Surveys Drive Values Down

[Derik]

The purchase of the 43 Marine Trader is now final! I started a thread here a while ago going through the purchase but wanted to start another to get your opinions on the Boat Surveys. Now that I have had some time to look around the boat and go through the paper work here's what I found.

2016 Survey found few items and listed the boat in good to satisfactory condition and the value at 65-70,000.

The owner then tried to sale it about a year later 2017 listed the boat in fair to poor condition found a few unsubstantial items that weren't on the first survey and listed the value at 50,000.

I come along my survey guy (who I would never use again) didn't look at the two previous surveys I had sent him and tore the boat apart listing 46 items (mostly minor) But not listing details which made it very difficult for me to get insurance and lowering the value of the boat to 40,000 Which I paid.

These guys seem to be everywhere here and seem to be the ones driving the prices of boats as well as dictating to Insurance Companies the overall condition and Value of coverage's to write.

So I have a fixer boat that's worth 40,000 or less and had one choice of Insurance companies and have 46 items to fix some within the next 30 days. Just because my survey guy says so?

Here is an example of what he put that really would scare any insurance Co. Fuel System corroded, Thru Hulls deteriorated.

In reality on thru hull above the water line has a pinkish color if hit very hard with a hammer. One fuel line near the shut off valve has surface corrosion and is slightly green.

I had to plead with him to be more specific and detailed in order for me to get insurance, he was on some ego trip and acted as if he wanted to purchase the boat himself.

 

[ben2go]

He may have thought you'd walk away and he'd pick up a good cheap boat or possibly a flip for cash. Either way, I feel he may have been trying to get over on you or possibly the PO.

 

[DavidM]

I have bought and sold a dozen boats of mine and participated in the survey for another dozen or so when i was a broker for a short while years ago.


The trend I have seen is towards the surveyor listing absolutely everything whether it is purely cosmetic, significant but not safety related or definitely safety related. And they don't make any distinction among the three. That is what is causing the grief with selling prices dropping or buyers having to fix stuff that doesn't really have to be fixed to get the boat insured.



Twenty years ago surveyors noted material issues and safety issues and for the most part the safety items were real. Not so today.



David

 

[Lou_tribal]

I guess that like everywhere else you have good and bad surveyors.
The one that did the survey on my boat only found 2 very minor things while I found more issues and addressed them.

L

 

[psneeld]

Because many boats actually sell for WAY less than asking price...not sure if the surveyors are at fault.

My boat was surveyed for WAY more than I paid for it or think I could have sold it for.

Not that I don't have a problem with surveys, but I don't think they have that much effect on sales pricing.

 

[dhays]

In general, most buyers want a surveyor to be very thorough and find all the issues, and potential issues with a boat. I don’t recall hearing a buyer concerned about a surveyor who was too thorough. The issue is that if you buy a fixer boat, there are going to be problems. Insurance companies are concerned about insuring boats with issues. It is their money on the line after all.

I suppose the answer would be to pay for a survey as a buyer, then pay another surveyor to do an “insurance survey”.

 

[DDW]

Many surveyors make a distinction between a before sale survey and an insurance survey. They assume in the former, you want every single little thing called out as serious, in order to negotiate the price down. In the latter, they call out only safety related items and may only comment on the others if mentioned at all.

Despite accreditation, surveyors are a mixed lot - some know less than an average boat owner, a very few are quite knowledgable.

 

[DavidM]

Many surveyors make a distinction between a before sale survey and an insurance survey. They assume in the former, you want every single little thing called out as serious, in order to negotiate the price down. In the latter, they call out only safety related items and may only comment on the others if mentioned at all.

Despite accreditation, surveyors are a mixed lot - some know less than an average boat owner, a very few are quite knowledgable.

Absolutely true. However I haven't seen any really good surveyors in the last ten years.


David

 

[Gmarr]

I’ve seen comments in forums where someone believes something was missed and the advise has been to go after the surveyor and make it their liability. I think that they do have a fiduciary responsibility to be honest. We can’t have it both ways can we?

 

[dhays]

I’ve seen comments in forums where someone believes something was missed and the advise has been to go after the surveyor and make it their liability. I think that they do have a fiduciary responsibility to be honest. We can’t have it both ways can we?

You wouldn’t think so, but it seems many would like it to be so.

When I was selling my sailboat, there was one potential out of town buyer that was so abusive on the phone to the surveyor that the surveyor simply walked off after my boat had been hauled. He is known in the area as solid surveyor who gives thorough and fair evaluations. My broker was pissed, not at the surveyor, but at the buyer. She had suffered a bunch of abuse by this potential buyer as well to the point that it was good the buyer was remote as my broker’s husband would have like to have met him.

My broker still tried to get the deal to go through and scheduled another haul out and survey. This time, she told me she was going to engage a local “broker’s surveyor” that she never uses because he is known to simply give whatever result that the broker wants.

At that point I told here not to bother as I didn’t want her (she is a friend) or anyone else to have to waste time on this guy.

 

[Rufus]

The best surveyor I ever had was a naval architect who had actually designed and supervised construction of trawler style cruisers. He owned a Grand Banks. Sadly, he's now retired. This gent refused to be associated with SAMS/NAMS and the like as many in the organizations are unqualified. I had to submit his credentials to my insurance company in order for them to accept his survey.

Absolutely crazy situation with SAMS/NAMS surveyors citing current ABYC criteria for a safety/condition survey on a 25 year old boat. They think they have to come up with deficiencies to justify their (and their umbrella organization's) existence. I bitched ceaselessly to my insurance company (Markel) about this incestuous relationship....and they've done something about it. Last year they gave me the option of hiring a surveyor or doing one myself. They provide an outline questionnaire and list of areas to check, and then ask for lots of photos as documentation. As mentioned previously, a pre-purchase survey is (or should be) a different animal. If boat owners don't complain about these insurance survey shakedowns....nothing will change.

 

[Derik]

My Surveyor was a SAMS/NAMS Surveyor and cited ABYC on many occasions with his list of 46 items that needed immediate attention.

I'll fix everything and then pay for an "Insurance Survey" so I have more choices in Insurance Companies.

 

[oscar]

When I was buying a boat in foreclosure there was, of course, a lot of "deferred" maintenance. The surveyor and I went through the boat together. A lot of little stuff, all the big pieces were there. I needed his valuation for the financing, of course. At the end he asked: "You want this boat?" I said yes I do, and he "made it so" and gave the boat a realistic thumbs up without nit picking all the little stuff. Worked out nicely.

 

[BruceK]

You can`t have it both ways. The Survey helps get the price down but then the insurer relies on it to ask you to fix things the survey disclosed that lowered the price. With your duty of disclosure you have to tell the insurer what you know or were told, so once you get the survey there is no escaping divulging the contents.
I think some surveyors try to involve themselves in negotiation by overstating defects. Or maybe they are just protecting their own butt.

Would it be worth getting a qualified shipwright you engage to do the work to comment on the extent of the survey work, whether it is all really warranted. He`s the one who will make $ out of the work, if he says not all of it needs doing the insurer might well find that quite persuasive.

 

[Art]

It's nice to be knowledgeable enough in boats to be able to do your own survey before purchase. Then get a surveyor to do an "insurance only" survey. You may need to speak with a few surveyors before locating one that will "work" with you to keep boat value up and remediation needs/costs down!

 

[markpierce]

Wonder about buyers purchasing used boats, often decades old, expecting them to be in brand-new condition. Meanwhile, the asking price is likely to be well below the original boat's price adjusted for inflation.

 

[Simi 60]

Its great for the buyer knocking the price down and getting a good deal.
The downside for us though was only being able to insure for market value which, was the price we paid.
Insurance payout on total loss will not get us within cooee of replacing her.
Upside is that the premiums are cheap.

 

[Art]

Its great for the buyer knocking the price down and getting a good deal.
The downside for us though was only being able to insure for market value which, was the price we paid.
Insurance payout on total loss will not get us within cooee of replacing her.
Upside is that the premiums are cheap.

Please read post # 15. My boats get "agreed value" coverage that is considerably more than what I paid. So does my classic 1967 Buick Wildcat car.

MOF... today I will take a 200 mile rt cruise on my 67 "KoolKat"... up to our 1977 Tollycraft tri cabin - "The Office". In so doing I will install 4 new batt bank batts in TO [current batts are 9.5 yrs. old... time to replace em - lol] and, I will change low-end fluid in 1975 Johnson o/b that powers our 1975 Crestliner, tow-behind runabout. Plan to have a blast while doing so this weekend.

This way, when Linda and I get time for pleasure days aboard... I don't need to also fit these work items into our fun time. BTW, Linda's in Austin TX visiting daughter and family... timing is perfect. I hit Austin for 10/19 thru 10/23. We fly back together.

Taint da cards ya delt... it's all in how you play yer hand!! Somebody as smart as Einstein must have coined that phrase.

Then of course there is always:

 

[Derik]

Wonder about buyers purchasing used boats, often decades old, expecting them to be in brand-new condition. Meanwhile, the asking price is likely to be well below the original boat's price adjusted for inflation.

I am not sure what buyers your addressing. Everyone I dealt with other than the Survey guy realized the boat was 30 plus years old.

I come from a testing background (owned my own Env. testing co for 20 years) We always prided ourselves on honesty and integrity. The fact that Surveyors do two types of surveys lacks both. In my particular situation the Survey guy was more concerned about price and how much money I had..

 

[MurrayM]

The first boat we looked at came with a survey...a survey for insurance requested by the owner of the boat. We had a survey done by us, and it turned out the surveyor was friend of the owner and probably did the insurance survey.

We allowed the owner to be on the boat when the survey was done, and when the surveyor asked us at the end, "Is there anything else I can do for you?" the owner said, "Yes, you can get off my boat". The surveyor had been very detailed in everything wrong with the boat and there was a big price drop.

My takeaway was that an insurance survey leans in the owners favour, being not too critical and padding the price, whereas a buyers survey is more critical and reality based as far as price goes.

 

[Art]

The first boat we looked at came with a survey...a survey for insurance requested by the owner of the boat. We had a survey done by us, and it turned out the surveyor was friend of the owner and probably did the insurance survey.

We allowed the owner to be on the boat when the survey was done, and when the surveyor asked us at the end, "Is there anything else I can do for you?" the owner said, "Yes, you can get off my boat". The surveyor had been very detailed in everything wrong with the boat and there was a big price drop.

My takeaway was that an insurance survey leans in the owners favour, being not too critical and padding the price, whereas a buyers survey is more critical and reality based as far as price goes.

There's monetary bottom line to most things... especially material items [such as boats] with levels of $$$ value and sprinkles of emotion salted in by both the owner and buyer!

Bottom line for boat insurance cos., sellers price and payers price: "Get as much as you can, for as little as possible effort, with best $$$ deal possible as the outcome for all three parties mentioned.

 

[TDunn]

You can work with the insurer on survey deficiencies. My last survey of my sailboat noted several "major" deficiencies that required repair according to my insurer. The worst was that the surveyor noted that my keel bolts were severely corroded and "must" be replaced. That would have been a very expensive repair IF my boat had actually had keel bolts. Since my boat has encapsulated INSIDE ballast there are no keel bolts. It took a fair bit of argument but I did finally get the insurer to accept that point all because of an incompetent surveyor who mistook the fittings on top of an abandoned iron fuel tank for keel bolts.


My point is that you can argue things in the survey with the insurance company.

 

[mahal]

Wonder about buyers purchasing used boats, often decades old, expecting them to be in brand-new condition. Meanwhile, the asking price is likely to be well below the original boat's price adjusted for inflation.

These type of buyer are out there. As a seller, you don't waste your time with them. Brokers can easily spot them too. But what the hell does this have to do with this thread?

 

[Rufus]

The first boat we looked at came with a survey...a survey for insurance requested by the owner of the boat. We had a survey done by us, and it turned out the surveyor was friend of the owner and probably did the insurance survey.

We allowed the owner to be on the boat when the survey was done, and when the surveyor asked us at the end, "Is there anything else I can do for you?" the owner said, "Yes, you can get off my boat". The surveyor had been very detailed in everything wrong with the boat and there was a big price drop.

My takeaway was that an insurance survey leans in the owners favour, being not too critical and padding the price, whereas a buyers survey is more critical and reality based as far as price goes.

I fired an insurance surveyor when he was still on the dock. The instant he pulled out his ABYC book of current construction guidelines he was dismissed.


Insurance companies should be focused on risk. That means safety, and material condition per the design requirements in place at the time the boat was built and current required government standards. That's different than ABYC guidelines.
A surveyor's estimate of value is typically nonsense. I've had a surveyor with zero experience on a larger cruising boat conduct an insurance survey because I couldn't find an experienced individual in the local area. I wasn't about to fly an experience individual in at my expense. He had no idea what he was doing let alone setting a value. He went on my recommendation and a look at Yachtworld. The insurance companies have to know this and should delete this nonsense from survey reports. A pile of photos such as those I included in my self survey (Markel Insurance) tells the story.

Pre-purchase surveys are weapons used by buyers. It's not surveyors who force boat values down...it's cheap skates.

 

[FF]

"Despite accreditation, surveyors are a mixed lot - some know less than an average boat owner, a very few are quite knowledgable."

Many surveyors simply want to find enough "flaws" to pay for their work.


Few seem to have a good background in boating , so simply parrot what they read in a book.

 

[DavidM]

I am fine with a surveyor using ABYC standards as the basis of his survey. That gives the buyer a standard to work from rather than the surveyor's view of what was acceptable 30 years ago.


And of course some ABYC standards are meaningful for safety such as fusing near the battery and some more for convenience such as DC wiring color coding.


I realize that it will be difficult for the typical buyer or insurance company to tell the difference.


David

 

[Rufus]

Again, ABYC is a wonderful leverage device for buyers to screw sellers who don't know the difference between what is required by the regulating authorities (which is what should be the baseline for insurance companies), and what are industry standards for new boat construction. Old boats are officially "safe" as designed unless there's a post manufacture accident or incident driven regulation that affects that design, or the fleet in general. Those are few and far between for pleasure craft. Bringing ABYC into a survey, whether for insurance or "screw the seller" purposes borders on unethical in my view. More safe doesn't mean something is unsafe. "More" safe has a price, which buyers use to screw sellers. It's packaged and made to appear "official" in pre-purchase surveys. ABYC loves it because it gives their product faux legitimacy in the old boat market place. They sell safety. They are business partners with SAMS/NAMS, and the insurance companies...look it up. Wanna know who pays for all of it? The end user, that's who. Most of us are against unnecessary regulation, yet these pseudo official organizations stick it to the operating community every day. They are a tax on all of us.

 

[CaptsWife]

We just bought our first trawler at the end of July (currently living aboard our sailboat) in Annapolis. We had a boat surveyor (who happened to run the yard in Taiwan that built the boat) and an engine surveyor. The boat is almost 30 years old so of course we knew there would be some issues. There were some serious issues found because no zincs were found on shafts, Ugh. Plus some other major issues. We dropped our offer based on the serious issues only. The seller wasn't happy, but in the end, with all the serious issues, she knew it would be harder to sell the boat now knowing what she and the broker knew. So she finally excepted our offer.

Our insurance is with BoatUS and we submitted the survey. We got insurance because we told them the boat is up on the hard and addressing all the serious issues in the survey. Our surveyor had a rating system for each item he found. He classified some as MUST, some as SHOULD, and some as AT SOMETIME IN THE FUTURE, or something like that. The boat is almost ready to be launched and we'll have to submit the work that was done that addresses the MUST parts.

And FWIW, we agreed with the surveyor on the MUST issues. We were very happy with both our surveyors.

 

[jimisbell]

My "new" 1978 Mainship is insured with BoatUS. They let me do my own survey and had me submit pictures of all areas. I did the needed repairs prior to taking the pictures. I made the repairs and am happy with both the price of the insurance, the agreed upon value, the price I paid for the boat and their survey policy. They may have been comfortable with me because I didnt try to "skinny" down the policy. I bought full coverage.

 

[Art]

"Despite accreditation, surveyors are a mixed lot - some know less than an average boat owner, a very few are quite knowledgable."

Many surveyors simply want to find enough "flaws" to pay for their work.


Few seem to have a good background in boating , so simply parrot what they read in a book.

Too often - True!