Escrow in RIB buying/selling?

[Channel Ribs]

Sellers waste a fair amount of time indulging "tyre kickers" and serious buyers want the rock bottom price, so why isn't escrow more popular with leisure powerboaters?

By using escrow a buyer can haggle hard, the sellers knows the money is real and that it is just a click away their account and being re-spent on some shiny goodness.

Likewise a seller gets the reassurance that the time spent showing someone round the boat is not indulging someone who just needed an excuse to get out the house.

Have any Ribnetters used this service, have you had good/bad experiences?

If you have not used it, why not?

And yes Martini, I know, Cash Is King.

[BruceB]

I thought escrow was money held by a third party after the sale but before delivery for security?
I certaiunly wouldn't give my cash to an escrow company committing to anything until I had agreed a sale and price so not sure how this would useful, unless I misunderstand what it is about?

[Channel Ribs]

Originally Posted by BruceB

I thought escrow was money held by a third party after the sale but before delivery for security?

You are probably right, escrow with buildings and stuff is no doubt something that happens late on in the process.

I use the word escrow because if I didn't someone would say 'you mean, like escrow?'.

In my vision a buyer would be prepared to make an offer, perhaps have paid a deposit. They would then lodge the money and the escrow holder would confirm as much to the seller, taking details of where they would like the money sending should the sale be agreed.

Once the buyer and seller reach an agreed sum, they both tell the holder and (assuming the figures match!) the money is transferred with any extra returned to the buyer's account.

Cash is probably The best way. But in circumstances where cash might be inconvenient, or perhaps the two parties are not actually in the same place and replying on surveyors etc it might work.

I dunno, just asking the question really.

[karlT]

I know what you are talking about but think as a buyer I would not be giving any money/deposit to either a broker or seller as a sign of intent until a sea trial / personal inspection was completed.

Obviously, sea trials take time and effort (and cost) but that is what a broker gets his commission for. The cost of a small amount of fuel on the sellers part, I would not expect to go miles on a sea trial or spend hours at sea. If a seller would not allow a sea trial I would walk away from any sale.

There is an interesting discussion about survey / lift out costs on worldseafishing.com talking about who pays for lift out etc etc. The attitudes of some brokers which I was amazed at.

If I was the buyer of a boat that could not be dried / trailered, I would expect to pay both the lift out and of course the survey costs (the surveyor of my choice) but before reaching this point would have agreed both a price and done a thorough check of boat and its equipment / received a detailed inventory. I think before the survey I would personally be 99% sure the boat is the one I want to complete a sale on subject to any MAJOR faults that I have not spotted (Ie not just cos of rust marks / out of date Fire Extinguishers etc etc) There may be minor things that further negotiation may be achieved on.

If the seller required a deposit before lift out then this would not be an issue if held by the broker on the condition "subject to survey".

As far as your question and to what I think you are alluding at is: you need to talk to any potential customers to get a feel for their knowledge (understanding of boat they think they want) / interest / commitment. If they are gonna fly to a rock in the middle of La Manche to take a look they are probably serious. If it someone stopping with the kids on a Saturday morning when the sun is shining then 10 mins of courtesy may save you hours of wasted time & subsequently costs.

[Channel Ribs]

Thanks Big K

Experience of brokering in the CI is generally very good, as you say people paying 300 quid for a return ticket to view a boat are showing they are serious in clear terms.

My thought was just an idle wondering really, based on comments from people in the UK and elsewhere. There was the question on here a while back about not feeling safe with squillions in hard cash, for example.

There is Paypal, not sure how many people would use that as a transfer medium.

The business of who pays for what is indeed complex, both parties are talking thousands yet neither want to pay for a crane.

Rather than a brokerage service (ie for the seller), I wonder if this is more for the buyer's benefit.

[martini]

Originally Posted by Channel Ribs

And yes Martini, I know, Cash Is King.

Escrow just doesn't have that lovely smell

Although I'd rather not think about where the smell comes from

People's back pockets let alone front pockets coke residue etc etc

[karlT]

Once the final deal has been agreed, the client a/c is an obvious benefit to both parties. It allows all the final paperwork to be checked and completed.

This may include bill of sale, proof of VAT if applicable, proof of payment on any linked finance etc. If there are any issues in this area either further investigation / legal advice can be taken or the buyer still has an option to walk away.

Once the paperwork has been done the fees can be released to the seller less any fees from broker.

Job done

[Nos4r2]

Some form of 'credit note' system would be very welcome-even if it was something as simple as showing a bank balance on a statement.

The one real numpty that sticks in my mind from a few years back got me to tow the boat from storage to view.
He didn't turn up the first time.He turned up the second time then said he wanted it-would I swap it for his fire engine...

I'm afraid to say I wasn't very nice to him.

[PeterM]

A good idea, but I feel is as open to abuse as any purchase/sale.

I have only ever had good experiances in buying and selling;

I bought the shearwater- arranged to meet the previous owner as he was bringing it over from the IOW. Saw it, tested it, agreed a price - sent the money to his account electronically , picked up the keys and drove it home.

I had lots of good contacts for him , Shearwater the company had known him for several years so I felt safe. When I sold it I handed over everything before the cash had cleared to my bank - but only as it was a friend of a friend and turned out I worled with him 10 years ago !

On the other side I have sold a Topper ( ok not big money) on the basis of a personal cheque clearing- he took the boat and I crossed fingers - it was all fine.

Sold a Jetski via paypal - then got stung for fees ! And still not sure paypal is very secure......

Any third party holding money would need to be well established or would they be independant ? ( especially if 'suggested' by buyer or seller )and what would they charge ?

[Searider]

It's the difference between doing it yourself - ie taking cash / bankers draft etc and employing a Broker to do it for you.

As part of ABYA - Association of British Yacht Agents membership you are required to have a dedicated and properly managed clients account.

http://www.abya.co.uk/

Usual procedure:

Vendor agrees terms with Broker - commission rate, storage costs, specification, marketing plan etc.

Buyer finds advert.
View boat. Like it.
Make offer Subject to survey.
Haggle a bit
Agree offer subject to survey
Pay deposit, normally 10%, into brokers client account.
Have survey and/or sea trial. Lift out costs and surveyor costs for purchasers account.
Maybe Haggle a bit more if there are faults that have come to light that weren't prevously known. Come to an agreement on final sale price.
If not done already the Vendor should then pass to the Broker the title paperwork. The Broker will then check this out to see that it is legitimate and proves that the vendor has clear title.
Transfer balance to Brokers client account.
When monies cleared into Brokers client account boat is released to Purchaser.
Sale price less brokers commission then released to Vendor.

In the above at no time do either party (Vendor and Purchaser) hold all the parts of the deal - ie no-one has both the boat and the money and the ownership paperwork.

If the boat is found to be in poor condition at survey or a major fault found that means that you no longer wish to proceed with the sale, even at a reduced price, the Broker will return your deposit. This may be less certain costs such as skippers cost, fuel cost etc (Which the broker would probably have swallowed if the sale went ahead).

For an Escrow system to work you'd need to have a contract detailing all of the above in place. Solicitor + escrow account is probably more expensive than having a Broker do it for you - and the Broker advertises the boat for free!