Re: US Practise of Deposit With Boat Purchase
 

It comes down to the individual broker and how he applies this 10% thing. I understand what Pablo is saying and don't particularly disagree. Its crazy to expect 10% before alot of basic questions are answered certainly. Maybe some brokers apply it that rigidly but I think its foolish. It becomes an issue when someone is making a serious offer with the intent to buy based on personal inspection, assessed value, surveys/surveyor etc. Thats where the flexibility and support of the broker comes in and its to his and the sellers best interest to manage that. Kinda common sense really. When its applied rigidly and stupidly its counter productive for everyone, but a necessary part of the game at the right point is all I am saying.

Re: US Practise of Deposit With Boat Purchase
 

So, pablothesailor, let me get this straight...you based this whole conversation in this thread and your conclusions about USA purchase practices on ONE experience with ONE broker, when we have told you all along it varies from broker to broker and its YOUR decision?? Then, here you are all lovey dovey with a broker and think you can trust him 100% even though he might be just kissing your arse and you are buying all his noddy doddy?

"Oh sure we can" HAHAHAHAAH!!

So, who is he really laughing at?

Re: US Practise of Deposit With Boat Purchase
 

There are a lot of negotiators out there who want to feel out where the seller is without a committment. The deposit means you're serious. Often a Broker will take a scanned copy of a check as a token that you are serious. Not sure being out of country though.

Re: US Practise of Deposit With Boat Purchase
 

Which is viewed as absolutely ludicrous by many/most people outside the USA. Or am I stupid and can the broker cash that using the scanned copy?!

ciao!
Nick.

Re: US Practise of Deposit With Boat Purchase
 

No the broker cannot. I don't quite understand it either Jedi, but I assume with a photo copy it somehow proves intention. If you are holding a check in your hands but not cashing it (as said some brokers do this), then really there is no difference, is there? The check writer could still cancel the check while you are holding it.

Having some proof of intention may be good enough?

Re: US Practise of Deposit With Boat Purchase
 

Im in love with my new broker, he loves me to ;)

Re: US Practise of Deposit With Boat Purchase
 

oh something important to consider here came to mind.

There can be multiple brokers involved in selling the yacht at the same time - one listing broker and many selling brokers..within and/or externally to the same brokerage house. This is another reason that the broker would want a 10% + PA up front. The seller may not want to haggle and answer every request in this kind of atmosphere with multiple parties and threads of relationships going.

Re: US Practise of Deposit With Boat Purchase
 

Wow, 6 pages of replies, thank you guys! :)

I suppose I should decide if I can trust the broker (a foreigner whom I don't know) or not. I have bought and sold houses in the past (and paid & received the deposit AFTER the offer was accepted), but in this case I find it difficult to trust someone asking for your money in order to be able to hear what the price might be...

Sure my offer is on the low side, it's about 30% below the asking price, but then again: Everything is worth what its purchaser will pay for it. (Syrus, Publilius), and I don't want to pay any more than I have to.

The previous broker with whom I was in contact with about 2 months ago (located in Florida) did NOT require anything in advance. I made an offer on an Irwin 65 but it was not accepted. Eventually the yacht sold for less than what I had offered. :(

Anyway, here is the latest exchange, my first (in case you guys are interested):

Hi (broker),
I'm not accustomed to pay a 10% deposit before knowing if the offer is accepted. I'm seriously in the market, and would be happy to pay the 10% deposit to an escrow account after the offer is accepted.
What I could do is to pay 1,000 USD upfront as a part payment of the deposit.
Best regards,
Erik

Hi Erik,
I have already received offers higher than yours but have not submitted them due to lack of deposit. Please see the survey report I have just received from 2009
which will answer some of your questions.
Regards,
(broker)

Pablo, no broker should require a deposit to ask questions, unless it is an offer couched as a question. You get to wear him out all you want but you have to paint between the lines when it comes to making offers. I don't see how this is an American issue, if I do business in Europe, I presume it would be done differently and if I want to do business there I do it their way.

Best I can tell, you've made a lowball offer and the sellers broker is just following protocol. He's not asking you to make a deposit to ask general questions, is he? "Will your seller take $100,000" is not a general query about the boat. Fish or cut bait is what we say here, and perhaps there is a cultural barrier for this broker making things worse.

In my past deals, a faxed copy of the check and signed contract was enough to tie the boat up, but obviously the check then has to be MAILED after this.

I made an offer site- unseen as we say on my current boat. It saved a trip to Florida but I still had an out with sea trial. The guy that bought my boat recently had a surveyor do a walk through then he made an offer. Then he never showed for sea trial and we closed anyway! Different strokes.

Sound like you have a buyers broker now and you're happy with that. What does that cost? Good luck with the search, most purchase prices can be worked out before you mail a check in my experience

csh

Re: US Practise of Deposit With Boat Purchase
 

Erik,
What a pompous plank.........why deal with someone like him?? Surely his answer should be ¨Dear Eric, thanks for your email, your offer is not quite high enough, however, after talking with the owner they would be prepared to settle on $$$$.....if this is of interest to you please send me a deposit of $$$$ to hold the boat, we can then start to make arrangements for the rest of your purchase,
Kind regads,
Broker¨


PS...I dont believe he has had any offers by the way!! Plus, he is probably 100 years old plus :banghead:

Re: US Practise of Deposit With Boat Purchase
 

agree, I had a bad vibe about this broker from the start of this loop...plenty of good brokers out there, be patient and shrewed, and good luck.

Re: US Practise of Deposit With Boat Purchase
 

I've sold a number of cars in the last couple of years, including my beloved Jaguar XJS Convertible.

It is clear that there are two kinds of buyers :

The one who looks around for a really nice, well-cared for example, and having found it is anticipating paying somewhere around market rate. He's a pleasure to deal with as he's done his homework, checked the VIN, and having confirmed that the car is indeed as stated in the ad, negotiations on price are straightforward.

Secondly, those who go around low-balling a number of owners in the hope of getting a bargain.

I know which kind of owner is likely to have a more satisfying long-term experience with their purchase, as in two years time it won't be the fact that you saved a grand on the purchase price that puts a grin on your face.

Re: US Practise of Deposit With Boat Purchase
 

There is another kind of broker you might want to consider since you are so far away.

A 'buyers' broker is someone who will work with the buyer to find a suitable boat. You basically give them a budget, agree on the kind of boat, and they look in the market place, give you listings and help you craft a proposal offer etc. You can also use them to look at specific boats in an area if you cannot get there to review yourself, instead of having a "drop by" survey done by a surveyor.

When you find one to buy, you basically buy through them acting either as the listing broker or a selling broker for another broker. Thats how they get paid.

Sometimes there isn't such a firm line between these types of brokers, but you might want to reach out for some brokers willing to act in the 'buyers' interests. They do exists and sell themselves as such.

Re: US Practise of Deposit With Boat Purchase
 

Salty makes a great point about using a "buyer broker". I've used one the last couple times and enjoy a good relationship with mine. As most here know, I'm toying with the idea of moving to a cat in a couple years. I recently contact my broker and asked him to look at a boat for me. Here is an edited copy of his response ... very professional, competent and more than I expected, which is why I recommend him often. This cost me nothing of course, but when the time come I will gladly make a deposit. Find a professional you trust and let them do what they do best. My guy also deals with international sales so if I want to look at something overseas he has the expertise.

Re: US Practise of Deposit With Boat Purchase
 

Doodles - very impressive letter. More than i ever expected coming from a buyers broker. This broker sure knows his worth and service!

Re: US Practise of Deposit With Boat Purchase
 

Salty, yes he's with Martin Bird who you mentioned earlier. This is why hate it when so many rag on brokers. There are some really good ones if you make the effort to find them. Of course, whining is so much easier. :rolleyes:

Re: Need help with buying a boat - common US practice with the deposit
 

Agree with Bash. I made a half a dozen offers in 2009 and wrote good faith checks with each but I wrote them for the amount I wanted -- not what the seller's broker wanted. In one case I wrote the check for the full amount offered -- in all others 5-20%. Also think about the agreement itself -- it is YOUR offer say what you mean to say. I compiled my own AOS, you might consider doing that or hiring someone to assist you (depending on the price of the vessel obviously)

Luck,
-M

It's not personal. It's business.
 

I think you need a bit of a breather here. Remember, this is business. It's not personal. So many people get wrapped up and offended when a business offer is rejected. Why get all worked up about something like "That guy wants too much for his boat!!!" So what? It's his boat. He decides what it's worth. Don't get all upset because the someone who's selling something thinks it's worth more than the someone who wants to buy it. Maybe he owes that much on it and can't go underwater on the sale. Again, it's nothing personal, it's business.

The 10% requirement isn't personal, it's business. They're not even going to deposit the check. Heck, most of them will accept a faxed copy. You obviously are way too close to the situation, but if you aren't willing to toss down some earnest money then you obviously aren't serious about the purchase.

Or, try this, as I did last year. Was looking at a boat that was priced very reasonably, but was outside my price range at the time. Guy wanted $119k for it. Asked the broker, "think he'll take $80k?" That's not an offer, the broker doesn't have to call the seller and ask, you've merely asked his opinion. Broker says, "no, he rejected one at $85k." OK, so now I know, and I can say "if he gets hungry call me."

Again, it's not personal, it's business. If the seller gets hungry he'll sell. My marina neighbor has his boat for sale. It's priced high, because he really doesn't want to sell it. If someone writes him a full price offer he'll take it, but other than that he's keeping it. It's a nice boat, and there's been a bunch of people looking at it, and several that have really wanted to buy it. One got really upset at the listing broker because the boat was listed so high and the broker was honest in telling him that only full price offers will be considered. How exactly is that the broker's fault?

JRM

-- I'm selling my truck at the moment. Price says "firm." Should be obvious, but I've had couple people get upset on the phone because I won't take less. I don't hate them, but I do think it's silly that they're upset about what I want for my property. They're free not to buy it, and I'm free not to argue with them.

Re: US Practise of Deposit With Boat Purchase
 

The broker is required to put the money in escrow anyway.... and of course the contract always specifies subject to inspection. You could take one look at the boat and reject it and he is required to give you the money back anyway. Yes, I think it is just a token of sincerety really... If given a check in hand most I know would hold it until a final price and terms are met... but not all I suppose!

Re: US Practise of Deposit With Boat Purchase
 

...agree Cheechako, and very well spoken JRM- hits the nail on the head. But living over seas and not knowing who your working/dealing with...what else ya gonna do if the broker simply decides to cash your check and not return your phone calls, take it to the small claims court in the Hague?

Re: US Practise of Deposit With Boat Purchase
 

No, you go to Texas or Annapolis or wherever the broker is and file in that court. You would have standing, just like a US citizen. Sure its would be an expensive trip, but why would you expect buying a boat from overseas to be simple and risk free?

Re: US Practise of Deposit With Boat Purchase
 

precisely.

Re: US Practise of Deposit With Boat Purchase
 

You guys still don't get it... most people can't write checks because they don't have that obsolete payment method anymore where they come from. Last time I could write a check was in 1985 or so. Even if I could write that check today, a broker in the US would not be able to cash it with their bank, because only European banks would have accepted it.

So, the only option would be to actually wire transfer the money at a cost of around $500. You still think that it's normal to loose $500 *and* the interest on the amount transferred, just to show you are serious? I hope not. Especially not if all you have to show is a photocopy of a check which cost you nothing.

ciao!
Nick.

Re: US Practise of Deposit With Boat Purchase
 

Who charges that much? I've never paid more than $50 and I did a wire transfer last night from the US to Thailand for $30. In fact I can do online wire transfers globally now for $30 a transfer. Get another bank.

Re: US Practise of Deposit With Boat Purchase
 

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.

Re: US Practise of Deposit With Boat Purchase
 

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.

Re: US Practise of Deposit With Boat Purchase
 

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.

?? 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 :)

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

ciao!
Nick.

Re: US Practise of Deposit With Boat Purchase
 

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":thumb:

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

Re: US Practise of Deposit With Boat Purchase
 

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

Re: US Practise of Deposit With Boat Purchase
 

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

Re: US Practise of Deposit With Boat Purchase
 

And then what happened? :whistling:

Re: US Practise of Deposit With Boat Purchase
 

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.

Re: US Practise of Deposit With Boat Purchase
 

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

Re: US Practise of Deposit With Boat Purchase
 

@Pelagic: exactly!

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? :whistling:

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 :D

ciao!
Nick.

Re: US Practise of Deposit With Boat Purchase
 

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... :thumb:

JRM

-- we'll try this again

Re: US Practise of Deposit With Boat Purchase
 

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 :devil: 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 :D

ciao!
Nick.

Re: US Practise of Deposit With Boat Purchase
 

Rofl!!! :thumb::thumb::thumb:

Re: US Practise of Deposit With Boat Purchase
 

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

Re: US Practise of Deposit With Boat Purchase
 

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

Re: US Practise of Deposit With Boat Purchase
 

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.