Contract and 10% deposit required before survey allowed? Is this typical?
I'm interested in a boat which is too far away to look at without being nearly decided on purchasing it, but the broker says that before a survey would be permitted, I must have a signed contract with a 10% deposit.
That seems pretty unreasonable to me, and makes me wonder, is this the way things are normally done, or is this a warning that the broker is less than reputable (or simply doesn't want to dick about with this poor man's yacht as he has alot more expensive boats to manage).
???
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Pretty normal in my experience. The deposit should be held in escrow, pending sale and is refundable if you decline to purchase based on the survey.
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If you put down a deposit, be prepared to loose it if you decide not to buy. You could try to make it a refundable deposit if the survey is really bad, but he probably won't go for it. He wants to make the sale.
I would think that the broker would be more than willing to let you pay for a survey, which would remain your property. (You could sell it to another prospective buyer) It's money out of your pocket, not his or the owners. Now if he is paying for the survey, then I can understand the deposit, but it still sounds unreasonable.
This is how I would go about it if you are really interested in the boat. Tell the broker that you will put down the deposit before the survey as long as all of the items that are flagged in the survey are repaired at the owners expense. Make sure that you get this in writing. If he says no way, then walk away. There are tons of boats out there for sale. find a broker or individual that is willing to be reasonable.
This is how I would go about it if you are really interested in the boat. Tell the broker that you will put down the deposit before the survey as long as all of the items that are flagged in the survey are repaired at the owners expense. Make sure that you get this in writing. If he says no way, then walk away. There are tons of boats out there for sale. find a broker or individual that is willing to be reasonable.
Dave
I think this stipulation would be a deal-killer to anyone because it is so one-sided allowing the prospective purchaser to make frivolous demands.
What your broker told you is standard practice - put down a deposit and stipulate in the agreement that the deposit shall be returned if the survey i9s not to your satisfaction.
Look at it this way -if you pay for surveying a boat without any contractual agreement, the seller can and may sell the boat to someone else after you just paid to have it surveyed. Why would you take that chance?
Pretty normal, Why would the owner allow you to haul his boat for a survey, have someone crawl all over it and empty all the lockers, without even a contract and deposit? The contract will allow you to get out if the survey shows items that are unacceptable to you.
What we did was contact a surveyor (not the one recommended by the broker)in the area and had him swing by and just take a look at the boat and give us general impressions (he didn't charge us for it, but we had him do a survey and sea trial later). Based on his observations we made an offer that was accepted and sent a 5% deposit to be held in escrow. I can't say that when I saw the boat I agreed with the surveyor that it was in good shape, but it was something anyway. You might also ask the broker if he could send an extensive set of pics, that might be enough to help you decide if you are seriously interested. Make sure the contract has contingencies that allow you to back out and get your deposit back. Good luck.
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Pretty normal in my experience. The deposit should be held in escrow, pending sale and is refundable if you decline to purchase based on the survey.
This also holds true in our neck of the woods.
I would also like to politely disagree with one of the other posters who suggested that you should be prepared to lose your deposit if the sale doesn't go ahead. This was not so in my past experience as a broker; and more recent experience as a boat buyer. In BC, the deposit is fully refundable if the buyer's decision is based on the survey results.
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Agreed. You should be able to get the deposit back if you simply do not...
Quote:
Originally Posted by sailjunkie
This also holds true in our neck of the woods.
I would also like to politely disagree with one of the other posters who suggested that you should be prepared to lose your deposit if the sale doesn't go ahead. This was not so in my past experience as a broker; and more recent experience as a boat buyer. In BC, the deposit is fully refundable if the buyer's decision is based on the survey results.
... like the way the boat sails, which is very important, personal, and impossible to know with certainty until the boat is sailed. Make certain the terms for rejection of the survey and sea trial are broad. By the same token, be realistic in the case of an older boat. There are conditions and wear that are normal for a certain age.
The purpose of the deposit is to chase out the time-wasters. You will be out the cost of the survey and a haul, which is enough.
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Most Brokered boats contracts are the same, and they even have a place to stipulate full refund of deposit for whatever reason you hand wright in there....Normally on buyers satisfaction of surveys and sea trial....this leaves the door wide open for you.
If this is a US broker he could loose his licence for reneging on that...Its about as safe a deal as one can get in the business world... A large broker wont even deposit your check but hold it onsite in a safe.
No Worries mate its a normal deal.
I have said here before many times...Im not interested in dealing with buyers not willing to pony up a deposit for a serious look at my boat.
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Last edited by Stillraining; 04-04-2010 at 12:14 PM.
I think that they just want to make sure that you are a serious buyer for this specific boat before the surveyor takes her for a sea trial, haul, pulls everything apart, etc..
Call again, this deposit should be refundable. Unfortunately cost of the survey isn't. As someone mentioned, you can get a local surveyor to do a walk through and provide you with a brief report. I am sure this won't require a deposit and may cost you about $100.
I just wish that there was a way to have all sellers purchase a non-biased survey from in independent organization of highly qualified boat surveyors with lots to loose if they don't disclose everything they find. I guess boat surveyors wouldn't like this model much, but as buyers it would be great. There are probably many reasons why this wouldn't work, but as a buyer I would really like to see a survey before making an offer.
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