# Boat Broker Ethics



## tanksalot (Oct 28, 2006)

I had been dealing with a broker regarding a Bristol 34. This was a long-distance relationship, and I have never seen a Bristol 34. 

As time passed, I became seriously interested in the Bristol 34, and had arranged for a surveyor to give the boat a quick once-over. I had offered the broker a deposit, since I didn't expect him to hold the boat for me based on a phone conversation. His response was, essentially, "we're both gentlemen, and I'll hold the boat until your representative has had an opportunity to view the vessel". 

Looking recently on yachtworld, I didn't see the boat listed. Calls to the broker went unanswered. The surveyor did return my call, and told me the boat was sold. Are the ethics of the boat-brokerage business as low as that of the used-car business?

This post has a mildness to it that IS IN NO WAY representative of my feelings. Hopefully this story will be helpful to someone. Also, in considering a distant boat, how the hell could I have prevented this??

A call to the home office of the brokerage produced 5 min. of BS.

Tanksalot


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## Squidd (Sep 26, 2011)

> I had offered the broker a deposit, since I didn't expect him to hold the boat for me based on a phone conversation. His response was, essentially, "we're both gentlemen, and I'll hold the boat until your representative has had an opportunity to view the vessel".


I was gonna say Money talks BS walks.. but I see you offered a deposit..

So obviously ..one of you is not a "gentleman"...


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## sawingknots (Feb 24, 2005)

boat brokers and used car salesmen, both always wear big gaudy pinky rings and toothy smiles


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## tanksalot (Oct 28, 2006)

I *JUST* realized the thinking behind the boat broker's behavior. If he commits to me, via a deposit etc. (legally binding), then he loses opportunities with other prospects who might have called, planned to stop by etc. If he tells me he's "holding it for me", then he's free (except for any possible guilt feelings) to sell it to whomever shows up with $$$$. He has no financial motive for keeping his commitment, since it's verbal and both his and the seller's goals are satisfied as soon as the boat is sold, to anyone. Until there's a contract, I'm just a voice on the phone.

From my viewpoint, I'm reluctant to put down money on a boat that I've never seen, even similar models, so my actions are understandable. Hopefully this experience will teach someone out there something. It did teach me.

Tanksalot


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## deniseO30 (Nov 27, 2006)

tanks.. chalk it up to lesson learned.. if you can, by all means try local to yourself. 
long distance is a PITA!


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## Faster (Sep 13, 2005)

deniseO30 said:


> .....long distance is a PITA!


Indeed... we have a friend who was shopping for a substantial trawler (GB36 or better)
He made trips to SF, Chicago, and SanDiego upon assurances from the broker that the boats were pristine and exactly what he was looking for (after detailed discussions)

In all instances he knew within 5 minutes of stepping aboard he'd wasted his time and money.

Certainly adds to the overall cost of purchase, not mention hiring surveyors and yards with no local knowledge or reference.

OTOH we know several people who have successfully bought boats at some distance and trucked them home, so if you are careful and maybe a bit lucky it can work.. it does expand the selection pool, and that is something worthwhile.


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## sailpower (Jun 28, 2008)

You know, it’s the owners boat not the brokers. The broker can’t “hold it” for anyone.

If you offered to sign a purchase agreement with deposit and a price that the owner agreed to subject to your personal inspection, survey, etc and the broker said not to bother than he is in the wrong big time.

If you just wanted to make some kind of deposit without the above than it would be pretty non-binding anyway.

If an offer came in from a third party before you had a ratified contract than the owner can do what he wants and the broker is bound to follow his direction.

Maybe some more information in order to answer your question?


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## tanksalot (Oct 28, 2006)

Buying a $20K boat, sight-unseen, and never having seen a similar model before would be scary for anyone of sound mind, I believe. That is the position I was in. I was following the advice of one of the moderators of this forum, who is far, far more knowledgeable in sailboat characteristics/construction than I would ever be.

If the boat "felt good" when I saw it, had adequate storage (for my wife) and needed only reasonable work, I would buy it. I was "close enough" towards a purchase to initially arrange a full survey (with a $400 haul out fee involved, as well) when I subsequently decided that having the surveyor look it over first to see if the trip and expense of a full survey was warranted was a more reasonable approach.

When I told the broker this, he agreed that having the full survey done would be premature for a boat that I had never seen. He had agreed to hold it for me until the surveyor had taken a look at it. He did say he would continue to show it, but that he wouldn't sell it until my surveyor had looked at it. IF HE HAD PROVIDED ANY SCENARIO THAT WOULD ALLOW ME TO LOCK-IN MY PURCHASE CONTINGENT UPON THE SURVEYOR'S INSPECTION I WOULD HAVE TAKEN IT! 

My plan was to have the surveyor look at it and if it was in reasonable shape, I'd drive the 13 hrs. and participate in the survey, just for the education on MY boat. If the survey went OK, I'd buy the boat. 

In retrospect, I should have said "I'll buy it", read the contract carefully, then taken advantage of any escape clause. Tough lesson learned.


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## sailpower (Jun 28, 2008)

tanksalot said:


> Buying a $20K boat, sight-unseen, and never having seen a similar model before would be scary for anyone of sound mind, I believe. That is the position I was in. I was following the advice of one of the moderators of this forum, who is far, far more knowledgeable in sailboat characteristics/construction than I would ever be.
> 
> If the boat "felt good" when I saw it, had adequate storage (for my wife) and needed only reasonable work, I would buy it. I was "close enough" towards a purchase to initially arrange a full survey (with a $400 haul out fee involved, as well) when I subsequently decided that having the surveyor look it over first to see if the trip and expense of a full survey was warranted was a more reasonable approach.
> 
> ...


Yep, sounds like the broker was pretty loose with his assurances given that he had no authority to make them.

Your last sentence is probably the way to go in the future.

BTW, did you see this boat? 73 Bristol 35 CB Model sailboat for sale in Virginia

It's more than the first one but if you were going to improve the first one then....? Don't know if there is a broker involved but you can always make an offer!

Good luck.


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## Minnewaska (Feb 21, 2010)

Boat Brokers can not ever be bitten by a shark. Professional courtesy.


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## bljones (Oct 13, 2008)

You and the broker are both at fault.
The broker made assurances that were not his to make, essentially telling you what you wanted to hear. Maybe he didn't think the boat would sell anytime soon, so he felt comfortable blowing smoke. It was the wrong thing to do, and was not fair or gentlemanly...
BUT...
YOU sat on your ass. If you're really interested in the boat you get in the car and go see it. if you can't be bothered, then you're not that interested, and you're just kicking tires.
If you're just kicking tires, asking the broker to "hold" the boat for you is wasting his time and the seller's, which is not fair or gentlemanly.

If you're serious, act serious. If you're not, then don't expect a broker or seller to take you seriously.


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## KIVALO (Nov 2, 2011)

Good post. As a real estate agent I sympathize with the OP however the brokers first and highest duty is to the boat owner(seller). However he(broker) should have been more upfront and honest with the OP and told him the truth. Sometimes I really hate brokers(real estate brokers more than most) who use deceitful tactics that benefit themselves.

I am curious though, for larger boats, do they not have clauses embedded into the purchase offer for satisfactory completion of a survey? In real estate we have a home inspection clause that allows the potential buyer to walk away if the inspection is not up to their liking.

Brad
s/v KIVALO



sailpower said:


> You know, it's the owners boat not the brokers. The broker can't "hold it" for anyone.
> 
> If you offered to sign a purchase agreement with deposit and a price that the owner agreed to subject to your personal inspection, survey, etc and the broker said not to bother than he is in the wrong big time.
> 
> ...


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## Brent Swain (Jan 16, 2012)

A friend had a Campbell River broker sell her a boat, then steal gear of it after it had been sold. I have been told that is common.


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## Minnewaska (Feb 21, 2010)

KIVALO said:


> .....I am curious though, for larger boats, do they not have clauses embedded into the purchase offer for satisfactory completion of a survey?......


Absolutely.


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## sailpower (Jun 28, 2008)

Brent Swain said:


> A friend had a Campbell River broker sell her a boat, then steal gear of it after it had been sold. I have been told that is common.


Absolutely true. A few years ago when business was brisk and there were lots of settlements, approximately 80% of the world's brokers were in jail for larceny committed after the sale.

Now that there are fewer closings a lot more brokers are home with their families hoping that business doesn't improve.

I mean it must be true because someone said it was "common" and it's posted on the internet.

Did your friend report the theft? Press charges? How did the trial go? How did the other trials go?


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## puddinlegs (Jul 5, 2006)

You know, there are brokers who are schlubs, and brokers who run a good, sound, honest business. My favorite schulb line is, "you'd better make an offer, one just came in yesterday." Of course there was no offer. Came in about 6 months later, same guy, told the same thing. I mentioned he used that one last time as I was walking out the door. That particular brokerage folded about a year ago.

The good guys. We've become very good friends and spend a good deal of time sailing together. Good brokers out there, pretty much like any business. Unfortunately I think they're probably harder to find in the 'small' boat market, i.e., 90k or under, which is what applies for most of us.

If you're looking at a brokered boat, find a broker you trust and have them be a 'buyer's' broker. They split commission with the selling broker, so they have your interest in mind. The good thing is they can steer you toward boats that might not initially have been on your radar after they help you figure out what you actually want rather than what you think you want.


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## sailingfool (Apr 17, 2000)

tanksalot said:


> Buying a $20K boat, sight-unseen, and never having seen a similar model before would be scary for anyone of sound mind, I believe. ...


Yes, a hard-to-believe circumstance, one that the broker knew to be pretty unlikely.

If you dont have a signed agreement, you have nothing. A broker who "held" a boat for a maybe looker, when a real buyer walked in the door, would face a serious legal situation with the seller.

I would think few brokers would want to take a contract from someone who had never seen the model, let alone the boat he was selling, why tie it up on a maybe?

Nothing is real until you have looked at a boat and decided thar you want to buy it. Then make an offer, sign an agreement, hire a surveyor, pay and sail into the sunset.

The only surprising thing is that the broker apparently gave you so much phone time.


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## Minnewaska (Feb 21, 2010)

puddinlegs said:


> .....If you're looking at a brokered boat, find a broker you trust and have them be a 'buyer's' broker. They split commission with the selling broker, so they have your interest in mind......


I've done this with reasonable success. If you have a specific brand in mind, your closest dealer could have a used boat broker and they can help you find inventory all over the world. I like this method, as you then also have a relationship with the source for questions, parts and advice after you buy.

However, you have to remain very careful. While I've had "my buying broker" work hard at sorting out the options, they don't get paid unless you buy something. Technically, there is no such thing as a buyer's broker, if they are splitting the commission. They still work for and are legally responsible only to the seller, even though they loosely throw the "buyer's broker" term around. They are the "buyer's broker" only in the sense that they are identified separately in the contract to get paid their half of the commission. They are only responsible to you, if you pay them separately and in addition to the commission, which I've never heard happen in boat buying. I do know it happens in some high end aircraft brokering.


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## denverd0n (Jun 20, 2008)

Brokers are human, and like all humans they vary in their degree of ethics.

That said, I have to wonder how long it was between the conversation where the broker told you he would "hold" the boat and when the surveyor visited. If it was more than, say, three days then I would not blame the broker at all, and see not one thing wrong with his ethics (though he probably should have called and told you when the boat was sold). No one is ever going to "hold" a sale under those conditions for more than a very few days.

In any case, chalk it up to experience and good luck finding another boat.


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## Tim R. (Mar 23, 2003)

I tried purchasing a boat through a broker once. All he did was steer me to all the boats his broker buddies needed to sell and were not even close to what we wanted. We got exactly what we wanted privately.

I did once purchas a boat through a broker. He dropped us off at the boat to let us take a look while he went back to his office. We examined the boat and returned to his office. We offered the asking price(10-15k below comparables) and said we would not be involved in any type of bidding war. Within two hours the owner accepted our offer. The purchase went very smoothly. He was one of the better ones.

All other boats we have owned were bought and sold privately. 

When shopping for boats, I have had too many dead end conversations with brokers who though we were not serious enough or just not bothered to take the time to respond at all. Lousy photos, lack of details, incorrect information, the list is endless. 

How many have looked at boats that were presented as "pristine" where the owner never even cleaned the boat? We have easily spent $5,000 over the years on time and travel expenses to look at boats that were represented badly.


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## chef2sail (Nov 27, 2007)

You may be makoing an assumption here also. Usually boats are listed with a primary broker and ANY broker can have the oppertunity to show it. Obviously someone who came along who put not only a deposit on the boat but also put a contract on the boat.

It is my understanding that once a contract is on the boat, anotherone can not be put on it, HOWEVER that does not mean that they stop showing the boat. This is for the obvious reason that the person could put a contract on it, wait a couple of weeks (takes a couple to arrange survey)...find a nother boat or decide not to purchase the boat and the seller would be out a couple of weeks showing the boat activity.

There are lessons here:

1-If you are serious about a boat sign a contract. You were talked out of this. Not sure what a deposit means, but we have always had to sign contracts to lock it up.
2- If you are not willing to do this and need to wait to see the boat because it is far away, do it quickly. The broker/ seller is under no obligation to hold the boat for you. He is under obligation to get the boat sold as quickly as possible
3-Try to look at boats in a closer area so you can do this quickly.

In my opinion, and I have no love of brokers although ours is very good and upfront, I dont find real fault here with the broker. The fault is that your process is flawed. Remember his object is to get the boat sold.

Dave


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## Tim R. (Mar 23, 2003)

chef2sail said:


> ...In my opinion, and I have no love of brokers although ours is very good and upfront, I dont find real fault here with the broker. The fault is that your process is flawed....
> Dave


I disagree. The broker made a verbal agreement with the OP. That was the mistake here.

Sure the OP should have been more informed but the broker never should have implied that he would hold the boat.


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## tanksalot (Oct 28, 2006)

Dave:

Thanks for summing up the lessons learned. I agree on all points. 

At one point I had decided to have a full survey done, and the broker said that he'd need a contract signed for pulling the boat for the bottom inspection. AT THAT POINT I SHOULD HAVE SAID "send the contract". Then I could have read it, signed it, put down a deposit and had the surveyor do a "quick" inspection. If the surveyor said it was worth pursuing, then I could have driven down in a few days and watched the full survey while evaluating the boat.

I subsequently decided that I'd hold off on a full survey until the surveyor could get back to me on the quickey look-see. No contract; no boat.

Now I need to see more boats to get my hyper-focus off of Bristol 34's.

Tanksalot


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## chef2sail (Nov 27, 2007)

> I disagree. The broker made a verbal agreement with the OP. That was the mistake here.
> 
> Sure the OP should have been more informed but the broker never should have implied that he would hold the boat- Treilly


Tim, this goes back to my first point



> Usually boats are listed with a primary broker and ANY broker can have the oppertunity to show it.- Chef2sail


You are assuming it was this broker who signed a contract with another party. It could have been another one who had the listings also Also we dont know how much time took place here which tanksalot got together a surveyor. This can be done in a couple of hours and done quickly if you are truly interested

When we shopped I had a broker ( Dave-Crusader in Annapolis) who was my broker. He dealt with other borkers for me. In addition the process was quick and expeditied. When I determined a boat I wanted to see, he got the info...researched it...contacted other parties. When I was serious about a boat I was e mailed the contract within 2 hours.

You need to be prepared to act decicively when the right boat comes along and start the process by signing a contract ( you can back out later). 
You need to have a broker who works for only you.


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## chef2sail (Nov 27, 2007)

Tansalot,

If you are truly in love with the 34 Bristols....wait foir the one you want dont settle. I am in the process now, waiting for a particular boat and model.

Dave


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## GeorgeB (Dec 30, 2004)

Tanks, when you sign a contract, putting down a deposit to bind it, and later you back out, you will then forfeit your deposit. In a way, the broker was looking out for your interests by not taking your money. I think that the lesson here is even in a down market, desirable boats still sell fast and you need to be in the position to act quickly. When was your surveyor scheduled to go down and inspect the boat?


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## Minnewaska (Feb 21, 2010)

While I know of more slimy brokers than slimy buyers, to be sure, there are both.

I've even seen it advised here that a buyer do a big bait and switch on their offer. Bid high to secure the boat and then pound the seller down with anything in the survey. Personally, I find that distasteful. Problems must be negotiated, but your offer should stand, if the boat is as it appears. Buyers are also notorious for not being able to come with the cash after they strike a deal. They often weasel out on other grounds.

To be fair, everyone gets a bit jaded in the process and the brokers probably feel as distrustful of buyers and have plenty of their own stories too.


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## tanksalot (Oct 28, 2006)

George B:

This week; but, it's been at least 10 days until he was going to be in the area. I was somewhat concerned that this would happen, but the only alternatives I saw were driving down myself or finding a different surveyor.

As far as the contract goes.....so if I see a boat online & "far away" and want to make sure I like it before I buy it, how do I do that? If I sign a contract and then don't like it, I lose my deposit?? If the survey finds ???? (real bad), I lose my deposit? I'm not clear on how this normally works.

Tanksalot


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## Minnewaska (Feb 21, 2010)

GeorgeB said:


> Tanks, when you sign a contract, putting down a deposit to bind it, and later you back out, you will then forfeit your deposit.....


Practically speaking, that doesn't happen. Contract are always subject to the buyer's satisfaction with the survey and you can be unsatisfied on any grounds by a defined date. Pass that and you're stuck.


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## Donna_F (Nov 7, 2005)

Minnewaska is correct. If you put a deposit down, generally that's just to show that you are serious and the contract will say that the final sale is based on a successful survey, acceptance by the seller of the offer based on that survey, etc.


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## KIVALO (Nov 2, 2011)

Are you certain that is the case? In real estate we have buyer's brokers and there are very clear and distinct differences between buyer's agency & seller's agency and agents must act accordingly.



Minnewaska said:


> However, you have to remain very careful. While I've had "my buying broker" work hard at sorting out the options, they don't get paid unless you buy something. *Technically, there is no such thing as a buyer's broker, if they are splitting the commission. They still work for and are legally responsible only to the seller*, even though they loosely throw the "buyer's broker" term around. They are the "buyer's broker" only in the sense that they are identified separately in the contract to get paid their half of the commission. They are only responsible to you, if you pay them separately and in addition to the commission, which I've never heard happen in boat buying. I do know it happens in some high end aircraft brokering.


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## chef2sail (Nov 27, 2007)

> Tanks, when you sign a contract, putting down a deposit to bind it, and later you back out, you will then forfeit your deposit- GeorgeB


This is not correct in what I have found. Minnie and DrFerron are correct. The deposit is usally 10% of the asking value and it is to insure that you are serious. That 10% is usally a check, MO or funds which the brokler must hold contingebnt upon the sale. If The boat sells then it it deducted of course from the final price. Hohw else is the seller protected from "lookers" or those who really are not going to purchase. The 10% shows more than a casual interest.

If there are issues or the buyer after survey or even after looking again at the boat finds any issue ( easy to find) the contract can be voided and the WHOLE deposit is returned.

Please understand that for the SERIOUS buyer this is not a deterent. For the CASUAL looker it will seem unreasonable. The deposit seperates the the wheat from the chaff.

Dave


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## GeorgeB (Dec 30, 2004)

Tank, in California, Brokers are licensed by the State. The license is similar to a real estate license so I assume that the transactions have to follow the same general rules. Unlicensed salespeople can work for a broker. The deposit binds the contract which is after your offer is accepted. If a boat is being listed at, say, $20k and you offer $15k and send in a deposit check, you still do not have a binding contract until your offer is accepted. You can also lose your deposit if you cannot put together things like financing. I’m not quite sure what happens to the deposit if there is a dispute in the survey. I just so happen to be meeting with one of my broker friends on Sunday and I’ll ask him then. I know from my own experience, that the survey findings are negotiable and are factored into the final agreed price. I personally have negotiated survey findings into a final price as well as rejected all the survey findings (buyer bought the boat anyway).

There is no easy way to buy a boat outside of your locality. I know lots of people who spent a lot of money traveling up and down the coast looking for the right boat. Expect to kiss a lot of frogs. To aide in your success, you need to get your ducks lined up and have your financing or at least the deposit handy and somebody already identified to do a quick “look over”. I think there is a thread here on Sailnet of people willing to do an initial survey. Where again are you located and where are your target regions?

Once you have bought a boat outside your locality, you still need to figure out how to commission it and do the delivery. Most used boats sold aren’t exactly in “sail away” condition if you are thinking of moving them a couple hundred miles or more.


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## chef2sail (Nov 27, 2007)

> However, you have to remain very careful. While I've had "my buying broker" work hard at sorting out the options, they don't get paid unless you buy something. Technically, there is no such thing as a buyer's broker, if they are splitting the commission. They still work for and are legally responsible only to the seller, even though they loosely throw the "buyer's broker" term around. They are the "buyer's broker" only in the sense that they are identified separately in the contract to get paid their half of the commission. They are only responsible to you, if you pay them separately and in addition to the commission, which I've never heard happen in boat buying. I do know it happens in some high end aircraft brokering. -Minnewaska


Not sure I completely agree with this statement. It is true that the broker get paid a % of the boat selling. If it is a boat which is listed with them...thier company the % is usually 10% if it is listed with another broker usually 5%. That doesnt mean the the broker I have sought out to look for the boat for us doesnt work for us.

Good brokers have a reputatuion and realize referrels are more by word of mouth vs any other way. I recommend our broker to others because of his attitude, knowedge, and the amount of homework, things he can find out about the boats I am looking at. he has dissuaded us from certain vessels beforehand. He already knows he will be paid when I plurchase the correct boat for us and works accordingly.

There are plenty of slimy brokers/ buyers. Thats why its important to find the ones which are not. Thats what recommendations from others are for and why REPUTATIONS are most important in this business. Thats why we have gone with the broker we have. Choose carefully in your area. Check reputations. Always keep in mind Caveat Emptor.

Dave


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## chef2sail (Nov 27, 2007)

> The deposit binds the contract which is after your offer is accepted. If a boat is being listed at, say, $20k and you offer $15k and send in a deposit check, you still do not have a binding contract until your offer is accepted. You can also lose your deposit if you cannot put together things like financing. I'm not quite sure what happens to the deposit if there is a dispute in the survey.-GeorgeB


Again your assumptions are incorrect

I just looked at my last contract, which I backed out of as the boat did not survey well

The language is

3.
ACCEPTANCE OF THE YACHT: The BUYER shall notify the SELLING BROKER of his acceptance of 30 the YACHT and inventory, or his rejection of same. Such notice which shall be in writing, shall be received no later than five o'clock p.m. local time on ___________________. If said notice has not been timely received, the BUYER shall be deemed to have rejected the YACHT and inventory in its present condition, subject to the terms, if any, of Paragraph #7. IT IS THE BUYER'S RESPONSIBILITY TO OBTAIN ANY ASSURANCES HE REQUIRES REGARDING THE AVAILABILITY OF SATISFACTORY FINANCING AND INSURANCE PRIOR TO THE ABOVE MENTIONED DATE.
4.
TERMINATION OF AGREEMENT: If the BUYER gives notice of his intention to reject the YACHT 37 under the terms of this Agreement, such notice shall constitute termination of the BUYER's obligation to purchase and the SELLER's obligation to sell, and the BUYER and the SELLER both authorize the SELLING BROKER to return the deposit to the BUYER, after deducting any fees and charges incurred against the YACHT by the BUYER, or by the BROKERS on behalf of the BUYER, including the cost of the survey and related expenses.


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## denverd0n (Jun 20, 2008)

GeorgeB said:


> You can also lose your deposit if you cannot put together things like financing. I'm not quite sure what happens to the deposit if there is a dispute in the survey.


It's just like with real estate. You put a clause in the offer that says it is contingent on getting acceptable financing. Then, if you can't, you get your deposit back. If you REQUIRE financing, and do not put a financing contingency in your offer, then you are making a very big mistake and may well lose your deposit. If you don't require financing, then obviously you don't need a clause like this.

As for the survey, the offer normally includes a clause that says it is contingent on a survey that is acceptable to the buyer. It may not seem really fair, but that is essentially a "get out of jail free" card for the buyer. After the survey the buyer can back out of the deal and get their full deposit back (though they will have had to pay for the survey). The only thing they have to say is "the survey was not acceptable to me."

Again, this is much like buying a house. Every time I have bought (or sold) a house (six times) it has included a clause that said the sale was contingent on an inspection that was acceptable to the buyer.

If your offer does NOT include a clause like this one then DO NOT SIGN IT! Otherwise you're going to end up in a debate with the seller over every little thing in the survey. Here in Florida at least, every reputable broker uses a boilerplate for the offer that includes such a clause.


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## denverd0n (Jun 20, 2008)

chef2sail said:


> Not sure I completely agree with this statement. It is true that the broker get paid a % of the boat selling. If it is a boat which is listed with them...thier company the % is usually 10% if it is listed with another broker usually 5%. That doesnt mean the the broker I have sought out to look for the boat for us doesnt work for us.


If the broker is being paid by the seller, out of the commission, then the broker has a "fiduciary responsibility" to the seller. That means, like it or not, the broker is working for the seller.

Think of it this way. You work for a company. The company sends you to a client's location to do some work specifically for that client. Do you now "work" for the client? No. If you are an ethical and responsible person, obviously, you try to do right by the client. But you still work for the company that is paying you, and in the end your responsibility is to them.

Having said that, some states have laws that define a "buyer's broker" (or "buyer's agent") and specify that the broker is then fully responsible to the buyer, despite the fact that they are being paid by the seller. In that case, clearly, the relationship is different. You need to be sure, though, that if you live in one of those states, you sign a contract with the broker that specifies that he/she is acting in the capacity of a "buyer's broker."


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## lancelot9898 (Dec 30, 2008)

This clause about getting your deposit back under certain conditions seems like a iron clad protection in theory, but I can tell you of a case in which the deposit was never returned. It was a real estate deal in Maine decades ago where the standard clause stated that if I was unable to get the required financing that the deposit would be returned. Six weeks was spent answering the banks questions and supplying paper work and a day before closing the stock market drops significantly. (1987 I believe) The bank said not to come for the scheduled closing and there was no piont in presueing the loan futher. Our broker agreed that going to another bank would not be useful since if one bank refused then another one would too. Plus it had been 6 weeks trying to get approval. However our broker did not hold the deposit and the other broker would not release it, since the seller refused to release it. The story goes on and on....The point is that no matter how iron clad the contract, the possession of the money is the most important part and in many cases lawyers are needed to be hired to retrive it. $$$ And being out of state never helps.


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## GeorgeB (Dec 30, 2004)

Don’t contingent offers take a back seat to a firm offer? Why bind an offer at all with a deposit if it is meaningless? This has been an interesting discussion and I am definitely going to talk to my broker and get the “real” answer rather than speculate…


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## tanksalot (Oct 28, 2006)

The above explains a lot. When it cost $$$ for the haul out as part of the survey is when the broker brought up the contract with deposit. They would (I guess) use part of the deposit to pay for hauling the boat, but I would get back the remainder if the survey was "unacceptable". Next time I either go in person or get a signed contract with deposit.


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## Donna_F (Nov 7, 2005)

chef2sail said:


> This is not correct in what I have found. Minnie and DrFerron are correct. The deposit is usally 10% of the asking value and it is to insure that you are serious. That 10% is usally a check, MO or funds which the brokler must hold contingebnt upon the sale. If The boat sells then it it deducted of course from the final price.
> Dave


That was how our boat was purchased. Broker asked for a personal check for the deposit and once our offer was accepted, the check was deposited when they received the money order for the balance. It was at least four days between offer and acceptance so the broker had plenty of time to deposit the check if he wanted to.

I have concluded, based on the broker stories in this forum, that we may have gotten lucky with our broker. I certainly hope he doesn't retire before we're ready to buy our next boat.


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## denverd0n (Jun 20, 2008)

GeorgeB said:


> Don't contingent offers take a back seat to a firm offer?


Not sure what you mean by "take a back seat." If you have two offers in hand, and one has contingencies and the other doesn't, then you would take that into consideration and accept the best offer. If you have accepted a binding offer that has contingencies, though, you can't just get out of it by saying, "Well, I got another offer without contingencies so I'm going to go with that one."


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## denverd0n (Jun 20, 2008)

tanksalot said:


> They would (I guess) use part of the deposit to pay for hauling the boat, but I would get back the remainder if the survey was "unacceptable".


No. The way it is usually done is that you pay for the haul-out and survey completely separately from the deposit. In fact, in Florida, the broker is legally required to put the deposit into an escrow account and it stays there until the sale is closed or the contract is voided.


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## tanksalot (Oct 28, 2006)

Denverd0n: That makes sense. It keeps the money "cleaner".

Tanksalot


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## Donna_F (Nov 7, 2005)

denverd0n said:


> No. The way it is usually done is that you pay for the haul-out and survey completely separately from the deposit.


Yep. That's how it was done with our boat.

And if you can, get the surveyor to go on the sea trial with you. Ours did and spent the time going over, under, in, and around stuff and answering our questions. Since the boat was at a yacht club we had to sail to a yard to have it hauled so it worked out well. The surveyor also went up the rigging, which I understand is unusual.


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## GeorgeB (Dec 30, 2004)

So an offer only binds the seller? What is the purpose of the deposit anyway if the offeror can back out at any time and for any reason and still recover all of his deposit? The haul out and survey are paid for by the buyer.


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## sailingfool (Apr 17, 2000)

GeorgeB said:


> So an* offer *only binds the seller? What is the purpose of the deposit anyway if the offeror can back out at any time and for any reason and still recover all of his deposit? The haul out and survey are paid for by the buyer.


What do you mean by offer? An offer binds no one. If an offer leads to an agreement to sell, then both parties sign a Purchase and Sale form, the YBAA being commonly used (http://www.oceanmarinellc.com/brokerage/PurchaseandSaleAgreement.pdf).

A signed agreement binds both parties. However, the standard form provide the buyer the opportunity to have the agreement cancel itself if he/she does not send an acceptance within the acceptance time period. The buyer does not need to give a reason for not accepting the boat, just needs to not act. Should the buyer accept the boat, he/she is bound to complete the sale.


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## denverd0n (Jun 20, 2008)

GeorgeB said:


> So an offer only binds the seller?


No, it binds both parties. Once the offer has been accepted, it is a legally binding contract. It's just that the way these contracts are normally done (again, just like with real estate) the buyer has options for backing out if they want to.



GeorgeB said:


> What is the purpose of the deposit anyway if the offeror can back out at any time and for any reason and still recover all of his deposit? The haul out and survey are paid for by the buyer.


The question sort of answers itself, doesn't it? A buyer who is not serious about wanting to buy is not going to tie up thousands of dollars for several weeks, nor are they going to pay hundreds if not thousands of dollars for a survey just on a whim. The deposit proves that the buyer is seriously interested in buying the boat. Paying for the survey means that he now has some skin in the game. As a buyer you're not going to back out at that point for a frivolous reason (even though the law and the contract would allow you to).


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## GeorgeB (Dec 30, 2004)

Why wouldn’t I make my offer contingent upon a satisfactory test sail and wave the survey? That way I can go out for a nice afternoon sail on a hot race boat and collect my check after the ride? I figure I can wrap all of this up in a single weekend. Now, I just have to find a broker I don’t respect and be willing to tick him off…


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## denverd0n (Jun 20, 2008)

DRFerron said:


> The surveyor also went up the rigging, which I understand is unusual.


Yes, it is. Most surveyors just inspect the rig as best they can from deck level. Some surveyors will go up the mast for an additional fee. Some buyers get a professional rigger to do a separate survey specifically of the rigging.

Same with engines. Most surveyors will do a once-over of the engine, but they do not usually do an extensive mechanical inspection of it. If you want that done then you normally either pay them more, or you hire a mechanic to do a specific survey of the engine.

If you're spending a lot of money on a boat that has a few years on it, it might be worth it to hire separate surveys of the boat, the rigging, and the engine. You just have to decide for yourself how far you want to go to be satisfied with the purchase.


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## tanksalot (Oct 28, 2006)

I've got a broker for you!


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## denverd0n (Jun 20, 2008)

GeorgeB said:


> Why wouldn't I make my offer contingent upon a satisfactory test sail and wave the survey? That way I can go out for a nice afternoon sail on a hot race boat and collect my check after the ride?


You're not going to just collect your check after the ride. It's going to take some time. If you're willing to tie up that much money for a month or so, just to go for a day-sail, I guess you could do that.

But no one is going to let you show up, look at the boat, write a check, take it for a sail, and then get your check back all in one day, nor even in one weekend. At the very least, the process takes several weeks.


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## sailingfool (Apr 17, 2000)

GeorgeB said:


> Why wouldn't I make my offer contingent upon a satisfactory test sail and wave the survey? That way I can go out for a nice afternoon sail on a hot race boat and collect my check after the ride? I figure I can wrap all of this up in a single weekend. Now, I just have to find a broker I don't respect and be willing to tick him off&#8230;


One reason is most sellers would laugh at the idea of a test sail...


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## GeorgeB (Dec 30, 2004)

Why would this take several weeks? My offer would match the sellers price, I'm waiving the survey, so all I need is the test sail which out here is Monday or Tuesday. Do my sail, then collect my check. All I have to do is tick off a broker... Again, what is the purpose of the deposit? If, in the scenario, it doesn't bind anything on the buyer's end? I'm definitly talking to my broker this weekend! Kind of a sidbar question, so assuming that the buyer isn't bound to the contract (contingent on being "satisfied") can I as a seller, charge the buyer for bottom paint when they haul for a survey? I'm thinking if the buyer power washes off a few hundred dollars of paint (boat has a faired and sprayed bottom), shouldn't I be compensated? I'd be glad to refund the cost upon completion of the contract.


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## Donna_F (Nov 7, 2005)

GeorgeB said:


> Why would this take several weeks? My offer would match the sellers price, I'm waiving the survey, ...


We tried to waive the survey and the broker wouldn't let us. Even offered more than the asking price because we wanted the boat and the last one was sold within hours of us boarding it. He wouldn't allow that, either.


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## denverd0n (Jun 20, 2008)

sailingfool said:


> One reason is most sellers would laugh at the idea of a test sail...


Don't know how it goes where you are, but most boat sales here in Florida include some sort of a test sail. Not a day of casual cruising up and down the bay, of course, but at least an hour or two so that the buyer can get the sails up and down, run the engine long enough to warm it up, that sort of thing. The last time I bought a boat this was accomplished by me, the surveyor, and the broker sailing the boat out and around to be hauled for the dry-land part of the survey, and then again sailing it back to its slip afterwards.

(I should say "the last time I bought a boat large enough to involve a broker and surveyor." The last time I bought a boat was actually just recently, it is a little sailing dinghy, and I just gave it a good looking over while it was sitting on its trailer.)


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## tommays (Sep 9, 2008)

I kind of find it hard to believe to can just blow off a sales contract if the survey comes back fine or the seller will take care of any minor deficiencies and you sort of kind of don't care for how the boat sails ?


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## denverd0n (Jun 20, 2008)

GeorgeB said:


> Why would this take several weeks?


The offer is a legally binding contract. It has to be notarized. It has to be presented to the seller. Then the seller has to sign it--again, in front of a notary. The broker collects your deposit with the offer. It goes into an escrow account. You're not just going to have your original check handed back to you. Then you're going to have to schedule a time for the test sail--again, they're not going to let you take the boat out on the same day that you make the offer and hand over the check. Then you cancel the contract. Oops! More legally binding papers have to be signed. And then the broker finally issues a check from their escrow account to refund your deposit. All this takes time. Again, no way you just show up in the morning, look at the boat, make an offer, hand over a check, go out for a day of pleasure sailing, and then get your check back at the end of the day. No way.

But if you think that will work, by all means give it a try.


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## tommays (Sep 9, 2008)

DRFerron said:


> We tried to waive the survey and the broker wouldn't let us. Even offered more than the asking price because we wanted the boat and the last one was sold within hours of us boarding it. He wouldn't allow that, either.


The rules seem to vary a LOT state by state BUT I know (i really do) TWO internet boat friends that ended up in court over boat motors failing within time X and a survey sure would have helped the sellers


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## denverd0n (Jun 20, 2008)

tommays said:


> I kind of find it hard to believe to can just blow off a sales contract if the survey comes back fine or the seller will take care of any minor deficiencies and you sort of kind of don't care for how the boat sails?


And yet that is exactly how most contracts are written. It is just like buying a house. Take a look at the contract from the last house you bought or sold and you will see, almost certainly, that the buyer had the option to cancel the sale based on the results of the inspection--and without any need to explain to the seller WHY he did not like the results.


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## Donna_F (Nov 7, 2005)

tommays said:


> The rules seem to vary a LOT state by state BUT I know (i really do) TWO internet boat friends that ended up in court over boat motors failing within time X and a survey sure would have helped the sellers


We would have had the survey done for the insurance after we got the boat home.

And, we just put in a brand new engine.  But the surveyor told us it was on its last leg and there's only so much more we knew to expect out of a 30-year old engine anyway so we would have done it either way.


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## Minnewaska (Feb 21, 2010)

chef2sail said:


> Not sure I completely agree with this statement. It is true that the broker get paid a % of the boat selling. If it is a boat which is listed with them...thier company the % is usually 10% if it is listed with another broker usually 5%. That doesnt mean the the broker I have sought out to look for the boat for us doesnt work for us.
> 
> Good brokers have a reputatuion and realize referrels are more by word of mouth vs any other way. I recommend our broker to others because of his attitude, knowedge, and the amount of homework, things he can find out about the boats I am looking at. he has dissuaded us from certain vessels beforehand. He already knows he will be paid when I plurchase the correct boat for us and works accordingly.
> 
> ...


Chef,

I think we are probably splitting hairs in our take. I too have had "buyers brokers" that have worked hard for me, found me good inventory, told me of the dogs that wern't so obvious in the listings (one was wrecked and no mentioned of it), etc.

However, can we agree there is an inherent conflict of interest in the system? They are being paid by the seller, not the buyer, and I believe have a fiduciary obligation to whomever is paying them. I've never seen language in a contract that said otherwise, or addressed it at all. The term "buyers broker", in contracts I've signed, is only defined to delineate who gets paid what. They also don't get paid at all, unless you buy something.


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## chef2sail (Nov 27, 2007)

> The offer is a legally binding contract. It has to be notarized. It has to be presented to the seller. Then the seller has to sign it--again, in front of a notary. The broker collects your deposit with the offer. It goes into an escrow account. You're not just going to have your original check handed back to you. Then you're going to have to schedule a time for the test sail--again, they're not going to let you take the boat out on the same day that you make the offer and hand over the check. Then you cancel the contract. Oops! More legally binding papers have to be signed. And then the broker finally issues a check from their escrow account to refund your deposit. All this takes time. Again, no way you just show up in the morning, look at the boat, make an offer, hand over a check, go out for a day of pleasure sailing, and then get your check back at the end of the day. No way.
> 
> But if you think that will work, by all means give it a try.


This is exactly correct as I have seen in the hte two boats I have purchased.

GeorgeB-- The sea trial as it is called is far different than a "day of sailing". If you have a good surveyor they will test the ngine under various loads and RPMs. The purpose is to ascertain that all of the systems are working correctly and even work at all. Poeple aserious about tying up their 10% in an escrow account are serious about buying the boat. If you werent willing to do that I would never even let you step foot on a boat I was selling for a sea trial.

The responsibility of paying for the surveyor, marina fees for splashing the boat ( if its out of the water, rewinterizing the engine ( if it is done after the boat is winterized) are borne by the potential buyer and the potential buyer must negotiate with tose entities himself. This has nothing to do with the deposit of 10%.

All of this keeps the casual looker at bay as it will cost them some money. If you are looking and spend this money as a potenial buyer ( around $1000 at least for a decent keelboat) you are not just walking away from the contract if you dont like it. You have spent some money. Potential buyers just dont survey and sea trial lots and lots of boats, they usual only do the onethey are mopst interested in, If still interested and they fid major things wrong, thats were negotiations begin again on a final price, or to have those itemns fixed which weresaid to work and didnt when the sea trial took place.

I cannot emphcise enough the imnportance of getting a reputable broker and surveyor ( ours climbed the rigging).

Lets look at the staement made that your broker bears the "feduciary responsibility to the seller" if you want to. I do not agree with this, as his share of the commision is paid by the listing broker. I have found most listing brokers would rather deal direct with me so they can get the whole 10% fee themselves. I have hired a broker who gets paid for only if I win and buy the boat I want best suited for me. Just like lawyers who work on a contingency fee. They only get paid if their client wins. They are essentially being paid by the other party and receive a % of the settlement.

I think you can get you own broker with your interests and it can also be looked at like hiring a lawyer based on contingency. He does not get paid if you do not win. If he cant find you a boat and help you obtain one which meets your criteria at the price you are willing to pay...he does not get paid. Also he has no relationship with the listing/ seller usually. He will find you a boat and collect his commission regardless of which boat you buy therefore he can be more objective and critical of a boat than the listing seller or the sellers agent can be. They only make their money if that particular boat sells. My experience is that uit usually comes down to a choice of differnt boats. The broker working for you gets his/ her commision no matter which boat you choose and therefore may tend to give you a more objective opinion. mY And essentially that lawyer is being paid for by your advesary...just like he is being paid for by the other broker in this case.

Find a good broker who works for you with a good reputation. Get past the boats he has exclusive listing rights for and then he doesnt care which boat you buy he gets paid regardless and he might be more open about the boats he sees. Decide on the best one....put your 10% down,... pay for the cost of the sea trial and survey...and hopefully the boat becomes yours.

Dave


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## chef2sail (Nov 27, 2007)

Minnie...I do agree with your stateemnt about the inherent conflict. No doubt about that. 

Find a reputable ethical broker

Dave


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## GeorgeB (Dec 30, 2004)

I am really, really interested in chatting with my broker this Sunday. 

While it is true that your “buyer’s broker” splits the commission with the selling broker. There is one big distinction. The selling broker only gets a commission on that one boat. Whereas your “buyer’s broker” will make a commission on whatever boat you eventually choose to buy. If you choose to walk away from a negotiation, your buyer’s broker should be fine with that. If anything, retaining a buyer’s broker removes you one step from the upfront negotiations which gives you a bit more power and breathing room. The added benefit of using your own broker is he (or she) will have a pretty good feel for what the local market is and can give a quick appraisal of a target boat’s true value. My broker has also found me Marina slips in a tight market and removed other barriers to the deal. My local guy has also helped with offshore deliveries and has helped some Australians in buying a boat in California, including helping them prep the boat for the voyage back to Oz. Might not be a service for everyone, but they have been helpful to me in the past.

The 10% down payment is for the boat loan (I think it is running 20% down now in California) and not the “deposit” amount. Albeit, the deposit rolls over into the down payment category for the loan.

I know that surveys are usually required if you are securing a boat loan, but I don’t think they are mandatory (I’ve bought a boat without a survey before). I still think that a deposit binds the buyer to the contract and if disputes arising from the survey can’t be reconciled through direct negotiations then isn’t there a clause that sends it to binding arbitration? (I’ll have to look this up on my old sales contracts when I get home.)


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## chef2sail (Nov 27, 2007)

Not to be argumentative as I belive you are correct in what you said about the brokers....



> The 10% down payment is for the boat loan (I think it is running 20% down now in California) and not the "deposit" amount. Albeit, the deposit rolls over into the down payment category for the loan.-GeorgeB


The 10% ($14,000 in this case) is for the deposit to begin the agreement of sail. It is put into an escrow account. We were borrowing no money for the purchase of this boat.

Yes boat loans are running between 10% and 20% down depending on the year age of the boat and the amount you are financing.



> I still think that a deposit binds the buyer to the contract and if disputes arising from the survey can't be reconciled through direct negotiations then isn't there a clause that sends it to binding arbitration? (I'll have to look this up on my old sales contracts when I get home.) - GeorgeB


Here is the exact copy out of our purchase agreement before survey as I posted on a previous page before. I have not capitalized anything which was not already capitalized but have boldened the pertanent phrase. It is pretty clear. The deposit is to be returned if the buyer gives notice of intent to reject which must be done at a specific time. Note: this time and date is 2 days after completeion of the survey in our case.



> 3.
> ACCEPTANCE OF THE YACHT: The BUYER shall notify the SELLING BROKER of his acceptance of 30 the YACHT and inventory, or his rejection of same. Such notice which shall be in writing, shall be received no later than five o'clock p.m. local time on ___________________. If said notice has not been timely received, the BUYER shall be deemed to have rejected the YACHT and inventory in its present condition, subject to the terms, if any, of Paragraph #7. IT IS THE BUYER'S RESPONSIBILITY TO OBTAIN ANY ASSURANCES HE REQUIRES REGARDING THE AVAILABILITY OF SATISFACTORY FINANCING AND INSURANCE PRIOR TO THE ABOVE MENTIONED DATE.
> 4.
> TERMINATION OF AGREEMENT: *If the BUYER gives notice of his intention to reject the YACHT 37 under the terms of this Agreement, such notice shall constitute termination of the BUYER's obligation to purchase and the SELLER's obligation to sell, and the BUYER and the SELLER both authorize the SELLING BROKER to return the deposit to the BUYER, after deducting any fees and charges incurred against the YACHT by the BUYER, or by the BROKERS on behalf of the BUYER, including the cost of the survey and related expenses. *


Maybe you can get your broker to write your agreement like this. It is standard here in the Annapolis area. If you want a complete copy of the agreement with all language PM me and I can send it to you.

Dave


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## Minnewaska (Feb 21, 2010)

Here's the rub. As soon as you become interested in owning a boat that a buyer's broker has found for you, it's in your interest to pay less, while its in the broker's interest that you pay more. Most often, I've not been bidding against anyone else, I'm just trying to get the seller to sell. In that case, I want to convince the seller to accept less, but the buyer's broker won't get paid unless I pay what the seller really wants. 

Sure, there are ethical brokers that are fair about it all, but in the end, they only get paid if you pay up. They ultimately work for the seller. The good ones, just make you feel good about it.


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## Donna_F (Nov 7, 2005)

GeorgeB said:


> ...
> The 10% down payment is for the boat loan (I think it is running 20% down now in California) and not the "deposit" amount. Albeit, the deposit rolls over into the down payment category for the loan.


It depends on your situation. The 10% that we put down really was a deposit to prove our interest and hold the boat while we had the survey and sea trial done. We didn't take out a boat loan.


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## bljones (Oct 13, 2008)

Minnewaska said:


> Here's the rub. As soon as you become interested in owning a boat that a buyer's broker has found for you, it's in your interest to pay less, while its in the broker's interest that you pay more.


No,
As a commission salesperson, i can testify that once you have a prospect interested, the objective is to get the deal down as quickly and as cleanly as possible. "Padding" the deal is a sucker's game- consumers aren't stupid, and are looking to get as little skin in the game as possible. If a buyer, or seller for that matter, thinks that the middleman is playing the middle for the margins, the deal falls apart. 5% of zero is zero.

Frankly, as a salesperson, i have seen buyers and sellers try to nickel and dime the deal far, far more often than the guy who makes his living putting the deal together.


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## PorFin (Sep 10, 2007)

I think that there's been a fair amount of bleed-over of terms from the real estate market to the boat market -- which aint necessarily a good thing.

What most are calling a deposit (and it is) is also referred to as "good faith money." This deposit into an escrow account of some kind establishes that the potential buyer is in fact interested enough in the boat to tie up some of his own money until the deal is sealed or it is cancelled. Like many have mentioned, it is largely symbolic but it is better than a simple verbal agreement. It also protects the owner from having to fight liens placed against the hull should the potential buyer fail to pay for the services of the yard and surveyor(s).

A good "buyer's broker" is going to represent the buyer, and has no fiduciary responsibility to either the seller or the seller's broker. He (or she) is going to split the listing broker's commission, and can be seen as a "finder's fee" for bringing a motivated buyer to the table. One thing to keep in mind, is that not all listing brokers/brokerages will agree to split the commission. This is usually noted in the boat listing, and your buyer's broker may try to steer you away from that boat simply because there's no benefit for him if you close on that boat. A lot will depend on the relationship you develop with your broker.

A boilerplate Purchase and Sales Agreement (PSA) has a lot of provisions built into it to protect the buyer, and to a lesser degree the seller -- and I think that's not by accident. The standard contingencies are for satisfactory survey and sea trial, and the buyer's ability to secure financing and insurance.


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## PorFin (Sep 10, 2007)

Something I meant to include earlier but forgot...

Both you and your buyer's broker want to see you buy a boat. A *good* buyer's broker wants to see you buy a boat that's right for you and your sailing plans, at a price that's fair, and that it's not a pig in a poke. Like several have said earlier, a good broker thinks long term as well as short term -- eventually you are going to be selling your boat, either to buy another or because your life priorities have changed, and to do so you will likely be in need of a broker. If he's satisfied you on this purchase, then chances are good that you are going to talk to him first about selling it for you. They also know that sailors are a gossipy bunch, and good word of mouth from satisfied customers beats glossy ads in the sailing rags every time. Likewise, bad reputations have a way of eating into their take home pay.


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## Minnewaska (Feb 21, 2010)

bljones said:


> No,
> As a commission salesperson, i can testify that once you have a prospect interested, the objective is to get the deal down as quickly and as cleanly as possible. "Padding" the deal is a sucker's game- consumers aren't stupid, and are looking to get as little skin in the game as possible. If a buyer, or seller for that matter, thinks that the middleman is playing the middle for the margins, the deal falls apart. 5% of zero is zero.
> 
> Frankly, as a salesperson, i have seen buyers and sellers try to nickel and dime the deal far, far more often than the guy who makes his living putting the deal together.


I can tell, I'm still not being clear. I'm not suggesting that a buyer's broker is incented to pad the deal. There is no precise value for any boat, so the meeting of the minds of a seller and buyers is subjective on the margin. If I've come up to $95k and the buyer has come down to $100k, I've never ever heard a broker say she isn't worth one penny more than the $95k. A good broker would tell you to walk if the gap was huge, but on the margin, there interest is in getting that sale done and encourage you to $97.

I had my buy side broker willing to buy me a dinghy to get a deal done once. While that sounds helpful, he was trying to salvage a deal that was going bad. The right answer should have been to walk away, which I decided on my own. Ultimately, that boat sold for $125k less to someone else about three years later.


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## denverd0n (Jun 20, 2008)

PorFin said:


> What most are calling a deposit (and it is) is also referred to as "good faith money." This deposit into an escrow account of some kind establishes that the potential buyer is in fact interested enough in the boat to tie up some of his own money until the deal is sealed or it is cancelled. Like many have mentioned, it is largely symbolic but it is better than a simple verbal agreement.


Well put and 100% correct.


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## sailingfool (Apr 17, 2000)

PorFin said:


> ....
> A good "buyer's broker" is going to represent the buyer, and has no fiduciary responsibility to either the seller or the seller's broker. He (or she) is going to split the listing broker's commission, and can be seen as a "finder's fee" for bringing a motivated buyer to the table. One thing to keep in mind, is that not all listing brokers/brokerages will agree to split the commission. ...


FWIW in a yacht sale, the correct name for the broker working with the buyer is the "Selling" broker, see the the text from the standard Yacht Brokers Association of America's P&S:
"14. BROKER REPRESENTATION: The SELLER and the BUYER each acknowledge that the SELLING BROKER represents the BUYER, and the LISTING BROKER represents the SELLER, each representing the party that the respective broker has brought to this transaction..."

It is interesting how many opinions have been offered in this tread about American buying practices, that are at odds with the clear words of the contract used by American brokers...
http://www.oceanmarinellc.com/brokerage/PurchaseandSaleAgreement.pdf


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## puddinlegs (Jul 5, 2006)

One brokerage that I'm very familiar with has many repeat customers. This says a lot about both their business model and integrity. I'd have no trouble recommending them to others to either help them buy or sell. They're also all experienced and passionate sailors who really do 'get it'. This certainly isn't always the case. As someone said earlier, if you cross paths with a good player, stick with them.


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## scratchee (Mar 2, 2012)

tanksalot said:


> In retrospect, I should have said "I'll buy it", read the contract carefully, then taken advantage of any escape clause. Tough lesson learned.


Careful there, you'll end up the subject of a thread called "Boat Shopper's Ethics." All kidding aside about brokers, they also deserve fair and honest dealing from buyers.

I generally trust people, and it generally works out OK. But I recognize that when I trust someone, I am taking a calculated risk. If the factors in that risk are too great (money spent, time wasted, etc,) then I try harder to get some security through a written agreement or whatever.


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## denverd0n (Jun 20, 2008)

sailingfool said:


> It is interesting how many opinions have been offered in this tread about American buying practices, that are at odds with the clear words of the contract used by American brokers...


Used by SOME American brokers. While that's a fine boilerplate, the fact is that the laws vary from state to state, and because of that the contracts also vary from state to state. The contracts that I have seen here in Florida are very similar in most ways, but none of them have been exactly identical to the one that you have posted.


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## sailingfool (Apr 17, 2000)

denverd0n said:


> Used by SOME American brokers. While that's a fine boilerplate, the fact is that the laws vary from state to state, and because of that the contracts also vary from state to state. The contracts that I have seen here in Florida are very similar in most ways, but none of them have been exactly identical to the one that you have posted.


here's what YBAA has to say:
"YBAA strongly recommends that all members utilize YBAA's copyrighted, standardized contractual Forms, which are provided as a free member benefit, designed to simplify the transaction process and to enhance customer satisfaction. Forms include: Central Listing Agreement; Open Listing Agreement; Purchase & Sale Agreement;..."
I do not know what percent of brokers belong to YBAA, ....


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