Survey etiquette ???

[Ship's Cat 73]

While speaking with a broker recently the subject of surveys came up. He said something like "On no account allow anyone to have a survey done on a boat without the prospective buyer leaving a returnable deposit of 10% of the agreed purchase price."

Is this normal practice? Never having sold a boat before, this advice came as a little surprising to me.

Is this practice commonplace when selling privately (without the 'benefit' of a broker)?

 

[sailorman]

Normal
what happens it your boat is damaged or yard charges are accrued in the process.
a deposit "Is intention to buy"

 

[Momac]

I bought my present boat last year.
I paid an initial deposit of £1000 of which £250 would have been non returnable if I had pulled out of the deal.
Then the survey.

 

[TheOrs]

Similar here:

-Viewing
-10% deposit
-Sea-trial
-Purchase

 

[JumbleDuck]

While speaking with a broker recently the subject of surveys came up. He said something like "On no account allow anyone to have a survey done on a boat without the prospective buyer leaving a returnable deposit of 10% of the agreed purchase price."

Is this normal practice? Never having sold a boat before, this advice came as a little surprising to me.

It's a bizarre custom of the yacht broking world. Many people will now tell you why it's entirely sensible. Ask them if they paid a returnable deposit before having a survey done on their house, or before having an AA check done on their car.

 

[GrahamM376]

It's a bizarre custom of the yacht broking world. Many people will now tell you why it's entirely sensible. Ask them if they paid a returnable deposit before having a survey done on their house, or before having an AA check done on their car.

Slightly different situation. The prospective buyer is usually responsible for lifts and yard costs and could walk away without paying if survey is bad. Also, some surveyors scrape through epoxy coats unnecessarily, leaving remedial work to reinstate afterwards at the cost of the prospective buyer who won't be a happy bunny and may try not to pay.

 

[jac]

It's a bizarre custom of the yacht broking world. Many people will now tell you why it's entirely sensible. Ask them if they paid a returnable deposit before having a survey done on their house, or before having an AA check done on their car.

Love it when people try to use completely non-comparable situations to justify their opinion when Graham has given a very good rationale.

To OP .

Completely up to you how you do it of course and the level of risk you want to take. Whilst the purchaser will be liable for survey and will pay direct, there is a risk of walk away and the yard then charging costs of lift to the owner of the boat. Having a sum you can dip into to cover those reduces the risk.

Many yards will want the person requesting the lift to pay there and then if it's not a resident boat /known owner but not all. Worth having a chat with the yard to ensure that they will take payment from the prospective owner and not chase you if you do seriously think about letting the survey happen without a deposit.

 

[l'escargot]

It also protects the buyer. You put down a deposit and the seller is contracted to go through with the sale providing the conditions of both sides are met. If you don't have a contract there is no recourse if the seller pulls out after you have paid out for survey, lift etc.

 

[Jim@sea]

Normal
what happens it your boat is damaged or yard charges are accrued in the process.
a deposit "Is intention to buy"

No. A deposit takes the boat "off sale" while the prospective purchaser has a survey or closer look.
If the boat was owned by a Boatyard then a deposit would be an intention to buy as buying a boatyard boat you would expect a warrenty and be sold something of merchantable quality, just like a second hand car.
But when buying from a Broker is like buying a car from an Auction, if the mast falls down or the engine seizes up the day after your cheque has cleared you have no claim against either the Broker or the seller. (No Warranty implied of given) Hence having Surveys.
Paying the deposit ensures that once you have paid a surveyor a considerable sum of money that someone cant come along and buy the boat whilst you are waiting for the surveyor to do his job.

 

[JumbleDuck]

Slightly different situation. The prospective buyer is usually responsible for lifts and yard costs and could walk away without paying if survey is bad.

Why is the buyer expected to give the seller a deposit to cover costs for which the seller is not responsible?

Love it when people try to use completely non-comparable situations to justify their opinion when Graham has given a very good rationale.

Love it when people say "It's different" without attempting to make any explanation.

 

[Birdseye]

Love it when people try to use completely non-comparable situations to justify their opinion when Graham has given a very good rationale.

To OP .

Completely up to you how you do it of course and the level of risk you want to take. Whilst the purchaser will be liable for survey and will pay direct, there is a risk of walk away and the yard then charging costs of lift to the owner of the boat. Having a sum you can dip into to cover those reduces the risk.

Many yards will want the person requesting the lift to pay there and then if it's not a resident boat /known owner but not all. Worth having a chat with the yard to ensure that they will take payment from the prospective owner and not chase you if you do seriously think about letting the survey happen without a deposit.

This rather illustrates the point that it is "Completely up to you how you do it of course". When I have bought a boat, I have never paid for the lift out and have taken the line that its up to the seller to make it available for survey. I've done the same when selling. And never any deposit.

Mind you I have never done a sea trial when selling. Thats what magazine boat tests are for and I'm not in the business of doing joy rides for tyre kickers.

 

[l'escargot]

This rather illustrates the point that it is "Completely up to you how you do it of course". When I have bought a boat, I have never paid for the lift out and have taken the line that its up to the seller to make it available for survey. I've done the same when selling. And never any deposit.

Mind you I have never done a sea trial when selling. Thats what magazine boat tests are for and I'm not in the business of doing joy rides for tyre kickers.

i would expect a sea trial as part of the survey, not as a joy ride, and after an offer has been accepted and deposit paid so certainly not as a tyre kicker. It wouldn't be to see if I liked the boat but to check that everything operates correctly - engine run up to temperature whilst actually in use, sails and rigging all operational and as advertised etc. Not the sort of stuff you can check on the quay or tied to the pontoon.

 

[V1701]

I've bought 3 boats & sold 2 privately & it is up to you (& the buyer) pretty much for a private sale. The people I've bought boats from have been decent people, the transactions have been pleasant & I've also walked away from some boats for sale privately because I've not had a particularly good impression of the seller. My latest boat I currently have a 10% deposit on, the owner is doing a few outstanding jobs which I will see are done then pay the balance. All verbal agreement but I could have used a proforma contract. There is a certain amount of risk inherent in this approach but the boats are not megabucks & I much prefer to deal with the owner than a broker. That said I've met some very decent brokers & some not so good. Have a look at my website (in signature) if you're interested in having a website to sell yours, it's helpful if you want to try DIYing or I can do one for you...

 

[Tranona]

This rather illustrates the point that it is "Completely up to you how you do it of course". When I have bought a boat, I have never paid for the lift out and have taken the line that its up to the seller to make it available for survey. I've done the same when selling. And never any deposit.

Mind you I have never done a sea trial when selling. Thats what magazine boat tests are for and I'm not in the business of doing joy rides for tyre kickers.

The problem with that approach is that you have no commitment from either side before you incur expenditure. The survey and associated costs is for the buyers benefit, so why should the seller pay? Of course he is free to offer that as an incentive to a potential buyer, but why should he without any commitment?

The purpose of the deposit is twofold. First it removes the boat from the market so the buyer is confident that the boat is his and the seller knows he has a secure buyer. Second it provides some protection against losses. Remember the debt for a lift does not attach to the person instructing the yard, but eventually to the boat.

Best if the initial agreement between buyer or and seller is formalized in a contract that lays out the terms and conditions of the transaction. That minimises the chances of either party reneging on the deal. The model contracts provided for example by the RYA or the YDSA carefully balance rights and obligations of both parties and are well proven. There is no reason why they cannot be used in private transactions and they can also be modified to incorporate specific terms or conditions if both parties agree.

 

[Spyro]

This rather illustrates the point that it is "Completely up to you how you do it of course". When I have bought a boat, I have never paid for the lift out and have taken the line that its up to the seller to make it available for survey. I've done the same when selling. And never any deposit.

Mind you I have never done a sea trial when selling. Thats what magazine boat tests are for and I'm not in the business of doing joy rides for tyre kickers.

You must be one of the very few that use that process. I know there is nothing set in stone but it's pretty much accepted that a potential buyer pays for the lift out for survey. It's another way of showing commitment to buy. I certainly wouldn't be paying for a lift out as a seller I would expect to as a buyer. At £300 pound a time for a lift it could get very expensive if a sale falls through.

 

[dombuckley]

Why is the buyer expected to give the seller a deposit to cover costs for which the seller is not responsible?

Because the charges are attached to the vessel, not the individual. If the buyer does a runner, then the seller is left in the position of having to pay, or risk having his boat impounded under Admiralty writ.

I had an example of this a couple of years ago, when a chap was buying one to live aboard. Boat turned out to be a bit of a basket case, so he pulled out and did a runner, paying neither myself nor the marina. Tracing him was fruitless, as he had moved from his temporary accommodation, and his mobile went dead shortly thereafter. My contract was with the guy himself, so I wrote the cost off. The lifting charges, however, were incurred by the boat, and the marina insisted on the present owners paying.

 

[Tranona]

You must be one of the very few that use that process. I know there is nothing set in stone but it's pretty much accepted that a potential buyer pays for the lift out for survey. It's another way of showing commitment to buy. I certainly wouldn't be paying for a lift out as a seller I would expect to as a buyer. At £300 pound a time for a lift it could get very expensive if a sale falls through.
Read more at http://www.ybw.com/forums/showthread.php?424390-Survey-etiquette#3i7TvdOewGqdOubB.99

Yes. Seems odd that anybody would accept advice based on one individual's random experience rather than the collective wisdom of those who do this sort of thing for a living.

 

[Spyro]

Because the charges are attached to the vessel, not the individual. If the buyer does a runner, then the seller is left in the position of having to pay, or risk having his boat impounded under Admiralty writ.

I had an example of this a couple of years ago, when a chap was buying one to live aboard. Boat turned out to be a bit of a basket case, so he pulled out and did a runner, paying neither myself nor the marina. Tracing him was fruitless, as he had moved from his temporary accommodation, and his mobile went dead shortly thereafter. My contract was with the guy himself, so I wrote the cost off. The lifting charges, however, were incurred by the boat, and the marina insisted on the present owners paying.

If I remember correctly with the first boat I bought I had to pay the marina for the lift out at the time it was being done. Presumably this saves the marina and the seller any possible hassle if it all goes t1ts up. quite comforting for the seller if this process is followed.

 

[jac]

If I remember correctly with the first boat I bought I had to pay the marina for the lift out at the time it was being done. Presumably this saves the marina and the seller any possible hassle if it all goes t1ts up. quite comforting for the seller if this process is followed.

True, assuming the payment clears. If the buyer is going to do a runner then they may pay by cheque, (sorry my wallet was stolen) and then cancel.

There may be costs to reinstate the boat to her previous condition, e.g. If the GRP is exposed for any reason. Will you lose loads? No. But if you had 2-3 purchasers pull out costing you a couple of hundred each time you would be annoyed.

 

[xyachtdave]

Strange boaty practices!

I got into trouble with our broker for immediately arranging a survey after making an offer over the phone (which was accepted) on our boat after viewing.

I thought he'd be pleased with the progress and the £500 outlay on the survey would show my seriousness.....apparently yachting doesn't work like this....!

Another strange yachting buying thing, our overpriced J 80 that's been for sale for over a year isn't overpriced - apparently it means there aren't any buyers around at that price.

And if we lower the price it might cause a 'crash' and upset some people....