Boat buying nightmares

[SteveK]

Enlisting the services of your own ‘buyers broker’ that you know and trust

I have always wondered about this comment. How do you get to know a 'buyers broker' to be able to trust the person?

 

[Nick14]

After nearly forty years of surveying dealing with sellers, buyers and brokers my advice is take your time do not rush into a vessel regardless of pressure from phantom buyers or brokers holding auctions. No prudent buyer should even think about going to survey without a hands-ons walk through inspection. Enlisting the services of your own ‘buyers broker’ that you know and trust can be as valuable as a good surveyor. Regardless of a surveyor’s qualifications they don’t know squat about subjective tastes, your plans and other personal needs. These are elements that must be satisfied during your initial inspection otherwise you should strike the vessel from your list. If the players are throwing up road blocks to an inspection/walk-through then keep walking. A new purchase that doesn’t fit, or is unfit, is the beginning of a cascade of disappointments. First time buyers are making a big investment in a life style venture that’s suppose to be a challenge with fun running right alongside. Long time owners know what they want, usually how to get it and what to stay away from

The survey is necessary for three reasons: actual vessel condition, financing and insurance. Many times I’ve seen a hot buyer fly across country land in Florida and hook up with the sellers broker. He doesn’t have his own broker but was told by his ‘ friends ‘ that by law all brokers must follow contractural legal requirements so in this department there is little or no risk, it seems. Wrong. The previous posts obviously reveal a different world that is much different from when I was surveying from the early 80’s to 2019. You don’t know any surveyors in this part of Florida and since you have to move fast on this ‘once in a lifetime deal ‘ you can’t possibly get a surveyor to take a job like this on short notice. You’ve called a few surveyors listed in the NAMS roster or online but it looks like two weeks out. The good ones are always busy. Then what about a yard who can haul the boat for the underbody inspection and of course organizing a sea trial. It’s common for the listing broker to arrange this but many times it’s a quick haul out during lunch time, no pressure wash so a surveyor has quite a bit less than an hour to look over a good size vessel which for me anyway is not possible. I don’t inspect hulls with sea growth. And another thing you need a reliable mechanic who should be aboard during trial run.

So as it stands you’ve already got lots of money in a flight, rental car and hotel, meals etc. plus the cost of a survey which probably can extend to two days depending on vessel’s size, type of equipment, sea trials, mechanics inspection, lab costs for oil and coolant tests. It’s a significant out of pocket investment on a ‘ possible ‘ sale. Everything from time and costs is more or less pressing on you so you decide you should use the broker’s surveyor and mechanic thinking they are all about the same. You still haven’t had a chance to set down and have a close talk with the boat’s owner, look over the maintenance and repair records and get some insight into what kind of owner he or she is. What we have here is a very common buyer’s scenario trying to buy a boat that is foreign geographically. It could work but the odds are against you so remember what I said in the first line “ take you time “ and understand that external pressure to buy is a red flag.

Rick

Thank you. That is some of the wisest, best advice I've heard.

I explored using a buyer's broker when I was looking at used boats. A problem I ran into was, it seemed most of the (admittedly few) people I contacted were just as anxious as the seller's brokers to make a 'fast deal' happen for a quick buck.

 

[Blissboat]

I finally just sold a boat after 90+ days of online advertising with few bites, so that points to a market that has slowed way down. Got my price because that boat I was selling was squeaky-clean with zero issues, came with 14 years of receipts and records, and I could answer every question to the buyer's satisfaction.

My take-away is that a clean boat fairly priced will still sell, but not at the pace it would have last year.

 

[garbler]

I finally just sold a boat after 90+ days of online advertising with few bites, so that points to a market that has slowed way down. Got my price because that boat I was selling was squeaky-clean with zero issues, came with 14 years of receipts and records, and I could answer every question to the buyer's satisfaction.

My take-away is that a clean boat fairly priced will still sell, but not at the pace it would have last year.

Well maybe it took longer than you’d like but this is what I call an honest sell by owners who know their boat and help the buyer with records and pride of ownership. Sounds a tad corny but ‘ Pride of Ownership ‘ though not often used by brokers, believe it or not, is factored by saavy underwriters. It says volumes and is included in my surveys.

I might add there used to be what we called ‘ dock walkers ‘. People who wandered the marinas especially on weekends when owners were around just looking at various boats and politely asking questions about different designs. I was a yacht painter then and we always tried to put on the final coat when other owners could watch, see us in our cleanest whites, inquire and hire us. The ‘ walkers ‘ would be around and it was common for owners to invite them aboard for a show & tell. It was a technique that worked for the ‘ walkers ‘ to find somebody thinking of selling and often a deal was made without a broker. But primarily a deal based on first hand knowledge from owners and others who knew the boat. It’s a fun way to shop and I think pretty reliable. Still need inspection/survey but the ground work is done. Not sure if people still do this ?

Rick

 

[phillippeterson]

Do buyers of new boats also hire an independent surveyor prior to delivery?

 

[Blissboat]

Do buyers of new boats also hire an independent surveyor prior to delivery?

Careful buyers do, especially if the newly accepted boat will travel far from the builder or dealer during commissioning and shakedown.

 

[Comodave]

Do buyers of new boats also hire an independent surveyor prior to delivery?

Yes. I spend a day poking around in the boat and usually have found most of the issues before the survey but it makes sense to have an impartial view of the boat. Besides most insurance companies will require one anyway.

 

[wkearney99]

Yes. I spend a day poking around in the boat and usually have found most of the issues before the survey but it makes sense to have an impartial view of the boat. Besides most insurance companies will require one anyway.

Agreed. And a survey also gives you a to-do list of what things might need fixing on the boat once you take ownership. It's not uncommon to have a survey turn up something that needs repairs, and that gets used as a negotiating point. Either to have the work done before the sale, or reduce the price by an amount necessary to have the repairs done. I'm typically in favor of the latter most of the time because asking them to have the work done on a boat they're trying to get rid of might not lead to them choosing the best level of service for the work. Granted, it throws the task onto the buyer but if you've got places/people that you know are good for doing that kind of work then it might work out better.

Yes, you're spending money out of pocket and that survey may tell you NOT to buy the boat. I've heard some situations where the seller will 'buy' the survey, as a means for them to better prepare the boat for the next potential buyer. But that's not something that happens all the time, nor should you expect it.

With a survey you're paying someone that really knows boats (hopefully) to prevent you from buying a money pit. Boats are much more complicated than other kinds of transportation. They're more like houses, and those too should often be inspected before purchase. Again, by someone considered 'reputable'.

 

[phillippeterson]

Careful buyers do, especially if the newly accepted boat will travel far from the builder or dealer during commissioning and shakedown.

Would you consider not having an independent survey for a boat from a well established builder, e.g. Fleming, Kadey Krogen, et al?

 

[backinblue]

Would you consider not having an independent survey for a boat from a well established builder, e.g. Fleming, Kadey Krogen, et al?

There's probably not much risk with a new boat warranty, but if you are buying one of those new, you're probably not concerned with saving a few dollars.

 

[mvweebles]

Would you consider not having an independent survey for a boat from a well established builder, e.g. Fleming, Kadey Krogen, et al?

On the new-build of a 7-figure yacht, I would probably do three with a focus on the electrical system. First inspection part-way through the build when the electrical system is being first installed but changes are easier to make to avoid faults like inverters placed in a lazarette subject to water. Second inspection when systems are buttoned-up and all circuit protection installed to make sure color-coding and wire-tagging is correct, changes discussed were made, etc. Final survey would be after commissioning is complete.

I think the mid-build inspection is probably the most important. There's a lot of stuff that can be easily changed then that won't be changed if left until delivery.

There's probably not much risk with a new boat warranty, but if you are buying one of those new, you're probably not concerned with saving a few dollars.

My concern is not warranty items - I agree that these are reputable builders. My concern is whether the entire system works with any changes made (Example: a pump ends up in a difficult-to-access place). Work crews often make easy-to-install decisions. I'd want someone with experience who can 'see around corners' to include other factors. i think especially on a complex build such a KK/Nordhavn/Fleming, you'd want that.

BTW - Steve D'Antonio does this type of inspection work.

Peter

 

[backinblue]

Great feedback and insights Peter.

 

[garbler]

When I was in the business I almost always had three or more ‘ new builds ‘ on my desk. Yes I think Steve D. takes these assignments and I’m sure he can cover all the bases expertly. I don’t know him as he was kind of after my time but he’s the type of person to hire I’m sure. Anyway hiring a surveyor or construction consultant on large complicated new construction projects is not only prudent but often required. Be careful who you hire for this work.

First depending on location of the job and the shop(s) the job should be visited regularly and on many I liked surprise visits regardless of what the builder thought. Otherwise good communications and stage inspections are the routine with travel expenses often regulating frequency especially overseas builds. I’ve found most of the time quality of work is not an issue, it’s more about insuring that the buyers needs and specs are being met. That quality hardware and fittings is as specified and located per plans. “ builders discretion “ is sometimes included in contracts and this little option can be tricky. Stage inspections should be agreed upon by all interested parties so depending on the vessel and level of customization and systems the needs will vary. On wood hulls I like to get involved during the backbone and framing stage, again during planking but on molded fiberglass hulls I rarely find a need to inspect until the hull is taking the deck mold. Anyway you get the idea but remember most problems occur in the interior as so much of this is very subjective.

Now then many may not know that incremental builder’s surveys are not required just by the buyer. On large expensive custom yachts the underwriter will want to know that construction is of course to standards but more importantly what %/percentage of completion and the approximate value at these stages. I had one big sportfisher years ago that was perhaps 50-60% complete when the shop burned down. Settlement was lengthy and turned bitter after a while as three underwriters were involved and like elephants in a room were stepping on everybody. Secondly lending institutions or banks always want feedback of stages of completion to warrant incremental payments. And last on large yachts that are being built to Lloyds A100 or some other classification they will require a couple of inspections always at their convenience.

Rick

 

[phillippeterson]

Yes, Peter, thank you for the input that sounds like it comes from a great head with great experience.

 

[wkearney99]

Would you consider not having an independent survey for a boat from a well established builder, e.g. Fleming, Kadey Krogen, et al?

If you're buying one of those brands new you're already on a pretty inclusive path with those builders. They're not typically "new in stock" somewhere and you buy them off the lot.

As for new from the factory being an effective gauge... there have been plenty of new boats that turned out to have warranty 'adventures'. Boats are not made in volume, like cars.

But to step back, you seem to be dancing around the survey question, shopping for an answer that tells you it's OK not to get one.

 

[mvweebles]

When I was in the business I almost always had three or more ‘ new builds ‘ on my desk. Yes I think Steve D. takes these assignments and I’m sure he can cover all the bases expertly. I don’t him as he was kind of after my time but he’s the type of person to hire I’m sure. Anyway hiring a surveyor or construction consultant on large complicated new construction projects is not only prudent but often required. Be careful who you hire for this work.



First depending on location of the andjob and the shop(s) the job should be visited regularly and on many I liked surprise visits regardless of what the builder thought. Otherwise good communications and stage inspections are the routine with travel expenses often regulating frequency especially overseas builds. I’ve found most of the time quality of work is not an issue, it’s more about insuring that the buyers needs and specs are being met. That quality hardware and fittings is as specified and located per plans. “ builders discretion “ is sometimes included in contracts and this little option can be tricky. Stage inspections should be agreed upon by all interested parties so depending on the vessel and level of customization and systems the needs will vary. On wood hulls I like to get involved during the backbone and framing stage, again during planking but on molded fiberglass hulls I rarely find a need to inspect until the hull is taking the deck mold. Anyway you get the idea but remember most problems occur in the interior as so much of this is very subjective.



Now then many may not know that incremental builder’s surveys are not required just by the buyer. On large expensive custom yachts the underwriter will want to know that construction is of course to standards but more importantly what %/percentage of completion and the approximate value at these stages. I had one big sportfisher years ago that was perhaps 50-60% complete when the shop burned down. Settlement was lengthy and turned bitter after a while as three underwriters were involved and like elephants in a room were stepping on everybody. Secondly lending institutions or banks always want feedback of stages of completion to warrant incremental payments. And last on large yachts that are being built to Lloyds A100 or some other classification they will require a couple of inspections always at their convenience.



Rick

From your stories, my sense is your experience overlapped with American yacht building. Last week I was aboard a beautiful 72-foot steel ketch that was built in Los Angeles area in 1967. Stunning boat, beautiful steel work that was indistinguishable from fiberglass in its smooth curves. Today, that boat would be built offshore - China, turkey, Philippines, somewhere many timezones away. Logistics of getting a qualified surveyor/inspector/advocate there are daunting and expensive - a hidden cost to the buyer. But needs to be done by someone if not the buyer (and i dont think the buyer is the right person to do the inspection, but should definitely accompany the surveyor). Otherwise you will just end up living with whatever the fault is.

Peter

 

[garbler]

From your stories, my sense is your experience overlapped with American yacht building. Last week I was aboard a beautiful 72-foot steel ketch that was built in Los Angeles area in 1967. Stunning boat, beautiful steel work that was indistinguishable from fiberglass in its smooth curves. Today, that boat would be built offshore - China, turkey, Philippines, somewhere many timezones away. Logistics of getting a qualified surveyor/inspector/advocate there are daunting and expensive - a hidden cost to the buyer. But needs to be done by someone if not the buyer (and i dont think the buyer is the right person to do the inspection, but should definitely accompany the surveyor). Otherwise you will just end up living with whatever the fault is.

Peter

Peter, I don’t quite understand what you mean by “ overlapped with American yacht building “

Rick

 

[mvweebles]

Peter, I don’t quite understand what you mean by “ overlapped with American yacht building “



Rick

Very few recreational production boats are built in the US anymore. Some in Seattle/BC area, but the ones I've seen are either commercial or do very large one-off yachts. If memory serves, your relevant stories seemed to include areas that no longer build. I thought I recall you mentioning San Pedro/Long Beach, perhaps Wilmington CA. But maybe this was just standard survey vs build-process inspection.

Regardless, for production boats, vast majority are built offshore which significantly complicates inspection process.

Peter

 

[garbler]

Very few recreational production boats are built in the US anymore. Some in Seattle/BC area, but the ones I've seen are either commercial or do very large one-off yachts. If memory serves, your relevant stories seemed to include areas that no longer build. I thought I recall you mentioning San Pedro/Long Beach, perhaps Wilmington CA. But maybe this was just standard survey vs build-process inspection.

Regardless, for production boats, vast majority are built offshore which significantly complicates inspection process.

Peter

Now I understand Peter and you’re essentially spot on. I did however do quite a bit offshore in Kaohsiung, Hong Kong and Singapore but mostly the earlier days of the great Taiwanese wave into the states. Things have improved dramatically since the 80’s and early to mid 90’s. So yes SoCal was a hot bed of production glass builders as was Florida and not as much in the PNW. I moved to New England because it was the center of wooden yachts and high quality custom builders.

I always had a few new builds in SoCal at Elliot Boats in Marina de Rey, large wooden yacht by Ditmar Donaldson in Costa Mesa, some in San Diego and Long Beach but yes the herd has thinned out. Much more of that work in NE.

Rick

 

[phillippeterson]

If you're buying one of those brands new you're already on a pretty inclusive path with those builders. They're not typically "new in stock" somewhere and you buy them off the lot.

As for new from the factory being an effective gauge... there have been plenty of new boats that turned out to have warranty 'adventures'. Boats are not made in volume, like cars.

But to step back, you seem to be dancing around the survey question, shopping for an answer that tells you it's OK not to get one.

You are right. While not really shopping for the answer to not get one, I am open to hearing any comments on both sides. That said, it seems like a survey would be a good idea in any situation.

 

[GrandWood]

As to buying a boat and the survey my understanding is the seller pays for the sea trial capt/owner, buyer pays for the boat surveyor and engine surveyor, seller pays for haul out.

Most of the boats im looking at will need a bottom paint( woodies, bottom not done for two years) most sea trials are done first, then haul out, hull inspected then back into the water. If bottom/hull/seacocks need work, owner has already paid the haul out, so you can get the work done and the splash is already paid for.

New to the whole process, so if I’m not up to par, please line me out, thanks.

 

[AlanT]

As to buying a boat and the survey my understanding is the seller pays for the sea trial capt/owner, buyer pays for the boat surveyor and engine surveyor, seller pays for haul out.

Most of the boats im looking at will need a bottom paint( woodies, bottom not done for two years) most sea trials are done first, then haul out, hull inspected then back into the water. If bottom/hull/seacocks need work, owner has already paid the haul out, so you can get the work done and the splash is already paid for.

New to the whole process, so if I’m not up to par, please line me out, thanks.

In my experience while you are correct on most items, it is the buyer not the seller who pays for the haulout. Now of course if the seller wants to have work done and will agree to pay for the haulout that is a bonus, but again in my experience this has not happened. If boat needs zincs or bottom work you may be able to work out a deal where you share the cost of the quickhaul. Usually for a purchase survey they will do what is called a quickhaul where the boat is left on the travellift, pressure washed and inspected, then splashed again. If on the other hand work is to be performed, beyond zincs, then the boat would come off the travellift onto blocks/jacks and incur the additional expenses of storage, work and splash.
~A

 

[garbler]

Owner paying for sea trials I guess it’s possible but it’s nothing I ever experienced in nearly forty years of surveying. I’ve even had sellers try to charge the buyer for fuel burned during trials. Those deals always get interesting.

Rick

 

[GrandWood]

Owner paying for sea trials I guess it’s possible but it’s nothing I ever experienced in nearly forty years of surveying. I’ve even had sellers try to charge the buyer for fuel burned during trials. Those deals always get interesting.

Rick

Well that’s a bit of a bummer to hear that

 

[GrandWood]

In my experience while you are correct on most items, it is the buyer not the seller who pays for the haulout. Now of course if the seller wants to have work done and will agree to pay for the haulout that is a bonus, but again in my experience this has not happened. If boat needs zincs or bottom work you may be able to work out a deal where you share the cost of the quickhaul. Usually for a purchase survey they will do what is called a quickhaul where the boat is left on the travellift, pressure washed and inspected, then splashed again. If on the other hand work is to be performed, beyond zincs, then the boat would come off the travellift onto blocks/jacks and incur the additional expenses of storage, work and splash.
~A

Learning more everyday

You would think it would be up to the owner to haul out, how is the buyer supposed to have the boat inspected to see if it’s sea worthy. Just makes no sense to me that the buyer would be responsible for all those costs. I understand if I wanted it on the hard to have work done would be my bill, my surveyors I’d surely pay for, jeez, like buying a car, owner does not charge me for the fuel and so on.

For sure a different world purchasing a boat

 

[AlanT]

Well that’s a bit of a bummer to hear that

My experience has been different, albeit on only 4 purchases (one in TX, the Others in the PNW). Seller has provided crew and fuel and all expenses relating to the sea trial (except haulout & my surveyors). On each purchase the seller's broker has piloted the boat, thus the expenses were not significant, only fuel.

Bear in mind the potential consequences should the buyer have his agent or himself at the helm if something goes wrong.

I did have one experience which could have been an expensive lesson for me, and ultimately was for the owner. When we sea-trialed my current boat, the seller's broker took us out, and when I was offered the helm I refused as I always do until after purchase. The Seller's broker then did a full power run (with my engine surveyor monitoring the DD 8V92 TA's in the Engine Room). A frantic call from the Mech caused the seller's broker to shut down the engines. One had overheated and seized after less than a minute of applying full throttle, dumping all its oil/coolant in the bilge. $75k later at seller's expense I took delivery of a fine boat with one completely rebuilt engine and one with completely rebuilt top end/cooling system.

Had I or my buyer's broker been at the helm I can imagine the potential for a dispute over responsibility for the damage (although it was clearly due to lack of maintenance of the cooling system).

Caveat Emptor in all situations!
~A

 

[AlanT]

Learning more everyday



For sure a different world purchasing a boat

It is indeed! Haulout is not cheap. And a prospective buyer may not follow through as every PSA has multiple "outs" for the buyer. So it is unreasonable to expect a seller (you will be one, one day!) to pay for haulouts, with no certainty of conclusion of the contract. If you as the buyer choose to have an out-of-water inspection, (which you should) it is part of your survey cost, which you are OK paying.

Many of us here have likely paid (as have I) for a quickhaul on a boat that we subsequently decided not to buy. No one will tell you that a boat is a wise investment.
~A

 

[GrandWood]

My experience has been different, albeit on only 4 purchases (one in TX, the Others in the PNW). Seller has provided crew and fuel and all expenses relating to the sea trial (except haulout & my surveyors). On each purchase the seller's broker has piloted the boat, thus the expenses were not significant, only fuel.

Bear in mind the potential consequences should the buyer have his agent or himself at the helm if something goes wrong.

I did have one experience which could have been an expensive lesson for me, and ultimately was for the owner. When we sea-trialed my current boat, the seller's broker took us out, and when I was offered the helm I refused as I always do until after purchase. The Seller's broker then did a full power run (with my engine surveyor monitoring the DD 8V92 TA's in the Engine Room). A frantic call from the Mech caused the seller's broker to shut down the engines. One had overheated and seized after less than a minute of applying full throttle, dumping all its oil/coolant in the bilge. $75k later at seller's expense I took delivery of a fine boat with one completely rebuilt engine and one with completely rebuilt top end/cooling system.

Had I or my buyer's broker been at the helm I can imagine the potential for a dispute over responsibility for the damage (although it was clearly due to lack of maintenance of the cooling system).

Caveat Emptor in all situations!
~A

Thank you, I won’t be piloting any boat myself until after I have hired a Capt to instruct me on the operation of the boat and rules associated with it. Limited experience on lakes is all I have in a 29ft daycruiser

 

[Comodave]

The buyer pays for the survey and haul out. The seller provides a skipper and pays for the fuel. It can be expensive buying a boat if you walk away after the survey and haul out but that is the deal. We walked on one boat during the survey. I told the surveyor to stop and we left. He cut me a break on the survey price since we didn’t finish. Never got to the haul out on that boat.

 

[backinblue]

Like most things, it depends. Many boats for sale (location dependent) may already be stored on land, so survey can happen and if moving forward, the boat gets launched for a sea trial and may remain in the water if the closing is imminent. That's the way it worked for my most recent purchase. Since the seller's broker was also the marina owner, there was no discussion (at least with me) as to paying for launch and re-haul if needed. That may have been paid by the seller or just absorbed by the marina as part of the deal.