Re: [MV] Vehicle pre-sale deposit. What's fair?

Jeff Polidoro (willys@vgernet.net)
Tue, 13 Jan 1998 17:55:09 -0500

> I'm currently negotiating the sale of my father-in-law's GPW (in Texas)
> http://www.jps.net/fordgpw/fs05.html with Mauricio Mora in Columbia. He
> wants to put down a deposit so that we will hold the GPW for him for six
> weeks until he arrives.
>
> (If anyone wants to buy the GPW right now, they'll have to wait. I'm
> currently holding the GPW for Mauricio because we haven't discussed the
> details of the deposit. If the negotiation with Mauricio doesn't work
> out, the GPW will become available again.)
>
> I'd like your comments on the details of the deposit arrangement.
>
> I thought I'd ask for $500 (drawn on a US bank) to hold the GPW for him
> for 6 weeks.
>
> If he doesn't show up within 6 weeks, we keep the $500. (I think that's
> fair since we might have to turn away other buyers during that time.)
>
> If he changes his mind before 6 weeks elapses, his refund is
> proportional to the number of days remaining. (That is, if he changes
> his mind after 5 weeks, we refund 1/6 of the $500.)
>
> If he shows up within the 6 week period and doesn't want the Jeep, we
> give the $500 back. (After all, he will have gone to a lot of expense
> to get here to look at it.)
>
> If he shows up within 6 weeks and buys the Jeep, we reduce his purchase
> price by the amount he's already given us ($500) for the deposit.
>
> If he shows up late (after 6 weeks) and the GPW hasn't sold, we still
> sell it to him for the amount we're asking minus the deposit he paid.
>
> What do you think? Are these terms fair to both of us? Can you think
> of a situation where one or the other of us isn't getting a fair shake?

My feeling about these type of things are that anything that people, above
the age of reason, agree on is fair. It may not be universally fair but in
the limited, isolated, snapshotted dealings of folks with certain needs at
a certain time, what might otherwise be a bizarre agreement may be the most
fair arrangement in the World.

Regarding comments on your specific deal, what you are describing is really
a prorated option to purchase, subject to (Mauricio's) approval, that you
will credit in full against an eventual purchase. A deposit is customarily
refundable for any reason the buyer wishes (doesn't seem inherently fair
but that's the nature of trying to sell stuff), whereas an option would
generally work more as you describe. The question would be whether
Mauricio feels he's giving you a deposit or buying an option or right of
refusal. As long as you are both clear on which it is, it sounds like a
fair (but rather involved) deal to me.

The US bank requirement isn't really necessary as he's not getting anything
in return for the money, meaning you're not shipping him the Jeep when you
get the $500, just waiting for him to come see it. You'd have plenty time
to negotiate the check or money order no matter where it's from, long from
before the Jeep goes away.

Further, (only 'cause you asked):

As you say, if you hold the Jeep (under whatever agreement) you run the
risk of losing a sale during the period you have agreed to make it
unavailable to the general public but, by the same token, Mauricio is
risking a trip from Columbia on your word that the Jeep is in a specific
condition. If it turns out that you have misrepresented the Jeep, (not
necessarily intentionally) you probably don't intend to reimburse him for
his time and expenses so he is really taking a much greater risk than you
are by holding it for a couple of weeks.

My feeling is always to keep both to a minimum, the deposit and the time
you keep it off the open market. If I were selling the Jeep to someone
serious enough to travel from Columbia, possibly buy the Jeep and then pay
to ship it back, I'd try to get them to come asap and hold it for them with
no deposit in exchange for coming in the shortest possible time frame.

But, in my opinion, even if he agrees that you can keep the $500 if he
doesn't show I think you should return it if it doesn't cost you a sale,
significantly delay another sale or force you to reduce the price to sell
it. My feeling is that under no circumstances should a seller... you, me
or anyone end up with more than your price by keeping deposits.

FWIW and, again, only because you asked,

Jeff

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