What is a successful Survey

[BandB]

Originally Posted by GordMay

If “successful” is in the mind of the beholder (buyer), and hence the offer to purchase cannot be enforced; what happens to the deposit?

Refundable. Legally could sometimes be argued based on industry definition but for practical purposes it will be refunded most of the time in that situation.

In essence you have no binding deal until the survey is completed and there's agreement to go forward. Now legally you might have standing to prove it was successful, but that's not how it generally works. Deposit is generally held at this point by the broker and will be returned. Now the broker will try everything they can to pull things together and make a deal go through. I have a broker friend who about ten days ago had a surprise during a survey. But everyone wanted to make things work. They got a technician on the job, both buyer and seller involved, determined how to deal with the cost, fixed the issue, closed less than a week later. They all wanted the same thing. In other cases, buyers are just looking for an escape route. There are some out there who continue to look at other boats, thinking they can always back out if the survey isn't perfect.

Incidentally, home surveys are much the same. And just as poorly outlined in many terms.

[ozsailer]

Hello all,
back again . Some very interesting responses. There are certainly some variations in what people are thinking. From what I am reading many have a differing view which is exactly what I believe the issue is. Every one thinking a different thing. Confusing and unfair to all parties involved.
Personally I like to negotiate a final price first having viewed the boat and being aware of what I have seen. If a surveyor identifies issues that are structural, safety or major flaws that I have not taken into account then I personally would either walk, attempt a re-negotiation of price or repairs made by the owner to the satisfaction of the surveyor.
Of course there are those that may wish to take the boat to survey first and then make an offer based on the result. I also understand this type of pre purchase arrangement.
I was always under the impression that subject to a successful survey meant that the boat was seaworthy, structurally sound, safe and met all state or federal requirements. Guess I was wrong .
Bottom line. The boat is only sold when the buyer hands over the money

[denverd0n]

Originally Posted by GordMay

If “successful” is in the mind of the beholder (buyer), and hence the offer to purchase cannot be enforced; what happens to the deposit?

That would depend on the wording of the contract. In the "normal" contracts that I have seen in the U.S. the buyer gets their deposit back if the survey is unacceptable to them.

[mdidomenico]

having just been through this and used the "successful survey" wording on my deposit slip, i'll offer my 2 cents on the issue.

this being my first real boat purchase i worded the deposit ticket under the advice of a marina to include the phrase. I was present during my survey and the surveyor provided some detail that lead me to renegotiate on the vessel.

but my full commitment to buy was held until i got the written report because i saw the survey as a two part process. the first being when we looked at the vessel and the surveyor pointed out things i certainly would not have know to look for. the second part was where he went home and did research on the vessel for insurance claims, grounding, etc.

fortunately, my vessel lined up with the advertisement and not much was really reported in the written report over the verbal report during survey, but i could certainly see an instance where a commitment to buy was made and then it was discovered that there was insurance fraud (i.e. unrepaired damage) or a grounding that wasn't disclosed.

there's probably some legal mumbo and wiggle room in my experience, but this is how i felt most comfortable completing the transaction

like others have said, i thing "successful survey" could only be defined by the buyer. in that to me it means, i'm getting what i'm paying for and that i understand what i'm getting

just my 2 cents, is my first purchase, so i could be and have done it totally wrong...

[FLLCatsailor]

I use the standard Florida Yacht Brokers Association contract, which is the norm for deals here in the US. The contingencies in place for the buyer are, "survey, sea trial, and personal inspection." Up until the acceptance or rejection date the buyer can walk and retain his deposit. That rarely happens after a successful survey, but it can and the buyer has the legal right to walk.

[Sailorman Ed]

So what is the purpose of the deposit? If there are no serious new issues and the survey only lists items that are readily apparent, it seems the seller has some recourse to retain some or all of the deposit. The seller may have lost a potential sale in the meantime. If the buyer can always get the deposit back, they why even make the deposit in the first place?

[oldragbaggers]

I think the main purpose of the deposit is to take the boat off the market during the survey/sea trial process. A buyer isn't going to write a check to a surveyor and pay a yard to have a boat pulled out for survey if they have no assurance that the seller won't sell it to someone else during the process.

It's "earnest" money. Or, as I often hear it called, a "good faith" deposit. The buyer is demonstrating that he is serious about buying the boat and the seller is agreeing, by accepting the deposit, not to sell it to someone else until the conditions of the agreement are either met or cancelled.

[leftbrainstuff]

What constitutes a successful survey? In practice 2 things.

Firstly the vessel's configuration is now documented. Secondly any visible and obvious defects or non compliances should be included in the survey.

What a survey won't give you is any guarantee of the boats performance, reliabilty or functionality in the future.

A survey is just a baseline or configuration status at a point in time.

A survey also will not discover any latent defects. This is something the buyer will need to research. It is only a limited inspection.

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[smj]

Originally Posted by Sailorman Ed

So what is the purpose of the deposit? If there are no serious new issues and the survey only lists items that are readily apparent, it seems the seller has some recourse to retain some or all of the deposit. The seller may have lost a potential sale in the meantime. If the buyer can always get the deposit back, they why even make the deposit in the first place?

The 10% deposit guarantees the brokers 10% commission is in the bank.


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[BandB]

Originally Posted by Sailorman Ed

So what is the purpose of the deposit? If there are no serious new issues and the survey only lists items that are readily apparent, it seems the seller has some recourse to retain some or all of the deposit. The seller may have lost a potential sale in the meantime. If the buyer can always get the deposit back, they why even make the deposit in the first place?

The deposit is a sign of seriousness required to hold the boat for a period of time. If it's then followed by a survey and sea trial it's a clear indication the buyer wants to and intends to buy.

You're right in that the seller isn't getting a lot that is tangible since it's a refundable deposit. But if someone is willing to give me a deposit and then pay for a survey then I'm willing to give them the time to do so.

[jostalli]

Originally Posted by smj

The 10% deposit guarantees the brokers 10% commission is in the bank.

[SimonV]

I just looked up the wording used in the contract for purchase used in Queensland Oz. No where does the word in the contracts suitable appear but it does say 'Subject to exceptable survey and sea trial' .

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[Greenhand]

Originally Posted by SimonV

I just looked up the wording used in the contract for purchase used in Queensland Oz. No where does the word in the contracts suitable appear but it does say 'Subject to exceptable survey and sea trial' .

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Does it really say "exceptable"?

[Cheechako]

A successful survey is one that leads to a final sale. It may require renegotiation or may not, depending on what was found. Or the buyer may walk away completely, in which case the survey was unsucessful in completing the sale.

[Cheechako]

Originally Posted by SimonV

I just looked up the wording used in the contract for purchase used in Queensland Oz. No where does the word in the contracts suitable appear but it does say 'Subject to exceptable survey and sea trial' .

Sent from my GT-N7105T using Cruisers Sailing Forum mobile app

Haha... only a boat brokerage would have use the wrong word! Those guys kill me sometimes...