Buying a Boat -- Survey Repairs

[Challo]

I have a contract on a boat and am awaiting the survey report and there obviously will be some issues that need to be addressed. I wonder if you could offer me some guidance as to what kinds of things I should expect the seller to repair/pay for and what customarily should be my responsibility.

My feeling is that normal wear and tear are on me, but damage, safety issues, defects and the like should be handled by the seller. What are your experiences?

Thanks for the thoughts.

Challo

[Capt.Alex]

It really makes no difference. If you think you are getting a great deal on a boat that needs some work, then you shouldn't ask for or expect the seller to remedy the issues. On the other hand, if you are paying top dollar for a "turn key" boat, then any survey issues should be negotiated. I normally estimate what it will cost to fix the boat, and negotiate a discount on the price. If you ask the owner to make the repairs, it's in their best interest to have them done as inexpensively as possible. Possibly with the use of inferior parts and materials. If you negotiate the discount, you can pocket the money and do the work yourself if you are capable.


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[Wannabe-007]

The short answer is "it depends" or "everything is a negotiation".

It will make a big difference as to whether you are buying an ex-charter boat that is to be phased out, or if it has been phased out already, or if you are buying from Bob The Boatie.


I've heard good things about how the Moorings handle this, but your mileage may vary and the jury is still out on this one for me.

Your expectations seem reasonable to me, but they may not seem so to Bob.
Bob may think you are getting his boat for a great price and if the hatches leak, thats just how it is.

[WindwardPrinces]

It sort of depends on whether the items are within the parameters of the current negotiation. Are they consistent with the expected condition, or do they change the value?

It's all a negotiation, though, so you and the seller can play it however you want.

[Challo]

Thanks for the comments. She's not coming out of charter, so it's not like there's a ton of stuff, but the stuff I have in mind kind of relate to the notion that when we negotiated the price, it was on the assumption that the boat was of a certain age with certain wear and tear (which was factored in), but was basically free of defects, significant safety issues and damage (not factored in).

The price we negotiated is market -- not outstanding for either me or the seller. I'm not going to nickel and dime this, but we are probably talking thousands of dollars that I'd rather not spend and didn't expect to spend when we negotiated the price. If I felt I was getting a great deal, I wouldn't sweat it - and still might not if the repairs needed turn out to be minor.

At the moment, I am talking based on principle. I do have a couple of things in mind that I saw during the survey and probably once I get the survey I will get estimates on repairs before making any decisions on whether to press anything.

The point about not getting the seller to repair is well-taken and I agree the best approach would be a price reduction.

[MarkSF]

It sounds like you already have the right idea.

To my mind, it's a question of whether what is found substantially changes the condition and value of the boat, relative to what you thought it would be.

My survey mainly threw up out of date fire extinguishers and flares. Not significant to me.

What it should have thrown up was that the 50 layers of bottom paint were losing adhesion, and would require a $5000 bottom job next time, to strip down to gelcoat and re-apply. The surveyor missed this.

[Challo]

Originally Posted by MarkSF

It sounds like you already have the right idea.

To my mind, it's a question of whether what is found substantially changes the condition and value of the boat, relative to what you thought it would be.

My survey mainly threw up out of date fire extinguishers and flares. Not significant to me.

What it should have thrown up was that the 50 layers of bottom paint were losing adhesion, and would require a $5000 bottom job next time, to strip down to gelcoat and re-apply. The surveyor missed this.

This is exactly the way I'm looking at it. Not sweating fire extinguishers (expired!) or CO detectors (not mounted properly and probably not working) and the like. My main concern is actually with the bottom, kind of like what you apparently experienced -- something that probably will cost a chunk of change to fix and is certainly not normal wear and tear.

[denverd0n]

Originally Posted by MarkSF

...it's a question of whether what is found substantially changes the condition and value of the boat, relative to what you thought it would be.

Exactly. You negotiate a price based on your understanding of the value of the boat. If the survey reveals something that substantially changes the value then you renegotiate.

Now, as to whether you negotiate for the seller to fix issues, or whether you negotiate a lower price and then fix them yourself, that's entirely up to you and the seller. Personally, I prefer to negotiate price and fix issues myself. That way I know that they are fixed right. If you negotiate for the seller to fix the issues then he has an incentive to fix them as quickly and cheaply as possible.

Good luck.

[Terra Nova]

Originally Posted by denverd0n

...You negotiate a price based on your understanding of the value of the boat. If the survey reveals something that substantially changes the value then you renegotiate...

This is your guide. Then do your own repairs.

[leftbrainstuff]

Originally Posted by Challo

I have a contract on a boat and am awaiting the survey report and there obviously will be some issues that need to be addressed. I wonder if you could offer me some guidance as to what kinds of things I should expect the seller to repair/pay for and what customarily should be my responsibility.

My feeling is that normal wear and tear are on me, but damage, safety issues, defects and the like should be handled by the seller. What are your experiences?

Thanks for the thoughts.

Challo

I wouldn't expect the seller to fix anything.

If you happen to encounter a good seller you may be pleasantly surprised. We did with our Liberty 458.

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[Cheechako]

I would say things that were obvious when you established an agreed price do not count in the potential survey repairs. (let's face it, you knew the wood needed varnishing!)
Other than that, anything is possible. You have some negotiating power as once the survey is done it becomes "local knowledge" that the boat went to survey but didnt sell due to survey issues.
I guess I'm saying ethically, only things that you found out on the survey should be negotiated.
Keep in mind the surveyors don't always find everything.... so there will be some hidden costs to you... therefore don't feel bad about negotiating... and keep your head... don't get emotionally hooked to having to buy that boat.


Here's an example: I contracted to buy a boat at $110k. It had been neglected for about 3 years was dirty and smelly. It went to survey and coring issues were found. The yard said $20k to fix the issues. There were other things... long story short we agreed and I bought it at $65k. The coring issues were bigger than expected, the boat had to be painted after resolving those issues etc. The Yard bill was $45k. I fixed a bunch of stuff myself also. So realistically I had about $125k in it when it was "done". I then spent another $50k on it also.
(BTW: get a written estimate from the yard for big items... before you do the final negotiation)

[Madehn]

when you buy used, expect some things to be used but not ABUSED- i think the key is anything that materially detracts from the value- example on our boat a cracked attachment for the rigging had to be fixed to even sea trial properly-- the owner was not even aware until the survey was done- cost about 5k to fix everything and that came off the selling price- surveys are important but expect them to miss some things- on our boat they thought the salis would be ok but we blew them out in moderate weather sailing the boat home-- got the boat back on what was left and had to immediately lay out 14k for new sales- expected to do it but thought we had a couple of years left- oh well that is why they call it a boat not an investment

[thuss]

There are generally 3 ways these things go down:

1. Overall valuation: if the surveyor values the boat below your agreed price you can negotiate based on that. That's a really strong and easy negotiating point.

2. If there is an extensive repair list you can negotiate a repair allowance. This one is more involved since you may need to get yard estimates for each item.

3. If you're getting a good deal and the repair list is minimal or already obvious stuff that was factored into your offer just close the deal at the agreed upon price.

Never give the seller a full copy of the survey, only give them the information based on the points you are negotiating (or even better summarize it yourself). Many years ago I had a deal fall through and the seller used my full survey (which I naively emailed to his broker) that cost me $1500 to sell the boat to a new buyer.

Expect that any reduction/allowance you request will be met with a counter offer so be a little aggressive and expect to meet in the middle. If you haven't already ask your surveyor for comparables so you can see what other similar boats actually sold for. Asking prices on yachtworld are always higher than the actual selling prices.

Lastly, when buying expect that you'll need to spend more than you ever estimated to actually do the repairs since one project will expose others. Never buy a boat you can't afford to spend at least 1/3rd of the price on repairs in the first few years. I re-learn that lesson with every boat I buy.


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[Terra Nova]

th--good post.

[warrior 90]

To determin a position the most important thing to me is:
1.)
Evaluating how much would it cost to update the boat under reasonable conditions.
2.)
Can I do it myself and how much would I save