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Old 12-01-2006
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Market value vs replacment cost

Hello all.

Ijust got a copy of a survey on a boat that I am interested in buying. The thing is that market value is very low compared to asking price , about 27,000 usd difference. The boat looks to be in very good condition and well equipped as well as being competively priced when compared against other boats of the same vintage. However the sellers are unwilling to move much off their asking price. How much stock should one put in the market price , and how does a surveyor come to such a figure , when by his own statements the boat is very well equipped and maintained?

Currently negotiating the price so any insight would be valuable .

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Old 12-02-2006
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KC, the value of anything is what someone will pay for it. All the other "statements" of value are simply opinions, subjective opinions in most cases.

The only semi-objective guide is to see what similar boats, in similar markets, have actually sold for. And that's not always easy. In theory the BUC Book lists actual sale prices and (agian in theory) condition as sold. You can get a valuation from BUC's web site for free, so you've got one more number to consider.

Online sales listings (like Yachtworld) are *asking* prices, not sale prices, so AFAIK BUC is unique although I've heard any number of people say the BUC prices are higher than real market prices "should" be. Dunno, since they claim to be reporting actual sales.

Sellers and buyers and surveryors alike may all be delusional. You offer what the boat is worth to you, and if they don't want to take it, you either find another boat or up your offer. Apparently your surveyor thinks the boat isn't worth the asking price, and your best guide to the logic behind that would be to ask him.
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Old 12-02-2006
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One thing that may concern you about a low market price in a survey is insurance. Even if you rationalize the price you pay (against, as you say, similar models) the insurance company may balk at giving you coverage to your purchase price if the market value on the survey is so low.

In my experience it's very rare for a surveyed market value to come in so low unless there is a fundamental deficiency in the boat.

I'd be a little concerned about the surveyor's credentials or experience with this type of boat.

Hopefully CardiacPaul will weigh in here with some insight.
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Old 12-03-2006
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I think the above-posts are the correct way to view pricing. Also, what percentage is that $27k, are you talking about a 50% difference or a 5% difference, I would be less concerned about the latter.
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Old 12-03-2006
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I just purchased a Tartan 37 having looked, in person, at boats in Florida, all the way up the east coast to the Great Lakes. During the 6 months of searching I asked many brokers and surveyors how they got their pricing. Most no longer used BUC as they objected to having to supply BUC with the true sail price and still pay big bucks for BUC results. Plus they all sited new boat brokers over valuing trade-ins and therefore skewing the results to justify their new boat prices. Apparantly a lot now use a private site of YachtWorld and provided to brokers of used vessels only.
My advise - Ask your surveyor how he came up with his price and ask for specifics of other sales. He should be able to tell you that a similar vessel sold in this state for that much so many weeks ago. He sould give you half a dozen or so senerios over the last year except for the rarer vessels.
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Old 12-03-2006
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As Stephen said, the brokers can search yachtworld for comparable sold boats. Just like real estate, actual value is where buyer and seller meet. A surveyor will use BUC which IMHO has fallen out of favor. Most brokers now go to yachtworld/sold units. You can go to NADA and get a value as well, but like BUC its values are based on reported sales: Small sample size results in skewed results.

Don't fall in love with the boat till after you buy her!

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Old 12-03-2006
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One recommendation - just like sellers use brokers, as a buyer you can use a broker too. Generally, they take a cut of the commission of the sale of the boat (i.e. you don't have to directly pay for their service). This may cause a conflict of interest, but most brokers are interested in repeat business. A buyer's broker can look up comparative pricing in addition to assisting in the arrangement of a survey, sea trial and the sale itself. If they are local to the boat you are looking to buy they may also know the history of the boat. If you just call up a yacht broker (any broker that sells boats) and tell them you want a buyer's broker, most will work with you. If it's a specific common manufacturer you're looking at, try to find a company that focuses on that manufacturer.

If the boat was already surveyed, for a fraction of the price of the survey you can often hire the same surveyor to walk through everything with you. They will often change the name on the survey, if you buy the boat, so you don't have to pay full price to provide the survey to a bank. This is what we did. Our boat had been surveyed 4 weeks before we bought it and we paid about 50% of the full survey cost.
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Old 12-04-2006
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As a real estate broker in Houston, I use comparable data to determine home values and can get very close. In my favor is lots of information on the condition and terms of sold homes. In regard to boats, the condition can vary so so much and I am not sure that info is available at buc or yachtworld. A rotten deck can cut the value of a small boat to near zero. That is generally not possible with a house. There is just not enough data to zero in on value so I beleive it becomes subjective and info gathering intensive to make a good decision.
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Old 12-05-2006
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It'd be pure conjecture to say what the survey covered and the method of valuation that was used, perhaps it was valid, perhaps not... I've posted about valuations and market prices and selling prices before...

this was early this summer
ok, just to feed your spreadsheet here are results for the sailboats I've surveyed since jan. 1 of this year (asking vs actual sales price)

Catalina 34, 78 %
Freedom 33, 61%
Catalina 27 94%
Islander 30, 79%
J/24, 69%
Valiant 40, 85%
Columbia 36, 40%
J/105, 72%
Catalina 30, 80%
Columbia 36, 96%
Bene Oceanis 430, 71%
CSY 44, 91%
Morgan 41, 90%
Cheoy Lee Offshore 41 60%

Now, please put down your slide rule, close your excel spreadsheet, and forget your graph. You're trying to analyze a subjective value.

Lets say I own a Frogbobber 41. It was my first boat, I lost my virginity on her. I put 20k of repairs, upgrades and fluffernutters in her. I sailed her from Seattle to Cabo singlehanded in a hurricane.

Now, my 4th wife hates the boat. She says "her or the boat" (ok, I know I'd chose the boat). So, I call Sailor Bob, the broker, and say "put her up for sale at 120k." (the boat, not the wife) knowing that the boat is worth 50k. Billy Gotbux comes along and says, "I'll give you 50k for the boat." Nope. He comes back a month later and says "I'll give you 70k for the boat." Nope. He comes back a month later and says "I'll give you 119k for the boat".. Ok, Billy Gotbux is now the proud owner of a Frogbobber41. You see, Billy Gotbux saw a Frogbobber 41 25 years ago an fell in love with the look of it. Now, his life is complete. Me? I'm putting a down payment on an Hylas, and divorcing the
4th cow.

everyone is happy, the broker is shaking his head while he cashes his check.

ask vs offer vs sale price is SUBJECTIVE!

Yes, there are boat valuation guides, the operative word is GUIDE.

Take for example the CSY 44, it was priced right and just what the new owner wanted.

One of the Columbia 36's had set idle on the dock for over 5 years, and was an estate sale thing, and the other Columbia 36 was a boat that was used almost every weekend... from the figures I gave, can you tell which was which?
I also know of a Catalina 30 that will probably go for no more than 10 to 15% of asking price.

Almost every one of the responses you have recieved on this topic have said the same thing. I'm seeing a trend, perhaps I'll make a graph...
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