Brokers, Surveyors, Insurance companies, and Fools

[Vino the Dog]

Every day thousands of buyers rely on pitches from yacht brokers and survey reports to purchase boats they know nothing about. Then they pay thousands of dollars to insurance companies who rely on the same survey reports until the new owner files a claim, and all too often they refuse to pay the claim. There are of course, good honorable brokers and surveyors, but they are about as common as lawyers who care about justice more than money. And if you don't know them personally, you can't tell them from the greedy, dishonest ones who will shamelessly deceive their customers for that commission.

Every day, new boat owners set sail in boats they know nothing about, risking their lives on the words of these people without ever locating the sea cocks, electrical panels, bilge pumps, fire extinguishers, battery chargers, fuel filters, and countless other smaller items that can sink a boat while the unprepared and helpless crew desperately tries to find the ePirb. Then, for those lucky enough to get their boat back to shore, often paying tens of thousands of dollars to tow companies, the insurance company refuses to pay up. Citing "pre-existing conditions", "operator error", "inclement weather", and all kinds of excuses to keep the premium money without honoring the terms of their contract, all justified by the semantic arguments of greedy lawyers, they leave their customer destitute and saddled with a boat that just cost them their marriage and house.

There IS a criminal racket going on between brokers, surveyors, and insurance companies. No one defeats it because of the high cost of attorney fees to litigate is prohibitive. The practice of law all too often has nothing to do with justice, it is who can bankrupt the other faster, and the lawer is going to be paid regardless if they win or not.


Brokers, even the "honest" ones, seldom tell a potential buyer of the flaws in the boats they represent. Surveyors hired by brokers are usually employed for the sole purpose of providing flowery reports to justify the asking price for the boat. Far too many ignore or hide life threatening defects that they know about Or if they fail to discover the flaw, it is often due to pure negligence in the performance of their jobs. A survey is often nothing more than an equipment list of that which is easy to see, telling nothing of it's age or condition.


I am right now working on such a boat, hired by the new owner who managed to save his new boat and his life when all hell broke loose offshore. After $22,000.00 expense to save the boat he had just paid $130,000.00 for from a well reputed Southern California yacht broker, he learned about this racket the hard way. The boat is a beautiful 50' pilot house sloop, reputed to have circumnavigated three times. Clean, pretty, and spacious. Just the kind of boat many will sell their houses for to live out their life long dream of a sailing adventure. Without digging deep into the bowels of this lovely craft, one would never have expected what was to come. He didn't, and he is an experienced skipper with over 40,000 sea miles and several boats behind him.


He hit modestly heavy seas on the way from Long Beach, California to Portland, Oregon when four through-hull fittings that he did not know about, with no valves and hoses completely open to the bilge began pouring water into the cabin. He had not seen them when he purchased the boat because refrigeration units were installed in front of them, and the surveyor failed to include them in his report, in spite of the through-hulls being clearly visible from outside the hull.

After going below and discovering he had taken on about 2,000 gallons of water, he then discovered that only the tiniest of four bilge pumps worked. His engine flooded, the sloshing of the weight of the water in the cabin destabilizing the boat to the point where he had little control, it was all he could do to keep the boat afloat until Coast Guard arrived and shuttled an emergence pump over to him to clear the flooded cabin of water. He managed to get her pumped out and keep her afloat until a tow service arrived and got him to port. The tow service then refused to honor his paid up membership and charged him over $20,000.00. The insurance company refused to cover his claim citing "pre-existing conditions", in spite of their issuing a policy when those conditions did exist.


Now, we are digging in where the surveyor should have reported, finding all manner of horrible rat's nests of disconnected wiring, rusted valves, open hoses, and decades of pathetic "improvements" all leading up to cumulative errors that almost cost him his life. This boat will be restored to a fine seaworthy vessel, but not without a lot of money and a year or more full time work. What else is he gonna do? Take yet another devastating loss by selling it for pennies on the dollar, or abandon it?

Fortunate for this man, his Buddhist beliefs let him look at the positive side of things, as we rip out the deteriorated crap that the surveyor never mentioned and he never found. He is a much wiser man now, and will never again set sail in a boat whose conditions are only known by the reports of "professionals". He now openly admits he was a fool not to do his own very extensive survey.

New boat buyer, are you a fool too? Don't be! Stick your own nose in the deepest, foulest, darkest, moldy corner of every inch of the boat you intend to buy. Find and operate every sea cock and bilge pump on board. Try every electrical circuit yourself and trace the wiring into the nooks and crannies where they could be cut off, leading no where and still live. MOST older boats are full of such problems, just waiting for the unsuspecting.


There is nothing wrong with hiring a surveyor if you do not know the dozen trades necessary to maintain a boat, but YOU hire them and follow their every move, asking questions as you go. If the broker will not allow you this thorough inspection, avoid them like a bowl full of rattlesnakes. If they surveyor will not allow you to watch and ask questions, do not hire him. There is a better boat waiting for those who are vigilant.


Be wise to the boat sellers racket and stay alive.

[Sailmonkey]

This entire post screams of someone who is trying to not take any liability for their actions.

Who takes a new to them boat offshore without digging around.

Who expects a surveyor to find everything on a go-through.....especially when everything may take days and they charge by the foot.

And who in their right mind allows the selling broker to hire the surveyor.


Sent from my iPhone using Cruisers Sailing Forum

[denverd0n]

Originally Posted by Vino the Dog

...set sail in a boat whose conditions are only known by the reports of "professionals".

Yeah, anyone who does this can, I think, pretty well be described as a "fool." Even the best professionals can miss things and make mistakes. They are professionals, but they are also human beings.

Originally Posted by Vino the Dog

Stick your own nose in the deepest, foulest, darkest, moldy corner of every inch of the boat you intend to buy. Find and operate every sea cock and bilge pump on board. Try every electrical circuit...

And anyone who DOESN'T do these things can also be described as a "fool." Doing these things is just common sense, so NOT doing them is obviously pretty foolish.

Now, what I think is REALLY foolish is saying that someone who doesn't do these things is a victim of a "criminal racket." Make stupid choices, win stupid prizes. That's the way the world works. Sounds like your guy made some stupid decisions and suffered the consequences. It is laughable to call that evidence of a "criminal racket."

[zboss]

I believe there is a racket as well (pretty much CYA) but I also believe that he probably should have found the seacocks himself.

You are the captain of your vessel and ultimately the one responsible for the safety of that vessel.

[Stu Jackson]

40,000 nm experience and he couldn't figure those thru hulls he saw outside he couldn't see inside?

C'mon.

Bad rant.

[shotglass]

I guess that the guy didn't take the vessel for a sea trial before purchase. If he had then surely those through hulls would have made themselves known in some form or fashion. :-/

Sent from my SM-G900T using Cruisers Sailing Forum mobile app

[dohenyboy]

I have bought lots of boats. I used to always get a survey first. But every single survey I ever received missed a fatal defect just as the original poster illustrated.
The classic is the survey I got stating that the PO was a master shipwright and the boat was in superlative mechanical condition. I guess the surveyor missed that all the fuel hoses were comprised of bright green garden hose. You get the picture.
First never trust any surveyor's report farther than you can swim to shore. Second, it is foolhardy to undertake any serious voyage without at least 20 hours of sailing through various conditions near shore. Third, you have to know every square inch of your boat.



Why can't things remain where i carelessly left them?

[Sailingveterinarian]

In every walk of life there are well meaning, honest people....and in every walk of life there are dishonest, immoral people.
This applies to the boat industry too.
Interview several brokers....find someone you feel comfortable with, and trust. Trust is the key word. You are counting on them for a lot of information.
I was very fortunate. I worked with the Multihull Company to buy my cat. They were helpful before, during, and after the sale. In fact, I felt they were such a good group of people, I now work for them as a broker.
Also, take a little responsibility. Get educated. Educate yourself. Join the SSCA. Read their website. Go to their Gams. Get moving and get cruising.

[Wulf]

Originally Posted by Sailmonkey

Who takes a new to them boat offshore without digging around.

Who expects a surveyor to find everything on a go-through.....especially when everything may take days and they charge by the foot.

And who in their right mind allows the selling broker to hire the surveyor

x2

[faa50]

Excellent post by Vino the Dog, for the various lessons it teaches to those willing to exert the time and effort to learn.

As one who is currently in the boat buying process, I can attest to the various unethical behaviors listed. This post screams of one lesson, that being "buyer beware." Most of us wish to believe the best of our fellow mariners, unfortunately, it is these very same folks who allow personal motivations to direct their "professional" behavior to the determent of buyers. My personal experience is that roughly 90% of yacht brokers fall into the described category.

A second lesson garnered from this post is to use extreme caution in selecting a surveyor. Conflict of interest is rampant between surveyors, brokers and insurance carriers, none of which is to the benefit of the buyer. All three groups willing place skippers, crews and families in grave danger. Even agents hired as buyer "brokers" are guilt of similar unethical behavior. Check references, review prior survey reports and speak to skippers who have used this surveyor previously and how they feel the surveyor performed now that they have owned the yacht for a while - would they hire him/her again? Yea it takes time, but how much is your life or your families worth?

A third lesson is that yacht brokers will go to great lengths to prevent reasonable inspections of yachts and pressure potential clients to "trust" and that you as the buyer should accept the yacht broker's conveyances of seaworthyness as valid and no need to dig deeper. Total BS. I've come to learn that it is prudent to spend significant time (2-3 hours) on the telephone with the owner, asking a long list of questions, while assessing the owner's knowledge of their yacht and truthfulness, both are good indicators of how a yacht has been maintained under there stewardship. Calls only last as long as I'm gaining valuable insight into the yacht and often cut the call short once I learn of major issues that are often disclosed without the owner realizing it. Its important to know what you are looking for and having done due diligence on the make and model of yacht PRIOR to speaking with the owner. The web is a great source for this type of information. I make a point to never discuss price or to attempt to negotiate a lower price on this call, that is not the purpose or goal.

A forth lesson from this post is that the buyer described in the post who should have know to perform a proper level of due diligence - failed, leaving it to others to point out deficiencies. Not wise, and given his level of experience should know better.

A fifth lesson, the need for a buyer to conduct their own in-depth inspection (I spend on average 2 hours on a boat inspecting) before I would consider bringing in my surveyor - a surveyor by the way who I have done a significant amount of due diligence confirming ethics, abilities and trustworthyness - not all credentialed marine surveyor's are equal.

At the end of the day, a skipper is SOLELY responsible for what happens on their yacht and ultimately to their crew.

[KidSheeleen]

Anyone who would purchase any thing that floats, on the hard, then decides to go immediately on a "long" cruise needs to retire from boating and buy a RV lol. A vessel needs to be tested under water conditions similar to cruise conditions and vessel totally
checked over by owner and someone who has good knowledge of a like vessel. Remember the old saying"buyer beware"

[foothillsailor]

Best broker I ever met was in Florida---when I wanted to look at a particular boat that was listed with his brokerage he queried me as to my experience (very limited), my intentions (excessively grandiose), my knowledge base (very limited)--he refused to show me the boat and told me to go and charter about 4 or 5 boats and then after I had some idea of what I wanted/liked etc then come back and see him--best advice ever--chartered Beneteau, C&C, Catalina, Island Packet, and a Bavaria--by then I knew what I wanted, needed, liked and didn't like---bought a Gozzard --if I could find that broker again I would take him out for the biggest dinner I could afford--wise, wise advice.

As for the rest of it --I agree with the others ---, don't accept "that's our standard contract" (and if you don't know what you should be putting in your purchase contract then go and see a lawyer (they are useful!), pay for a haul-out inspection, do an extensive sea trial, find your own surveyor for the boat, a sail loft to advise on the sails, a mechanical surveyor for the engine (with oil and fuel sample testing), crawl all over the inside and outs of the boat before the survey, after you've bought it live on it for a couple of continuous weeks and take it out for at least a couple of 3-4 coastal cruise.

As has been said for more than 2,000 years --'Caveat Emptor' (Roman for 'Buyer Beware')

Sounds like the buyer should remember when you point a finger at someone there are always 3 pointing back at you.

[BandB]

It's really a matter of using good business practices as a boat buyer. I recommend a buyer's broker so it's not all in the hands of the seller's broker. Second, I recommend you selecting your own surveyor and do it from recommendations of those you trust. Also, you should be present for the survey and the sea trial. Don't close either until you have the final, complete survey report in your hands. Then before any long range cruising I always recommend one or more local shakedown cruises.

Do all those things and there are no guarantees everything will be caught but the odds will certainly tilt very much in your favor.

[secrabtree]

These suggestions are valid for the experienced boat owner, but one does not become an experienced boat owner without being first an un-experienced boat buyer. And it is necessary for the unexperienced to get help in determining the condition of a prospective purchase. The surveyor is one place to get that help, though friends that own and personally maintain boats are sources that are often available and their knowledge and experience should also be listened to. When I taught piloting and celestial navigation at a local community college I was often asked how one selects a surveyor. Past experience if have had. Experience of friends if available. If one hasn't had experience with surveyors and has no friends with applicable experience my suggestion was to get a list of the surveyors that your lender will accept. Get another list from your insurance company of who they would accept. And get a list from the seling broker of who they would recommend. Than choose a surveyor that would be acceptable to both your lender and your insurer and is not recommended by the selling broker.And there was one local surveyor that I suggested when the survey was for the owner's eyes only and not for the lender and/or insurance company - that surveyor found everything EVERYTHING that was wrong or might possibly cause a problem eventually, but not really necessary to safely and comfortable use the boat. (On my boat he found that one side of the sheave that was in the steering system was worn more than the other side of the same sheave and should be realigned. He found that problem in 1979. Since then I've sailed over 50,000 miles, many of them ocean miles. Due to both access and the corrosion in fasteners I have not corrected the problem and the steering has not failed because of that uneven wear. I still own the boat.) I would definately want him, or someone similar, to survey my boat FOR A SURVEY THAT WAS FOR MY USE, but not for one to go to the lender or insurer.

[skipmac]

First, I 100% agree with the several posts pointing out the buyer as the one ultimately responsible for making certain the boat was seaworthy and safe to take to sea. To start a passage without knowing exactly where every single through hull and seacock are located, how to access them and their condition is beyond foolish. Same applies to not personally testing the condition of the primary, backup and emergency bilge pumps, electric and manual. To depend on anyone, even the best, most ethical, skilled and thorough surveyor in the world to certify the seaworthiness of the boat without confirming it personally is almost beyond belief.

Not to dispute or minimize the claims of malfeasance in this case, but I do get tired of these general, wholesale rants against brokers and surveyors. To me that is no different than putting down any group as a whole whether based on job, race, religion or any other category.

I was a broker for several years and there are absolutely people in the business that will lie and say anything it takes to make a sale. I knew surveyors for some very respected companies that were well known in the trade as a seller's surveyor. Basically if the boat wasn't sinking at the dock it would pass survey. However, the majority of the people I knew in the business were honest, hardworking and did their best to find the right boat for the buyer based on budget, experience and intended use and would never consider misrepresenting the quality or condition of a boat.

Bottom line, buying anything be it boat, car, house, whatever, it is always up to the buyer to take ultimate responsibility for the purchase. That process may involve hiring professionals to inspect the purchase, researching the history and reputation of the seller/broker/dealer but the final responsibility still lies with the buyer.