cash deposit

[menzies]

If you have any doubt at all just use a marine title and escrow company. Their fees are astonishingly low, and they are an impartial third party.

I have one I can recommend. It cost me $295 for all of the title, lien, paperwork, and Coast Guard Documentation. Smooth process. Lady I dealt with knew what she was doing.

 

[gflc123]

hey Menzies thanks guys, that sounds reasonable will gladly take that contact at your convenience. Thanks again

 

[THD]

GFLC-much good advice so far, so just a point or two. From one of your posts, he wants "cleared funds." Assuming you are within the US, a personal check will take no more than 5 business days to clear but a simple call to the bank can verify the check, a Cashier's check no more than 2 business days, but if he has any relationship at all with his bank, he will receive immediate credit for a Cashiers' Check. And as someone noted, a wire transfer is completed in less than 2 hours or so usually if done before about 2 in the afternoon. Also as noted, I would want any agreement to specify "deposit" to be held in escrow, and the time and form in which it will be returned should the sale not proceed. I would ask that it be returned in the same form and manner as delivered by you, i.e. Cashier's check or wire transfer.

 

[menzies]

hey Menzies thanks guys, that sounds reasonable will gladly take that contact at your convenience. Thanks again

Just PM'd you the info.

Good luck.

 

[BandB]

Cleared funds is insane for a deposit. First, with all the effort you've gone to, writing a bad check is highly unlikely. There is the risk you stop payment. However, if he has a signed contract and you decide not to follow through then it would be returned to you anyway so no big deal on stop payment. If you follow through you won't stop payment but you'll replace the check with a bank check or wire transfer.

As to you writing a bad check, again unlikely if he's properly qualified you. If you did, he can file a criminal complaint.

I have written checks on house deposits and boat deposits and never been asked for cash. I've written checks for cars. Had they not been good, I believe the term is Grand Theft Auto.

As to the contract, it should look much like the one I posted the link to earlier.

I don't know the price range you're looking in but odds are great that it doesn't go contract, survey, closing. There are almost always things in the survey you'll either want fixed or want a price concession on. Plus insurance to arrange, registration and such.

 

[Richard W]

Could this be a miscommunication?

Cash as opposed to Credit Card (that charges the seller a significant fee).
Usually a check is as good as cash in face to face transactions.

I told the broker I was surveying the next day and had told him originally I am a cash buyer (meaning i didn't need financing) He would not take deposit till the contract was signed. apparently it takes 2 business weeks for bank checks to clear and 3 weeks for personal checks to clear.

Looks like I am still catching up and reading the entire story ... but ... the above 2/3 weeks clearance time is, oh, a bit unusual. In light of this I would insist on paying by wire transfer, US bank account to US bank account. Fast, traceable, and safest way for either party.

 

[kthoennes]

We bought our boat in Massachusetts long distance (from South Dakota). Just as another poster said, two plane tickets across the country, a rental car, at least one night's hotel, meals and miscellaneous travel expenses...if that doesn't demonstrate serious intent, then I'd tell him to forget it. Hundreds of boats out there, especially if you're willing and able to transport your purchase. Our seller was fantastic, we shook hands, I gave him a check for $1000 on the spot, signed a bill of sale, then we flew back home and FedEx'd him a cashier's check for the balance.

 

[BandB]

Could this be a miscommunication?

Cash as opposed to Credit Card (that charges the seller a significant fee).
Usually a check is as good as cash in face to face transactions.



Looks like I am still catching up and reading the entire story ... but ... the above 2/3 weeks clearance time is, oh, a bit unusual. In light of this I would insist on paying by wire transfer, US bank account to US bank account. Fast, traceable, and safest way for either party.

Maybe he's talking about checks drawn on foreign banks or something.

 

[O C Diver]

When I bought my boat, a wire transfer was done from my bank to the broker's escrow account. Same as cash, but with a record trail. Closing was handled the same way.

Ted

 

[rwidman]

When I bought my boat, a wire transfer was done from my bank to the broker's escrow account. Same as cash, but with a record trail. Closing was handled the same way.

Ted

Exactly. There's too much chance of fraud with checks, cashier's checks and even certified checks.

 

[johnrupp]

When I bought my boat, a wire transfer was done from my bank to the broker's escrow account. Same as cash, but with a record trail. Closing was handled the same way.

Ted

My most recent boat purchase last fall was handled this way. I would never do cash as there is no official bank record of transaction.

 

[rwidman]

Cleared funds is insane for a deposit...............

To you, perhaps, but it's a standard way of doing business in boat buying, at least when using a broker. You don't have to like it, you can call it names, but that's how it is.

Are there exceptions? Perhaps, but what sane broker wants to get involved in a bad check situation? What sane broker wants to be sued for the cost of a boat because the buyer's check bounced?

And the seller doesn't care how far you flew or what it cost, he/she just wants to be sure he gets his money and doesn't have to take a bunch of people on a free boat ride.


The bottom line of course is, if you are unwilling to meet the conditions, you can just walk away and find another boat to buy.

 

[ksanders]

so...

I personally know the broker involved in this situation, and he is a full time, regular business that is well known in the industry, but prefers to keep his name out of this public discussion.

The situation is that the buyer wants to fly into town, make an offer on the boat, and have a survey and sea trial all within 24 hours.

The broker indicated to the buyer that he needed before survey and sea trial.

1. A signed by both parties offer (which is really a contract to purchase if you think about it).

2. Cleared funds.

Both things are entirely normal in a boat buying transaction. The problem is the buyers time frame of 24 hours from wheels down on his flight into town, to sea trial. How the funds are delivered he does not care, so long as they are cleared funds prior to sea trial and survey.

And...

The parties do not even have a signed offer prior to the buyer coming to town.

I only wrote this because the way the OP posted his question regarding "cash" was only part of the story.

 

[Wxx3]

Never, never cash.

Never. And at this point, I'd walk away, if in fact, they are asking for "cash" and not just money.

To me it implies they are sure the boat will not pass survey.

 

[kthoennes]

...The problem is the buyers time frame of 24 hours from wheels down on his flight into town, to sea trial....

Well, yes, but whole point of money up front is to demonstrate the serious intent of a buyer, so you don't waste your time and effort in providing access to the boat for inspection and survey and end up giving tire kickers a free boat ride for no good reason. Spending $1000 or more for a trip down there seems like a pretty good demonstration of serious intent to me and not tire kicking.

Heck, when we were boat shopping, if all we had wanted was a boat ride I could have done it a lot cheaper near home instead of dropping about $1200 for my wife and me to jump across the country for a weekend. Other posters are right, the seller and broker can set whatever transaction terms they want, and the buyer can accept them or walk away. To me though, this discussion is a good example of why there's so much broker bashing on boat forums. Brokers are supposed to facilitate boat sales, not throw up hurdles and make the process more difficult or elaborate. If I'm a seller and somebody wants to hike across the country to seriously consider buying my boat in a 24 hour window, yipee.

 

[Wxx3]

Thanks Kevin for the clarification.

That makes more sense.

 

[rwidman]

so...

I personally know the broker involved in this situation, and he is a full time, regular business that is well known in the industry, but prefers to keep his name out of this public discussion.

The situation is that the buyer wants to fly into town, make an offer on the boat, and have a survey and sea trial all within 24 hours.

The broker indicated to the buyer that he needed before survey and sea trial.

1. A signed by both parties offer (which is really a contract to purchase if you think about it).

2. Cleared funds.

Both things are entirely normal in a boat buying transaction. The problem is the buyers time frame of 24 hours from wheels down on his flight into town, to sea trial. How the funds are delivered he does not care, so long as they are cleared funds prior to sea trial and survey.

And...

The parties do not even have a signed offer prior to the buyer coming to town.

I only wrote this because the way the OP posted his question regarding "cash" was only part of the story.

When I sold my previous boat the situation was similar. The buyer was flying to town and renting a truck to tow the boat home. The time frame was too short for the wired funds thing so the broker insisted on cash.

 

[Hawgwash]

I personally know the broker involved...the way the OP posted his question regarding "cash" was only part of the story.

Nice ballast you added there Kevin. Hard to walk through this one without getting hit by a jerked knee.

Funny how facts can sometimes make a difference.

 

[ksanders]

I have myself bought two boats that were in Seattle and I was living in Alaska.

As a buyer you have to make time to take care of things, especially on a large purchase like a boat.

Both times I flew down, and looked a series of boats over, then flew home.

In both cases I made an offer, and went through the price haggling process from out of state. In one case I over nighted a cashiers check to a marine title company that we agreed to use, and in the other case I made a deposit to the brokers escrow account at a local branch of his bank.

Then, and only then I sought out a marine surveyor, and scheduled a survey and sea trial. Once that date was set I bought plane tickets to be present at the survey and sea trial.

That's the way the system is supposed to work I think. I for one would never try to hurry such an important purchase. Especially when there is no logical reason to do so.

 

[BandB]

Exactly. There's too much chance of fraud with checks, cashier's checks and even certified checks.

Closing wire transfers but for deposits checks are common. The only concern with a deposit is the one sending it not getting it returned. A deposit on most boat contracts is nothing more than a good faith symbol that someone will strongly consider buying a boat. They buyer has nearly unlimited rights to back out of the deal when it's subject to sea trial, survey, and final acceptance. Most of the time the check is never deposited.

Home sales have turned the same way with home inspections and periods of time allowing buyers to back out. Again, final transactions generally transfers but deposits are almost always checks.

 

[yachtbrokerguy]

The accounting department at my office only wants wire transfers. No cash because of reporting requirements and no checks unless we know the buyer or we have at least ten days from getting a check deposit and the sea trial. The FYBA agreement says the deposit must be "cleared funds."
My office has run across numerous "buyers" who pretend to be boat buyers and will go to elaborate lengths to go for a sea trial, including bad checks. Some do not even go for a sea trial but want to make offers and then never send a deposit. When a middle aged fat guy shows up with a young blond and tells her how they will cruise the islands I might get suspicious.
We also have pretend buyers who send a deposit, cancel before sea trial, and then want the deposit returned to a different person to launder money. I am in South Florida where this stuff is normal.

 

[dimer2]

I second the GET a BUYERS BROKER. It costs you nothing!

 

[BandB]

The accounting department at my office only wants wire transfers. No cash because of reporting requirements and no checks unless we know the buyer or we have at least ten days from getting a check deposit and the sea trial. The FYBA agreement says the deposit must be "cleared funds."
My office has run across numerous "buyers" who pretend to be boat buyers and will go to elaborate lengths to go for a sea trial, including bad checks. Some do not even go for a sea trial but want to make offers and then never send a deposit. When a middle aged fat guy shows up with a young blond and tells her how they will cruise the islands I might get suspicious.
We also have pretend buyers who send a deposit, cancel before sea trial, and then want the deposit returned to a different person to launder money. I am in South Florida where this stuff is normal.

It's normal everywhere. Just more volume in South Florida. I'd add words of caution and that is don't schedule to meet if you haven't talked at length and exchanged information.

As to what the FYBA agreement says,

2. Acceptance of Agreement; Deposit. If either party fails to sign this Agreement and deliver it to the other party on or before the
Offer Expiration Date, this Agreement will be ineffective. Within _______ business days (or three (3) business days if left blank)
following Seller’s execution of this Agreement, Buyer shall pay the Deposit to the Selling Broker’s escrow account, as acknowledged
below, as a deposit toward the Purchase Price to be held subject to the terms of this Agreement. Seller may refuse to permit Buyer to
proceed with the trial run, survey and other inspections of the Vessel until the Deposit is in the Selling Broker’s escrow account.​

I see nothing in it about "cleared funds."

As a broker you have to qualify the potential buyer.

As you point out, accepting cash is very unwise for many reasons. The other things of looking at yachts to show off to young girlfriend, sending money from out of the country and asking for it to be refunded to someone in the US and many more things are common. However, requiring the deposit to be cash doesn't help any of them. There are even perpetual boat lookers who go from broker to broker looking each year. (In the auto industry, they're tire kickers).

For a broker, determining who to spend time with, and how much, is a real challenge. Is the person calling someone who is serious and might be willing to let me serve as their buyer's broker or are they calling the listing broker on every boat on Yachtworld?

I would never have the patience nor the tolerance for failure that is required to sell boats. By tolerance of failure, I mean the number of no sales it takes for each sale you actually make, even the best of brokers.

 

[Richard W]

In both cases I made an offer, and went through the price haggling process from out of state. In one case I over nighted a cashiers check to a marine title company that we agreed to use, and in the other case I made a deposit to the brokers escrow account at a local branch of his bank.

Then, and only then I sought out a marine surveyor, and scheduled a survey and sea trial. Once that date was set I bought plane tickets to be present at the survey and sea trial.

I assume the following took place ... please correct me if I am wrong ...

1. The offer was conditional on a survey and sea trial.
2. The deposit doesn't mean bank deposit of the entire amount but rather a refundable partial deposit to show good faith.

 

[ksanders]

I assume the following took place ... please correct me if I am wrong ...

1. The offer was conditional on a survey and sea trial.
2. The deposit doesn't mean bank deposit of the entire amount but rather a refundable partial deposit to show good faith.

Of course.

 

[dhays]

Kevin, I understand the buyers time issue. That is exactly how I purchased my current boat. I made an offer on the boat sight unseen subject to inspection, seatrial, and survey. I was in Tacoma and the boat was in Marina Del Rey. The buyers accepted the offer and I gave my broker a check for 10% of the total purchase price. It was a month before the seatrial and survey took place. I need to get tickets, find a surveyer, get the yard and travel lift scheduled and pick a time that both my broker and the selling broker was free. All of that ended up happening on one day. My broker and I flew down in the morning, met the surveyor and brokers at the boat, did the seatrial and on the water inspection, then went back and had the boat hauled out to finish the inspection. We signed the purchase contract and then flew back home.

It is tight, but it can be done. I don't see a problem with asking for a deposit before the seatrial and survey, but it only takes a week for a check on a US bank to clear and it is very easy to simply wire funds to a brokers account. They are used to dealing with escrow funds. If the buyer doesn't have the resources to wire funds, I would be concerned a the seller. If the seller can't get a US check to clear in a timely manner so wants cash, I would be concerned as the buyer.

 

[Richard W]

I assume the following took place ... please correct me if I am wrong ...

1. The offer was conditional on a survey and sea trial.
2. The deposit doesn't mean bank deposit of the entire amount but rather a refundable partial deposit to show good faith.

Of course.

THANKS ... just wanted to clarify and enforce my understanding as some of the discussion in this topic could suggest different conditions to uninitiated.