placing an offer

[2salts]

we are interested in making an offer on an ''87 Morgan Classic. the asking price is $104,000. is there a general rule on starting the offer process?

[Jeff_H]

My usual process is to try to figure out what is a typical sales price for the model that I am looking at. I do this by looking at BUC book prices and looking at asking prices across the internet. A 1987 Morgan Out Island Classic 41 appears to typically sell for something well less than $90K with the average sales price somewhere well below $85K. Typical asking prices seem to be in the $90K range (roughly 10% higher than they sell for). So starting out this boat has a very high asking price relative to the norms.

That does not necessarily mean that this boat is over priced. These were not exactly well constructed boats and they are now 15 years old. The condition of these boats can vary quite widely. In the court of general opinion, these boats were generally seen as homely and being pretty poor sailors but cheaply priced. As a result lot (but not all) of people who have actually bought them were fairly inexperienced and under-budgeted and were looking for inexpensive roomy boats to live aboard and do coastal cruising on. Few things run down a boat quicker than the combination of an inexperienced and under-budgeted owner so that would perhaps account for the $20,000 difference in price between the average Morgan Out Island classic 41 and the asking price of one in excellent shape.

To explain, by this point in the life of the boat, if the prior owner has not done the work, you can expect to need to replace sails, standing and running rigging, electronics, refrigeration, replace the dinghy and dinghy outboard, replace deck canvas,rebuild steering gear, rebuild or replace deck hardware, perhaps do an engine rebuild, a whole range of aesthetic issues, etc. All told this adds up to somewhere around $20K to $40K. As soon as this work is done it depreciates by something like half. So you can figure that the difference in price between a boat that has had no long term maintenance vs a boat which has been updated and maintained could easily be $10K to $15K.

So you need to evaluate the individual boat in question. You need to ask questions like:
-How old are the sails? How much were they used and where? (Cruising the Lower Caribbean really takes a toll on a boat vs something like cruising Maine with its short season, and minimal sunshine. Who made the Sails? (Cheaper lofts often do not have as sophisticated stress mapping and cutting programs and often use lower spec cloth so they last a shorter length of time.)

-When was the standing and running rigging replaced?

-How old are the electronics and refrigeration?

And so on.

With that information you can make a value judgement. If this boat is especially clean and well maintained, it might be worth somewhere in the mid- $90K range. If not, it is probably worth something well less than $90K.

Good luck,
Jeff