What are the best practices for escrowing funds when selling for sale by owner?

Please note that since publishing this article CatamaranSite has started offering a high quality contract to closing service at the lowest price in the industy. Please see more at this link and read more below about all options.

One of the most uncomfortable aspects for a buyer and seller in a for sale by owner catamaran transaction is the escrowing of funds. We see that purchase and sale paperwork is formalized and examples are available online. Closing paperwork is easily handled by a marine documentation agent for a reasonable fee. But escrow services has more complicated options, costs, and risks involved.

In a for sale by owner situation, escrowing can take many forms. A buyer may not provide a deposit which then exposes the seller to costs incurred in the case the buyer disappears without paying the haul out, survey, or any other costs as agreed upon. A second dangerous scenario is when the buyer provides his or her deposit directly to the seller for safe keeping. But if this deposit is agreed as refundable, the incentives in the transaction weigh heavily against the interests of the buyer and towards the seller. If there is any disagreement about the transaction, the seller is holding funds and seeing the dispute from his point of view. The seller is not a neutral third party to decide what is fair. This situation option puts both parties in difficult positions.

What we see working best is the budgeting in a for sale by owner transaction of some type of mutually agreed upon third party service and thanks to the internet many are available. Here are a few options.


One option is Escrow.com which has straight forward pricing of 0.89%. This service is simple software that helps handle the flow of the transaction. The downside is that it is not marine specific and at almost 1% of the transaction the fee can get pretty steep for higher value sales. The nuances of a catamaran transaction will not be specifically addressed, and you will have to find your own purchase and sale paperwork as well as closing paperwork to handle title transfer. CatamaranSite.com can recommend a documentation agency to help with that part. For most clients, Escrow.com is too high priced and not marine specific enough.

Marine Title / Documentation Agency

No matter what, you will likely appreciate the service of a documentation agent. Some documentation agents also act as title agencies and provide escrow service. The integration of the escrow and closing paperwork makes for a smoother transaction. One that we have seen multiple times provide this service to for sale by owner transactions is Pacific Maritime Title. And not only are these companies marine specific and experts at handling closing paperwork, their escrow fees are usually fixed unlike the percentage based fee of other options. The escrow fee can be as low at $600. The regular documentation fees vary based on registration details anywhere from $500 to thousands of dollars. Documention agents can be very good value!

One downside is the title agency is unlikely to offer transactional paperwork, advise on common sales standards, or understand marine surveys and handle disputes related to transactional issues.

Maritime Attorney

A regular or maritime attorney. Escrow is a basic service they may provide. Maritime is probably best as they understand better unique complexities of boat transactions and may have connections to handle paperwork such as a referral to a reputable marine documentation agent. Fees widely vary here from our experience and are usually based on hourly rates and time involved. While it is difficult to predict hours, an attorney could run as high as $5,000. Fees here are non-refundable if the deal does not go through which could be very painful. Maritime attorney in our experience can be a frustrating option.

Yacht Broker

The most expensive option is a broker and while you should find a yacht broker who will do the transaction for less than the standard 10% catamaran commission, their fees are much higher than a documentation agent. They may also refer you to the documentation agent at the end for the closing paperwork, so you could incur documentation fees anyways. A suggestion would be to negotiate the best price possible which should be less than 5% of the transaction or if the catamaran value is a high price then capped at some sort of fixed fee. One benefit is their fee structure is conditional on the sale and refundable if it all falls through.

Brokers will provide the most support including purchase and sale paperwork, deal flow management, escrow service, and referrals to local yards, surveyors, and other support groups. But when you have gotten this far selling by owner, it can be annoying to bring in someone else with other incentives. A broker may see the failure of the deal as an opportunity to sell the buyer a higher commission catamaran or to capitalize on the seller’s frustration and disappointment to score the catamaran as a new brokerage listing. Bringing a broker in can result in complications. We recommend you find a highly regarded broker that you have had personal experience with in the past and know you can completely depend on to be a third party and respect the FSBO situation.

CatamaranSite Closing Services

In 2022 we have started offering what we think is a better option than an attorney or yacht broker for full service. We can provide a range of service from a low cost basic service like a title agent all the way to the level of support of a yacht broker at a much lower price without any of the conflicting motivations of a yacht broker. We have 30 years of contract to closing experience, have appropriate licensing, tax registrations, etc. Please see our escrow request form at this link and feel free to submit a request or ask addtional questions. We model ourselves as the Costco of yacht sales providing incredible quality at unbeatable prices.

Bottom Line

Handling escrow is an important discussion item for a FSBO buyer to protect his deposit or a FSBO seller to prevent liens from a disappearing buyer. A third party service provides the smoothest transaction and there are many options outlined above, and we think our service is the best choice for every situation. For forms and more information, please see our Catamaran Sale Forms page.

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