If you are financing a boat purchase, the lender will usually ask for an independent report on the boat's condition and value. That report serves your purchase decision too, but it has to be prepared to the lender's requirements.
What the lender wants
- Condition
- The boat's structural and technical condition; findings that affect safety.
- Value
- An estimated market value from condition and market data; the basis for the security.
- Identity
- Hull number, registration and engine serial numbers matching the papers.
- Independence
- That whoever prepares the report is not a party to the sale.
The order
- Get the lender's requirements. Report format, required sections, who the report is addressed to.
- Plan the survey. Haul-out, a week of drying and a sea trial.
- Report. Within 2-3 working days; condition and valuation together or separately.
- Insurance. Lenders usually require cover for the loan term; the condition report can serve the insurer too.
How the report is laid out for a lender
A report for a lender rests on the same readings as one for a buyer; the difference is how the information is presented. At the front, a short summary gives the boat's identity, general condition and findings affecting safety. The valuation section states the estimated market value and how it was reached. Detailed findings and photos are in the body of the report.
Condition versus valuation
A condition report describes the boat's state; a valuation estimates what a boat in that state is worth on the market. The valuation rests on market data for similar boats and on the boat's condition. Lenders often want both; some find a valuation alone enough. Settling which is required at the start lets the work and fee be planned accordingly.
Timing
In finance, dates matter: the date agreed with the seller, the lender's approval time and the survey schedule depend on each other. A week of drying after haul-out and a 2-3 working day report time are built into that schedule from the start.
After approval
Once the loan is approved, lenders usually require insurance for its term and sometimes a periodic condition check. The original report becomes the baseline for those later checks.
Its value to the buyer
A survey done for finance does not only serve the lender. The same report underpins the buyer's decision and negotiation. A and B findings let the lender's valuation and the buyer's talks with the seller work from the same data. So the report remains the buyer's; it is shared with the lender and seller with the buyer's permission, and only as far as needed.
What to prepare before applying
Registration and hull number, engine serial numbers and service records, the draft sale contract and agreed price, and any earlier survey report and invoices for major repairs. These serve both the lender's file and survey day; gathering them once speeds up both.
Lenders often require insurance for the loan term with the lender named on the policy, and the insurer may want a condition report too. One up-to-date report can serve both, saving time and cost.
Knowing the lender's required format at the start avoids a second edition of the report. Some lenders want the report addressed to them; others accept a copy of the report addressed to the buyer.
If the lender has a list of questions, share it before survey day; the answers go straight into the report.