Originally Posted by JohnRPollard
Your earnest money will get returned to you if you don't accept the boat. But if you accept the boat, then you have made a contractual obligation to purchase it. If you back out, the seller is damaged by having taken the boat off the market and possibly having lost another prospective purchaser.
But there are some folks feel the real purpose of earnest money is so that the broker can get his/her commission up front without worrying whether the seller will gyp them after the sale is completed.
Our experience was:
- Make a purchase offer, contingent on a satisfactory survey, accompanied by a personal check made payable to the broker, "coincidentally" in the amount of the broker's commission;
- After our offer was accepted and the survey was found to be acceptable, the balance was due upon title transfer by guaranteed check, payable to the owner.
So, I presume the up-front money was the broker's fee.