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Good Faith Down Payment?


LifeSong
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Being new to responding to classifieds, I have a question about securing a potential TT until you can look at it.
Is it a common practice to offer a good faith down payment until you can get there to inspect it?
I know this must be risky, and no one has asked me to do this, I'm just curious as to what is custom.  With so many of these moving at light speed, I hate to miss the opportunity by being slow to respond.
Thank you!

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There is no way that I'd ever do that, and I have heard of at least one major dealer who has asked buyers to do that. For a dealer, it is a way to tie a customer to them until the salespeople find something they can sell to you. In most cases the dealer I'm thinking of never shows the advertised RV to the customer and I suspect it never actually existed. In a private sale it would be even more risky.

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That's how I bought my motorhome.  Paypal deposit of $500 until I could get there a week later, with the understanding that full payment was due if it was in the stated condition, and refund if it was not as stated.  It was better than stated, so I gave up the rest of the cash.  The way Paypal handles buy protection makes it very safe.

 

Edited by Carlos
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When I got my current fiver they asked for a $500 deposit and there were two other customers who were trying to buy it and they had credit applications pending. They had already given me a trade in amount for my current fiver and it was paid for and in their shop. I told them no because with two people trying to buy it ahead of me and they had my fiver in their shop that I was going to trade had in with a trade in value of $27,000. The salesman had to ask the sales manager if that was ok, it was. Then the salesman told me that one of the would be buyers had a credit score of about 600 and they wouldn't get credit approved. I asked why they took his application and deposit if they knew that he couldn't get a loan? They never really responded. I ended getting the fiver because both of the potential customers couldn't get loans approved.

There were two fivers which were almost the same. This was in September 2018 and they where 2018 models which had been on the lot for some time and it seemed that they wanted to get rid of them. The paper work listed them both at about $116,000. and they where selling for $68,000. I had followed then on the dealers website for a number of months and they were asking almost $90,000 back then.

We felt good about the deal and I had already had approved credit from Essex, Bank of the West now owned Essex and they were now funding RVs thru them. I always get my own credit before I go shopping for RVs, trucks and autos. I don't tell the dealers what interest rate I have and most of the time the dealers will due better. They did by 1/4 percent. Good Luck

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1 hour ago, NDBirdman said:

I would never do it.  But to each his own.  I'd rather show up and the RV be sold than show up and they say eff you, what $$.

So I assume you also make NO deposit once you see the unit and agree to buy it. Otherwise, they could simply deny that as well. Unfortunately, I'd never sell to someone that refused to make ANY downpayment, unless they paid me cash at that moment. I'd NEVER hold an RV for someone if they had no "skin in the game".

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1 hour ago, NDBirdman said:

I would never do it.  But to each his own.  I'd rather show up and the RV be sold than show up and they say eff you, what $$.

 

5 minutes ago, Jack Mayer said:

So I assume you also make NO deposit once you see the unit and agree to buy it. Otherwise, they could simply deny that as well. Unfortunately, I'd never sell to someone that refused to make ANY downpayment, unless they paid me cash at that moment. I'd NEVER hold an RV for someone if they had no "skin in the game".

I think that is a different situation. We only purchased our Rv's, all 6 of them from a dealer and once we have placed the order and agreed to the purchase a down payment is a normal thing . I do not consider that a "good faith payment"

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Earnest money, good faith, deposit, all the same.  Just a way for a buyer to declare himself more than a tire-kicker while there are things to do before delivery, such as inspections, financing, or just an inability to pick it up instantly.

When I sold my last boat, the buyer gave me a $1k check pending her survey (boat inspection) and financing.  This is such SOP that you just download the form for this from any of the boating clubs.  I'm kind of surprised to see adults who have never done this.

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PPL, a consignment dealer, says they require $500 earnest money, and though they take your credit card info, they don't charge anything on it. Of course they say it's fully refundable if the RV is not as advertised or the owner refuses to fix any deficiencies discovered. In truth, I think it's just to get you to show up like you say you will, as they are holding the unit for 2 weeks, basically on your word. They never did charge my credit card, but instead asked me to bring the entire negotiated amount with me, either cash or cashier's check. I chose a cashier's check to keep the government out of it, as any purchase over $10k cash must be reported to the IRS on form 8300.

I don't think I'd trust an individual seller with any earnest money though. Too much opportunity to be scammed.

Chip

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14 hours ago, Jack Mayer said:

So I assume you also make NO deposit once you see the unit and agree to buy it. Otherwise, they could simply deny that as well. Unfortunately, I'd never sell to someone that refused to make ANY downpayment, unless they paid me cash at that moment. I'd NEVER hold an RV for someone if they had no "skin in the game".

The question was about making a deposit to hold an RV before you see it. Making a deposit on an RV after you look at it is a very different thing. 

Sending money to people you have never met, to hold an RV that you have only ever seen in a picture is very different from putting a deposit on one when you are at the RV and dealing with the seller in person. Even then, if the seller doesn't give me a written & signed receipt for the deposit, I don't give them money. 

Edited by Kirk W
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I bought my motorhome by sending the private seller $500 via Paypal.  This is safe since Paypal is an intermediary, it's all documented, and they have a process for reclaiming the deposit.  It's a very different thing if you're talking about handing someone cash, but that would be silly since...you'd be there to see it.  In my case the rig was 500 miles away and I needed time to make arrangements to get there.

 

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4 hours ago, Carlos said:

I bought my motorhome by sending the private seller $500 via Paypal.  This is safe since Paypal is an intermediary, it's all documented, and they have a process for reclaiming the deposit.  It's a very different thing if you're talking about handing someone cash, but that would be silly since...you'd be there to see it.  In my case the rig was 500 miles away and I needed time to make arrangements to get there.

 

Then I assume you sent the funds via PayPal as a business transaction as opposed to a "gift" or a "friend or family" transfer.  The business transaction charges the recipient a fee.  The gift does not.  And, IIRC, there is no recourse for a gift transaction.  Many people do not know there are variations of PayPal payments.

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I always follow Paypal and eBay rules.  This is why I've never been ripped off on either, though some have tried.  PP has always come through.  One time for $3k!  Every time I hear about a Paypal horror story, the person telling it did something shady themselves.

 

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