Survey before Offer?

[GoneDiving]

Many thanks for welcoming me to the Forum.

I'm looking at the steps for purchasing my first "real" boat. Im leaning towards something in the 45ft, converted lobster/cray trawler range to be used as an offshore dive and family island-hopping platform. Most options are mid 1970's wood and/or Fiberglass.

I understand that the norm is to Survey and Sea Trial after a conditional offer is accepted.

I would be far more comfortable making a cash and unconditional offer after the Survey and Sea Trial with any remedies or repairs being my responsibility and completed to my standards.

For a <$100k motor cruiser how common is it to permit these to be done at my cost before an offer is made? Id expect the ~$2k cost to be sufficient evidence if my serious intent. Are there benefits to me in having these done after the offer?

Also, I read about an "engine survey". For an old mechanical Gardner or Lehman would this be required or would an oil and load test be sufficient?

Many thanks.

[valhalla360]

You can do it that way but no guarantee they accept your offer after you paid for a survey.

The reason for the offer first, is they have accepted your offer contingent upon survey...if the survey goes well, you know exactly what you will pay. If it doesn't go well, you still have an opportunity to renegotiate.

I don't see a seller complaining but I don't see any advantage for you.

PS: plus it gives you some time if you get cold feet to pull out because no boat will come thru a survey with absolutely no issues, so you can always pull out based on the survey.

[Discovery 15797]

The buyer pays for the survey.

Any deficiencies identified in the survey are a negotiating point on the offer. It is unlikely the seller will want to repair any deficiencies.

Usually, you view the vessel, then make an offer contingent on the survey to protect yourself. If your offer is accepted, then you will pay for the survey. Then you can renegotiate your offer, or you can back out completely.

WRT to engines...absolutely get a complete engine analysis on any motorboat; especially that old.

[GoneDiving]

Thanks. I've certainly got no issues with getting and paying for a Survey. I was just a bit unclear whether to get it first to enable the offer price to reflect any faults found by the surveyor but not me or to get an agreed price first and then regenotiate if/when faults are found

It looks as if I should educate myself more so that there are no surprises. 😁

Cheers

[denverd0n]

To elaborate a bit on Valhalla's answer...


Without a signed contract, the seller is free to sell the boat to someone else. You could pay for the survey, and on the day that you are doing that, the seller is signing a sales contract with someone else. With a contract in place first, that will not happen. The contract says that the seller cannot sell it to anyone else unless you cancel the sale based on the survey results (and/or other contract provisions).


That is the main reason that you want a sales contract BEFORE you pay for a survey.

[john61ct]

Yes in this case a good contract is there to protect the (prospective) buyer.

The seller can ask for a nominal deposit to show good faith, ideally held in escrow by someone trusted by both parties.

You see 5% often mentioned, much more than that would require more faith in the escrow holder.

Here is a thread where people have posted example sales contracts, would be fantastic if more members could do so!

http://www.cruisersforum.com/forums/...te-227050.html

[GoneDiving]

This is great info for a relative newbie like myself.

At what $$ level do these new steps start to be used? I can certainly understand them being used to protect high dollar transactions. However, at my previous price points for amall trailerable run abouts it's been turn up, kick the tyres, pay your cash and drive away. Roughly, what's the tipping point for people making use of the extra precautions? $20k, 50k, 100k??

Thanks again.

[verb88]

Originally Posted by GoneDiving

This is great info for a relative newbie like myself.

At what $$ level do these new steps start to be used? I can certainly understand them being used to protect high dollar transactions. However, at my previous price points for amall trailerable run abouts it's been turn up, kick the tyres, pay your cash and drive away. Roughly, what's the tipping point for people making use of the extra precautions? $20k, 50k, 100k??

Thanks again.

insurance, if sought, ought to tip the scales.... insurance will likely require a survey

[thirds]

The survey increases the sellers negotiating position, because it adds to the value of the boat and takes out much of the risk that there are things wrong with the boat that the seller didn’t know about.

Further, you are now committed to buy or walk away from more money than you would otherwise be (as the deposit is refundable.)

If the survey comes back strong, the seller might even raise the asking price.

[GoneDiving]

Originally Posted by thirds

The survey increases the sellers negotiating position, because it adds to the value of the boat and takes out much of the risk that there are things wrong with the boat that the seller didn’t know about.

Further, you are now committed to buy or walk away from more money than you would otherwise be (as the deposit is refundable.)

If the survey comes back strong, the seller might even raise the asking price.

Huuh? I thought the contract was for the seller to accept the buyer's price if the survey was acceptable to that buyer. How does the seller back out or raise the price post survey?

If the buyer is paying for and receiving the survey, I'm guessing there is no requirement to share the results with the seller if the buyer doesn't wish to do so??

I've seen several vessels for sale with surveys already completed (obviously paid for by the seller) in an attempt to show it in a positive light. They all seem to indicate the vessel is in pristine condition. I'd place the same faith in buyer provided surveys as assurances of engine rebuilds 100hrs ago and only driven on sundays. 😁

Cheers

[john61ct]

Originally Posted by thirds

If the survey comes back strong, the seller might even raise the asking price.

Would be a pretty lame contract that allowed that.

A good one, the seller is locked in, but the buyer is free to walk.

Of course actual enforcement is the tough part, but part of haggling is making them thin you can and will bring your crack legal team to bear if they renege.

[Woodland Hills]

If you survey before an offer or contract, the seller can raise the price if the survey is better than expected. In that case you are paying extra twice: once for the surveys and once again if the price goes up.

[GoneDiving]

Is a survey paid for by the buyer normally provided to both buyer and seller or just the buyer?

Thanks

[S/V Illusion]

Originally Posted by GoneDiving

Huuh? I thought the contract was for the seller to accept the buyer's price if the survey was acceptable to that buyer. How does the seller back out or raise the price post survey?

If the buyer is paying for and receiving the survey, I'm guessing there is no requirement to share the results with the seller if the buyer doesn't wish to do so??



Cheers

Big misconception here - sellers don’t buy objective surveys. They can and do sometimes have “condition and value” surveys done for different reasons but these are cursory inspections only and should never be used as a basis for a purchase decision. Neither can you rely on someone else’s surveyor or his thoroughness or objectivity.

This is a simple process: you find a boat which interests you, negotiate a price subject to a survey acceptable to you, get your own surveyor, decide if you want to execute, modify or cancel the purchase contract. That’s it!

[Wotname]

Originally Posted by GoneDiving

Is a survey paid for by the buyer normally provided to both buyer and seller or just the buyer?

Thanks

Normally just to the buyer but sometimes abnormal things happen.
The surveys belongs to the person who paid for but...stuff happens occasionally and other parties get to see it. Once seen it can't be unseen