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Go Back   SailNet Community > On Board > Boat Review and Purchase Forum
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  #21  
Old 07-17-2013
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Re: What Is A Boat Really Worth?

Quote:
Originally Posted by jimgo View Post
Julie, I think banks go with NADA because it is free and easy to access.
Having worked in the mortgage industry, I have some idea of how underwriting a loan works. My guess is that the only reason they use NADA is simply carry-over from the car loan industry.

NADA is well known and well respected as a source of useful, accurate information when it comes to underwriting car loans. The people who are responsible for underwriting boat loans desperately want something similar, which takes most of the guesswork (and therefore the risk) out of approving a loan. They don't actually have anything that is as accurate as NADA is for cars, so they grasp at the next best thing.

When it gets right down to it, it is a CYA sort of thing. If the loan goes bad, the underwriter hasn't put his neck on the chopping block. He can always say to his boss, "But we only loaned him the amount that NADA said the boat was worth!"
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  #22  
Old 07-17-2013
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Re: What Is A Boat Really Worth?

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Originally Posted by BubbleheadMd View Post
Oh hey, all the advice you've been given here is just "folksy sayings and anecdotes". Ok, now you've had professional lenders and surveyors confirm what everyone here has been telling you. Feel better?

You keep approaching this from a house/car viewpoint. You are trying to find a boat that a lender will finance, and that you think will retain it's value for resale, years later.
Okay Bubble, let me explain this, again... Just so you don't get your shorts in a bind, again... And so you don't have to take your interpretation and try to make it fact, again... What I'm doing is sharing some information I've gained from talking to people who will ultimately affect the real life value of a given boat, especially if you need to get a loan. What anyone does with that knowledge is up to them. This is a forum. Sharing information is what forums are for. Are we clear?

But I have to ask... Why do you think all the advice you've been given here is just "folksy sayings and anecdotes"? I think you've discredited some of the members here who offer up useful information that helps a lot of people here.

You really need to apologize.
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  #23  
Old 07-17-2013
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Re: What Is A Boat Really Worth?

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Originally Posted by JulieMor View Post
What I'm doing is sharing some information I've gained from talking to people who will ultimately affect the real life value of a given boat, especially if you need to get a loan. What anyone does with that knowledge is up to them. ....

You really need to apologize.
Julie, at the risk of having to apologize, I disagree with you that lenders are setting the market.

That may be true in your case because you need to borrow and don’t have the required equity and so are bound by that limitation. For other people in different circumstances your situation would be irrelevant.

I wish you luck in your search but it doesn’t look like you are going to make the Chicago season this year.

The good news is that you will have all winter to play with spreadsheets and post on every sailing forum you can find about buying a boat.

Now that recreation is free!
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  #24  
Old 07-17-2013
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Re: What Is A Boat Really Worth?

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Originally Posted by T37Chef View Post
Roger that, I am just not following your line of thinking.
Shawn, that's OK I having a hard time following my own line of thinking at times.

In my world my boat's value should represent a minor portion of my overall net worth. That is because it is a depreciating, unnecessary luxury item (at least to me it is).

That is regardless of whether the boat is worth $10K, $100K or $1M.

If you have to borrow money to buy a boat, it indicates to me that the boats value may represent a significant portion of your net worth.

If you elect to to finance a boat, because it makes financial sense to do so, that is, to me, an entirely different kettle of fish.

Ok, that probably confused the issue even further, if possible. ;-)
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  #25  
Old 07-17-2013
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Re: What Is A Boat Really Worth?

Julie, even if a broker were a good and honest person, they'd have an easier time in the diplomatic corps than in brokerage. If either the buyer or the seller is not a perfectly rational person (and one can debate whether rational persons deal in boat at all) then the broker will insult and upset at least one of them by mentioning reality and what the boat is really worth.

And then of course there are the brokers who are in the business to make or steal money in one manner or another, not simply because they are trying to balance the karma of the bazaar. Or so I've been told.

Reality is a terribly fluid concept, even more so in small markets like boats.

The car buying books (NADA, red book, black book, etc.) vary just as badly, and in the hands of someone who doesn't know how to read them--because they ALL say there are other factors to apply--they're all dangerous tools.
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  #26  
Old 07-17-2013
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Re: What Is A Boat Really Worth?

I've said if you have the cash to buy a boat, you're free to spend as much as you want on the boat. If you get emotionally attached to a boat and feel the need to put more down (if you're borrowing) then do so. It's a free world. We all have a free will. It's a beautiful thing.

There's a concept called OPM - other people's money. Rather then taking cash out of the bank, use someone else's money. I use that in my investments. (I know, a boat isn't an investment, but I haven't bought one yet.) No way I'm paying cash. But that's just me.

FWIW, I never meant for this thread to be about me. No need to treat my post as such. I was just trying to share what I learned. That's all, really.
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Old 07-17-2013
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Re: What Is A Boat Really Worth?

"There's a concept called OPM - other people's money. Rather then taking cash out of the bank, use someone else's money. I use that in my investments. "
EH, I'd say you've got that backwards, Julie. Unless you are literally stealing their money, when you borrow someone else's money, and presumably pay them back iwth interest, THEY are using YOUR money. You're not using their money.

If you borrowed the money from yourself, you'd keep the vigorish. Borrowing money only works if you can borrow for less than the return you get elsewhere, like taking out a 3.5% mortgage and putting a quarter million in the market at 10% instead. (Which for a while was very possible, not quite such a sure thing right now.)

In the 1970's, when a million-dollar robbery was a BIG one, the DOJ/FBI stats said that something like 90% of those big ones were never solved. They attributed this to professional planning. As opposed to the guys who said "Ah, I ain't got no beer money, let's go rob the 7-11."
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  #28  
Old 07-17-2013
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Re: What Is A Boat Really Worth?

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Originally Posted by JulieMor View Post
Okay Bubble, let me explain this, again... Just so you don't get your shorts in a bind, again... And so you don't have to take your interpretation and try to make it fact, again... What I'm doing is sharing some information I've gained from talking to people who will ultimately affect the real life value of a given boat, especially if you need to get a loan. What anyone does with that knowledge is up to them. This is a forum. Sharing information is what forums are for. Are we clear?

But I have to ask... Why do you think all the advice you've been given here is just "folksy sayings and anecdotes"? I think you've discredited some of the members here who offer up useful information that helps a lot of people here.

You really need to apologize.
You completely misinterpreted my statement. I do NOT think the advice you've been given is "folksy anecdotes". I'm saying that YOU have been given the same advice here, but apparently didn't understand or believe what anyone was telling you until you spoke to brokers and surveyors, and suddenly you're here sharing the same wisdom with us that forum members have given you as if you've had some kind of epiphany.

I was utilizing sarcasm when I asked you if you thought the advice you've been given was merely folksy anecdotes. You obviously missed it.

I think you've been given a lot of good advice by people here and I respect their opinions, so no apology to the other members is necessary.

Some of the information you're sharing, is merely opinion and a lot of people in this thread have disagreed with you. I also disagree with you, and I'm not apologizing for it. I've imparted some sarcasm your way, but I hold no malice towards you. I haven't name-called, used profanity or crossed any forum boundaries so an apology isn't forthcoming.

I'll just reiterate an opinion that I've voiced in the past:

In our society, a recreational vessel is not a rational or sound financial decision. Ever. Ever.

On paper, it is a huge financial loss no matter how you try to spin the numbers. The reason for this, is because it is simply impossible to quantify "joy". The joy that you get from sailing. You can't measure, buy or sell joy.

I told you before, that I absolutely respect your desire to make a smart purchase, and not rush into a big, financial (floating) mistake, but you've gone to the total opposite end of the spectrum.

You are rationalizing yourself right out of your dream.
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  #29  
Old 07-17-2013
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Re: What Is A Boat Really Worth?

Quote:
Originally Posted by denverd0n View Post
Having worked in the mortgage industry, I have some idea of how underwriting a loan works. My guess is that the only reason they use NADA is simply carry-over from the car loan industry.

NADA is well known and well respected as a source of useful, accurate information when it comes to underwriting car loans. The people who are responsible for underwriting boat loans desperately want something similar, which takes most of the guesswork (and therefore the risk) out of approving a loan. They don't actually have anything that is as accurate as NADA is for cars, so they grasp at the next best thing.

When it gets right down to it, it is a CYA sort of thing. If the loan goes bad, the underwriter hasn't put his neck on the chopping block. He can always say to his boss, "But we only loaned him the amount that NADA said the boat was worth!"
Property is really only worth what someone can pay for it, so, what you are saying is that NADA is an accurate representation of what a boat is worth to the lien holder.

Most sellers or owners don't like to agree with NADA, but, in fact it is what it is. An accurate representation of what a boat is worth to someone who needs to get a loan.

Moving forward, since we may all have to sell our boat at some point, we need to stay in a price range that will allow the next buyer to finance if at all possible.

Most of us dump money into our boats that we will never get back but NO seller like to bring cash to the table to pay off a loan at closing.

So NADA may very well be in the ball park much of the time.
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  #30  
Old 07-17-2013
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Oh gosh, let's not bring "free will" into this. Tee hehe.
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