Question about Boat Surveys

[Teknishn]

Hi,
Am in the middle of negotiations to purchase a boat remotely as I live abroad. The price has been negotiated down to one that both the owner and I are comfortable with. However, prior to purchasing the boat I am having a survey done on it so that I have a 3rd party view of the boat's condition before forking over the cash. More concerned about the boat's condition than the valuation assessment included in the survey.

I've owned a few boats over the years but have never had a professional survey done. I understand the survey process (I repair boats and yachts for a living). What I don't understand is what happens AFTER the survey....yes, I get a survey report, which is what I'm paying for. Does the owner of the boat also get a copy of the survey (which I've paid for)?. And if so, when said owner sees the valuation of his boat is over twice his asking price I'm worried that he may back out of the deal or try to increase the price. Is this something that happens? Just curious, as I don't know....Or am I asking the wrong questions with the surveyor?

[robert sailor]

No, you hire the surveyor and only you get a copy of the actual survey. What you decide to do with the information is up to you.

[Teknishn]

Thanks for the info Robert Sailor. Now I know (Doesn't make me smarter...just better prepared as I know something new)

[robert sailor]

That's what these forums are for, your welcome R

[vjm]

If you have a written contract, that usually locks the seller into a price (he can't back out or try to increase the price) but leaves you free to back out based on the surevey and sea trial. You do not have to give a "good" reason to back out, or disclose the contents of the survey. if you choose to renegotiate the price based on the survey, that is a new contract. The seller can refuse, and you can either execute the old contract at the old contract price, or you can walk.

I am sure this varies country to country, so if you aren't sure if what you are doing is legal/correct, consult an attorney for guidance.

[valhalla360]

Originally Posted by vjm

If you have a written contract, that usually locks the seller into a price (he can't back out or try to increase the price) but leaves you free to back out based on the surevey and sea trial. You do not have to give a "good" reason to back out, or disclose the contents of the survey. if you choose to renegotiate the price based on the survey, that is a new contract. The seller can refuse, and you can either execute the old contract at the old contract price, or you can walk.

I am sure this varies country to country, so if you aren't sure if what you are doing is legal/correct, consult an attorney for guidance.

Unless the seller made a huge mistake agreeing to the terms of the contract, you do need a reason to back out or you risk the seller hanging onto your deposit.

Of course, there is always something that shows up in the survey you can use as a reason.

To the original question, the survey is yours to do with as you please.

[StuM]

Agreed that it is your survey, you do not have to disclose any part of it to the seller.

But if the survey reveals any significant defects not disclosed when you agreed the initial price, you can disclose those defects and negotiate with the seller to reduce the price or fix them before settlement.

[Teknishn]

To all that have replied,
Thank you for the information. It has clarified things for me. No, there is no contract as we are not talking about a whole lot of money for the boat. As I stated in my original post, I live abroad. As such, I cannot inspect the boat myself as I have done on my previous boats (2 power, 2 sail). The photos of the boat and the description of the boat that I have received from the owner when compared to the asking price make it a sound a bit too good to be true (those deals are out there...but are rare). So, "Caveat Emptor" (Let the buyer beware), am having a survey done. Again, Thanks for all of the information, much appreciated

[vjm]

Just a tip, before you spend a dime hiring a surveyor, get into contract. And that means a written contract. I just went through this, and the seller decided not to sell after I made travel reservations that were not refundable. Your seller could sell the boat five minutes before the surveyor arrives, and you are stuck paying for the surveyor's time.

If you want the boat, get into contract and renegotiate later if the condition is not as represented.

[skipmac]

Originally Posted by Teknishn

To all that have replied,
Thank you for the information. It has clarified things for me. No, there is no contract as we are not talking about a whole lot of money for the boat. As I stated in my original post, I live abroad. As such, I cannot inspect the boat myself as I have done on my previous boats (2 power, 2 sail). The photos of the boat and the description of the boat that I have received from the owner when compared to the asking price make it a sound a bit too good to be true (those deals are out there...but are rare). So, "Caveat Emptor" (Let the buyer beware), am having a survey done. Again, Thanks for all of the information, much appreciated

If the boat is worth enough to hire a surveyor it is worth enough to sign a contract.

Note that not only is a contract a legally binding document for the buyer and seller it also makes sure both clearly understand the terms of the agreement. I've done business with good friends in the past where a few months after the original agreement there was a difference of opinion on one of the details of the sale. However, the terms were in writing so it was very easy to go back and confirm what we had agreed.

[denverd0n]

Originally Posted by valhalla360

Unless the seller made a huge mistake agreeing to the terms of the contract, you do need a reason to back out or you risk the seller hanging onto your deposit.

Maybe in your part of the world, but not here.

The standard contract, here in Florida, says that the purchase is contingent on a survey and sea trial that is "acceptable" to the buyer. The buyer does not have to give any reason at all, if they choose to back out, other than to say that the survey was not "acceptable." I guess you could argue that that is a "reason," but then that is stretching the definition of the word quite a ways.

Personally, I would consider it a huge mistake on my part, as a buyer, to allow the seller any say whatsoever in deciding what was an acceptable survey and sea trial. And as they would have no say in whether I accept it or not, they have no need to get an explanation from me as to why I accept it or not. I might provide one, but only as a courtesy. I would never allow that to be written into the contract.

[Teknishn]

To vjm,
Too late, have already spent the money for the surveyor, as well as launching the boat for sea trials and hauling it out again to place it on the hard. I'm having the survey done BEFORE I make my travel arrangements. And yes, the owner could sell the boat at any time, I realize that. That is a acceptable risk that I am taking.

To Skipmac,
Truthfully, the boat is not worth enough to pay for a survey (a 27 year old pocket cruiser). As I previously stated, I live abroad. As such, I am using the surveyor as my eyes and ears to determine the condition of the boat before committing. Would rather pay a little now to find out the truth than pay a lot later to find out that I've purchased a delaminated piece of flotsam.

Am repatriating to the States after being gone for nearly 19 years. No family, a few old Navy old buddies in Florida. Coming back to the States with nowhere to go and no reason to go anywhere. So this boat will be my home for 6 months to a year while I figure out where I want to go. My plan is the Ches Bay area, which I know, then the ICW down to Florida, and then over to Morgan City in La. to possibly attempt an inland trip up to the lower Ouachita River to Monroe, La., my hometown.

[skipmac]

Originally Posted by Teknishn

To Skipmac,
Truthfully, the boat is not worth enough to pay for a survey (a 27 year old pocket cruiser). As I previously stated, I live abroad. As such, I am using the surveyor as my eyes and ears to determine the condition of the boat before committing. Would rather pay a little now to find out the truth than pay a lot later to find out that I've purchased a delaminated piece of flotsam.

In this case I can understand your situation but I still think at least putting some kind of agreement in writing, even informally between you and the seller is a good idea. As I mentioned, just so the two of you are on the same page for the deal. Then later there's no question like "but I thought the dinghy was part of the deal" or "what do you mean you're keeping all the galley equipment"?

Originally Posted by Teknishn

Am repatriating to the States after being gone for nearly 19 years. No family, a few old Navy old buddies in Florida. Coming back to the States with nowhere to go and no reason to go anywhere. So this boat will be my home for 6 months to a year while I figure out where I want to go. My plan is the Ches Bay area, which I know, then the ICW down to Florida, and then over to Morgan City in La. to possibly attempt an inland trip up to the lower Ouachita River to Monroe, La., my hometown.

Coming back to the states I think you will find getting into the boating fraternity is a great way to make new friends and reconnect. I have always enjoyed the camaraderie and community spirit that has been an integral part of every where I've been on a boat. If you're ever in my neighborhood (currently Green Cove Springs on the St Johns River in north FL) drop by to say hello.

Skip

[valhalla360]

Originally Posted by denverd0n

Maybe in your part of the world, but not here.

The standard contract, here in Florida, says that the purchase is contingent on a survey and sea trial that is "acceptable" to the buyer. The buyer does not have to give any reason at all, if they choose to back out, other than to say that the survey was not "acceptable." I guess you could argue that that is a "reason," but then that is stretching the definition of the word quite a ways.

Personally, I would consider it a huge mistake on my part, as a buyer, to allow the seller any say whatsoever in deciding what was an acceptable survey and sea trial. And as they would have no say in whether I accept it or not, they have no need to get an explanation from me as to why I accept it or not. I might provide one, but only as a courtesy. I would never allow that to be written into the contract.

You misunderstand. Allowing a contingency based upon survey and sea trial is very reasonable assuming the issues found were not readily obvious and the seller didn't inform the buyer before the offer was accepted.

It's the idea that the buyer can walk away for any reason even if the boat is in perfect condition and exactly as advertised that is a contractual problem. If you want that right as part of the contract, I'm going to want the right to sell to someone else if they show up with cash even though I accepted your offer because you didn't commit to purchase.

I could care less what some fool with the Florida brokers association came up with. With an "any reason" clause for the buyer, you effectively do not have an offer.

[Teknishn]

skipmac,
Won't be repatriating for a few months yet. Tryng to finish up a restoration on a 1937 motor yacht. Want to see the project through to completion (hell, somebody has to protect the boat against the owner's stupidity). Still have to divest myself of a couple of pieces of real estate and a couple of cars afterwards. Then, it's back to the States...and whatever adventure that brings.