As a Marine Surveyor, for me this has been a busy season. Lots of boat buying going on. It’s been pretty much a buyers market these past few years. It’s not so hot if you’re selling but if you’re in a position to buy the timing couldn’t be better. For the next few posts I’m going to go over the process of purchasing that first or next boat.
In my position as a surveyor, and being in the middle of the whole process I have usually have a front row seat to all this so I thought it might be prudent to review some of the common mistakes buyers make and discuss ways of avoiding them.
The first common mistake is that people make is that they get in a hurry, their emotions take over and this usually winds up costing them money. My advise here is to go slow, think things through and solicit professional assistance if necessary.
The next mistake commonly made is to purchase a vessel without having it surveyed. Believe it or not this happens more often than you might think. After the deal is closed the next step for the purchaser is to obtain insurance. On application one of the first comments made by the insurance company is “send us your survey.” The buyer is then sent scrambling to get the vessel surveyed and hopefully nothing major is uncovered. If it is then it’s up to the buyer to either try and re-negotiate with the seller or cover the repair cost themselves. I have to admit this happens more often on private sales as brokers usually press to have vessels surveyed as part of the process. I get involved in these deals every season and it’s tough to see people waste their hard earned money but its reality. Make the offer to purchase “conditional on survey” and allow enough time in closing for this to take place.
The next step in the boat buying process is to find a competent marine surveyor and arrange for the inspection of your potential purchase. This can be quite a chore in itself as surveyors come in all shapes, sizes and degrees of expertise. I could spend all day on this subject but I’ll try and stick to the most important points. Compile a list of the surveyors in your area. Your broker can usually supply you with this or simply look in the classifieds of local marine publications such as this one. Shop and compare pricing. Surveyors of quality and integrity will usually show similar pricing structures. Be wary of any quotes that are substantially higher or lower. With surveyors you usually get what you pay for. Ask top see a sample of their work. No reputable surveyor should have any problem with this request. As you read various survey reports you’ll soon become aware of the differences. Some will be three to four page inventory lists and some will be comprehensive twenty five page documentaries commenting on everything from the tasteful salon décor to the choice of hull color. A good survey report is usually somewhere in between. If the broker or marina states that they have their own “in house surveyor” be very cautious. There is the potential for a huge conflict of interest with this one. Ask if the surveyor carries liability insurance. Any surveyor should and if they don’t move on. Many marinas and yacht clubs will not allow un-insured surveyors to work on the grounds so this needs to be carefully considered. Finally be sure to contact your insurance company and verify if the surveyor you have selected will be accepted by the company. I often get called to re-survey boats that have just been surveyed and the insurance company would not accept the surveyor’s report.
This brings to the next mistake that is commonly made. The buyer does not to allow enough time have the vessel, hauled, surveyed, the report completed and the deal closed. This can vary depending upon the season but a time span of ten days to two weeks is not unreasonable. A boat purchase is usually an emotional experience and everyone’s in a hurry (the broker included) but remember, a considerable amount of money is being spent so try not to get carried away and let the process unfold as it should. You wouldn’t buy a house and expect the deal to close in three days. A boat purchase is no different. The process takes time. Marinas are busy and haul outs can be difficult to schedule. Surveyors are busy and since they have to co-ordinate their schedules around haul out times this can also be difficult. Once the survey inspection is completed it will usually take a couple of days for the surveyor to complete the written report.
Read the survey report carefully and question the surveyor on any issues that you deem important. Review the surveyor’s findings and recommendations with the broker or seller and ensure that you’re satisfied with the terms and conditions of the deal before closing.
Doing it this way can help you avoid many of the pitfalls and traps boat buyers can fall into as they try to rush the process and potentially save a few bucks in the process.