How to document a "deposit" on a private party sale?

[tyoungs]

Helping a good friend who lost her husband just before Christmas - she is selling her motor home and I am handling all the contact with "prospects". Showing the unit tomorrow and if they want to purchase, what is the proper documentation for taking a deposit. We won't be able to finish the deal for about 2 weeks as the owner is out of town. So I want to be able to take a deposit with the understanding that it locks both of us into a specified deal.

I could come up with some appropriate language but I thought I would ask the all-knowing on here. Any suggestions would be greatly appreciated.

[Walaby]

Glad it worked out without any hassle.

Nice that you helped them out as well. Good on you.

Mike

[tyoungs]

OP here - on-line document worked just fine - nice couple drove 100 miles to see the coach and offered a fair price to purchase. Gave them receipt for the modest deposit (they offered to pay full cash on the spot) and recognized that owner will complete sale when she gets back from Fla in about 10 days. Receipt had my name and owner's name on it and was acceptable to both parties.
Appreciate all the legalese but this transaction was based on a mutual feeling that we were dealing with honest folks on both sides. Guess if I was in more metropolitan area I would be more worried about being scammed and I guess they trusted me enough to leave a $500 check made out to owner, not me.
Bottom line, glad I could help a friend who is going through a really tough time. We only advertised this on RV Trader last Tuesday and apparently priced it right because we got good response (2 folks were waiting to see if this couple bought before they came to look at). Got a nearly full price offer because it was a clean low mileage unit that was obviously well maintained.

[Walaby]

westernrvparkowner wrote:
Not to be a spoil sport, but how would most people feel on the other side of this transaction. Some guy is asking for people to leave a non refundable deposit on a RV he does not own and has no ability to legally sell. That deposit will either need to be cash, or a check made out to either the non-owner or to someone the buyer has never laid eyes on. Not much recourse for the buyer should the whole thing be a scam.
If I was the buyer, I wouldn't offer anything other than a hearty handshake and my phone number for the owner to call when they are able to actually complete the sale.

Now that's a good point that none of us thought about.

Mike

[Bill_Satellite]

Ohhh, ohhh, I know! Don't take a deposit. First person with enough cash wins!

[westernrvparkow]

Not to be a spoil sport, but how would most people feel on the other side of this transaction. Some guy is asking for people to leave a non refundable deposit on a RV he does not own and has no ability to legally sell. That deposit will either need to be cash, or a check made out to either the non-owner or to someone the buyer has never laid eyes on. Not much recourse for the buyer should the whole thing be a scam.
If I was the buyer, I wouldn't offer anything other than a hearty handshake and my phone number for the owner to call when they are able to actually complete the sale.

[BobGed]

Bumpyroad wrote:

BobGed wrote:
This is why vehicles should be titled and registered in both names as 'OR' instead of 'AND', i.e. John Doe or Jane Doe.

a good point. at least till some lawyer comes on here and rebuts the argument. 🙂
bumpy

Whew, some lawyer did come on here and didn't rebut my statement. 😉

I actually went through this situation in CA years ago. After my father passed away my mother wanted to sell the large car they had, and buy something smaller. Since the title was in both names as 'OR' there was no problem simply signing it over to the dealer where she traded it in. They did not ask for a death certificate.

[DownTheAvenue]

westernrvparkowner wrote:
Deposits are typically refundable, despite what most people want to believe. The entire transaction is going to be done on faith and goodwill until the actual funds to purchase are exchanged and buyer takes delivery.
While you can go through a whole bunch of legalize and probably create an enforceable document, you will also be creating some legal issues for yourself. The document is going to have to spell out all the potential contingencies that could happen. What if the buyer dies, becomes incapacitated, loses their job, their house burns down with the cash to purchase the rig inside etc. etc. etc. On the other hand, what if the rig burns to the ground, or a tree falls on it, or the neighbor kids decide it is a great canvass for graffiti? You are going to spend a lot of time and money for nothing. There isn't a contract you could create that would force the buyer to buy if they change their minds. You might, and I stress might, be able to keep a small deposit, but you would lose in court if the deposit was deemed to be too large for the transaction. For example, a $500 dollar deposit on a $20,000 transaction may hold up in court, but a $10,000 deposit never would. After spending a day or two in court, would that $500 be worth it, especially if the buyer actually had a legitimate reason for backing out? (i.e. would you feel good about enforcing it on someone who just got diagnosed with terminal cancer?)
Just take a check for a deposit and hold it. Tell the buyer you are going to take back up deposits if the opportunity arises and proceed accordingly. Set a closing/delivery date that works for the absent seller and move on. If they back out, they back out. Tear up the check and go on with your life. The very worst thing that can happen is you lose two weeks of selling time in January, which isn't the greatest selling season anyway. RVs are not like fruit and meat, they don't have a short shelf life.

Like I previously posted I really like the arm chair and RV.net attorneys who speak what they know not.

I am an attorney (OK do some attorney jokes...I think they are funny too) and as I previously posted if the transaction is 4 figures then just wing it. If it is 5 to 6 figures get an attorney to write up the transaction hold the deposit money, and help with titling (especially if the deceased husband owned the motorhome and died w/o a will).

[Walaby]

Good points from most people. The one item of significant value that I sold involving a deposit was my 2010 Dodge Challenger. The individual said he wanted to give me the 10K deposit in cash, and of course, I keep vehicle until remaining balance paid off.

I made it real easy as I said, and I set it up to keep 1K of the deposit, he told me, after I wrote it up, that he was expecting I'd keep all deposit. I told him no, that's just not my way. And I said if he had a honest reason for backing out, and just let me know, that in all reality, I'd probably give it all back.

I also told him, in writing, I would not drive the vehicle, unless necessary, such as if my daily driver was inop etc...

Really these transactions can be very easy and don't have to have a lawyer writing everything up. Just be reasonable in what you ask, and treat the other party like you want to be treated, and it will go just fine.

As WRVPO points out, you can spend forever and a ream of paper documenting all the potential scenarios, and what the course of action is. And worse case, you may be out a couple of weeks of lost time in sales.

Mike

[DutchmenSport]

You can simply write it down on a slip of paper with all the terms and conditions and you'll be fine .... IF both purchaser and buyer sign it! Make 2 copied and you both sign both, you keep one, they keep one.

Include vehicle description, VIN, currently titled to... and actually, the true owner is the one who really should sign it, unless you have power-of-attorney.

[Bumpyroad]

BobGed wrote:

Bumpyroad wrote:

rgatijnet1 wrote:
Since her husband died just before Christmas, I have to assume that a lawyer is involved to settle his estate. I also assume that her deceased husband's name is on the title, which further complicates the transfer to a new owner.
Why not let the estate lawyer handle the paperwork and deposit to sell the RV?

I bought a boat from a lady who's husband had recently died and needed a copy of the death certificate to get it titled,etc. as his name was on the title. don't remember if her name was also on it.
bumpy

This is why vehicles should be titled and registered in both names as 'OR' instead of 'AND', i.e. John Doe or Jane Doe.

a good point. at least till some lawyer comes on here and rebuts the argument. 🙂
bumpy

[BobGed]

Bumpyroad wrote:

rgatijnet1 wrote:
Since her husband died just before Christmas, I have to assume that a lawyer is involved to settle his estate. I also assume that her deceased husband's name is on the title, which further complicates the transfer to a new owner.
Why not let the estate lawyer handle the paperwork and deposit to sell the RV?

I bought a boat from a lady who's husband had recently died and needed a copy of the death certificate to get it titled,etc. as his name was on the title. don't remember if her name was also on it.
bumpy

This is why vehicles should be titled and registered in both names as 'OR' instead of 'AND', i.e. John Doe or Jane Doe.

[Bumpyroad]

rgatijnet1 wrote:
Since her husband died just before Christmas, I have to assume that a lawyer is involved to settle his estate. I also assume that her deceased husband's name is on the title, which further complicates the transfer to a new owner.
Why not let the estate lawyer handle the paperwork and deposit to sell the RV?

I bought a boat from a lady who's husband had recently died and needed a copy of the death certificate to get it titled,etc. as his name was on the title. don't remember if her name was also on it.
bumpy

[wolfe10]

westernrvparkowner wrote:
Deposits are typically refundable, despite what most people want to believe. The entire transaction is going to be done on faith and goodwill until the actual funds to purchase are exchanged and buyer takes delivery.
While you can go through a whole bunch of legalize and probably create an enforceable document, you will also be creating some legal issues for yourself. The document is going to have to spell out all the potential contingencies that could happen. What if the buyer dies, becomes incapacitated, loses their job, their house burns down with the cash to purchase the rig inside etc. etc. etc. On the other hand, what if the rig burns to the ground, or a tree falls on it, or the neighbor kids decide it is a great canvass for graffiti? You are going to spend a lot of time and money for nothing. There isn't a contract you could create that would force the buyer to buy if they change their minds. You might, and I stress might, be able to keep a small deposit, but you would lose in court if the deposit was deemed to be too large for the transaction. For example, a $500 dollar deposit on a $20,000 transaction may hold up in court, but a $10,000 deposit never would. After spending a day or two in court, would that $500 be worth it, especially if the buyer actually had a legitimate reason for backing out? (i.e. would you feel good about enforcing it on someone who just got diagnosed with terminal cancer?)
Just take a check for a deposit and hold it. Tell the buyer you are going to take back up deposits if the opportunity arises and proceed accordingly. Set a closing/delivery date that works for the absent seller and move on. If they back out, they back out. Tear up the check and go on with your life. The very worst thing that can happen is you lose two weeks of selling time in January, which isn't the greatest selling season anyway. RVs are not like fruit and meat, they don't have a short shelf life.

I agree-- don't over-think this.

Of the 4 boats and 2 DP's I have sold, I took a deposit on none of them. Only stipulation was outside closing date (how long I would hold it off the market) and an agreement on most secure way for both parties to transact the money transfer.

[westernrvparkow]

Deposits are typically refundable, despite what most people want to believe. The entire transaction is going to be done on faith and goodwill until the actual funds to purchase are exchanged and buyer takes delivery.
While you can go through a whole bunch of legalize and probably create an enforceable document, you will also be creating some legal issues for yourself. The document is going to have to spell out all the potential contingencies that could happen. What if the buyer dies, becomes incapacitated, loses their job, their house burns down with the cash to purchase the rig inside etc. etc. etc. On the other hand, what if the rig burns to the ground, or a tree falls on it, or the neighbor kids decide it is a great canvass for graffiti? You are going to spend a lot of time and money for nothing. There isn't a contract you could create that would force the buyer to buy if they change their minds. You might, and I stress might, be able to keep a small deposit, but you would lose in court if the deposit was deemed to be too large for the transaction. For example, a $500 dollar deposit on a $20,000 transaction may hold up in court, but a $10,000 deposit never would. After spending a day or two in court, would that $500 be worth it, especially if the buyer actually had a legitimate reason for backing out? (i.e. would you feel good about enforcing it on someone who just got diagnosed with terminal cancer?)
Just take a check for a deposit and hold it. Tell the buyer you are going to take back up deposits if the opportunity arises and proceed accordingly. Set a closing/delivery date that works for the absent seller and move on. If they back out, they back out. Tear up the check and go on with your life. The very worst thing that can happen is you lose two weeks of selling time in January, which isn't the greatest selling season anyway. RVs are not like fruit and meat, they don't have a short shelf life.