Surveying a yacht before making your final purchase decision is critical. You need to know what kind of condition the boat is in and whether all systems are in good working order. Surveys are meant to protect you from unpleasant surprises.
The majority of marine insurance and finance companies will insist on a survey not more than three months old before they will insure or finance a vessel. Check in advance that your insurance and finance company will accept your surveyor choices.
Once you and the seller have settled on a price and you are in possession of a Purchase and Sale Agreement signed by you and the seller, the yacht is then taken off the market until you make your final decision to purchase. Your deposit money is safely tucked away in your yacht broker's escrow account. The purchase agreement allows a window of usually two to four weeks for you to have the vessel inspected.
Every boat should be surveyed before you lay out your hard earned cash and take possession; this includes new boats that have just been delivered from the builder. I have not met a new boat yet that arrived in perfect condition with all systems working and all flaws corrected. Float switches are not working, engine mounts are not secure, nicks in the Gelcoat have not been fixed, screws are missing and the list goes on. I have seen five page lists of items that need to be fixed on a brand new boat that need approval by the builder. Getting a survey done will save you a lot of money and oftentimes months of aggravation in warranty claims.
An engine survey and general hull survey are recommended; this requires two surveyors. The engine survey should be done by a qualified mechanic for the type of engines on the yacht. Have the engine surveyor inspect the generator as well. My experience has been that most general or hull surveyors will be able to recommend engine surveyors if you do not have a personal preference.
It is helpful to keep in mind whenever selecting people to assist you in your boat purchase to try and choose those with no conflict of interest in working for you. For example, asking the local dealer for the engine type on the boat that you are buying to do an engine survey may not be the most helpful choice. Your new boat is potential new business for that engine dealer in future repairs and maintenance. Those engines could get a clean bill of health during the survey only for you to discover they require a major overhaul once you take delivery. It may be a wiser choice to select a qualified mechanic to do the inspection who is not the local dealer for those engines.
The general or hull surveyor inspects all of the other systems on the vessel. This will include but is not limited to the condition of the hull and deck, running gear, appliances, furnishings, bilge pumps, and sanitation systems.
Sailboat buyers will also want to employ a rigging surveyor. Rigging surveyors have specialized knowledge in standing rigging, deck hardware, and sails that general surveyors usually do not have. To find someone qualified to inspect sailboat rigging check the nearest sail loft or ask around at your local yacht club.
If you do not know a surveyor personally, have your yacht broker refer you to someone. I always recommend three or four surveyors to my clients from which to choose to ensure that there is no perceived conflict of interest. It stands to reason that if I have an interest in you buying the boat so that I can earn a commission, then I should not be telling you who would be your best choice in verifying the condition of the boat under consideration. You should be a little suspect if your broker insists that you use the surveyor that he recommends. When the boat is located in a part of the world that I am not familiar with I will call a broker colleague who works in that location for recommendations.
You can also do your own search for a surveyor by going to the Websites for the National Association of Marine Surveyors (NAMS) or the Society of Accredited Marine Surveyors (SAMS). NAMS requires their members to have several years of experience and that they attend workshops and seminars to update their skills. You can search for surveyors in your area or close to the location of the vessel you wish to purchase. Find someone close to the boat if you can as surveyors will charge by the hour for travel.
Survey day is Judgment Day! Survey day typically has you meeting with your surveyors, the seller or his representative, someone to operate the yacht during the day, and your yacht broker if you are using one. Surveys on small to medium size yachts can usually be accomplished in less than a day. Larger vessels can take up to a week to inspect all systems.
Arrange with a boat yard to have the yacht hauled out on the day of the survey so that everything below the waterline can be inspected. You will need to tell the yard manager when you want the boat hauled and the size and make of the vessel.
The survey day schedule will have everyone meeting at the boat first thing in the morning to start the survey. Surveyors like to do engine room work when the engines are cold. When that work is completed the boat is run to the haul out facility that you have selected. The boat is hauled to facilitate the inspection of everything below the waterline. This includes the hull, struts, shafts and bearings, props, through hull fittings and anything else that lurks down there.
Note that you should always insist on the boat being hauled. I remember several years ago surveying a fairly new 57-foot Motoryacht in Miami, FL. We took the boat for a sea trial and then back up the Miami River to a boatyard. When the yacht was hauled we discovered a section of the hull below the waterline about 3-feet by 6-feet had delaminated during the sea trial. A call to the builder in Seattle verified that they would pay for the repair and re-inspection and the sale went to closing. If we had not done the haul out, my client would have discovered the problem at his next boatyard visit. That would likely have resulted in a law suit or some type of legal action involving several people. Clearly the lesson here is to always, always have an inspection done below the waterline.
The yacht is placed back in the water for a sea trial and the completion of the survey. Be prepared to pay all surveyors before they leave the yacht at the end of the day. You will also be required to pay for the haul out before the vessel is put back in the water.
Most surveyors will give you a report of their findings during the course of the day with a verbal summary before leaving the yacht. That will be followed by a written report by email and a hard copy by snail mail generally within a couple of days depending on the size of the boat and length of the survey.
The advantage of having both the listing and selling broker present at the survey is that you can often negotiate to have the seller fix items that have come up during the survey, or ask for an appropriate price reduction on the spot.
When you receive the survey results you will have the information necessary to make a decision to accept the vessel as is, ask to have certain issues corrected before accepting the yacht or reject the boat and get your deposit back.
Once the survey repairs have been completed have your original surveyors re-inspect the boat to verify that the repairs were done to their specifications. Once they have signed off on the repairs you can then proceed to the closing.