Purchasing (Deposit)

[zupa]

Hi,

I'm in the final process of signing the sale agreement and the owner wants me to transfer the deposit to his personal account. I want to transfer the deposit to an escrow account with my loan broker.

What is the correct way or usual way?

Any advice is greatly appreciated.

[KC375]

escrow

[Montanan]

Definitely to an escrow agent and account which escrow agent should be provided each and every specific requirement agreed upon by the two parties to the contract as to when and how the excrow agent is to release the funds.

Preferably use as an escrow agent an uninterested third party, a bank or a lawyer, who is not involved as to anything to do with the transaction other than fulfilling the escrow agent role. So not a boat owner, or a boat broker or a loan broker.

The link below is in regard to a real estate escrow agent's function but is exemplary of the same role for a boat.

https://denhalaw.com/duties-of-an-es...tween-parties/

[LeeV]

Omg, no. Never give funds to a seller, unless you’ve done the survey, inspections, title validation, due diligence, etc..., and you’re both standing in the bank - him with his title and bill of sale, and you with a checkbook and a notary!

Or hire a lawyer who does this stuff (or a boat broker). For a small fee they’ll use Yachtcloser or some other escrow service.
Good luck.

[Dogscout]

How much are we talking about and what is your tolerance for risk?

Setting up escrow accounts costs money and if you hire a lawyer then MO money.

Can you give a small deposit just to show commitment but not so large that it hurts?

Its your money do smart things but don't ask rando's on the internet.

[zupa]

Originally Posted by Dogscout

How much are we talking about and what is your tolerance for risk?

Setting up escrow accounts costs money and if you hire a lawyer then MO money.

Can you give a small deposit just to show commitment but not so large that it hurts?

Its your money do smart things but don't ask rando's on the internet.

I'm purchasing my first boat and I was told by the seller that the usual way was to send a deposit to his personal account so that is why I wanted to ask.
This forum is made to ask questions and help each other out (not just to ask random people on the internet for their opinion)

[LeeV]

Originally Posted by Dogscout

How much are we talking about and what is your tolerance for risk?

Setting up escrow accounts costs money and if you hire a lawyer then MO money.

Can you give a small deposit just to show commitment but not so large that it hurts?

Its your money do smart things but don't ask rando's on the internet.

Agree; the amount is crucial. $5k vs $500k is very different. My opinion is based on our own situation which we’re in the middle of.

[Fore and Aft]

Escrow account for sure. I did a survey last year and the client put $5000 into the owners (pensioner) account as a deposit. The survey highlighted a lot of issues so the sale did not go ahead. The owner then told the buyer he was keeping the deposit and take him to court to get it back.
No idea how it ended, but the buyer was pretty annoyed and even offered to just get $4000 back.
Cheers

[GRIT]

If you're dealing with the owner directly, then there's no need for a deposit. Finish the paperwork, and give him the whole thing. We bought our boat without a broker, and that's how we did it. I hired a lawyer, for 30 minutes, to witness the signatures, but a Notary could do that just as well.

Sign the paperwork, sign the certified cheque, and you're done.

You did say you were in the final stages... So I assume you've already had a survey, or done it yourself, and there's nothing left to do but sign the paperwork, right?

Cheers, and good luck.
Paul.

[Cheechako]

Escrow, and the deposit doesn't have to be much really.

[Montanan]

Another reference.

https://www.yachtsinternational.com/...ions-explained

[rabbi]

depends...
With typical broker deals you have to send a 10% deposit. No way I would give that amount into anything but escrow.

But what I used as both buyer and seller in direct non-broker deals:
Agree on a reasonable fast schedule so the seller doesn't lose much time. Then agree on a deposit large enough to cover haulout fees plus some. Maybe 1-2k should be enough. That amount was then wired into the seller's account, of course only with a written purchase agreement in place.

1-2k is enough to show the seller that this is a serious buyer, and also good enough to cover any costs if the buyer walks away in the middle of the survey without paying the yard.

[Cheechako]

My deposit on a $332k boat was $5000, on a $265K cat it was $3000 by fax. If they really want to sell they just need to know you are serious.

[sailinglacigale]

Ok. This is a simple one.

DO NOT SEND ANY FUND TO ANY SELLER’S PERSONAL ACCOUNT.

I hope that’s clear enough. There are online simple cheap escrow accounts if you need them. But really you should think about using a lawyer.

I recently sold my boat and we used the buyer’s lawyer. It just made things so much smoother. We split the cost and it was less than 1%. And, as I said, you don’t even have to do that - just get a cheap online escrow account.

I’m sorry to say there are a lot of dodgy people out there and one bad experience will put you off buying a boat for life. And that would be a disaster.

[FLLCatsailor]

Use an escrow agent, your lender, or if you're working with a broker he/she will have a bonded escrow account.

In addition, most good brokers carry E&O insurance.