The Hidden Value of a Survey

Wooden boat owners, buyers, and sellers often seek in vain to find knowledgable and experienced persons to help them with their passion by providing some needed balance in the world of the rational. We are fortunate to be able to introduce to you one Dan Ryan, the owner of a "restored to Bristol condition" Kettenburg 40.

Dan is a professional marine surveyor with the experience, credentials, and satisfied customers to validate the claim. We have imposed upon him to help us explore the variety of roles a surveyor can play in the relationship one has with a wooden boat(s). Over the course of time we will be posting articles penned by Dan, information he forwards to us about the field, and the results of an ongoing conversation we will be having with him on line and in person about surveying and how it can be as important a tool in the wooden boat owner's bag as a GPS, a sextant, or knife.

Our first installment is the following article Dan wrote for the LOG newspaper.

BE SAFE AND SAVE MONEY WITH A MARINE SURVEYOR

Many individuals who are looking at getting a survey, whether it be pre-purchase, or for insurance purposes on their existing boat, may look at the survey as a nuisance: something that they must have done and pay for in order to get financing or insurance on the boat. As a result, many people will "shop" for the cheapest survey. In doing so, you are only cheating yourself, and more than likely, losing more money in the long run.

A good, quality survey, will help you in numerous ways. As a potential buyer, you want to make sure that the boat you are buying is the boat you are expecting: you do not want any hidden surprises, such as a faulty seacock, cutlass bearing, or rudder post that could cost you a lot of money down the road. For an insurance survey, you want a high quality survey that will fully support the insured value of your property should you ever need to file a claim.

First and foremost, a survey is for you, the party who contracts for the survey. It is not for the seller of the boat, and it is not for the yacht broker. You are buying this information to enable you to make a wise decision. What is the true value of the boat? Are there any major problems that need to be fixed before you could even take the boat out of the slip? Are there any lurking problems that could cost you money and heartache down the road? As a result, you should be the one who selects the surveyor who will conduct the report. Any quality surveyor should make it very clear that this information is for you and you alone. Unless you authorize him to share the information in the survey with the broker or the seller, that information should be shared only with you. You can then provide the survey to your finance company and/or insurance company.

Some yacht salespeople may attempt to steer potential buyers to one particular marine surveyor. If this is the case, buyers beware! Most good brokers will provide a list of marine surveyors and allow you to choose one, and this is perfectly fine. However, if your yacht salesperson heavily pushes one surveyor over another, only gives you the name of one surveyor, or offers to set up the survey for you, you may want to think twice. If he/she is steering you to one particular surveyor, there may be a reason. There are "surveys" out there that are nothing more than 2 page copies of the brokerís listing sheet, with the asking price listed as the fair market value or more, and signed by a marine surveyor. No true independent inspection is done, and there are very likely problems with the vessel not listed in this report, that you will discover after you own the boat. This type of report serves the needs of the broker and the seller, not you, the buyer. After all, would you have a real estate broker appraise a house you were considering buying?

Choosing a quality surveyor can seem daunting at first. Anyone can build a boat, and anyone can call themselves a marine surveyor, even if they are not qualified. To choose a surveyor, you can refer to one of the marine directories published in Southern California; check local marine publication advertisements; browse the internet; ask around at boatyards and chandleries; ask for a list from the broker; call your finance or insurance company; or call one of the national organizations for accredited/certified marine surveyors. The two largest and most recognized national organizations are SAMS (Society of Accredited Marine Surveyors) at 800 344 9077 and NAMS (National Association of Marine Surveyors) at 800 822 6267. Each of these organizations can give you a list of surveyors in your area. Although being a member of SAMS or NAMS does not guarantee that you will get the high quality survey for your needs, any surveyor you do decide on should at least be a member of one of these organizations.

The important thing to remember when choosing a marine surveyor is that you are the customer; ask a lot of questions to determine if the surveyor is right for your job. Some questions to consider asking include: Are they a full time professional marine surveyor, or is this a "side" occupation/hobby? Are they familiar with the boat you are interested in? What is their background in the marine industry? Do they have past boat building/repair or mechanical skills that enable them to find those things that will cost you money down the line? How is your communication with the surveyor when you first contact him? Can you attend the survey? Does the surveyor answer your initial questions?

You will want to find a surveyor who will give you a quality survey that will save you money in the long run. You should highly consider having the surveyor go on a sea-trial with you, before you contract for a marine survey. On a sea-trial, your job is to see/feel the boat and determine if you like the vessel. Your surveyorís job is to make sure everything functions as it should: testing the vesselís gear underway, looking for problems with the engine, transmission, steering system, vibrations, hull flexing, etc. These are items that can not be checked in the slip or on the hard in the boat yard. It may also be wise to take an engine surveyor along on a sea-trial to thoroughly check the engines, beyond what a standard surveyor does. On sailing vessels, a separate rigging survey should also be considered. Your surveyor should be able to arrange these surveys for you. This can be money well invested, preventing the expense of a haul out and survey if it turns out it is not the boat for you.

Once you have conducted a sea-trial, before you have a pre-purchase survey, you will usually have an offer accepted by the seller. The equipment that is listed on a boat for sale, as well as her gear and machinery, should be in good working order. A quality survey will be in depth. Each and every item of her construction, machinery, and equipment should be listed in the report, with its condition noted. A good survey is a thorough breakdown of the vessel: hull, deck, superstructure, cabin appointments, propulsion, water systems, sanitation, steering, ground tackle, electronics, navigation and entertainment systems, electrical systems, thru-hulls, bonding systems, safety equipment, etc. For example, a survey should not just list that the boat has a Perkins engine, or that it has a 30 gallon water tank. A quality survey will list the condition of the engine hoses, clamps, engine beds, mounts, etc., and it will list the material the water tank is constructed of, how is it installed, what is the accessibility, is the tank properly ventilated, etc.

When something is found inoperative or missing, this will give you bargaining chips when re-negotiating the price of the boat after you receive a copy of the survey. A minor example might be that the surveyor finds that the cutlass bearing needs to be replaced. You can then do one of two things in your negotiation. First, you could request that the cost of the repair be deducted from the purchase price, or you could request that the seller pay for the repair. Either way, you have saved money, which will likely more than cover the amount spent on a detailed survey.

A more drastic example of money saved would be if a surveyor found a fiberglass boat with delamination, or a wooden boat full of rot. He could point out major repairs you would have to pay for if you were to buy the boat, and then you can obtain estimates from a yard on what the cost would be to make the repairs. At this point, donít allow your excitement over the boat put blinders on you: extensive repairs on boats can be quite expensive, and you donít want to end up with your perfect boat in the junkyard of broken dreams. Be objective, and if the necessary expense to bring the boat up to par can be used in negotiating your purchase price, and makes the deal worth while, then at least you know what you are getting, up front. If the repairs are too much to make it worth your while, then once again, you have more than saved the cost of a quality survey.

Another important aspect of a quality survey is the report itself. Even a highly knowledgeable surveyor who knows the type of boat inside and out, is of little value if he can not put it in writing. A high quality report can also save you money. So far, we have primarily discussed the money and heartache you can save in the ďpre-purchaseĒ phase of the process. A high quality survey report should also save you money in an insurance survey.

A high quality survey report will be more than a copy of the 2-page brokerís sheet, as mentioned above. The report will list out the equipment, gear, and machinery, and any deficiencies found in the above. A good report will summarize the findings for you, and where appropriate, reference the Code of Federal Regulations or other guidelines used in evaluating the given system. Most surveyors will utilize the Code of Federal Regulations (federal laws regulating items from the number of fire extinguishers and life jackets on board to how a gasoline engine is installed), The American Boat and Yacht Council (ABYC) recommended standards, and National Fire Protection Agency (NFPA) recommended standards. The Code of Federal Regulations are laws that must be complied with, while ABYC and NFPA are accepted marine industry guidelines for safe boating. A high quality survey report should also include at least 4 inside and outside pictures of the vessel on a smaller boat, and as many as 12 Ė 30 on a larger boat. It should incorporate the engine and rigging surveys, have a HIN (Hull Identification Number) rubbing or picture attached to the report, and list serial numbers of major equipment.

Now, how can this save you money in an insurance situation? Think about it this way: if you ever have a claim, the more information and documentation you have on the equipment of your boat, especially when photo-documented, the better off you are going to be if you ever do need to make a claim. If there are any deficiencies on the original survey, donít panic. Work with your surveyor, and after the items are corrected, ask your surveyor to prepare an addendum to the survey, and keep your receipts. Take your own photos of your repairs and any subsequent upgrades. Again, if there is ever a claim, you will have all of the documentation that fully supports the value of your insured property. This will be a lot more valuable to you than a 2 to 4 page fill in the blanks broiler plate when dealing with your insurance company.

Another consideration is to hire a surveyor as a consultant when you have expensive repairs or upgrades done to your boat. The surveyor can make sure that the repairs are done to the standards of the CFRís, ABYC, and NFPA. This can save you money when you are the seller, and the next surveyor steps aboard to evaluate the vessel.

Another, and more important aspect of a quality survey goes far beyond money. A high quality surveyor will always be putting you and your family first. A safe boat is of utmost importance when you and all you hold dear are out on the water. A good surveyor will point out any potential safety hazards and make recommendations for corrections and advise you of the appropriate safety gear to have on board. This, along with the piece of mind that you paid a fair market value for your new boat, will truly make for Happy Boating!