow funds and release them when the terms of agreements are met.
I know of buyers who have had their earnest money held by a broker for months in the current market before having it returned after the deal cratered.
The purchase agreement is also negotiable. Offshore purchasers should try and have the agreement vetted by legal counsel familiar with US contract law which may vary from their domestic law. Make sure you understand completely what the terms and conditions are.
Having sold and purchased boats in foreign countries for clients (I am not a broker), I always sought legal counsel in the country where the sale was being transacted as well as the countries of the seller and buyer. There are some traps that one can unintentionally step in with a foreign transaction so beware. Capt Phil

[SaltyMonkey]

We not only take foreign checks you can fedexm here overnight. Whineypantz

[savoir]

Originally Posted by Capt Phil

Sorry, I can't help but dive in here. Nick and others who have international experience are rightly baffled at the quirks of the transaction side of business in the US. It is borne out of the laissez faire capital mind set in the US which has worked marvelously well for about 150 years. The consumer laws in this country are mild when compared to other developed countries around the world.
One point that seems to have been passed over is the 10% earnest money 'standard' that is common in marine transactions. As it was explained to me by a broker who was in the business for over 50 years, not too many years ago, it was truly a sellers market. Many boats never even came on the listed market for sale, rather they were sold by word of mouth through yacht club members and other connected to the sailing and cruising community. Brokers were finding that boats were being sold out from under them and their listing agreements were being challeged constantly. To secure their commission in the event that a buyer sold their boat outside of the listing agreement, they got their 10% commission up front from the buyer. Listing agreements now have been wordsmithed to death by attorneys and run pages long instead of a single paragraph. But the "10%" earnest money is still in vogue. This IS negotiable, however.
On an international deal, while the US broker may desire to hold the earnest money in their escrow account, it does not mean that an account with a bonded third party in the sellers country of origin cannot hold the funds provided the selling broker agrees. The brokers bank no doubt has relations with other banks in the sellers country who could hold the escrow funds and release them when the terms of agreements are met.
I know of buyers who have had their earnest money held by a broker for months in the current market before having it returned after the deal cratered.
The purchase agreement is also negotiable. Offshore purchasers should try and have the agreement vetted by legal counsel familiar with US contract law which may vary from their domestic law. Make sure you understand completely what the terms and conditions are.
Having sold and purchased boats in foreign countries for clients (I am not a broker), I always sought legal counsel in the country where the sale was being transacted as well as the countries of the seller and buyer. There are some traps that one can unintentionally step in with a foreign transaction so beware. Capt Phil

No it isn't. Three brokers all told me "no phone call to the owner until we get the 10%". No deals. No negotiations. No nothing until I paid.

The first sold 6 months later for 10k above my offer, the second 10 months later for 8k below my offer and the third 4 months later for 5k below my offer.

If you are still out there Vasco, I gave up on them all and bought another boat and even then I had to endure the "10% or no phone call" rubbish. I repeat that if an owner can sell their boat between my first offer and the day my signed contract with deposit is delivered then good luck to them. I will happily take that risk.