10 Common Buyers’ mistakes during Survey

[mvweebles]

On the back of another thread where a specific survey was discussed, I am opening a thread on best-practices. Why me? When I was delivering, teaching, and presenting at TrawlerFest, I was hired to be buyer’s Sea Trial captain a couple dozen times so have been part of a few dozen transactions.

So almost 20-years ago I assembled the attached “Sea Trial Template.” It’s still a pretty good checklist of what to look for during a Sea Trial. Missing some items like ground tackle/anchor, electronics’ integration, maybe more detail on battery/inverter given evolution, but overall, pretty thorough. So I am re-posting.

A frequent lament on any boating forum is “Surveyor missed a LOT during the survey.” But I have to wonder, how much is the surveyor’s fault, how much is the buyer’s fault for not being thorough? So what are the most common mistakes buyers make during the purchase process?

Top 10 Buyer Mistakes - in no particular order:

1. Using broker for recommendation of a surveyor (I only partially agree*). This is a sign that the buyer is not controlling the transaction which is the real risk.
2. Co-mingling inspections. Using Sea Trial as a simple transit to the yard for haul-out and survey. Do them sequentially – cheapest one first (Sea Trial is free unless you bring a professional).
3. Thinking a buyer’s broker is there to protect the buyer’s interests. Simple rule: If you are paying someone directly, you can expect them to put your interests first. If they are being paid by someone else (i.e. proceeds from the sale), you can assume their interest is, at best, to close the deal, though they are obligated to be ethical and professional.
4. Using Sea Trial as a sort of joy-ride with friends.
5. Not running engines to WOT for at least 5-minutes; not loading-up generator for at least 15-minutes (preferably 30). I have seen sellers refuse to do this - an especially good reason not to co-mingle inspections. What do you do if seller won't WOT-test and you're on the way to the yard?
6. Leaving boat in yard after a survey thinking they will complete the deal and will have other work done thus saving money on haul.
7. Joint survey readout with owner and/or broker Reason for this is not nefarious – buyer really needs to assemble all information and disseminate before discussing outside their team. I realize the full report will be generated later, but still, giving partial information to the seller is just not good business. And I just do not believe it professional for an expert hired by a buyer to share the information with the seller directly. No arguent if the buyer shares, but the professionals should not.
8. Allowing surveyor to send broker a copy of the survey before buyer and surveyor have discussed thoroughly.
9. Being adversarial or confrontational. Will not help the deal to call the Seller’s baby ugly.
10. Not attending the survey and asking questions. Seller should be available for questions, but should not be present – this is time for the buyer to candidly discuss with their hired-gun.

*So why am I not firmly against on using broker for surveyor recommendation? I certainly understand the conflict of interest but here's my thinking: First, if you have a reputable broker who has been in the business for a while, they will already know any surveyor you can find so finding an arms-length relationship may be difficult, especially in out-of-way locations. Second, you should always check the surveyor’s credentials (SAMS or NAMS) and reviews (BBB is still relevant). Finally, you should work to establish a personal connection with the surveyor – they are working for you, no one else. Goes for mechanic and anyone else you hire. Regardless, you should make sure your insurance company and finance company will accept the survey.

I had posted this YouTube a couple days ago but was lost to the server crash. Jeff Merrill of JM Yacht Sales posted this a year ago. "Survey Day" shows a 1-day compressed survey (hull, mechanical, sea trial) of a Nordhavn 46 in Ensenada MX so breaks a lot of the rules I laid out above which in this case was probably driven by difficult logistics of getting a US buyer, seller, broker, mechanic, and surveyor 80-miles into Mexico. And I’m guessing it all worked out fine. But still, I couldn’t help notice how few questions the buyers asked; about how it seemed everyone was there to convince them they were doing the right thing by writing a $450k check (the listing price). If they discover the ‘surveyor missed something’ down the road, I have to wonder if a better process would have been prevented the miss in the first place.

Thoughts?

Peter
aka "Big Dog"

View attachment SeaSkills Sea Trial Template.pdf

 

[Porgy]

11. The buyer shall not go into the liquor locker until papers are signed and money has changed hands. Until then you have no implicit right to touch anything.

 

[Gdavid]

Can you expand on #6?, Leaving boat in yard after a survey

On the occasion that I wished to do this, the yard didn't have room to block me so I relaunched and hauled a couple months later, but if the out of water survey is the last punchlist item, and no further negotiations are requried, why is this a bad idea? The only potential pitfalls of this approach that I can think of: the boat requires work and the yard has no capacity to complete it in a timely manner, or the boat yard is far from your home port.

 

[mvweebles]

Can you expand on #6?, Leaving boat in yard after a survey

On the occasion that I wished to do this, the yard didn't have room to block me so I relaunched and hauled a couple months later, but if the out of water survey is the last punchlist item, and no further negotiations are requried, why is this a bad idea? The only potential pitfalls of this approach that I can think of: the boat requires work and the yard has no capacity to complete it in a timely manner, or the boat yard is far from your home port.

Not everything is set in stone - logistics definitely play a role. I also think there are regional variations - process is slightly different on east coast than west coast. I'd be curious what others think, especially those who have purchased in the last couple years.

That said, hard for me to imagine a scenario where the deal is done after haul. Takes a few days at least to finalize paperwork and registration even if there are no further negotiations which there frequently are. All the while the meter is running on the buyer's wallet. Where possible, for boats under 45-foot or so, a 'noon hang' can be fairly economical to sound the underbody, check rudders, shafts, etc. All other sounding is done in-water, often while waiting for noon-hang.

Overall, there is of course the diminished negotiation position the buyer has when the seller knows they decided to leave the boat in the yard. But perhaps more importantly, for the buyer to have best chance of making an informed unemotional decision, best to view the haul as a 'sunk cost' (poor metaphor for a boat, but you get the idea).

Peter

 

[backinblue]

Thanks Big Dog. I think #1 is fairly common but not real sure it's a huge mistake. Ideally you want someone on your side as a buyer and no conflict of interest. When buying from a remote location the broker can often recommend a good local surveyor. (I did this on my last purchase). Sure there could be a potential for conflict of interest, but if you reasearch them and they are reputable and credentialed, I'd be surprised if they would blatantly hide something important. In my experience, they are more likely to miss things than purposely hide them.

 

[jleonard]

I've violated many of those and would not view them as mistakes necessarily. Every deal is different, every situation is different.

 

[garbler]

A.
1.

11. Be very careful of self-proclaimed and promoting
forum experts with little or no credentials calling
themselves marine surveyor experts. Unless of course

They “ spent the last 20-years as a buy-side advisor
for large IT outsourcing deals - a deal guy and
negotiation lead for IT Transformations up to $7B
total contract value “.

 

[Don L]

that probably killed this thread

 

[mvweebles]

I've violated many of those and would not view them as mistakes necessarily. Every deal is different, every situation is different.

I 100% agree - I should have soft-peddled a bit to make a set of recommendations vs term them total mistakes. In all candor, I should have simply cut/paste Page 1 from my 2004 Sea Trial Template with Do's and Don'ts (below for convenience). But truth is, I too have 'broken' these rules but with judgement. When I bought Weebles 25 years ago, it was love at first sight. Met the owner on Sea Trial and we really hit it off and stayed in touch for a couple years. Same when I sold my Willard 30 - even gave the buyer several lessons and acted as her captain for a while as she came-up to speed. But the guy I sold my 42 Uniflite to was an absolute jerk - even his broker couldn't stand him.

Ideally you want someone on your side as a buyer and no conflict of interest. When buying from a remote location the broker can often recommend a good local surveyor. (I did this on my last purchase). Sure there could be a potential for conflict of interest, but if you reasearch them and they are reputable and credentialed, I'd be surprised if they would blatantly hide something important. In my experience, they are more likely to miss things than purposely hide them.

Rigid conflicts of interest are difficult to avoid in small communities such as boating. I think the best bet is to work to develop a relationship so your hired experts want to help you. Now, I've heard of surveyors who don't want the buyer around - I would avoid them just because it isn't a good fit for me.

From my perspective, I guess my word of advice is for the buyer to control the transaction. That doesn't mean being a General Patton type, but just think about what makes sense and don't ignore your inner gut. Keep track of who's getting paid and by whom.

Might be a subject for another thread, but as a seller, how many would be nervous about running their engine WOT for 5-10 minutes (I would be)? How many would walk-away if the seller refused to demonstrate (I would)?

Big Dog

 

[mvweebles]

11. Be very careful of self-proclaimed and promoting
forum experts with little or no credentials calling
themselves marine surveyor experts. Unless of course

Rick, in the other thread, I asked you specifically what is the upside to giving an initial readout to both the buyer (surveyor’s client) and the owner (the person on the other side of the negotiating table). Golden opportunity for you to show knowledge, experience, and leadership to explain why that makes sense. Instead, you chose to lob derogatory comments about me and hurl insults. It's a fair question that deserves and answer, not just a 'shoot the messenger' response.

Rather than doubling-down on name-calling, perhaps you have some constructive input? Set aside that we don't exactly get along - guessing this is an interesting topic for the many folks who come to TF as part of the pre-purchase process. Help them out a bit....

Peter

 

[rslifkin]

Might be a subject for another thread, but as a seller, how many would be nervous about running their engine WOT for 5-10 minutes (I would be)? How many would walk-away if the seller refused to demonstrate (I would)?

It depends on how the engine is rated. If it's continuous rated or a more medium duty engine, a few minutes at WOT wouldn't concern me. With higher output ratings, gas engines, etc. my usual attitude for a WOT test is to open them up, then once the boat stops accelerating, watch coolant temps, exhaust steam, etc. for 15 - 30 seconds or so. Then it's time to back off. If coolant temps aren't rising significantly from what was noted at max continuous, exhaust steam isn't excessive, RPM is good, etc. then I'm happy. No need to beat on them longer than that to get a reasonable idea that things are good. For some boats it takes a good few seconds to accelerate from max continuous to the point where speed and RPM stops climbing at WOT anyway.

 

[mvweebles]

Steve D has written several times about WOT testing. Here is one example of his recommendation from 2011:

https://www.passagemaker.com/channels/the-often-neglected-and-frequently-misunderstood-engine-survey

As previously mentioned, even a cursory engine survey, which requires no special tools, instruments, or equipment (and therefore you can carry out yourself), should include a WOT run to confirm several performance parameters. Initially, it will confirm that the engine and propeller are properly matched. Additionally, the WOT run will confirm that the engine is capable of producing maximum rpm for a sustained period of time without overheating, starving for fuel or air, or experiencing other problems such as smoking or vibration. How long should the engine be operated in this manner to carry out the tests? My preference is to perform a WOT run for 10 minutes and then back down to cruising rpm, typically 80 percent of WOT, for an additional 30 minutes. If the seller, broker, or builder is reluctant to operate the engine(s) under these conditions, then he or she is either uninformed or has some concern about the boat's ability to perform, which in turn should raise your level of awareness and concern.​

In some articles, he does mention that the OEM ratings should be consulted so you are correct Rlifkin. That said, prospect of doing this as a seller sorta scares me. So much so that as a buyer, I wouldn't buy without it. And it's why I recommend the buyer never touch the controls during a sea trial.

Peter

 

[boomerang]

Steve D has written several times about WOT testing. Here is one example of his recommendation from 2011:

https://www.passagemaker.com/channels/the-often-neglected-and-frequently-misunderstood-engine-survey

As previously mentioned, even a cursory engine survey, which requires no special tools, instruments, or equipment (and therefore you can carry out yourself), should include a WOT run to confirm several performance parameters. Initially, it will confirm that the engine and propeller are properly matched. Additionally, the WOT run will confirm that the engine is capable of producing maximum rpm for a sustained period of time without overheating, starving for fuel or air, or experiencing other problems such as smoking or vibration. How long should the engine be operated in this manner to carry out the tests? My preference is to perform a WOT run for 10 minutes and then back down to cruising rpm, typically 80 percent of WOT, for an additional 30 minutes. If the seller, broker, or builder is reluctant to operate the engine(s) under these conditions, then he or she is either uninformed or has some concern about the boat's ability to perform, which in turn should raise your level of awareness and concern.​

In some articles, he does mention that the OEM ratings should be consulted so you are correct Rlifkin. That said, prospect of doing this as a seller sorta scares me. So much so that as a buyer, I wouldn't buy without it. And it's why I recommend the buyer never touch the controls during a sea trial.

Peter

That is such Bull $#!T. I don't care how many books Steve D or anybody else writes , if I don't want to put my boat under excessive load , I'm not doing it for ANYBODY. I don't ever run any of my boats wide open except for very short bursts once or twice a year to make sure the RPM's are obtained. I've never sold or bought any of my boats and run them wide open on a sea trial , except again, for a very few seconds. If the boat engine cooling system maintains the temperature in the normal zone for hundreds of hours each season, it's in good condition. If the engine runs for hundreds of hours each season without issues, it's in good condition. I'm not going to take the damn boat out in 8' seas just to see if it will hold together. Sure, it should, but IT'S NOT GOOD FOR IT! Just like running an older engine wide open. Of course the chance of something breaking increases when you subject it to undue strain!
You don't go buy a classic used car , jump in it for a test drive and start cutting donuts in the damn thing do you? No. You take care of stuff and don't abuse them. That way they last.

Let me make this clear right now. When we market our boat, I'll be happy to go for a seatrial, operating the boat as I do every time we take a trip. The cruise RPM's are 1650, sometimes 1800 for a short while and I'll even peg the throttle for a few seconds to show that it'll turn 24-2500. If the prospective buyer or surveyor thinks I'm going to do something I don't normally do & run it wide open for 10 minutes, they're mistaken. If they buy the boat, they and their surveyor are free to run it at max throttle all the way home.

 

[Don L]

I have had my boat for 13 years and don'''t think I have ever run it at WOT for 5 minutes. I run it up every few hours or operation, but only for a minute or so.

Just saying.

 

[Porgy]

I run my engine up to max at least once a trip. 15-30 minutes or more. Check load, temp, gph, speed, fuel filter vacuum, engine room check. The engine was built to do that, so it should be able to do it. M-1 rating, it should be able to go at max RPMs 24/7. Everything should remain nominal. Even an M-3 rated diesel should be able to go four hours out of twelve. I’d never buy a boat that couldn’t maintain its rated RPMs the way it’s supposed to.

On a rocky lee shore or out of shape for some reason and you need warp factor right now, is a sorry-ass time for Scotty to tell you I’m givin’ her all she’s got Captain, and she can nay do no more.

 

[rslifkin]

I run my engine up to max at least once a trip. 15-30 minutes or more. Check load, temp, gph, speed, fuel filter vacuum, engine room check. The engine was built to do that, so it should be able to do it. M-1 rating, it should be able to go at max RPMs 24/7. Everything should remain nominal. Even an M-3 rated diesel should be able to go four hours out of twelve. I’d never buy a boat that couldn’t maintain its rated RPMs the way it’s supposed to.

On a rocky lee shore or out of shape for some reason and you need warp factor right now, is a sorry-ass time for Scotty to tell you I’m givin’ her all she’s got Captain, and she can nay do no more.

Up to probably an M3 rating, I agree, it'll handle a good few minutes at without WOT just fine unless it's broken. But for an M4 rating or anything higher performance, or with no specified duty cycle, I'd hesitate to run sustained WOT. I'd plan for a long run at max continuous (which would be WOT if the engine is M1 rated), then a short run at WOT to confirm power delivery is good, no smoke, proper RPM, boat reaches expected speed, no rapid temperature climb, etc. A few minutes at WOT still shouldn't blow it up, but in the interest of mechanical sympathy, I wouldn't want to beat on it longer than it took to get a good idea that it's working properly.

 

[Stabi]

That is such Bull $#!T.

REALLY

if I don't want to put my boat under excessive load , I'm not doing it for ANYBODY.

Totally your prerogative, but mine would be not to buy your boat. So please inform your potential buyer that you will not run your boat at WOT for more than a few seconds before the sea trial.

 

[Choices]

When I worked for Cummins we routinely ran engines on the wall. But never for long unless on a Dyno. We did have several let go, and cleaning up the oil blown through a brand new boat and resulting engine room fire brought the practice to a stop quick. Of course that was forty years ago.

My 30 year old Lehman has 6+k hours. As far as I am concerned it has nothing to prove. You want to buy my boat we will run it up to about 2100 and then bring it back down. I will state this stipulation in the listing documents.

When I buy a classic car I don't run it on the wall as some sort of test, cause it won't be driven that way. If a mechanic or surveyor thinks WOT is a form of test, best find another one.

But hey, if the seller doesn't care let it rip. And if you buy it, you can lay in bed wondering how much damage and life you just took off it.

 

[Delta Riverat]

I guess I got the A Team treatment. Which is good as I didn't know anything about big boats when I bought one.

Surveyor arranged by broker, spent a whole day in the boat, stem to stern and down in the bilge. Caught everything, not working, needed repair or adjustment and took a ton of pics. Twenty four page report with value analysis including only the pics needing attention and not the 70 other ones he supplied.

Attended the sea trial along with the captain and the broker and the haul out after for the bottom inspection with the tap hammer and more pics.

During the sea trial the broker advised wide open throttle and hard turns to port and starboard, donuts in the water with big wakes to bust through!

The survey cost me $700 and took at least 12 hours of the surveyor's time.

Yeah, it was a good day!

 

[boomerang]

REALLY



Totally your prerogative, but mine would be not to buy your boat. So please inform your potential buyer that you will not run your boat at WOT for more than a few seconds before the sea trial.

Yes sir, it is indeed my prerogative. I wasn't asking anyone for their opinion on how to sell a boat. I was making clear how I operate my equipment and my opposition to running an engine WOT just to see if it stays together. 10-4?

 

[Delta Riverat]

Isn't a WOT run (under load) good for an engine? Especially a diesel?

My broker advised doing this regularly (short times) blow out the carbon?

See if the props are pitched right? Engines making correct revs?

I guess not.

 

[rslifkin]

Isn't a WOT run (under load) good for an engine? Especially a diesel?

My broker advised doing this regularly (short times) blow out the carbon?

See if the props are pitched right? Engines making correct revs?

I guess not.

WOT is good to check prop pitch, etc. Getting an engine good and hot to burn off any carbon buildup requires a decent load on the engine, but not necessarily WOT. A good run near max continuous will build plenty of heat in most engines.

 

[Delta Riverat]

Mostly I run at a little over minimum recommended to save fuel.

But for a few minutes I let 'er rip! Make some waves -

 

[guy with a boat]

Yes sir, it is indeed my prerogative. I wasn't asking anyone for their opinion on how to sell a boat. I was making clear how I operate my equipment and my opposition to running an engine WOT just to see if it stays together. 10-4?

The beauty of TF and every other forum is that you don’t have to ask for opinions; they just happen. You put your philosophy out there and you were lucky enough to get some constructive feedback.

A healthy marine diesel should have no problems running at max rpms for a reasonable period of time and it is an industry standard procedure to do so when evaluating an engine and running gear. You are free to not allow that when you sell your boat, but it may raise the concern that you have a lack of confidence in the condition of the boat. You got the helpful feedback that informing a prospective buyer of that position in advance would be worthwhile and may avoid conflict. That is a reasonable suggestion considering your position. Do what you want but there is no need to be touchy about it. 10-4?

 

[BruceK]

Boomerang`s posts make sense. If the buyer says the limitations are unreasonable and rejects the boat, so be it. At least the boat is intact, though perhaps unsold. There is sure to be a buyer out there with some mechanical sympathy.

A paragraph in the sale agreement stipulating the boat is at buyers risk during survey might curb excessive survey inspection enthusiasm.

 

[mvweebles]

Not-so-hypothetical example: Haul and survey are scheduled and sea trial is being conducted in parallel on way to yard. Surveyor is aboard having started his work while boat is underway.

Disagreement comes up: Seller will allow short duration WOT to demonstrate prop sizing, but refuses to perform sustained >5-min WOT test.

Now what? Surveyor is already aboard. Haul is scheduled. From the buyers perspective, sea trial is a <FAIL>. Why bother with the survey except the expense cannot be shed because it's being done in parallel, not series.

Sure seems like co-mingling the inspections does not benefit the buyer. Potentially puts them in a difficult spot. I realize it's done all the time, and for convenience, guessing many brokers schedule the two in parallel and tell a buyer it's normal. But my recommendation for a buyer is to avoid it if practicable. Give yourself time to gather information without incurring expense and pressure. You're writing the checks - it's your prerogative to push back.

Peter

 

[SteveK]

I guess it all depends on whether you need, as in want to have a surveyor on board during sea trial.

 

[mvweebles]

I guess it all depends on whether you need, as in want to have a surveyor on board during sea trial.

Even if surveyor meets the boat at the yard, buyer is likely committed to payment at this point. May be able to avoid paying haul fees though.

But still, buyer is in a tough spot. Does not have much time to call-off the deal. Steve D makes a good point in his article: WOT test doesn't even require a mechanic. Armed with a decent checklist such as one I posted in OP, sea trial carries $0 expense for buyer.

Peter

 

[SteveK]

Peter, If a buyer makes an offer, places a deposit, then the next steps are mechanical inspection, sea trial and survey. In any order that makes sense to the buyer.

Sea trial with mechanic observing the engines while buyer observes the operation of the boat. The mechanic does not need to see the boat hauled,
but a surveyor does, so if mechanical passes return with surveyor.

 

[mvweebles]

Peter, If a buyer makes an offer, places a deposit, then the next steps are mechanical inspection, sea trial and survey. In any order that makes sense to the buyer.

Sea trial with mechanic observing the engines while buyer observes the operation of the boat. The mechanic does not need to see the boat hauled,
but a surveyor does, so if mechanical passes return with surveyor.

I roughly agree. I've seen buyers survey three boats before finally closing on one.
I suspect that it wasn't that #3 was the right one but more that the buyer had deal fatigue and just settled to halt the madness and expense.

Now, not all buyers are knowledgeable enough to do their own sea trial beyond a nice ride on the water, and certainly as the value of the boat gets higher it makes more sense to hire experts, but a no-cost sea trial is a good first step in the process. There are a few basic mechanic checks a reasonably mechanically inclined buyer can do without an expert mechanic - WOT, basic blow-by (tissue over oil fill opening), check stuffing box temps, does gear shift smoothly, check for vibration, load-up generator and run for 30-mins, and take oil samples. Beyond mechanical stuff, all electronics should be demonstrated including interoperability. As electronics have become more sophisticated, getting them tweaked has become more difficult and expensive, often whack-a-mole trying to tamp down pervasive issues. Heck, just loading firmware can be frustrating.

This doesn't mean you can avoid hiring a mechanic for a full workup at >$175/hr, but it does mean a sea trial may be able to detect major issues before committing further. It's a lot of good information the buyer can aquire with near zero expense as long as the sea trial is a separate and autonomous event.

Peter