Buying a boat privately and paying a deposit

[Whitelighter]

Tentitivly we *may* have found a boat of the right size and budget but it is for sale by the owner privately. This is fine, and I suspect it means at least some of the brokers 6% has been passed on in the lower asking price which is all fine and dandy but

If a deal is done the owner requires a £5,000 deposit prior to the balance being paid after Survey/Seatrial etc etc. Now, in principle I dont have a problem with that as its only 5% or so of the asking price but what security can I take from the buyer? Instinctivly I feel I should get something for my £5,000 other than a handshake and the promise the bloody thing will still be there tomorrow.

Should I ask to take away the original VAT invoice and Builders Certificates as security? Or is there a legally binding general contract that we could both sign that would unequivicly give me the right for a full refund should the boat fail its survey (I dont think it will but you never know).

My feeling is take proof of ID from the seller (DL, Passport copies that match home address) and the paper work for the boat in exchange for £5k.

 

[Sandyman]

You could ask the seller if he will agree to a third party holding your deposit.
Dont forget to use the defects found in the Survey (there will be some) to negotiate a further price reduction.

 

[jimg]

Can you not use the RYA or BMF contract?

 

[RobWales]

Why 5k?
As little as 1K in these trying times would be enough in my book to prove you are serious about things.

 

[Nick_H]

Personally i'd tell him you wont provide a deposit, but will arrange the survey and sea trial at lightening speed, and should be able to complete in 2-3 weeks. Realistically is he going to sell it to anyone else in that time, and whilst he wont agree to take it off the market without a deposit, if he can see you spending money on surveyors, lift outs etc., he knows you're serious.

You could argue that you're risking the survey fee, but better than risking a £5k deposit IMO. Alternatively offer a £1k deposit, just so he knows you're not a time waster.

 

[jfm]

Hmm, tricky. I don't think he would hand over the boat papers (I wouldn't).

You can use a stnadard contract, which is fine. That isn't your problem though. your problem is that he absconds with the money or refuses to refund deposit when boat badly fails survey, DESPITE the contract. He could gamble "well let them sue me - I bet they dont bother"

Tricky. A good answer is get a 3rd party known to both of you. I did this when TCM sold his Antibes berth - I happened to know the buyer very well. So Buyer put the money in my bank till TCM had got the port officials to issue the new title paperwork. Actually i missed a trick - I should have absconded and would be half a mill up

Buit the chanvces of you both knowing the same middleman are probably zero

You can use a solicitor but that will need a written set of escrow terms and will cost perhaps £1000

There's no easy answer. I would, in your shoes, pay him a deposit only just above the crane-out charges he faces for the survey (say £1500) and tell him that's all, else no deal. If he is sensible in this market he'll accept. If the boat passes survey flying colours he still has a contract with you for the £100k and can sue you for any losses, so he is in a reasonably strong position.

He does need to accept (and tellim, if he doesn't get it) that he chose to sell without broker and that kinda means this issue is bound to come up. He therefore has a strong obligation (in the moral and business logic sense) to move away from the £5k demand to cure the problem of his making

 

[ebbtide]

Suggest you use recommended RYA pro forma and/or employ a broker to act as middleman - holding deposit, doing paperwork - for a fixed fee. Have done that several times without any probs.

 

[jfm]

In your exp, if buying a boat privately for £100k, how much would a broker want for being the middleman and stakeholder of the deposit etc? And would it be non contingent, ie he still gets paid if boat fails survey and the deal is abandoned?

 

[silver-fox]

Why don't you miss out the deposit stage altogether? You are being asked to pay it after the sea trial and survey so what is its purpose?

You will have invested in a haul out and survey so you have proved yourself to be more than a tyre kicker already.

Have the boat surveyed, and if you decide to go ahead, buy the boat in one transaction - full payment on receipt of boat plus papers/proof of ownership - the validity of which you should check before hand.

Even if that is not acceptable, the buyer will be flexible with his terms in this economic climate surely?

 

[NealB]

Agreed - a very sensible suggestion!

 

[PowerYachtBlog]

no broker....
use a notary of your choice if owner says no tell him bye and stay away from this
some yacht brokers can also offer this service indipendently with a fee for transfor

 

[ebbtide]

Re: Wake up at the back there!

[ QUOTE ]
some yacht brokers can also offer this service independently with a fee for transfer [/quote after spellcheck]

Didn't someone suggest that already?

 

[Chas25]

[ QUOTE ]
Why don't you miss out the deposit stage altogether? You are being asked to pay it after the sea trial and survey so what is its purpose?

[/ QUOTE ]

Deposit is before survey.. possibly before seatrial as well, so there is a potential risk.

 

[Deleted User YDKXO]

I would put it to the seller that he is being unreasonable asking for deposit to be paid direct to him. After all if he was selling thru a broker, it would be the broker who would hold the deposit, not the seller. The whole point of the deposit is that it should be returnable if the survey or seatrial throws up a major defect and you cannot know for sure that the seller will do that. I agree with NickH. Tell him you're going to proceed quickly. He has no costs or obligations for the survey or sea trial so he should accept that. Otherwise use a solicitor to hold the deposit. If he's going to be bolshy about it, then you know he's going to be bolshy about any defects so walk away

 

[z1ppy]

we are selling our boat at the moment for about the same sort of money.

havent really thought about it but guess i would want a nominal deposit to cover costs of lift out and sea trial. be sure to be present for the survey and seatrial.

if i were a buyer i would not be prepared to pay a deposit of that size on a private deal so why should i expect anyone else to!

obviously, if a broker is involved then its a slightly different story but there is little confidence in them at the moment either!

i guess the risk would be to start racking up legal costs that are not necessary with a little trust but that is a precious item at the moment!!

good luck!!!

 

[Nautorius]

Jez,

When I was selling mine there was no deposit until after Sea Trial...and even then I only asked for a Token £500, mind you he and I were both extremely trustworthy! I would do the same and say £1000 after Sea trial is satisfactory but before Survey. In this way the deal is subject to a satisfactory Survey.

Cheers

Paul /forums/images/graemlins/smile.gif

 

[Nautorius]

Jez,

When I was selling mine there was no deposit until after Sea Trial...and even then I only asked for a Token £500, mind you he and I were both extreemly trustworthy! I would do the same and say £1000 aftert Sea trial is satisfactory but before Survey. In this way the deal is subject to a satisfactory Survey.

Cheers

Paul /forums/images/graemlins/smile.gif

 

[strakeryrius]

I bought my boat privately last year from a UK vendor with the boat in Mallorca.

What we did was make a written legal offer, detailing that the iintial deposit was fully refundable in the event that the survey and sea trial were not acceptable or indicated significant defects.

I paid a £5K deposit prior to the sea trial/survey on receipt of his signed acceptance of the offer.
Then paid another £5K after the trial etc was OK.

We then moved to a full contract detailing the boat and all accoutrements, as well as defects to be rectified prior to accepting the boat at sale in a separate schedule. We agreed a date to "complete" the sale for the balance to be handed over and keys/docs given to me. I wrote the contract myself in about 3 hours on the PC, based on the RYA standard contract for sale of a Motor yacht.

It all worked through very well. Only one thing I would have done differently - a couple of the things in the schedule didn't get done before pickup - his marinero suffered the manana syndrome, so I ended up getting them done in the UK after transportation and waiting for him to pay me back. In hindsight I should have put it into the contract to hold back a couple of grand until any works to be done were inspected and verified.

 

[hlb]

We had this problem when selling the barge privately. Catch is. Buyers dont like handing money over directly, they like there hand holding, dont blame them really. We went the broker route.

 

[DoubleVision]

I must be well behind here. What happened to the V39?