s I'd like to set up an
escrow account with the sellers $$$s, do the deal, and pay for repairs
with the escrow funds. It may be sticky getting insurance however
with defective tanks on the survey. If I push the deal out waiting
for repairs, there is a big risk of interest rates taking off in a big

Ask your insurance broker about "port risk" coverage. That's a limited policy
that would cover the vessel if it sank or caught fire while waiting to get into
the yard for repairs. (If you take it out and use it, you're uninsured). In
your situation, there might be an exclusion for oil spill liability.

The escrow approach works well, and since there's a lender involved that may be
the factor that allows the deal to move ahead prior to the tank repair. The
seller might be understandably reluctant to spend several thousand dollars
repairing the tanks while risking that your financing
might dry up. Undoubtedly you could survive a bump of a few percent or more in
the interest rate, but the seller doesn't know that you are capable or willing
to do so.

If the survey makes the lender balky, (and if you're dealing with an
organization where you can talk sense to the actual decision makers), another
solution is to set up a "hold back" provision in the loan.

You and the seller agree that the selling price of the boat will be (example)
$300,000 *with* the survey items corrected. The survey items total $30,000.
At closing, you sign a note for $300,000 (less your dp, of course).
The seller gets $270,000 (gross, before commissions, payoff of any marine
mortgage, etc). Your lender sits on the remaining $30,000 until the repairs are
completed to the surveyor's satisfaction.

The lender is insulated by your down payment as well as the $30,000 holdback,
so this can sometimes get the lender on board when there are serious exceptions
to survey.