Deposits, Escrow, and Not Wiring Money to a Stranger
Where the deposit sits decides whether a bad survey costs you a weekend or costs you ten percent.
By Boatmere Brokerage Desk · Updated · 6 min read
Two things decide whether your deposit is safe: who is holding it, and what the contract says you can get it back for. Neither is decided by how nice the seller seemed.
Is a boat deposit refundable?
Only if the agreement makes it so. The standard US brokerage structure does, and it looks like this:
- Ten percent of the price, paid on signing.
- Held in the broker's escrow or trust account, not the seller's.
- Refundable if the buyer rejects the boat, in writing, by a named date, on the basis of the survey or sea trial.
- Credited against the balance at closing if the buyer accepts.
The mechanism that matters is the acceptance deadline. You are not accepting the boat when you pay the deposit. You are reserving the right to inspect it, and acceptance is a separate written act that happens after the survey.
Miss that deadline and many agreements deem the boat accepted. Diary it the day you sign.
Why the account matters more than the amount
A deposit in a broker's trust account is segregated client money. The broker cannot spend it, the seller cannot reach it, and it moves according to the agreement.
A deposit in a private seller's checking account has already been spent, at least conceptually. If the survey goes badly you are relying on a stranger's good character and, failing that, on small claims court in a state you do not live in.
On a private sale with no broker, use a marine escrow service or a title company. It costs a few hundred dollars and it converts a trust problem into a paperwork problem.
The unsatisfactory survey clause
Read this clause specifically, because the drafting varies and the difference is real money.
The buyer-friendly version lets you reject on findings you consider unsatisfactory, full stop. Your judgement, your call.
The seller-friendly version requires the findings to exceed a dollar threshold, or gives the seller the right to cure defects and hold you to the sale once they have. That second one sounds reasonable and it is how people end up owning a boat they no longer want because the seller fixed the two items on the list and the deal stayed alive.
Neither is unusual. Just know which you signed.
The wire fraud pattern
This is the part of a boat purchase most likely to cost you everything, and it is depressingly consistent.
Someone compromises an email account in the chain, usually the broker's. You get payment instructions that look exactly like the real ones, from the real address, in the same thread, with the same signature. The account number is different. The money lands in a mule account and is gone within hours.
The counter-measures are unglamorous and they work:
- Phone the escrow agent to confirm details, on a number you found on their website or a previous statement, never the number in the email.
- Treat any change to payment instructions as fraud until confirmed by voice. Legitimate changes mid-transaction are rare.
- Send a token amount first on large transfers and confirm receipt before sending the balance.
- Be wary of urgency. Pressure to wire today, before a deadline, is the oldest tell there is.
I would rather be the buyer who irritated a broker with a verification call than the one who wired $140,000 into a stranger's account because the email looked right. It has happened to people considerably more careful than average.
Frequently asked questions
- Is a boat deposit refundable?
- It is if the purchase agreement says so. The standard structure makes the deposit refundable on an unsatisfactory survey or sea trial, with a written deadline for the buyer to accept or reject. Without those contingencies in writing, a deposit is usually at risk.
- How much deposit is normal on a boat?
- Ten percent of the purchase price is the convention in US brokerage sales. It is held in the broker's escrow or trust account rather than paid to the seller, and it is credited against the balance at closing.
- What is an unsatisfactory survey clause?
- A contingency letting the buyer reject the boat, in writing and by a stated date, based on the survey findings. Well-drafted versions do not require the buyer to prove the findings are serious, which keeps the judgement with the buyer rather than the seller.
- How do I avoid wire fraud when buying a boat?
- Confirm account details by voice on a number you sourced yourself, never a number from the email carrying the instructions. Treat any last-minute change to payment details as fraudulent until proven otherwise, and send a small test transfer first on large amounts.
