Escrow and Survey before seeing a Boat

Ralph Johnstone · Oct 25, 2024

That looks like one of the last documents to be signed once all the rest of the nuts and bolts are sorted out.

I would up my cautionary alerts by a few points. Unless you're nearly giving the boat away and he sees a really good deal.

It's always a personal viewing first and then a surveyor. Tell him to get his ass down there for his first viewing and you'll see where it goes form there. He doesn't need to be there for the surveyor if he's serious about the purchase.

Just too, too many scams floating around out there at this time.

Stu Jackson · Oct 25, 2024

Ralph's right. IIRC, BoatUS should have a "How to sell your boat" procedures and recommendations right on their website. If not there, try an internet search and you'll learn how to do it.

Tally Ho · Oct 25, 2024

Seems a little odd, ut maybe he knows what boat he is looking for, and relies on a surveyor to inspect it.

Are you out anything to accommodate? Can you ask for a small non-refundable deposit ?

Greg

PaulK · Oct 25, 2024

Why does he need an escrow account to have a boat surveyed? The surveyor should just bill the "gentleman" directly if he wants a boat surveyed -- you're not involved with the surveyor getting paid for his work. If a potential buyer comes to see the boat or if a surveyor comes to see the boat, what difference does that make to you, except that a surveyor might take longer? If you set up an escrow account and a surveyor comes to look at the boat expecting to be paid from the escrow account, what happens if the "gentleman's" check deposited to the escrow account bounces? Will the surveyor expect payment from you? Maybe the "surveyor" is in cahoots with the "gentleman"? Whole thing sounds screwy.

marcham · Oct 25, 2024

I'm assuming the escrow is for a deposit? Makes complete sense .... if they are going to travel and pay for a lift / survey, they need an accepted offer and deposit and I'm assuming there's no broker involved? So the escrow makes sense to protect the buyer's deposit.

I had to do something similar.... boat was a day's flight away and I couldn't see it for 2-3 weeks. I made an offer, arranged for survey all before I laid eyes on it and we then finalized the price based on survey and sea trial results.

Ralph Johnstone · Oct 25, 2024

marcham said:
I made an offer, arranged for survey all before I laid eyes on it

What if you arrived at the boat and found it had been used as a refuge for his pet otter for the last year ? Something the owner had not noticed due to his lack of ability to detect odors, a chronic case of "anosmia."

Let's see, a haul out plus wet survey for a 38 ft. boat ...................... I'm gonna say about $800.00 in my neighbourhood based on the insurance survey of my H-310 in 2019.

Certainly not a recommended business practice.

marcham · Oct 25, 2024

I had to travel, take time off work, a night or two in the hotel, $1000 plane ticket.....etc... It was easier/quicker/cheaper to have the surveyor look at it than for me to travel. I spoke to the seller, got them to make out of water videos, etc.... and offer was conditional to survey and sea trial.

Ralph Johnstone · Oct 25, 2024

marcham said:
It was easier/quicker/cheaper to have the surveyor look at it than for me to travel.

Life in the fast lane I suppose. Too exciting for me.

dlochner · Oct 26, 2024

Who has control of the escrow, your attorney or bank or the buyer's?

If you have control through your bank or attorney, then it is probably legit. Set a time limit and perhaps an option to accept offers greater than his offer. Continue to show the boat and let other potential buyer's know there is a pending offer.

PaulK · Oct 27, 2024

marcham said:
I'm assuming the escrow is for a deposit? Makes complete sense .... if they are going to travel and pay for a lift / survey, they need an accepted offer and deposit and I'm assuming there's no broker involved? So the escrow makes sense to protect the buyer's deposit.

I had to do something similar.... boat was a day's flight away and I couldn't see it for 2-3 weeks. I made an offer, arranged for survey all before I laid eyes on it and we then finalized the price based on survey and sea trial results.

OP hasn't mentioned any offer or any agreement. Brokers usually serve as the escrow agent in a transaction, but if there's no broker who's going to do it? A lawyer? A banker? Will they want recompense? Putting "earnest money" in escrow makes sense because if the deal doesn't go through having the funds in escrow ensures that it gets returned to the buyer. Funds for paying a surveyor are not subject to the deal going through - the surveyor does his report and he gets paid regardless.

jssailem · Oct 27, 2024

PaulK said:
having the funds in escrow ensures that it gets returned to the buyer

I think the deposit return will be dependent on the contract that is a part of the escrow. The Escrow Instructions direct the escrow agency. how distributions are paid. Instructions usually come in the contract between the buyer and seller. The instructions would include deposits and expenses. The escrow agent has a fiduciary duty o follow the letter of the instructions.

LloydB · Oct 28, 2024

The link you posted doesn't work for me and there seems to be some missing information. On the other hand if you have already made a full price offer to sell, your perspective buyer has got it a little bit backwards as to who writes the sales contract or is trying to give you a counter offer not so clearly stated.

dlochner · Oct 28, 2024

LloydB said:
The link you posted doesn't work for me

It is a pdf file that can be downloaded.

Sailfanatic · Nov 2, 2024

Stu Jackson said:
Ralph's right. IIRC, BoatUS should have a "How to sell your boat" procedures and recommendations right on their website. If not there, try an internet search and you'll learn how to do it.

FYI...

Sailfanatic · Nov 2, 2024

teacherspet said:
I have a boat for sale and was contacted by a gentleman who wants to open up an Escrow account to have the boat surveyed before he comes down in a couple of weeks or so. He sent me a standard Boat US Purchase Agreement
https://www.boatus.com/-/media/files/boatus/boatus-purchase-agreement.ashx I am wondering why someone would want to have a boat surveyed when they have not even seen it in person? Has anyone ever experienced this? Just being cautious.

You can find the BoatUS sales contract from this page

https://www.boatus.com/expert-advice/boats-and-tow-vehicles/buying-and-selling-advice

This contract a pretty simplistic one pager,. I would only use it to sell a daysailer or a dingy. If used for an expensive vessel, I'd have a lawyer tune it up. Better to find a version of the YBAA purchase and sales contract used by professional brokers.

There's no provision in the BoatUS contract for an escrow. It would seem that the buyer is perhaps somewhat clueless or there's confusion about terminology, Sounds like what he should do is to giver you a deposit on an agreed purchase price with the closing dependent on the survey (and his personal observation of the boat). If not satisfactory, you return the deposit and the deal is terminated. Basically the deposit indicates the buyer is serious and allows him a temporary hold on the boat while the survey is underway.

I guess a buyer could want a deposit to go into some form of an escrow. If a buyer wants to find, hire and pay an escrow company, it would be fine with me, but usually, with no broker involved, you just sign the purchase and sale and give the seller a deposit. If the buyer cancels the purchse prior to the closing date, the seller refund the deposit and the deal is dead.

Barnacle Bill · Nov 2, 2024

I didn't read all of the responses so I apologize if I repeat something, but here is my take on your question.
Some people cannot take the time, or for whatever reason, to come inspect the boat themselves and so hiring a qualified surveyor is a good way to get an assessment of a boat's condition. i am in the boat sales biz and there are times that i have sold boats sight unseen to customers who have trusted me and I have yet to have a disappointed customer. But, if a buyer doesn't have an established relationship with a local seller (and in this case, it is a private owner), engaging a surveyor is a good way to go. You can only hope the surveyor knows what he is doing and is thorough. Regarding an escrow account, i assume in the purchase agreement there is some sort of deposit included and some buyers want their deposit escrowed for safety reasons. i sold a boat to a buyer in England who insisted on a lawyer to handle the deposit and eventual fund distribution so I engaged a lawyer. Most brokers will have an escrow account for their deposits, but not all. Anyway, it does provide some security for the buyer all in good faith.

PaulK · Nov 3, 2024

Barnacle Bill said:
I didn't read all of the responses so I apologize if I repeat something, but here is my take on your question.
Some people cannot take the time, or for whatever reason, to come inspect the boat themselves and so hiring a qualified surveyor is a good way to get an assessment of a boat's condition. i am in the boat sales biz and there are times that i have sold boats sight unseen to customers who have trusted me and I have yet to have a disappointed customer. But, if a buyer doesn't have an established relationship with a local seller (and in this case, it is a private owner), engaging a surveyor is a good way to go. You can only hope the surveyor knows what he is doing and is thorough. Regarding an escrow account, i assume in the purchase agreement there is some sort of deposit included and some buyers want their deposit escrowed for safety reasons. i sold a boat to a buyer in England who insisted on a lawyer to handle the deposit and eventual fund distribution so I engaged a lawyer. Most brokers will have an escrow account for their deposits, but not all. Anyway, it does provide some security for the buyer all in good faith.

Paying a surveyor to look at a boat you aren't able to inspect yourself makes sense. The issue with this thread is that as far as we know there is no Purchase & Sale agreement. Even if there IS a Purchase & Sale agreement there is no call for an escrow account in order to pay the surveyor. The "shopper" owes the surveyor payment for a survey he does regardless of any deal happening or not happening. The seller is not involved in the transaction between the "shopper" and his surveyor, and should not be involved in setting up an escrow account for it. If there is a Purchase & Sale agreement, THEN an escrow account should be set up to hold the buyer's "earnest money" deposit.

Tally Ho · Nov 4, 2024

It is about time for @teacherspet to provide an update on this post.

Greg

Escrow and Survey before seeing a Boat

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SBO Weather and Forecasting Forum Jim & John

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