Pursuant to the Purchase & Sale Agreement

Often the search is far and wide, similar to an online dating service, for a new boat. After all, the boat must meet all the predetermined requisites as set forth by the owner-to-be. Every hiding place for fine boats and, as it sometimes turns out, derelict boats will be sought. On land and by sea, and often through the air, the buyer will not quit until that buying urge has been satisfied. And along the way, oh wise one will have learned that nothing is ever as it seems, and that is so ever true with boats.

Recently, my search led me to an online site often used by brokerage houses. As with dating services, the personality, specifications, and featured benefits, must be condensed into a finite number of words which never seem to satisfy the reader's curiosity. The listing contains whatever is required to pique the buyer's interest. The listing only scratches the surface of what you actually might be getting yourself into. Usually, brokers will submit a positive personal opinion in the description - be sure to separate fact from opinion. If the boat described generates any interest at all, prepare specific questions for the broker based on the listing.

To uncover the truth about the condition of the boat, an inspection must first be arranged. It is preferable to view the boat out of water; however, during the nice weather, the boats are being used by their present owners and features below the waterline will have to be inspected during the haul out. Whether boarding the boat from a dock or from a ladder, take a stroll down the side decks; look around on the foredeck; sit at the wheel. The boat must feel right for handling lines, long hours at the wheel, anchoring, and moving fore and aft on the boat. How about the accommodation? Is there sufficient headroom? Will the layout work for captain and mate? Is the motor(s) accessible for routine maintenance? Is there enough storage space and tankage to suit your cruising needs? These questions are subjective and can only be answered by the skipper and crew. Questions pertaining to the condition of the yacht are normally determined by a qualified surveyor or journeyman boatbuilder. Boarding a yacht in obvious disrepair is risky from a liability standpoint as damages might be incurred during the inspection and the potential client could be put in harms way by merely boarding the boat. These "death row" boats are best left for the do-it-yourselfer with marine experience in structural and mechanical repair.

Once the initial inspection has been completed, more research must be undertaken by the buyer. Find the manufacturer's website; study the builder's original specifications; look for an owner's group website for the particular brand as owners will often post problems experienced with a particular model. Plan on doing the research on the high ticket items - the motor, electronics, generator, and so on. Many buyers rely on the broker for information; this is a mistake. It is up to the buyer to do the research so there can be no mistake interpreting the information. The broker will assist in coordinating the showing, seatrial, and survey, providing a Purchase and Sale Contract, holding monies (deposits) in escrow, registering and documenting the vessel and, most importantly, providing the communications link between buyer and seller. For the buyer this means that the bulk of the work; ie, knowing and understanding the boat in question, will be up to the purchaser.

In most cases, the broker will submit offers to the buyer. Depending on the broker/seller relationship, the broker may not submit a low ball offer to the owner; this can sometimes become a sticking point. Yet, an offensively low offer may not be worth the trouble for the buyer. Better results may be achieved by submitting what the broker defines as a reasonable offer. Later in the buying process the seller will often submit a new, lower offer based on the results of the pre-purchase survey. All sales are driven by this mutually agreed upon number. Nevertheless, the buyer never knows for sure what motivates the seller. Depending on the personal circumstances of the seller and how long a boat has been on the market, all "reasonable offers" can be very difficult to determine. Once an offer is presented to the owner, a counteroffer by the seller might be a clue as to how low they might be willing to go. A middle ground can usually be found by both parties compromising and lowering their respective expectations.

At the point when both parties agree to the purchase price, and any and all contingencies, the survey and seatrial are scheduled. Very few boats will come away with a spotless pre-purchase survey. If the recommendations exceeds a tolerable number of repairs, the purchaser is likely to walk away with the deposit. If not, an estimate of the cost of the repairs per the surveyor's recommendations will be sought out and the purchase price will no doubt be re-negotiated.

The object of the exercise is to get to the truth about a particular boat. Every boatowner will treat a boat differently and the results of this attention or lack thereof influences the purchase price of a boat. A potential buyer will sense immediately how well a boat has been cared for. A broker's listing usually won't give a clue as to what problems a boat might have. A lengthy inspection by the purchaser and a thoroughly technical pre-purchase survey and seatrial, will determine if the boat is worth pursuing.

Truth in Advertising and Other Notions

I have been involved in various boat deals of late; for many owners, now is evidently a good time to sell. When shopping for classics, there is no shortage of boats available. In fact, I dare say most any boat is available - for the right price!

Which brings me to the value of a survey. While employed for various brokerage houses and dealerships, we as sales personnel urged our buyers to have any used boat surveyed prior to purchase. Likewise, before accepting a boat in trade, the "house" would have a mechanical and conditon survey performed on the trade. There are different types of surveys available. For the buyer, it is essential to have a pre-purchase or condition survey done on the boat prior to purchase. This type of survey is not to be confused with an appraisal or valuation survey. These are performed for the owner of the yacht generally for insurance purposes but often to get a handle on the yachts' value.

A thorough pre-purchase survey will find the boat commissioned and in the water and the surveyor will accompany the buyer for the seatrial. The surveyor will also inspect the vessel out of the water. This survey takes much longer to perform than an appraisal survey and will also cost more. Often the seller will make an older survey available to the potential buyer. Careful for what you wish for! Usually, it is an appraisal survey which the owner had carried out to obtain hull insurance. And, indeed, it was performed in the past - often years in the past. These types of surveys are great for the owner because they are very kind to the boats' condition: they don't go into too much detail other than the boat's specifications. It also gives the owner a market value and a replacement value. In this day and age - ouch! But brokers love these figures as they usually translate to hyper-inflated asking prices.

For the pursuer of a classic yacht, the buyer must beware of intrinsic structural problems. Will a pre-purchase survey make the buyer aware of potential problems? Not always. In wooden boats particularly, problems such as leaks, rot, and loose structures will often be hidden behind built in joinery or the inner ceiling. Corroded or de-zincified bottom fasteners will not be discovered unless several fasteners are removed in an appropriate pattern. In a recent survey I was privy to, I noticed the statement "all observed keel bolts appeared sound". Interesting since no destructive disassembly took place as the survey reminds the reader throughout. It is therefore safe to assume that nary a keelbolt was removed - thus, the nut, washer and whatever amount of thread being exposed is, well, sound! This is useless information to anyone trying to assess what he or she is about to buy.

Anyone buying a classic yacht, in particular a wooden classic yacht, will require either the skills or the resources or both to carry on with the yacht's legacy. In a previous blog entry, I touched on full disclosure by the seller. It is up to the buyer to dig for the truth. Most sellers are not willing to admit, for whatever reasons, that their boat may have a problem or two. And here's where we get into semantics. What exactly is reconditioned, rebuilt, restored. Often these words are contained in the listing. It is up to the buyer to figure out what it means exactly. A carefully worded listing will naturally steer the reader in a positive direction by creating excitement and sometimes even urgency for the buyer. A worthwhile surveyor working for the buyer, will naturally look in a negative direction and hopefully turn up any and all defects in the yacht. For the collector of vintage wooden boats, it is not uncommon to have pieces of the interior removed for the survey particularly in the chainplate region; the owner will of course have nothing to hide and will grant permission providing the yacht is returned to its original condition. The same holds true for bottom fasteners and deck screws providing the fastening and bung is replaced. It is the buyer's responsibility to contract a boatyard in advance for the hauling during survey and to perform any structural removal for inspection purposes.

All too often the dream gets in the way of reality for the classic yacht owner. The best foundation for the successful stewardship of a classic is knowing in advance what you are getting into. I have used the analogy that buying a boat is similar to joining a club. The purchase price is merely an initiation fee. The yearly dues are relentless - they keep coming and coming in the form of invoices for storage, maintenance, upgrades, and repairs. This is the costly part of the ownership. When buying the boat, find out all the information available about the boat's condition in order to make a sound decision.