I agree the deposit shouldn't be returned if the boat does pass the advertised condition and checks. Isn't that the whole idea behind a deposit? In this situation, the seller might as well said 'no deposit needed, I'll hold it for you till you look at it, and I'll be the one to take the chance of missing a sell" as that is how it's being presented, more or less.
That said, with the statements of will return deposit and just the 1 day notice, I'd return it myself. Not worth the hassle nor publicity. Not like Legend passed up on other sells, we'd have to assume. Good business sometimes requires bending the rules. Just gotta decide which and were to bend them.

I am surprised that Baja126, stating 'our company' wasn't a little more thorough here though getting the terms in writing. $5000 is enough to put the ink to the paper

Also...if 5k was placed down. This now means the price is non negotiable after inspection ?
If the $ was non refundable they had this guy by the gonads from the get go....
Why budge on price? They'll make money regardless.
Should have been a contact. Sux for all....sounds sloppy on both ends.

With my limited experience in buying big ticket items, "deposit" meant being able to recoup monies down. "Earnest" money meant no refunds, hold the item for "my" purchase regardless of success or failure to secure funds or simply backing out. jmo

This could be the part that proves whether monies will be given back:

"contacted Casey, and he assured us that the money would be refunded, and also sent a text message to our customer saying that we would be getting the money wire transferred back to us."

Sloppy yes. A good contract protects the buyer and seller.

I try not to take deposits because of situations like this. Much smaller scale though. If I do take one it's not for an extended period, and I tell other potential buyers cash is not in hand, but get back to me in a couple days.

They sound broke to me. Nothing worse than someone who won't man up and discuss the issue with their client.

Unless we haven't heard the whole story...

Why are boats different than houses, cars, or anything else for that matter? I got burnt on this as a buyer myself. Had nothing to do with money. Had nothing to do with a survey. If I change my mind and want to go another route why would a seller be the beneficiary?

When you put earnest money down on a house do you get it back? Yes.

I put money down on my first boat, which I did buy, and had I changed my mind the dealer would have returned it. It seems that only private parties follow this practice, or at least until I saw this.

As a seller, there is a burden of risk and you as the seller assume the responsibility of holding your property.

Legend, refund the guy his money...your out nothing (in this case because so little time went by). Now if the 5K was sent as a deposit and weeks went by and this buyer did not show up, Legend could show good cause that they passed up a few potential buyers but said it was on "deposit hold" with another buyer which then they could argue, no refund.

When you go to a car dealer and ask to take a car for a test drive, some dealers ask for a small deposit before they hand you the keys...if you take the car for a test and decide it is not what you thought, good customer service hands the money back to the customer. A crook of a car dealer says "sorry" no refunds.

What about pulling the boat out cleaning it etc etc!Boat is not a house binder is the term used AKA binding!!I think unless subject to was added to the contract he has to loose some or all of his deposit !Nuf said!

I think more info is needed here. Could be a case of not knowing the whole story.