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Non refundable deposit


PMcC

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When buying a house you dont pay the seller a penny until you complete. Neither the seller or buyer are at all committed to complete until contracts are exchanged, usually a week or so before completion. That in essence is the problem when buying houses and gazumping. Although the seller doesnt get a penny until completion the buyer has a number of expenses such as legal fees, searches and surveys etc., all the while the seller can pull out at a whim. So that is I think where the process we have discussed when buying a boat is preferall, IE at least both parties are making some comittment at the point an offer is accepted and a deposit paid. 

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6 hours ago, jonathanA said:

Sorry your argument doesn’t make any sense to me. 

Agree about exchange of contracts but I was referring to the broker still marketing the boat  ( comparable to still taking viewings for house) after taking deposit. It’s usual to put down a deposit before exchange of contracts on house purchases too. 

The issue here is around the non refundable deposit being asked by a broker and if I was selling I would not want the broker to stop marketing my boat until after the buyer had done their survey. 

No way would a reputable broker continue to market a boat after a price has been agreed and a deposit paid - IME after 40 years of dealing in property at all levels and values pre contract deposits are not normal in house purchase transactions unless a very nominal £250 on a new estate just to get rid of tyre kickers.

10 hours ago, PMcC said:

It's a big , can't call it an investment as it will decrease in value with time, so I will have a survey, two other boats I don't like as much but am hesitating about are only asking for 1000 deposit so 10% seems a bit over the top. Anyway thanks for your view :)

 

Never lost money on a boat yet - I'd call that an investment.................

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My answer to the broker would be along the lines of " it seem to me that you think there are defects and an inadequate description that means the true vale of the boat is 10% less than the price I agree so my offer has just gone down by 10% (or whatever) unless you reconsider that clause. Now show your good faith by passing my new offer and the reason for it  to the owner".

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14 minutes ago, Tony Brooks said:

My answer to the broker would be along the lines of " it seem to me that you think there are defects and an inadequate description that means the true vale of the boat is 10% less than the price I agree so my offer has just gone down by 10% (or whatever) unless you reconsider that clause. Now show your good faith by passing my new offer and the reason for it  to the owner".

Yes, it's an odd thing isn't it.  I wouldn't mind continuing with the purchase at a reduced price if the boat needed, say, a new inverter or central heating unit, which is entirely fixable.  What I really don't like the idea of is that the survey discovers something less easily put back to 100%, like there's been a bit of a flood and some of the floor is suspect, (or insert similar not completely erasable issue here) - now it simply isn't, and isn't going to be, the boat I'd hoped for.  I don't want it cheaper - I simply don't want it.

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13 minutes ago, Sea Dog said:

Yes, it's an odd thing isn't it.  I wouldn't mind continuing with the purchase at a reduced price if the boat needed, say, a new inverter or central heating unit, which is entirely fixable.  What I really don't like the idea of is that the survey discovers something less easily put back to 100%, like there's been a bit of a flood and some of the floor is suspect, (or insert similar not completely erasable issue here) - now it simply isn't, and isn't going to be, the boat I'd hoped for.  I don't want it cheaper - I simply don't want it.

So that is where you need to define up front, WHO determines WHAT needs to be done. In your floor example, likely the real cost of fixing it properly is more than £4K on a £40k boat, hence you can walk away with your money back. Fixing it properly means no botch jobs.

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I have only bought  twice and both times from the same brokerage.

Initial £1000 deposit after the offer is accepted , subject to survey.............of which £250 is not refundable.

The 10% comes after the survey and after ant further cost negotiation.

 

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20 minutes ago, Dr Bob said:

So that is where you need to define up front, WHO determines WHAT needs to be done. In your floor example, likely the real cost of fixing it properly is more than £4K on a £40k boat, hence you can walk away with your money back. Fixing it properly means no botch jobs.

 

But is Mr Dog's point that he doesn't want it fixed (properly or not), he wants the right to get his deposit back and walk away as he is 'not satisfied'?

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A standard BMF/RYA approved contract states -

5.Defects
5.1.If the inspection, survey or sea trial reveals any defect in the Vessel, its machinery, gear or equipment which was not disclosed to the Purchaser in writing prior to the signing of this Agreement, or if there are any deficiencies in the inventory prepared and attached to this Agreement, for which the aggregate cost of rectification by a competent and reputable shipyard or replacements (on a like for like basis, discounted to second hand prices) is collectively equal to or exceeds [5]% of the purchase price then the Purchaser may give written notice to the Seller or the Broker within 7 days of completion of the inspection, survey and sea trial, whichever is the later, specifying the defects and/or deficiencies and including a copy of all relevant extracts from a surveyor’s or adviser’s report, and either:
5.1.1.reject the Vessel, or
5.1.2.require the Seller to make good the defects and/or deficiencies or make a sufficient reduction in the purchase price to enable the Purchaser to do so. In this case all agreed items of work shall be completed without undue delay and shall be carried out to the express requirements contained in the Notice served by the Purchaser.
For the purposes of this Clause 5.1 and Clause 6.1.2 "completion of survey" shall mean the date of receipt by the Purchaser of a written or emailed survey report.

 

Edit to Add - another 'contract' :

5.2.2 Within fourteen days of the completion of the survey the Buyer may, by written notice to the Seller:
 
EITHER
 
5.2.2.1 Reject the boat outright if the Buyer rejects the Boat, this Agreement shall be automatically terminated and the Seller shall refund the Deposit to the Buyer in accordance with Clause 8.
 
OR
 
5.2.2.2 Reject the Boat but offer to proceed with the purchase and accept the Boat on the condition that the Seller agrees either:
 
5.2.2.2.1 to rectify specific listed defects or deficiencies in the Boat and/or the Inventory before Completion.  All required items of work to be completed without undue delay and carried out to meet the expressly specified requirements of the survey; or 
 
5.2.2.2.2 to a reduction in the Purchase Price to enable the Buyer to rectify such defects or deficiencies after Completion.
 
5.2.3 If the Buyer serves notice requiring the Seller to rectify specific listed defects or deficiencies, or to make a reduction in the Purchase Price, and the Seller has not agreed to make good such defects, or the Parties have not agreed a reduction in the Purchase Price within twenty one days, then this Agreement shall be deemed to have been rescinded on the twenty second day after the service of notice, and the Seller shall refund the Deposit to the Buyer in accordance with Clause 8.

Edited by Alan de Enfield
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3 minutes ago, Mike the Boilerman said:

 

But is Mr Dog's point that he doesn't want it fixed (properly or not), he wants the right to get his deposit back and walk away as he is 'not satisfied'?

But my point was that he can walk away as the repair cost would be high enough. Surely any problem that would not make you want a boat on a mid price sale would cost that sort of money to fix?

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5 hours ago, Dr Bob said:

So that is where you need to define up front, WHO determines WHAT needs to be done. In your floor example, likely the real cost of fixing it properly is more than £4K on a £40k boat, hence you can walk away with your money back. Fixing it properly means no botch jobs.

Oh absolutely!  The thing is, I need that decision to be mine or a joint one, but not the broker deciding that with clauses in his paperwork to help him.  The better brokers wouldn't be stuffing an unwanted boat up someone or forcing completion on a bodged up boat I'm sure, but there are those who will and many folk here could name a couple.  If I'm content with the small print I might well accept the terms, but I haven't had to do that so that's even better. In other words, I do define up front and it's never been a problem.

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5 hours ago, Mike the Boilerman said:

 

But is Mr Dog's point that he doesn't want it fixed (properly or not), he wants the right to get his deposit back and walk away as he is 'not satisfied'?

It's not that I won't accept a proper fix, I'm entirely content to do so.  My earlier examples were the inverter or the central heating unit, where a repair or replacement gets the unit to a known good standard.  What I don't want is to have to accept something not up to scratch, and we all know some repairs can never restore some things to the condition they were or should be in, the example I gave being the effects of water damage.

It's different with any issues declared up front, because then it's my choice as to whether I go ahead, whereas it's not that if such things can only be discovered after paying a binding deposit.  The 5% thing may well head most of issues off, but not all - and some brokers do fob off.  I want to be the arbiter of what I'm happy with is all.  If I was content that 2.5k was a reasonable discount to put right the damage to a 50k hull, then that's fine; if the broker thinks 2.5k worth of vinegar and brown paper covered with bitumen is acceptable over-plating, I don't wish to be forced by small print to accept that decision.

The broker I bought my boat through understood and accepted that, so he took my fully refundable deposit, I then had a proper, thorough look at the boat (which could equally have been a surveyor acting on my behalf) and, finding nothing amiss, I paid the balance.  I wasn't going to be pulling out because I didn't like the curtains or if I decided 57' wasn't long enough, purely if something was discovered which meant all was not as it appeared and the shortfall meant the boat could no longer meet the standard it otherwise appeared to. 

Mike, I feel you may be reading into my post a less than reasonable approach on my behalf.  I assure you that that's not what I mean to imply, nor do I expect traders to comply with unreasonable demands. I just ask, in the case of used motor vehicles or boats, that they allow me to give them a holding deposit unencumbered by small print whilst I carry out due diligence and they've been entirely happy to do so.  I don't ask this of all traders as, of course, in most other purchases of goods or services that approach simply isn't appropriate or necessary.  

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