Making an offer - procedure re:deposit

[teaden]

Could you shine a light on the "making an offer" process. From what I've read, it varies a lot from broker to broker.
We are looking at a yacht in Florida and are offering 17% below asking. Quite a long shot I realise but nothing ventured, nothing gained!
The broker wants a 10% deposit up front saying CAN'T present the offer to the owner without it.
Our money is in South Africa - so paying it across before we know if the sale is even a possibility, is going to cost a lot in bank charges due to exchanging currency and sending across, if offer is rejected, we will pay it all over again to come back to us.
We are totally prepared to pay the deposit when we know that seller will accept the offer by way of a signed offer agreement.
Is this unreasonable?

[FLLCatsailor]

In the state of Florida a listing broker is legally obligated to present all offers. They can advise their seller not to take the offer until a deposit is in hand, but they still must present the offer.

What kind of boat is it on out of curiosity?

[S/V Illusion]

While an offer typically includes an earnest money deposit, there is nothing which requires it. An offer isn't a contract!



The broker certainly can present an offer without it; he is really saying he doesn't want to present it absent a deposit.


All you need do is ask the broker "Why cant you present the offer?" If he insists on some nonsense about a deposit being required, ask him "where such a requirement exists?"

[boatman61]

America has some weird ideas/customs..
If I am making an offer on a boat I have an interest in I see no reason whatsoever why I should put up any money before knowing if/whether my offer is acceptable..
Once I am told its accepted I am only to happy to present a holding deposit subject to survey.
To me a demand for a deposit to get my offer presented stinks to high heaven.

[Davidhoy]

I'm right in the middle of this process myself, in Florida. The offer does not require a deposit up front, but upon an acceptance/negotiation of the offer I am required to wire transfer the deposit within 3 days.

And offering 17% below listing price is not a showstopper, it all depends upon comparable sales, and what the seller is willing to do. In my case I was able to determine that the average sale price was 15% lower than listing. Your situation may be different, and ultimately it's up to how much the seller is willing to bend. And remember that this is just the first stage of the negotiation, you still the survey to come, after which there may be further discussions.

BTW, while I live in south Florida, I'm from SA originally. If you need any help, give me a shout. What kind of boat are you buying?

Regards,
David

[stewie]

I used to own a yacht brokers and when a low offer was made I would suggest placing a deposit before I presented the offer as the first thing the seller would ask is “ Do you have a deposit ? More often than not the low offer was accepted and having the deposit closed the sale.

[nhschneider]

When we were buying our current boat, we wrote a personal check for the deposit and the broker said it wouldn’t be cashed. It’s more of a demonstration of the level of interest.

We offered 30% less than the asking price, which the seller accepted.

Fair winds and calm seas.

[Cheechako]

10% is something they LIKE to do, but don't have to do. I have bought a $300k Boat with a faxed copy of a small deposit check ($5k) . If they want to sell something they will take it. You could always go through another broker if you need to.
Just tell them "here is $xxxx for deposit". Dont feel bad about -17%, I usually start at -40%.

[YachtBroker]

Wiley is correct, all offers are obligated to be presented BUT the seller doesn't have to take your offer seriously if you don't have any earnest money up front or a way to get a wire into the brokers account within 24 hours of the offer being accepted.

Same goes for financing. If you're making an offer in Florida based on a financing contingency, some sellers won't even counter it.

If you are seriously looking for a boat in the US and from overseas, I recommend you get at US bank account and transfer some of the funds into that to work from. It Works way better than doing this with international wires etc and will also make it easier for you to fund the final amount later.

[sail sfbay]

I just purchased a Hunter 46. Broker initially proposed 10% deposit but then requested a 6% deposit by check since I gave them a reasonable offer below the asking price. The check was held by the broker and not cashed until the sale went through.

[sailcrazy]

Write your offer up, with the stipulation of $XX earnest money w/i YY days of acceptance , sign it, and personally present it to the broker. He is obligated to present it to the seller...if he won't/doesn't, report him! We bought our boat in Singapore, with our $$ in the US. Once the offer was accepted, we had a pre-specified time to have the cash there, assuming the survey went well and all identified squaks were fixed, but we gave ourselves enough time to accomplish that.....while the seller was doing the survey, etc.

[teaden]

Originally Posted by S/V Illusion

While an offer typically includes an earnest money deposit, there is nothing which requires it. An offer isn't a contract!



The broker certainly can present an offer without it; he is really saying he doesn't want to present it absent a deposit.


All you need do is ask the broker "Why cant you present the offer?" If he insists on some nonsense about a deposit being required, ask him "where such a requirement exists?"

Thanks - stood my ground and offer is being presented.

[stormalong]

Beyond the deposit be sure that your purchase agreement has contingencies for a survey and an acceptable sea trial. You always need a way to walk away from the deal if you don't like the boat.

You are the sole judge of what is acceptable in the survey and the sea trial.

[Roniszoro]

Do NOT give 10% with the offer. Give 10% upon a signed contract by both parties. It is best to say in the contract that the 10% will be wired within 48 hours of a contract signed by both parties. And it must be wired into an Escrow Account of the Broker, not a general account. Also add that the deposit will be returned within 7 days of rejection of the vessel.

I have lots of experience with this, as I went to contract 6 times in 2018. Five times there was something wrong with the vessel, so I got my deposit returned in the specified time. Remember, most brokers make used car salesmen look like the pinnacle of honesty and integrity. Trust no one on the purchase of a used boat. It is better to walk than to lose your 10%. If the broker won't agree, it is because there is a problem or going to be one.

[jmschmidt]

Boatman61 says America has some weird ideas/customs. In America you can usually do whatever the hell you want as long as its legal. But that doesn't mean the other guy has to go along with it. Most brokers don't want to waste their time with tire-kickers, that's why they insist on earnest money up front, I would too. Another poster says that in Florida brokers have to present all offers. That also is true but brokers don't have to draft an offer for you without earnest money if that's the way they run their office, I wouldn't either. So Florida, Schmorida, get real son, if you are going to buy a boat in the US you need to transfer some money here now. The simple facts that you are trying to low-ball it, and that all your money is in South Africa, and you are hesitant to bring any in, screams "Tire-Kicker, Tire-Kicker" which is enough to give any broker or even a FISBO pause. That's For Sale by Owner for those of you out there in Rio Linda. And Boatman61, baby, I usually like your stuff but foreigners have weird ways of interpreting simple things American too, in the business world there is usually a good reason for what seem weird. I have a Swedish business partner, he thinks we are weird too.