Buying through broker, why 'offer before survey'?

[jerrytug]

When I am seriously interested in a yacht, buying through a broker, WHY am I supposed to look it over myself, then make a binding offer subject to survey, then put down a deposit, and only then, get the boat professionally surveyed?
It's in the wrong order for the buyer. Why can't I get the boat surveyed, and THEN make my offer?
I, as the buyer (just a knowledgable amateur) can't possibly work out a fair offer after being shown around the boat by the owner or a broker's rep. Why should I be expected to make an offer (which is legallly binding remember) based on a quick tour?
Have others met this problem?
One possibility might be to bring a surveyor to advise me, with a long unhurried viewing, without actually calling it a survey?

As a buyer, buying a newer, larger and more complicated yacht type than I am familiar with, it all seems rigged with traps and pitfalls, if I an not allowed to get her surveyed first, and only then make an offer, my offer might be way too high...but binding!
Anyone care to offer expert advice, mucho appreciado Jerry

Edited to add, I could make a drastically low 'offer subject to survey' to try and cover myself, but I don't want to annoy the seller and be told to feck off, nor do I want a good helpful broker to mark me down as a p!sstaker/timewaster..

 

[Daedelus]

When I was selling a boat if someone had wanted to do it in that order I don't think I'd have been fretted. In fact one withdrew his offer when he found the hull had been painted, which I would hardly have thought was grounds but fair enough he didn't like the survey.

One surveyor told me if he couldn't find enough faults on a boat to cover his fee he wasn't doing his job properly.

 

[jerrytug]

Yes Daedalus, I'm sure the surveyor can cover his fee, but it's my OFFER I find hard to judge, without a survey!
I guess there's no reason why I shouldn't ask if I can get a survey done before I make an offer, it doesn't seem to be usual practice though..

 

[sailorman]

Why should a buyer expect to poke my boat about without an intention ( deposit & contract ) to buy

#02, that last statement is unethical. when i sold my previous boat i phoned the surveyor after to thank him for a very fair survey. I have used him since.

 

[Seajet]

I've always thought it an unofficial but well known rule that surveyors find at least enough snags so that the repairs - hence price knock-down - covers their fee.

As insurerers usually insist on at least an initial survey before purchase, it seems daft to make any offer before that ?

Beware surveyors vary wildly in their competence and fees ( I'd ask around clubs, as boatyards might have cosy arrangements ), and there are various grades of survey from insurance valuation to fine tooth-comb masthead to keel jobs, with prices to match.

 

[Eyore]

Why should a buyer expect to poke my boat about without an intention ( deposit & contract ) to buy

Absolutely right , and a deposit shows not only serious intent ,but good faith too.

 

[johnlilley]

One reason for a deposit prior to survey is to enable any surveyor caused damage to be reinstated using the deposit prior to returning the balance back to the buyer in the event the purchase falls through. A good surveyor should not cause any damage other than some missing paint coatings below the waterline here & there. Experienced & accurate inspection does not necessarily require excessive damage. However, a surveyor should not remove any epoxy based coatings (unless previous agreement with buyer & seller) & it should only be antifoul that is removed. However, some enthusiastic surveyors will cause damage to both topside coatings on timber boats and epoxy coatings on GRP. In effect the boat should have no significant signs of having been surveyed as the seller has every right to have the vessel in exactly the same condition as she was prior to survey. Of course that does not mean the vessel should be improved by repairing areas that "fell to bits" when the surveyor checked them, it is a difficult area as how can you make good a broken guard line if it breaks on testing for instance. There are some grey areas but a good surveyor & good broker can make a huge difference.
This is also the reason that few brokers will allow "intensive surveyor type" inspection prior to deposit.

John Lilley

 

[Seajet]

I think the days when people had nightmares about Osmosis, resulting in surveyors scraping away, are gone now ?

I'd be seriously upset and reaching for a Big Gun if a surveyor removed Gelshield or otherwise damaged a boat I was selling - that should be made clear from the outset - but I don't see any problem with a careful inspection by or on behalf of a potential buyer, after all boats represent a significant outlay.

 

[jac]

Appreciate the challenge you face here but most of the obvious stuff is within the remit of a vaguely knowledgeable amateur. i.e. do the instruments all turn on. DO the sails / rigging look in reasonable shape - no stitches coming undone, frayed wires. Also of course the general impression of the boat - sad and neglected, green decks, frayed lines or clean and cared for, moving bits capable of moving etc indicating a careful owner.

IF any of the obvious stuff is wrong then when you make the offer based on your knowledge of what similar boats / conditions might go for you can justify it. I.e. asking price less £5k as she has knackered sails.

Of course if you're making a cheeky offer - 25% off the asking price it all becomes a bit academic but you should still mentally make a note of what those likely costs are likely are to be and what the boat might be worth when all done. i.e. if it costs £20k in refit costs to get a boat worth £50k then you would question why anyone would pay over £25k-£30k for the boat.

Once you know that you and the vendor are at least in the same ball park ( and the offer costs nothing) then you can commission as many surveys as you want to confirm any doubts you may have or to get more off the price. However - if the survey calls out something yiou have already mentioned and factored into your initial offer then you can't re-use that argument to get more off.

It's more a case of - I think the boatr is this condition having seen her so I offer X
If survey comes back and says - yes you're right - you deal - if they survey says - you missed these 3 faults I would expect the price to be looked at again.

 

[prv]

if I an not allowed to get her surveyed first, and only then make an offer, my offer might be way too high...but binding!

If the survey finds major faults then your offer isn't binding - that's what "subject to survey" means.

Pete

 

[prv]

I think the days when people had nightmares about Osmosis, resulting in surveyors scraping away, are gone now ?

Nope, antifoul scraped away for survey in various places on both the boats we've bought.

Ariam has now been coppercoated in a climate-controlled spray bay, with all the attendant expense, so obviously we wouldn't want holes made in that.

Pete

 

[syvictoria]

Also the contract places a legal obligation on the vendor to sell to the purchaser. As a purchaser, you don't want to spend good money on a lift out and survey only to find that the vendor sells the boat to someone else at the last minute (or withdraws it from the market altogether) because you didn't formalise the sale pre-survey with an offer and contract. The contract is designed to protect the interests of both parties.

 

[rotrax]

I've always thought it an unofficial but well known rule that surveyors find at least enough snags so that the repairs - hence price knock-down - covers their fee.

As insurerers usually insist on at least an initial survey before purchase, it seems daft to make any offer before that ?

Beware surveyors vary wildly in their competence and fees ( I'd ask around clubs, as boatyards might have cosy arrangements ), and there are various grades of survey from insurance valuation to fine tooth-comb masthead to keel jobs, with prices to match.

Not with the two serious-as opposed to little cheap jobs-I have purchased.

My insurer did not require a survey either. One vessel was 21 years old, the other 10.

I surveyed both vessels myself, from experience, and negotiated from there.

It worked for me, but I had the time and the skills to do it.

Obviously not for everyone.

 

[Martin999]

The last boat I purchased was very specific about the conditions associated with offer subject to survey, specifying that should the surveyor find problems with the boat that represented a certain percentage (or minimum amount) of the boats value then the buyer or seller could withdraw and the deposit returned. This meant that anything found that was a significant structural problem would enable the deposit to be returned

 

[Seajet]

Rotrax,

I don't know what you mean by ' serious as opposed to little cheap jobs ', I've been involved in the buying of and indeed bought boats myself which seemed serious to my half-Aberdonian self and would be happy to let you try the A22, i returned to her after trying larger boats

As an experienced engineer and sailor, when looking at a prospective boat I always would have a good look over her myself first before getting a surveyor in; frankly I suspect I'd be more thorough, but the surveyor is a legal requirement.

I get the message nowadays that any boat over 23' or £10,000 requires at least an initial insurance survey, my lot, Haven seem to think so.

 

[catalac08]

If the survey finds major faults then your offer isn't binding - that's what "subject to survey" means.

Pete

The problem comes when there is "no major fault" but a large number of minor issues are identified by the survey. I wanted to pull out of a boat purchase in that situation but the seller hung onto my deposit saying that there "were no major faults identified". My view was that there was quite a lot of work and some money to rectify the long list of small things and I wished to call off the purchase. We had a stalemate and eventually in order to avoid legal costs and uncertainties and to go go sailing I gave in and proceeded with the sale, having a little money deducted from the price.
I was very niggled about this and resolved never to give a "returnable deposit" to anyone!

 

[Tranona]

Most of the issues have been covered already. However it is worth bearing in mind that you are buying from a private person so your purchase is not covered by consumer legislation but by the law of contract. Equally once the transaction is complete you have no recourse to the vendor.

The aim of the normal process is to provide a means of both parties protecting their interests at every stage of the process. The vendor offers the boat as it is with a description. The potential buyer makes his offer based on sight and what he considers the value to be. He can of course employ somebody to help him establish the value, but the vendor is under no obligation to allow anything more than a visual inspection, without some commitment or assurance that any damage or costs arising from that inspection are covered. Equally the potential buyer may not want to go to that expense of making that commitment when the vendor has in turn not made a commitment to sell to the buyer - which happens when he signs the contract.

So the offer, contract, deposit, survey, renegotiation if appropriate, process protects both parties and lays out the conditions of the transaction before anybody has made any financial commitment. It also ensures that vendor does not sell to anyone else. Clearly some buyers may be reluctant to pay a deposit, particularly to an unknown person, so there is some merit in having this held by a third party such as the broker whose job it is to ensure the transaction is carried out successfully to the satisfaction of both parties. The purpose of the survey (and trial sail if appropriate) is to satisfy the buyer that the boat is as described, not to determine the appropriateness of the boat or establish an offer price.

The system works, but of course it does not necessarily satisfy every situation so alternative proposals might be considered. However, don't be surprised if a vendor prefers to follow the normal route unless he can see that it is really in his interest to consider alternatives.

 

[jerrytug]

Thank you very much indeed for all your informative replies folks, I will read, digest and answer them all properly, later or in the morning, cheers Jerry.

 

[JumbleDuck]

When I am seriously interested in a yacht, buying through a broker, WHY am I supposed to look it over myself, then make a binding offer subject to survey, then put down a deposit, and only then, get the boat professionally surveyed?

This comes up regularly, and the answer generally seems to be "because that's the way we've always done it." There is no particular reason why a survey shouldn't be done before an offer, as is the case for house purchases in Scotland, but it might result in coughing up for multiple surveys before having an offer accepted, as is also the case for house purchases in Scotland. On the whole I think being able to spend money on the survey with confidence that you have first dibs on the boat is probably a good thing, but it is all undoubtedly a bit odd.

 

[prv]

Also the contract places a legal obligation on the vendor to sell to the purchaser. As a purchaser, you don't want to spend good money on a lift out and survey only to find that the vendor sells the boat to someone else at the last minute

Indeed. We had someone come and look at Kindred Spirit when we were selling her. No contract or formal survey, but he did have a chap he was employing have a look on his behalf. However, we learned through yard gossip that he was planning to simply use her as a floating bedsit while refitting another boat, which seemed a shame for a pretty little boat I'd spent so much effort restoring. So when another gentleman appeared, wanting to buy her to go sailing in Cornwall with his young son, we happily agreed to sell to him instead. Very glad the first guy hadn't secured the boat with a deposit while making his enquiries.

Pete