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Marine Surveys and Surveyors
by Chris Caswell
It was an eye-opening experience because, as a long-time boat owner, I thought I knew a lot about boats. I was buying a used 25-foot fiberglass sportfisher, and I’d already spent most of a day crawling around the bilges and poking into the corners, and I had given the boat a clean bill of health. But my insurance company had insisted on a marine survey, so I was following the surveyor as he examined the boat. A tiny crack in the gelcoat at one corner of the cockpit led him, just like Sherlock Holmes in pursuit of a clue, to the main cabin bulkhead. I’d examined that same hull/bulkhead joint too, but the surveyor found another hairline crack that indicated the whole bulkhead had broken loose. In fact, all the bulkheads had "let go" from the hull to some extent, and they were so hard to spot that I’d missed them completely. The final repair bill, which was picked up by the boats owner, was more than $5,000 in labor and glass work. In a few minutes, that surveyor had saved me more than 40 times his bill!
Even if you think you know everything about boats, you still need a marine survey. A survey assesses both the structural condition and value of a used boat, and it’s the seagoing equivalent of a termite inspection, plumbing/electrical report, and property appraisal.
Although you can buy a used boat without a survey, you probably can’t arrange financing or insurance without one. So any idea of cutting costs by eliminating the survey is just going to make life difficult after you’ve bought the boat, especially if it won’t pass survey and you’ve already paid the buyer.
The first question faced by any prospective buyer is finding a reputable marine surveyor. Unfortunately, there is no licensing program for this profession, so anyone can have business cards printed up and call themselves an expert. Reputation is the key to finding a good surveyor, however, and you’ll need to do some sleuthing of your own to find one. Start with your bank, and ask them for a list of surveyors that they accept. They’ll often have a list of "approved" surveyors from which you can pick. Call your insurance agent for his recommendations, and compare the two lists to see which surveyors are on both lists. From that point, you should call yacht brokers or boat dealers in your area and, if you know anyone who has recently purchased a used boat, ask about their experience.
There is a National Association of Marine Surveyors, which attempts to regulate the level of expertise among its members, who must have a minimum of five years of surveying experience as well as pass tests and provide recommendations from other surveyors before they are accepted for membership. You can get a list of NAMS surveyors in your area by contacting NAMS.
When buying a used boat, it is your responsibility to find a surveyor and, although many yacht brokers or boat dealers will offer to do this for you, you’ll be wise to screen and hire the surveyor yourself. All surveyors have different backgrounds, and you’ll want to find one that matches with your boat and needs. If, for example, you’re buying a stern drive cabin cruiser, you don’t want a surveyor whose background is primarily racing sailboats. You also want to insure that the surveyor is answering to you, and not to a broker or other client.
Price is also a variable, and surveyors in the Great Lakes area charge either by the hour or by the foot. Typical costs range from $5 to $12 per foot of length for boats of 30 feet or longer, while some surveyors prefer to charge $30 to $40 per hour, particularly for smaller boats or very large ones. If extensive travel is required, you can expect to pay expenses as well.
In preparation for the survey, you should arrange to have the boat hauled out of the water. No surveyor likes guessing at the underwater condition of a boat, and most banks and insurance companies won’t accept an in-water survey, either. While some surveyors prefer to work alone, remember that you’re the client and have a right to be present. Make sure that the surveyor has no objection to your presence, but make it clear that you will not interrupt him, because he needs to concentrate.
The surveyor will arrive with a clipboard and checklist, as well as an array of unusual tools, including an ice pick, pocketknife, mallet, mirror, and flashlight.
Most surveyors will start with the hull exterior, checking for cosmetic damage and previous repairs, which will require additional inspection inside. I was surprised to find, on my 25-foot sportfisher, that the surveyor immediately spotted a patch on the bow that I hadn’t seen at all, but it had been expertly repaired and was not a problem.
Using the mallet, the surveyor will "sound" the hull by tapping it and listening to the tone. On both wood and fiberglass hulls, questionable sections of material will emit a distinctly different sound that can signal dry rot, delamination, or water absorption. Some marine surveyors are starting to use an English-made moisture tester that uses radio waves to check for excessive water in the hull laminate. This is particularly useful in cored hulls and, with the growing concern over hull blistering or "boat pox", the use of this tester is expected to grow.
Wooden hulls in particular will get the ice pick applied to areas where dry rot is expected, and one Detroit surveyor told of leaning on a hull stringer while using his icepick in the bilge area. The stringer collapsed like a baked potato, and it turned out that the wood was completely rotted away, leaving only a spongy filler holding up the layer of paint. Needless to say, that boat didn’t pass survey.
Actually, a boat doesn’t really "pass" a survey. The surveyor will usually provide a standardized form that records the specifications and gear aboard the boat, as well as short lists of findings and recommendations. To remain neutral, however, the surveyor won’t tell you to buy or not buy the boat ... that remains your decision. His job is simply to provide you with an expert analysis of the boats condition, on which you can judge for yourself. The survey, of course, is the best tool for price negotiation since the owner can’t refute the findings.
A prospective buyer should also have a clear grasp of what the marine surveyor is not checking. In a powerboat, some surveyors will survey the external condition and appearance of the engine and drivetrain, but it is not a condition report. They will note loose wires, bad hoses or belts and other external items, but a wise buyer should have an oil analysis to check the actual internal condition of the engine. On a sailboat, the surveyor will usually count the number of sails for his inventory and perhaps superficially check their condition but, again, the buyer should have the sails examined by a sailmaker who can offer a better appraisal of their present shape and value. Most surveyors also will not go up a mast to check its condition, although they may examine it with binoculars.
On the surveyor’s report, he will list the equipment aboard at the time of survey, but the most important section for both the buyer (and his bank and insurance agent) is under "Recommendations". In this area, the surveyor will list everything he feels is necessary to bring this boat to safe operating condition. In the case of my sportfisher, item number one on recommendations was "Rebond all bulkheads and vertical cockpit supports to hull and longitudinal stringers," which was a simple phrase for a lot of expensive work.
The recommendations should become the starting "work list" for your new boat, and your insurance company will probably ask you to sign a form stating that the recommendations have been met before they will issue coverage on your new boat. The bank may insist that you promise to perform the repairs "promptly," in return for their loan.
The sheer number of items can be extensive and can take up several pages, although you shouldn’t be frightened by the minor ones. On my sportfisher, the two pages of items ranged from the $5,000 bulkhead repairs down to number 27: "Have fire extinguishers serviced and tagged by reliable agent." In between, it was suggested that sea valves be replaced, that signal flares be renewed to meet legal requirements, and that the bilge be cleaned of sludge.
Usually buried at the end of the survey form is the section on value. Surveyors will assign two distinct values: market and replacement. The market value is based on the condition of the boat, the prices asked and paid for sisterships, and a review of the "blue book" guides used by boat dealers. The market value should correspond fairly closely to the price you are paying for the boat, and it should be adjusted to reflect needed repairs itemized in the survey. Replacement value is more of an ego stroke than a useful number, because it indicates the estimated cost to build the identical boat at today’s prices. For my little sportfisher, it was nearly four times the asking price of the boat, so don’t be misled by replacement value.
There is a lovely 36-foot fiberglass trawler yacht sitting in the back of a boatyard not far from a major Midwestern boating center. The hull still has a gloss although the varnish is starting to peel, but anyone who asks about the boat is told a sad story. It seems the yacht was bought by a man who skipped the survey, only to find that the boat had major problems. The deck was plywood covered with teak, and rainwater had soaked into the plywood until it was rotten from bow to stern. Estimates for replacing the entire deck, which meant removing the cabin as well, were nearly as much as the price he’d paid for the boat. In the end, he decided to recover part of his loss by selling the engine and electronics, leaving the boat as a hollow monument to his folly. I nearly made the same mistake with my sportfisher, and the moral is simple: don’t ever buy a boat without a competent marine survey.