private purchase

[xort]

How does one handle a private purchase? When dealing with a broker, the broker holds a deposit that keeps the boat from getting sold to someone else (most of the time!).
Boat US will do escrow but only if I finance through them. I found rates lower elsewhere but the 'elsewhere' doesn't handle escrow, only the actual loan.
Once we come to an agreement, I don't want someone else to come in and offer more and pull the rug out. And I'm not giving the seller a down payment directly. Transaction is out of state too.

[Schuckerman]

Sounds like you have a real dilemma on your hands. We are in the process of trying to sell our boat ourselves as well. When we finally get someone to make us an offer, we'd expect a down payment of some type. There's no set percentage required. You have to work that out with the seller. But don't expect them to hold the boat for you without a deposit. Make sure you get some kind of a signed contract before you give a deposit. Verify the numbers on the boat as well as the sellers info. If the person is reputable, they should have no problem with that. If you hit any roadblocks, then hang on to your deposit and head home quickly. But be prepared to lose your deposit should you default on any stipulations to agreed to.
Scott

[mbarksdale]

I am going to be shopping loans soon. I thought Boat US had really good rates, but appearantly there are better. Where did you find better rates?

Also to anyone else. Do you have have anyone you would recommend for a loan?

[sanjuan2R]

Whether you are buying or selling privately [without a broker's assistance], you should have all the paperwork for the purchase and/or deposit of the merchandise in question.
A seller would be a fool NOT to require a deposit to hold his boat for a prospective buyer.
If you, as a buyer, are interested in a boat, get all the HIN numbers from the stern, write them onto your [previously typed up] deposit form plus all the extras that are included in the sale.
Just like any contract, it has a time limit [subject to an acceptable survey] with the signatures of each party. Simple.

Good luck.

[blt2ski]

Being as my wife is a home loan escrow agent, I am sure someone like this could hold the funds if you will for you. I believe there are also marine escrow companies that could handle said transaction from when we bought our boat. Yes there will be a cost/fee for this service, but in the end, it could very well be worth it! Along with they will make sure you have a clean title or equal!

marty

marty

[chucklesR]

More importantly, sounds like you have finally found your boat. Congrats and I hope it goes well.
In selling my Crownline privately I've never had this come up. All the 'buyers' have been bogus as hell. I always figured if a guy says he'll buy it for xxx dollars I'll go to close and take a certified check for the full amount.
When I sold by Hunter to folks that had a power boat right at the same pier they offered a down payment that was equal to 1/3. I told them it wasn't needed, let them survey the boat and when they said the deal was on simply met them and signed the title over when they handed me a check.

At what point does a man's word require a lawyer to make sure it stands?

[xort]

Loan rates: Trident Funding was at 5.75% about a week ago. They have several offices around the country and know the marine market.

As for the purchase; I don't blame the seller for wanting a deposit but I also will not hand over cash to someone a 1000 miles away. Contract or no. I don't want the hassle of trying to get my money back. I am quite sure the guy in question will not pull any funny stuff. But I'm with Ron Reagan; trust but verify.

Boat US will do escrow but only if you give them the whole deal & their rates are 1/2% higher. The other funding sources won't do escrow.
If I get serious with this purchase, I'll probably search around for a local bank to set up an escrow account. Never done it but I think it can work.

Chuckles, I'm between this boat & one other. Just trying to get my ducks in a row. Sometimes it takes a while to get an answer to these sorts of questions hence the lead time here. Plus it can't hurt to get this out for others to discuss.

At what point does it require a lawyer? When it involves a lot of money and a lot of effort! This is both, to me. Actually, what I'm trying to do is set it up so that a lawyer, or the police, won't have to get involved! It's lawyer time when you try to do a deal on a handshake and it goes south.

[eherlihy]

Xort,

The deposit is a show of your "good faith" to the buyer. The buyer's accepting the deposit is a show that you have come to an agreement. In essence it says that you are seriously interested in buying, and it associates your offer with a point in time at which you and the seller have agreed upon the terms of the transaction.

It does not need to be 1/3 the purchase price. In L&A, Bob Bitchin tells of how his new, custom built Shannon, was secured with a deposit of $1. Most car dealers will accept a deposit of $50 toward the purchase of a car.

If the seller were to then sell the boat to someone else, you would then be entitled to your deposit back, and you could go after him for breach of contract through the court. In that event you would be entitled to damages from the seller. (your time and transportation costs come to mind)

From the seller's perspective, if you were to bail on the deal, he would be entitled to keep the deposit. Because his time, and effort invested in selling the boat are valuable too, I suspect that he will want more than a buck.

I hope that this helps!

-Ed

[xort]

Ed
That is all understood.

My point is that with a $100,000+ purchase, a seller will most likely expect something more than $50. 10% is $10,000. I am NOT going to hand over a $10,000 check to a stranger, PERIOD. You can if you want, good luck.
This is what escrow is designed for. A trusted third party holds the money and releases the money under the right circumstances.

In my shopping, I've come across licenced brokers I would not hand a $10,000 deposit to without terms that would punish him. Some brokers will not refund the deposit if you reject the boat. That is their commision check! They will tell you the boat "passed" survey and you must buy. Or they will try to hold off on the refund so as to keep negotiations going.
When buying from a broker of questionable character, at least insist on a penalty clause that charges $100 per day after 10 business days if you don't get your refund. It's rare but it can happen. I'm getting off track into brokers, sorry.

In my 30 years of doing business independently, I've seen some of the nicest people turn out to be ripoffs. Again, I'm not handing a deposit check to a stranger.

Both seller & buyer need protections. A contract is a piece of paper and doesn't mean a damn thing until you go to court at great expense to prove it means something. And then you need to get the judgement enforced.

[blt2ski]

I did a google search for "boat escrow services" and got some 300K links, not sure how many are doubles or triples, but still from looking at 2 pages, there were a few companies that do bot/yacht escrow. Another thought is "yacht escrow service" or equal.

marty