Buying through broker, why 'offer before survey'?

[bitbaltic]

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

This comes up quite often and I am always interested to find out what the prospective buyer thinks a 'viewing' is.

There is a Bav 32 for sale on our pontoon. I know she is a good clean boat with lots of money spent. Obviously prospective purchasers won't know that. Some came by the other day and it was an unaccompanied inspection. They looked at nothing above decks, spent twenty minutes down below and went away. I suspect that this is often average.

When I bought my current and first boat I looked at four examples of the exact same boat. I had no previous ownership experience but bought a book about what to look for and went to each viewing with pencil, paper and torch. Each boat (they are only 30 ft long) took four hours to inspect. Two viewings were 'accompanied' by the broker on the boat who happily sat in the cockpit for four hours.

By the end of the process I had a very good idea if what the boats were worth.

So I don't buy the idea that you, as a knowledgeable amateur, can't meaningfully inspect a boat to a standard sufficient to know that your bid is worthwhile. Then all you need a surveyor to do- and you still do need one- is provide specialist advice on what should essentially be a chosen boat. You are at this point looking for reasons beyond your knowledge that tell you not to buy, not a re commendation that you should.

How long have you spent viewing the boats that interest you? Did you feel you saw all you needed to, or did you feel pressured to curtail the viewing?

Cheers

 

[garvellachs]

Perhaps the OP is thinking the surveyor is going to value the boat as well as report on it - and perhaps they will. But are surveyors equipped to value any but the most common boats today in the buyers' market that seems to prevail? There's no substitute for personal research on the particular boat type in question - lots of boat types are really quite rare compared with types of houses or cars.

Presumably a surveyor could be asked simply to value the boat on what he can see, prior to offer. Or another broker could be asked, for a fee, to give a verbal report on boats of that type and what he thought they were worth/selling for in the current market?

 

[Doug_Stormforce]

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

When you buy a house you make an offer, haggle a bit and once you have agreed a price you start spending money on surveys etc, however in England the seller can change his mind, accept a higher offer from someone else or do what he likes. When buying a boat you are in a much safer position. Once the seller and you agree a price, you sign a contract that still gives you wiggle room and when you start spending money on surveys etc you know the boat is not going to be pulled away under your feet. This is a far better and safer position for a buyer than a house purchase.

If you feel you want to employ a surveyor before you make an offer then feel free to, the broker won't stop you, however you could spend a lot of money to find out the boat is OK, but the seller won't match your offer. Do you really want to invest in survey fees on a boat that is still on the open market?

In terms of price, I would suggest you ignore all advise about % off asking price etc. You simply offer and agree to a price you are happy with. It does not matter what someone else thinks it is worth, it is simply a matter of what it is worth to you. If you and the seller agree a price and the survey comes up with no problems then great. If he finds some problems then you either walk away with return of deposit or you re negotiate.

The idea that a surveyor will find enough wrong to justify his fee may work for some people. A good surveyor however will find what is wrong with a boat and advise you accordingly. You don't pay a surveyor to get the price down, you pay the surveyor to confirm your are investing your money wisely. He comes with professional knowledge (and insurance) that you do not have and you need.

Good luck with whatever boat you have found. If you like it make an offer and see where that conversation goes. Be aware however that just like houses there are sellers out there who are not seriously ready to sell. I would not personally invest too much time or money in a boat that I had not negotiated into a contract. The contract is there to protect you both from time waisters.

 

[JumbleDuck]

If you feel you want to employ a surveyor before you make an offer then feel free to, the broker won't stop you,

A Clyde based broker to whom I suggested that practically fainted with horror before absolutely and adamantly refusing. No, I was no under any circumstances to a get a professional view on why the galley lockers were full of brown-stained water. I reckon it was either the teak decks leaking (ouch), water getting into the balsa core of the cabin roof and bringing rot out with it (OUCH) or perhaps just a leak past the instrument repeaters and down between the rear surface of the cabin and in the interior woodwork (meh). In one case I'd have made a good offer, in once case I'd have made a low offer and in one case I'd have run away as fast as my little legs would carry me.

 

[rotrax]

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.

The "Little cheap jobs" were exactly that-clunkers purchased for sweeties that responded to a good going over and spruce up before sale. I did about four, and worked my way up to my current boat, each re-sale turning a good profit, which was used for the next purchase and renovation. This also helped me improve my skills to survey and repair boats.

I am confused-my last boat-sorry First Mate is co-owner-our last boat cost almost 100K. I dealt through a broker. I did not use a surveyor. Where is the legal obligation to use a surveyor?

As I said in my earlier post my insurance company-the same one for seven years-has not required a survey for comprehensive insurance.

If, in the future they do, I am pretty sure they will want a proper guy-or gal-not me. That will not be a problem. I'll have to pay up and look big........................

 

[prv]

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.

No he isn't.

Pete

 

[jwilson]

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.

The main reason, as others have said, that you should sign a sale and purchase agreement and put down a deposit before getting a survey, is to stop the seller selling to someone else after you have laid down £300-£1000 for the survey (and frequently lift-out charges as well). It also tells the seller that you are serious. The system does actually protect BOTH buyer and seller.

Most surveyors will do a "viewing" for you - maybe an hour's work and in that hour, if they are any good, they will know more about the boat condition than most buyers will learn in several hours pottering about. No report, just a phone conversation saying perhaps "basically a good boat but I've concerns about mast compression/some not very well matched gelcoat repairs/etc". We often suggest this if a buyer is several hundred miles from the boat - it can be cheaper than the travel costs of going yourself. Some surveyors will discount the full survey fee after that if you go on to a proper full liftout/scrape antifoul/unscrew floorboards type survey.

Recently sold a nice boat on brokerage where the buyer arranged for a surveyor to accompany him on his initial viewing - that also worked well. But this was a viewing, maybe a detailed one, but not a survey. The full survey did not get done till paper was signed and a deposit lodged.

 

[biscuit]

If there is no broker involved, getting a deposit back from the vendor can be a problem. This happened to me some years ago: the survey showed leaking chainplates with defects in the overlying GRP and teak decks. I chose to withdraw my offer, the vendor was outraged, and I needed the help of the RYA's legal department to recover my deposit. Buying through a good broker does have some merits. Joining the RYA also !"

 

[AntarcticPilot]

Two points:

1. Your offer is "Subject to survey", or at least, it should be - walk away if it isn't! In the UK (YMMV elsewhere), that is an absolute - if the survey turns up anything that you don't like, or which has a significant effect on the value of the boat, your offer can be withdrawn without loss (except of the survey and associated fees, which you'd lose anyway).
2. Surveys, if done properly, may require some mildly destructive testing; for example scraping antifouling off to check the state of a GRP hull, or the use of a spike to test for rot on wooden hulls. That may involve minor damage to expensive coatings such as epoxy and/or coppercoat; either could preclude the surveyor properly assessing the state of the structure of the hull. I'm not about to let anyone who hasn't made a binding commitment to the process do stuff like that.

I'm a novice compared to many here, but I am pretty sure I can assess whether a boat is basically sound or not; it isn't rocket science. The survey I had on purchase brought up a few issues - nothing scary - which I would probably never have spotted on my own. These were fixed by mutual agreement between myself and the vendor, with some adjustment of the purchase price.

The usual system of offer, deposit, survey protects both vendor and purchaser; it is difficult to think of a process that would protect BOTH as well as it does.

 

[gjgm]

Wouldn't you want some sort of agreement of price before you start spending money, unless you are willing to pay the full price anyway?

 

[jerrytug]

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.

That's right Daedalus I wouldn't be fretted either!

 

[jerrytug]

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.

SM I just don't get what you mean. Of COURSE a buyer wants to " poke about" the boat, otherwise how does he know if he's interested?

 

[jerrytug]

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.

Yes itseems daft to me as well!

 

[jerrytug]

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

The trouble is, the deposit has to be a percentage of something, so the buyer has to make an offer on something he doesn't know enough about..

 

[jerrytug]

More answers to all your replies later thanks

 

[sailorman]

SM I just don't get what you mean. Of COURSE a buyer wants to " poke about" the boat, otherwise how does he know if he's interested?

Hammer,screwdriver,pointy knife. NOT without a deposit he wont

 

[Birdseye]

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..

An offer subject to survey is a conditional offer and isnt legally binding.

 

[jwilson]

An offer subject to survey is a conditional offer and isnt legally binding.

It is if the surveyor finds nothing at all wrong. It has happened once (finding nothing wrong), out of hundreds of boat sales. That was the boat where every screw head was fore and aft lined up, everything had a tailored cover and the deep bilge sump was cleaner than most boats fridges. All the surveyor could come up with was a few suggestions, such as "....now would be a good time to epoxy the hull as moisture levels are very dry". We sold that boat twice, the second time the surveyor actually found a minor defect or two.

 

[Tranona]

An offer subject to survey is a conditional offer and isnt legally binding.

Of course it is legally binding - on both parties provided the conditions are met. No point in going through the process without it being legally binding. That does not mean the transaction will go through automatically, the boat still has to pass the survey to the satisfaction of the buyer to meet the condition.

 

[Birdseye]

You just have to be a lawyer Tranona to split such a fine hair. Since " the boat still has to pass the survey to the satisfaction of the buyer to meet the condition" it can hardly be legally binding as agreed prior to survey. As with a house where you offer subject to contract.

As for the OP I suggest he makes an offer subject to contract and makes the deposit returnable in full if for any reason he decides not to go ahead after survey