Buyer-Seller: Who Does What?

Buyer-Seller....

Who Does What???????

Written by Captain Stanley G. Konz, A.M.S.

Download DOC: Buyer-Seller: Who Does What?

Who Is Responsible The Following: The Buyer, The Seller/Broker or the Yard?

Survey Fee                                           Bottom Cleaning Prior To Survey

Hauling The Boat                                Scheduling the Survey

Scheduling The Sea Trial                  Who Does What on Day of Survey?

Sea Trial Safety                                   Sale Agreement

Defining Roles

There can be some confusion on whose responsibility it is to prepare the boat for a survey, pay for hauling the boat, for cleaning the bottom, insuring paper-work is in order, etc..

Maritime Vessel Surveying, Inc. hopes

the below will help you understand the relationship between the buyer (you), the seller (owner or broker) and the surveyor.

For the purpose of this article:

Buyer

The person(s) interested in purchasing the boat who has completed a purchase agreement, including giving a deposit to the seller or a broker, which should becontingent on the findings of a marine survey.

Seller

The current owner(s) of the boat or their selling agent, such as a Yacht Broker.

Surveyor

A professional marine surveyor hired by the buyer who will perform a full marine survey on the boat to determine if there are any safety or defect issues which need to be addressed by a prudent buyer.

Yard

A full-service Marina or a place where marine repairs are made that is accessible by water that has the

equipment to "haul" or take a boat

out of the water.

What If The Seller Has A "Current" Marine Survey

On The Boat?

In most cases, a previous survey wouldn't be acceptable to savvy buyer unless you know the owner and how they have cared for and maintained the boat and you are familiar with the surveyor's reputation and the fact this report was not done just for the owner's benefit (i.e. sale of the boat).

If the owner or their representative indicate they have a "current" survey

on the boat, ask for a copy of it. If the

report is over six months old, insurance agencies and lending institution may accept it but you should check with them first.

Remember ~ a survey represents the conditions found at an inspection date and time. At no other time is should

it be considered completely valid.

If it's a more current survey report, first check out the "findings and recommendations" for the discoveries that were made during that survey. If repairs or deficiencies were noted, ask for a copy of the updated Survey Report which should clearly reflect that those items have been satisfied. If there isn't one, consider getting a new survey done!

If the Marine Survey Report is not professionally done it may not address all the areas a prudent buyer should expect (see Marine Survey Report) for their investment!

What The Buyer Should

Tell The Surveyor

First, the more you tell the Marine Surveyor you select about your boating experience and how you plan on using this boat, the better they will be able to serve your interest in representing you and the boat.

In addition, most insurance underwriter's

need to know the "intended use" of the vessel which will be reported in the survey report. Therefore the surveyor will ask if you intend to use the vessel in local water, offshore trips, long distance cruising, or even racing.

It helps the surveyor to understand what your level of experience is and how best to respond to your questions i.e. if you're a novice or a fairly new captain, we will try our best to respond to you in "layman's" terminology/language so that you will fully understand what the exclusive Marine Survey Report prepared on your vessel will include.

Buyer vs Seller

Pre-Survey Responsibilities

Who needs to arrange what....then who pays for it:

Survey Fee

The buyer is responsible for the survey fee. The surveyor will expect full pay-ment for their services at the time of the survey.

Hauling The Boat

The buyer will have to make arrange-

ments with the Marine yard of their

choice for hauling the boat where

it will be accessible to the Marine Surveyor to perform the survey.

Typically the "haul out" fee charged by the yard is expected to be paid at the time of hauling. Discuss this with the Manager of the yard you've selected. Sometimes, if additional work needs to be done on the boat as a result of the findings of the survey, a yard will waive the haul out fees if you'll commit to having the work done by their yard.

Sea Trial

See Sea Trial to understand what this is. The seller is responsible for any fee for someone to operate the vessel during the sea trial, such as a paid captain, if the owner isn't available.

Sea Trial Safety

The seller is responsible for insuring that the vessel has adequate fuel for the sea trial. An "experienced" boater/buyer would also make sure the vessel has standard safety equipment on-board the vessel prior to the sea trial as some seller's have been known to remove this equipment prior to sale.

Bottom Cleaning

A significant portion of a full boat survey is the "bottom" or hull of the vessel. If the bottom of the boat is dirty or full of barnacles, it will need to be pressure cleaned prior to the start of the survey.

Typically the seller should cover this cost, since they allowed the bottom to get in that condition to begin with! However, the buyer needs to establish (or negotiate)

with the seller who will be responsible for paying the yard for the cost of cleaning the hull of the boat to avoid confusion later.

Scheduling The Survey Timing

Unfortunately, this effort will take some time and effort on the buyers part as it will be necessary for you to arrange a specific, mutually agreeable, date and time with the seller/broker, the yard, the Marine Surveyor as well yourself!

The buyer should only schedule the survey after you have an accepted, signed offer. When you sign the purchase agreement make sure it provides you with at least two weeks after the agreement date to complete the survey and accept the vessel. I.e. the "closing" on the sale of the boat should be scheduled at least two

weeks after the purchase agreement. The "sale" will not be complete until the "closing".

It is only the sellers (or broker) job to insure that the vessel is made available on the scheduled date.

The first thing you, the buyer, needs to do is schedule a "haul out" date with a reputable Marine yard.

Scheduling The Survey Timing continued

Before you do this, ask the seller for a "time window" for some dates they are available to bring the boat around to the yard in case there's a conflict with the dates the yard has available. This assumes the boat is not already in a yard.

Typically it is best to schedule the haul out at yard at the earliest hour possible in the morning since a complete survey, including the sea trial, can take a full day.

Once a date has been established with the seller/broker and the yard, then the buyer needs contact a professional Marine Surveyor to schedule the survey including the sea trial. Normally the surveyor will try to work with you on the dates. If they are not available on the arranged date, and the schedule cannot be changed, a reputable surveyor will recommend another qualified surveyor in the area.

Day of The Survey

Time and additional expense can be saved by preparing the vessel for inspection and making her more accessible.

Once you retain the surveyor, he or she works only for you and reports to no one else.   The professional marine

surveyor is there to protect your interests! They work for you, but speak for the boat.

The surveyor should never be asked to prepare a boat for inspection. The surveyor may request minor dismantling of interior ceilings, headliners, flooring, etc. in order to gain access to those areas.

The owner should arrange to present a clean, shipshape boat, and should have all papers and miscellaneous gear

ready. Lockers and cabin areas should be cleared of all miscellaneous gear.

Random removal and examination of below-the-waterline fasteners on wood boats may be required. Any dismantling

and re-installation of parts should be performed by qualified personnel and is the responsibility of the person ordering

the survey (typically the buyer).

Written authorization from the owner may be needed to board and/or to remove part of the vessel or for the surveyor to perform any type of destructive testing.

The buyer should advise the seller/owner (or the yard) not to start or run the engines before the Marine Surveyor arrives on the day of the survey. They will want to check the oil when the engine(s) are cold and do a "cold start"as part of the mechanical inspection.

The Marine Surveyor will need to check-out the boat prior to the sea trial. They will be checking the hull construction and outside areas (through-holes, outdrives, shafts, etc.) on the boat while it's out of the water as well as checking the engine's oil. Typically, this will take an hour to two

hours, depending on the size of the vessel. Therefore, the seller/broker does not have to be present during this work. The buyer may want to be present.

After the completion of the hull inspection,

and providing the boat is sea-worthy, the yard can put the vessel back into the water for the sea trial and/or for the surveyor to complete their inspection.

The most desirable schedule would be to provide time for the Marine Surveyor to complete their inspection of the topside

and interior of the vessel prior to the sea trial.

To understand the comprehensive listing of items checked please see Marine Survey Report.

The advantage to the buyer in allowing this time is that the surveyor will be able to provide a verbal summary of their findings after the completion of a thorough inspection and sea trial.  The buyer should consider this when scheduling all parties for the sea trial.

All parties should be present for the sea trial or as a minimum the buyer, the surveyor and the owner or a licensed operator for the vessel. Depending on the location of boat/yard to open and deep water (i.e. time to reach deeper water) the sea trial itself can take another one to two hours.

The Marine Surveyor will then meet with the buyer, and the seller if the buyer desires, to provide a verbal finding of their findings including major concerns on structural or safety issues.

The written Marine Survey Report, including any photographs taken during the survey, will usually be faxed to the buyer with a hard copy sent in the mail. If there's a priority need, the report will be faxed to the buyer within 24 hours and the report sent priority mail.

At this point, the Marine Surveyor's

job is completed.

The buyer then should discuss any recommended repairs or safety defects discussed in Marine Survey Report with a qualified yard and get an estimate of any costs associated with fixing the items listed in the recommendations to use in your negotiations with the seller.

If the buyer elects have the repairs done after the sale is completed, Maritime Vessel Surveying, Inc., as your selected surveyor, would be willing to work with the buyer and the yard in detailing-outlining the necessary repairs to ensure that the work is done properly to satisfy the Survey's findings.

On safety or major defects, the lending institute and/or insurance agency will require notification when the defects that were discovered during the survey are completed.

Sale Agreement

This is provided for the buyer's information only for the purpose of this article. A professional Marine Surveyor

does not get involved with the negotiation of the vessel between the buyer and seller.

All boats for sale should have a detailed list outlining the boat's specifications and equipment. Be certain the owner provides you with a written list of equipment noting dates along with descriptions of original and replaced equipment. Be certain you are aware of the equipment included and excluded in the sale. This list should be part of the purchase and sale agreement.

It is in the buyer's best interest to make sure a "condition" of the sale agreement is one that clearly shows (is written into the agreement) that the "closing is contingent on the survey not showing any major repairs or safety concerns" on the boat.

If major repairs need to be done on the boat you will have to re-negotiate a fair price with the seller and sign an amended sales agreement. You may have trouble getting your deposit back without this condition!

Do not allow yourself to be rushed into a closing by the seller or their broker!

If you have any questions, please feel free to contact us.

Safe Boating!

Please contact our office if we may be of service to you:

Captain Stanley G. Konz, A.M.S.

Maritime Vessel Surveying, Inc.

1-800-576-9116

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For permission to use this article, please email: Maritime Vessel Surveying