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A deal is a deal - definitely not cool to back out. But like everyone said - talk is cheap and cash is king. Tell the local guy you have a better offer but you will stand by your word as long as he can come up with the cash by a specified time - otherwise start talking to the ebayer.
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+1
Also let the (potential) ebay buyer know that you had already made a verbal agreement to sell the boat for less than what ebay guy offered. If the deal with the local guy falls through, then you'll contact ebay guy for first dibs.