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  #1  
Old 07-01-2006
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Boat Prices, Boat Values

So how's a guy supposed to know what a boat is worth?

I'm looking at a steel ketch built in Italy in 1970 by a yard that has long since been taken over by a larger outfit that doesn't even build sailboats anymore. You can't really plug this info into BUC or NADA and get a good result. So I go on boats.com and yachtworld.com and that really doesn't help either. There I find steel boats built in the late 60s going for $100,000 and boats built in the 90s going for $30,000 and every possible combination in between. What's the rhyme or reason here?

In other words, how do I figure out the approximate market value of a sailboat so I don't wind up paying too much?

Or have I just asked the only question to rival "What's the meaning of life?"
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Old 07-01-2006
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This seems to be a situation where you just have to decide how much the boat is worth to you, as market price is really unknowable.
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Old 07-01-2006
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John is right, what is it worth to you? You might narrow down your choices and then get a survey, Good luck, Rick -Equal Partners.
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Old 07-01-2006
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Hmmm...a 1970 steel boat. Probable value = displacement in tons x spot price of steel/ton!
Unless the boat has been kept incredibly well for 35 years..chances are that it is worth substantially less than FG boats of the same age and level of finish. If you like a particular boat I would offer substantially less than asking price...maybe 2/3 and then haggle and make your final offer contingent on survey. Surveyor can then tell you how much more the owner should take off to alllow for the defects he will find.
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Old 07-02-2006
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Any boat that is thirty-five years old is going to have issues, unless it was well-maintained. A steel boat that age, that was well cared for, should have some decent life left in it, and be very solid..but the price will generally reflect the amount of care given the boat.
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Old 07-02-2006
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This will be posted in two parts because of the word limit:

You haven't said how long the boat is, its build quality, where you are living or what condition. These are the main factors in determining the value of a steel boat. Steel boats vary in fair market value far more widely than glass boats. Partially because glass boats are comparatively closer to a commodity item, where as steel boats with any age on them, are pretty much one of a kind.
Steel boats that were built in Europe during the 1970ís tended to be normal steel. typically red lead oxide primed and painted on the interior. 30-year-old steel boats built that way have very little value unless they have been replated and coated with a more modern sealing system. There is no good way to recoat one of these old boats because you canít get behind the framing where the rust is typically located. I would expect a boat like this to have very little fair market value compared to a similar initial quality, similarly maintained, similar design glass boat of that era (perhaps 20-30%of the value of the glass boat). I would also expect it to need extensive work perhaps equaling several times the fair market value of the boat, unless you are able to do the work yourself within a short period of time.

The following is part of a series of articles that I had written for another venue, but which might prove helpful to you:

EVALUATING OLDER STEEL YACHTS


It is never easy to set a fair market price for an older limited production boat. This makes evaluating a fair market value for most steel boats especially difficult since most were built on a one off or semi-custom basis. Adding to the problem is the bad reputation that steel has gotten from poorly constructed home built boats. If I had to work my way through determining a value for a older steel yacht, I would rate the boat each of 5 categories; 1) Original Build quality, 2) Finish, 3) Design obsolescence, 4) Maintenance, and 5) Location, and then sort of multiply the ratings out.

Original build quality:
Steel boats vary very widely in price because the boats themselves began life varying very widely in build quality, in terms of materials used, building technique, and quality of construction. There are wild differences behavior of the various steels and coating systems used and consequently in fair market value. The variations can impact on the strength and rust resistance of steel. On an older boat, mild steel pretty much reduces the value of the boat to its salvage value whereas if the boat was built using some of the more exotic steels and coatings, the boat can be worth as much as, or even slightly more than a similar sized glass boat.


Whether the boat is round chine and fair vs. hard chine also compromises it value. Independent of all other rating factors, a radiused hull steel boat can worth as much as a glass boat of equal age and size. A hard chine or folded hull can be worth as little as half as much mostly because of perceived aesthetic and sailing ability issues.

There are also wild differences in value based on the build quality. By this I am not talking about the finishes but more about the quality of the welds and connections, fairness, and other aspects of workmanship. I have been in the bilges of steel boats that were work of art and steel boats that were simply scary. A well built steel boat adds nothing to the score but a poorly built one reduces the boat to the negative cost to cut it up and haul it to the junk yard because in effect you will eventually need to build a new boat that is essentially a replica of the old boat.

Finish:
This is a very subjective area. To begin with, just like most boat building materials steel boats have been built with beautifully finished yacht levels of finish, with purposeful workboat levels of finish, and with cobbled homebuilt levels of finish. A good case can be made for each of the first two, but the third should be walked away from because a truly crudely built steel boat can have life threatening problems such as bad wiring resulting in sudden massive electrolysis.

In my life I have been aboard 1950-60ís era Dutch build steel boats that were extremely elegantly finished with levels of fit and finish that were fully on a par with and perhaps even nicer than Hinckleys of that same era. But steel boat interiors (or wooden boats for that matter) have a special challenge. On a steel boat it is important to be able to get to the interior of the hull periodically and so no matter how beautifully it is finished it needs to be removable for long-term maintenance. On an older boat, if the interior is not removable, a yacht level interior can be a liability and not an asset, because not only do you have to remove and dispose of the existing interior but also on a yacht finished boat, the next buyer expects a replacement with similar yacht level of finish to the original.

Yacht finished steel boats are substantially more expensive to maintain than either fiberglass or workboat finish level boats. In a marine industry study of life costs as they pertain to various materials, steel was the most expensive material to maintain over long period of time (even more expensive that wood for example). Some of this reflects the need to replate and possibly reframe at some point, but it may also be skewed by the sheer cost to maintain a yacht finished steel yacht, which require being periodically refaired and refinished with high tech finishes to maintain that yacht finish.
As a result many steel yachts purposely receive workboat finishes. There is nothing inherently wrong with a workboat finish. They are inexpensive to build and inexpensive to maintain. Workboat finish does not mean poorly built, with cheesy levels of fit and finish. Instead, workboat finishes are simply detailed, low gloss, using solid but basic materials. Maintenance is much easier because a small repair does not result in a major repainting and refairing job, and their low gloss finishes can mask a whole range of minor defects.

But while a workboat finish is perfectly respectable and offers real advantages for distance cruising, they are generally of less inherent resale value than similar sized, aged and condition, yacht finished fiberglass or steel boats. They typically sell for prices 1/3 to 50% less than the value of a yacht level boat.
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Old 07-02-2006
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Part two :
Design Obsolescence:
This is a very subjective topic but in a general sense, the golden age of steel construction (meaning that the largest volume of steel yachts were built in 1950ís through the late 1970ís) was a period, which was not one of the best for yacht design. Many of these boats were designed to boat styles with short waterline, low ballast ratios and massive wetted surface. These boats have little value as sailboats except as museum pieces or coastal cruisers. Others were built as serious traditionally styled offshore cruisers, and if that is what you are seeking then these boats are not hurt by their design style and all other factors being equal they are worth about the same as glass heavy duty cruisers of that same build quality, size and era.

Then there are the positively freaky out there. Some are good boats for some specific purpose and other are just plain poor ideas for any purpose. But either way, these unusual boats demand inherently smaller prices because even if this boat fits your needs, it will be harder to find someone who wants the same thing that you want.

Size comes into play here as well. A serious hull weight penalty is paid in boats under 45 or so feet in length. This weight penalty usually results in some combination of reduced carrying capacity, motion comfort, stability, fuel efficiency, and performance. Smaller boats therefore take a real hit at resale time as compared to larger boats because their designs are seen as being a real compromise.
What you just about wonít find are well-conceived, relatively up to date modern cruiser or high performance designs. (Yves Tanton and Dudley Dix have done designs that come closest). If you do these would make great offshore passage makers.

Maintenance:
This is the big one. When I was working for Charlie Whittholz, designing steel boats in the early 1980ís, Charlie and I talked about the lifespan of steel boats. In a general sense they were seen as having a lifespan of 25 to 30 years without needing a major rebuild. In those days, worldwide there were quite a few yards that specialized in replating steel boats, so the idea of replating a boat was not seen as a big deal. But even in the early 1980ís these yards, were becoming increasingly rare and quite expensive. And it is not a matter of whether a steel boat will need to be replated, but when.
Much of the problem with steel construction is that there really is no good way to protect the steel permanently. While some of the newer steels and coatings greatly extend the life of the boat, by the very nature of typical steel construction there are places that simply cannot be protected. One such example is the area between the frames and the hull, especially on longitudinal framing, where water gets trapped and rust begins quite readily and over time can become a critically weakened condition.

When you talk about maintenance on an older steel boat, it therefore goes beyond the usual types of routine repairs and maintenance found on any boat that age. Just like you can expect a 20 plus year old boat to have had its engine replaced or rebuilt, or its standing rigging reaching a point of needing replacement, you should expect that a 20 year old plus steel boat will be nearing a point where the plating has been or needs to be replaced or at least partially replaced. Good long-term maintenance would have included periodic inspection and minor repairs to the coating systems, periodic detailed surveys and replacement of any bad plating or frames. This may also include some destructive testing around frames.

A 10 year old or more steel boat that has never had replating is worth considerably less than a newer steel boat (all other factors being equal perhaps a third to half the price of a glass boat of that era). An older steel boat that has had partial replating or even been replated is worth a bit more (all other factors being equal perhaps half to 2/3 the price of an equal quality glass boat)
Location:
Lastly, this is a highly subjective point, but there are portions of the world where steel boats are more widely accepted and places where they are seen as a white elephant. It seems as if they are much more popular in the North American Northwest, New Zealand, South Africa and Australia and much less popular in the rest of the US and Europe. (They used to be very popular in Europe and there were a bunch of top-notch yards building routinely in steel) As a result, the same boat on the US east coast might sell for a small fraction of what it would sell for else where in the world.
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Old 07-02-2006
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If the boat is for sale through a broker, find yourself a buyer's broker agent to represent your interest. Never go through the seller's broker. It won't cost you anything since your agent will be paid by splitting the selling broker's commission. A competent broker has access to on-line resources showing sales of comparable vessels. (Something the general public does not have access to.) They should be able to give you an accurate valuation. Then, if you move into the purchase contract phase, be sure to have it be contingent upon a survey that is satisfactory to you. (Personally, I wouldn't buy a steel boat.) A surveyor can give you an even more accurate appraisal. If you don't like the way it goes in the survey phase, just walk away!

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Old 07-03-2006
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Also, never use a surveyor that is recommended by the seller, the seller's broker or the marina where the boat is... they may not have your best interests at heart....and an independent advocate for you, the buyer is what you are looking for.
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You know what the first rule of sailing is? ...Love. You can learn all the math in the 'verse, but you take
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her going when she oughta fall down, tells you she's hurting 'fore she keens. Makes her a home.

óCpt. Mal Reynolds, Serenity (edited)

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Old 07-03-2006
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Jeff H,

As always you've gone above and beyond the call of duty. Thanks very much.

To answer your questions she's 36 feet long with a beam of 9 feet 6 inches, weighs 13 ton and has a full keel and what looks to me as rather low freeboard. To my untrained eye the hull looks to be both well-constructed and very well taken care of. I don't know about replating but she was sandblasted in '02. Finish is mahagony and though not gold-plated it's not working-boat either. She has a 900-hour Nissan deisel and some good electronics but rather amateurish wiring. She also comes with a load of long-distance gear - huge tanks, a workshop, piles of spares, life raft, EPRB, two dinghies, two outboards, etc. The mizzen mast and both booms were removed in a storm. (Wouldn't this be indicative of poorly maintained rigging?). At the moment she's lying in Southeast Asia and they're asking $40,000.

I'm not looking for anything fancy. I just want a bulletproof boat that can be repaired anywhere if I happen to bang a rock and that will take me safely around the world at something over 5 knots without costing me an arm and a leg.

Last edited by Edo Kazumichi; 07-03-2006 at 08:06 AM.
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