Would you spend $11,500 to find out if a $10,000 boat is worth buying? ….No

Yet, I am often asked to do just that. To perform a complete “PRE-PURCHASE” survey on an older used boat.

Having worked as Expert Witness on 43 Maritime lawsuits since 1983, it is amusing when a Yacht Broker informs me that, “Any survey performed prior to the purchase of a vessel, is by definition a ‘PRE-PURCHASE SURVEY”….. Often, the boat salesmen also believes that this perceived “PRE-PURCHASE SURVEY” also carries a GUARANTEE by the surveyor.

Unfortunately, the Broker’s myth about the timing of the survey, does not hold up in the courts. Instead,  “PRE-PURCHASE SURVEY” has a precise legal definition in State and Federal Admiralty Courts. Under the court’s definition the survey must include an “exhaustive inspection”. “Exhaustive” requires that ALL the shipboard systems must be thoroughly tested, and ALL discrepancies must be listed in the final survey report. The surveyor can be held liable for anything missed or not listed. Consequently, the surveyor will need enough time to check everything and then include it in his “exhaustive” write up.

On the other hand,  if for any reason the buyer chooses to leave out any part of the inspection (For example choosing not to have a mechanic inspect the engine, because it has low hours, or not assigning percentage condition to the sails, which is almost always left out because it takes too much time to get them all out), then the survey is no longer “exhaustive”, and will not qualify as a “Pre-Purchase Survey” even when so labeled. Instead, regardless of its label, it is viewed by the court as only being a Condition & Valuation Survey-CVS (an insurance survey).

Yet, some of my direct competition, who are obviously not expert enough to know these legal definitions, will gladly label their normal 3 hour insurance survey as a “PRE-PURCHASE SURVEY”. just to get the work. And, not surprisingly for this “specialized” work they often want to charge more than I do.

Unless you are Larry Ellison buying a four deck mega-yacht, you should be content to purchase a Condition and Valuation Survey-CVS (an insurance survey), which is a definition the court uses for all surveys other than a Pre-Purchase survey.  After all, a CVS survey satisfies the lending institutions for your boat loan, and the underwriter’s for your insurance.  So, do you really need to be more thorough than they do?

Of course, since an insurance survey is required to get the loan or the insurance, you are smart to have it done before you buy, the surveyor might just find a reason not to buy. But, remember like the bank you are just buying his expert opinion, and not a guarantee.

To qualify as “EXHAUSTIVE”  the inspection must examine everything” on the vessel. This means that all navigational equipment must be energized and tested for proper operation. All electronics systems should be energized, and each malfunctioning application properly noted. That nav-electronics inspection alone, will take an underway sea trial and two days researching the various equipment and writing up the list of operational and non-operational functions. Next. the surveyor must activate the stove, refrigerator, all pumps and household systems, all of which must be cycled, operated and inspected, and then all the questions answered, “Yes the freezer cools down to below 32 degreesF”, “Yes, the hot water heater works on 125VAC and also from recycling engine heat”….  “Yes, the HVAC system both cools and heats the cabin adequately…..

Next, the surveyor must test all the 125VAC circuitry to determine if it is in accordance with  with the latest NFPA code for Motor Craft (NFPA STD 302). I’m actually one of 12 Principles who sit on the NFPA Committee which writes that standard. Then the inspection must verify the 12VDC system is also in accord with the NFPA & the applicable ABYC codes …..

Finally, the engine must be operated to see if it is up to it’s specified performance levels, and compression tests must be done, and any discrepancies listed in the survey report. Finally all the tankage and valves on supply and returns to all tanks, must be examined and cycled. And all through hulls must be cycled and examined.

Establishing this multitude of facts simply takes many hours of testing, and then it all has to be written up in a formal report which must be checked and edited.

Consequently, visually examining, and then checking all these systems against the specs, for even a small boat will take a minimum of a week for one surveyor, or all day for a team of (4) surveyors….  The cost for those 4 guys for 8 hours at $120/ hour (the current rate for an hour of work in most boat yards on SF Bay) which comes to $4,000 just for the inspection. Then all this information has to be collated and written up in a 16-20 page report, photos have to be processed, and just the photo editing and writing up can take another three days of office time. +$2,880.

Finally if the vessel is made of wood, there will be a lot of dismantling by paid shipyard workers so that all the timbers can be inspected. + $2,500, Which includes replacing everything that was dismantled.

So, the likely cost of a true “PRE-PURCHASE SURVEY for a 20 year old, 36 ft wooden boat will be just under $10,000 including the survey and the shipyard labor, then there is the added cost of the haul out and a weeks storage on the hard while the survey is being completed. This adds another $1,500, for a total of $11,500, where a CVS survey might only cost $600.

Now, why would you spend $11,500 just to find out if a $10,000 boat is a good buy?

This is why you should not ask for a PRE-PURCHASE survey, unless the boat is selling  for a minimum of $200,000.