The deposit: how escrow protects you

What the deposit does

The deposit commits the buyer to the agreement and gives the seller confidence to take the boat off the market. It is commonly about 10% of the price. It forms part of the price, and it is returned if the agreement's conditions are not met.

Why a neutral holder

If the seller holds the deposit, you carry the risk that it is spent or that the seller disappears. A neutral holder keeps it separate until the conditions are met. The holder could be a broker's client account, a lawyer, a notary, or a specialist escrow provider. Ask the broker which one is used in this deal and read its terms. Sea Wave's own arrangements are not set out in this guide.

What the agreement should say

• Who holds the deposit, in which bank and in what currency.
• The conditions for refunding it in full: failed survey, failed sea trial, failed document checks, failed finance.
• The conditions for releasing it to the seller: closing, or a buyer's default.
• The deadlines for each step.
• Who pays the bank fees.

Check the holder before you transfer

1. Look up the company or the lawyer in the official register.
2. Phone the number on the register, not the number in the email.
3. Confirm the bank account name matches the holder.
4. Send a small test amount if the holder agrees.

Payment fraud

Fraudsters copy a broker's email and send "updated bank details" shortly before payment. Treat any change in account details as suspect. Confirm it by phone with someone you already know. See 10 red flags in a used yacht listing and Proof of funds and anti-money-laundering checks: what to expect.

What if the deal fails

The agreement states who gets the deposit. If the buyer rejects the boat for a reason the agreement allows, the buyer gets it back. If the buyer withdraws without reason, the seller may keep it. Disputes over this are the most common after a failed sale, which is why the conditions need exact wording.

Related guides

• Making an offer and the memorandum of agreement
• Survey and sea trial: how it works, who pays, what happens next
• Closing and handover: bill of sale, payment, documents, keys