Tutorial on a Buyer's Broker

[Seevee]

I don't know how this thread got this far from my original post but please indulge me in clarifying this concept of seatrials and deposits.

A deposit is placed on a boat to hold it it from being sold to another buyer as the deposit placer does his due diligence. The deposit is fully refundable and does not force the buyer to purchase the boat. The contract on the boat included with the deposit can include any terms agreed to by the buyer and seller. If the buyer wants to "test ride" the boat prior to the expense of a survey and the seller agrees than that can be done.

Daddyo,

I really don't understand the logic of that. The buyer puts down a non refundable deposit and takes the boat off the market. I don't do that as a buyer or seller. No upside.

As a seller, I don't want my boat tied up without some reasonable consideration. It's probably ok for a few days, but really don't want to loose a sale to someone else that's more serious. I put a clause in that say if another buyer comes in with a better offer, I'll give the first guy first right of refusal. And I'd rather they pay for operating costs than a non refundable deposit.

As a buyer, I don't want my dollars tied up in a deposit that my representative doesn't hold... no matter how reputable the boat dealer is.... and if it's non refundable, what's the point?

 

[Daddyo]

100% REFUNDABLE. I don't know what this non refundable deposit is you are referring to. The cost of due diligence on a yacht is extensive so of course the boat will have to be tied up for the buyer to do his thing. Normally about two weeks is given. For the seller, as soon as the buyer starts spending actual cash on their due diligence than the more motivated the buyer will be to complete the purchase. If the deposit wasn't fully refundable than fraud would be ramped ie. people advertising problem boats as perfect and collecting a deposit on anyone who comes looking.

 

[Daddyo]

As a buyer, I don't want my dollars tied up in a deposit that my representative doesn't hold... no matter how reputable the boat dealer is.... and if it's non refundable, what's the point?

That is not necessary in states that require licenses and a bond for brokerages. FL, MD, VA. I carry a license and bond in FL and VA. The deposit is always 100% refundable prior to accepting the vessel after completing the due diligence.

 

[BandB]

Band,

Tons of boats and houses are sold without brokers, but perhaps not the majority of them. There's a huge advantage in dealing right with the seller (and some advantages not).

I've bought and sold many without a broker, and often did my own closings. Not for everyone, but worth a thought, and often works better. There's a big advantage in developing a relationship with the seller.

But in boats over 30' in length you can't normally deal with the seller directly. Smaller boats are a different story. Boats on the lake were generally sold person to person unless a trade in was made. However, you're not going to see many long range coastal cruising boats sold that way. As a buyer, you'll be limited to a very small portion of the boats for sale by choosing not to use brokers.

 

[Seevee]

100% REFUNDABLE. I don't know what this non refundable deposit is you are referring to. The cost of due diligence on a yacht is extensive so of course the boat will have to be tied up for the buyer to do his thing. Normally about two weeks is given. For the seller, as soon as the buyer starts spending actual cash on their due diligence than the more motivated the buyer will be to complete the purchase. If the deposit wasn't fully refundable than fraud would be ramped ie. people advertising problem boats as perfect and collecting a deposit on anyone who comes looking.

Daddyo.

Brain fart on the non refundable, should have been refundable.

Good point on the off the market time. But who should pay for that? Agreed, a reasonable time is prudent and with a big deal I'd probably go to two weeks. It usually doesn't take that long for a survey and inspectors but I suppose it could. Also, I wouldn't be adversed to paying the buyers expenses if another more serious buyer came to the table.

 

[Seevee]

But in boats over 30' in length you can't normally deal with the seller directly. Smaller boats are a different story. Boats on the lake were generally sold person to person unless a trade in was made. However, you're not going to see many long range coastal cruising boats sold that way. As a buyer, you'll be limited to a very small portion of the boats for sale by choosing not to use brokers.

BandB,

True, but a creative buyer can find folks that want to sell prior to their listing... just write to them. I've done that several times with boats, houses and planes, with excellent results. Some rather large deals for me.