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What Is A Boat Really Worth?

40K views 272 replies 53 participants last post by  Ajax_MD 
#1 ·
In our "continuing education" we've learned yet another valuable lesson. Owners and brokers have a very different idea of the value of a boat than lenders and surveyors. And in more cases than not, the latter has a value sometimes approaching 40% or more less than asking price.

We saw this but getting the information direct from the horse's mouth confirmed it. And with a little more hunting we've found selling prices are more in line with lender values.

If you're a cash buyer, you can pay anything you want for a boat. If you're a seller, you can ask anything you want for your boat. If you're a broker, you're hoping both the above will get together and complete the sale.

But once you get lenders and surveyors into the mix, things change and it's usually the seller who's not happy. At least that's what we're learning in conversations with lenders and surveyors we've had recently.

I suppose inflated asking prices are due in part because there is no system in place where brokers take known sale figures and advise the prospective seller what a good number would be if they want to sell their boat reasonably soon like they often do in real estate. Maybe that's why the average boat is on the market almost a year before it sells.

In a nut shell, what the lenders and surveyors have said is the value of a boat continues to decline as it ages until eventually it has no value to the lender. If a boat is valued at 25% its original asking price, the upgrades an owner does will be depreciated at pretty much the same amount. They could also have no value to the lender. So a $20K repower may only be worth $5K to the lender, even right after work is completed. On older boats it may have no value at all.

One lender said if the owner wants to pour money into improving the condition of their boat, that's fine, just don't believe it will automatically increase the value of your boat. At least not in the lender's eyes. They are only concerned with actual value in a given market, as in "If the borrower defaults, what price do we need to be at to sell the boat in a reasonable amount of time?" They don't get emotionally involved. It's strictly numbers and they know them well.

Surveyors may attach value to major upgrades but the overall value seems to be more in line with the lender's value estimates.

The more we learned, the more I realized the saying, "A boat is a hole in the water into which one throws money" is not just a saying. It's a fact. And that fact may be why so many boats fall into disrepair. The love is gone and there's no financial advantage to keeping the boat up. Just dump it as fast as you can.

When we started our search 6-8 weeks ago, I was gathering values from BoatUS and NADA for boats we were interested in. One boat was valued dramatically lower by NADA than BoatUS. I told the broker that. He said BoatUS had more realistic prices because they also do lending. It made sense so I started using BoatUS values to determine the real value of boats in the hunt.

Recent conversations with lenders proved just the opposite. All lenders we talked to said they use NADA prices to value boats. And the surveyors tended to agree with the lenders regarding boat value. Seldom did either agree with the seller value. Still, there are exceptions.

So who is right?

If you're obtaining a loan and you aren't willing or able to come up with a down payment that will bridge the gap between owner/broker perceived value and lender value, you have no other choice than to move on if the seller won't come down to lender value.

If you have the cash, you can pay whatever you want.
 
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#250 ·
Of course the pricing information would only have real meaning if it were extensively documented with photographs and descriptions and inventories and surveys and local market conditions. Much like the existing pricing information elsewhere, just the "facts" and dollars wouldn't help anything. "I got lucky and found a bargain after three years" doesn't reflect a larger market, does it?
 
#254 ·
Well that is the problem it is locked down to brokers, and has been shown to not be very accurate. There was recently a post about a Bristol, I believe, and the "sale" price was significantly higher. It is in the interest of the brokers to inflate the prices, as higher prices mean higher commissions. NADA and Boat US are at least as accurate as soldboats.com.
 
#256 ·
Can't you just go to Walmart and pick one off the shelf? I mean if it's good it would have been reviewed on Amazon. Also Consumer Reports would have info as well. Didn't Ralph Nader do a 60 minutes special on boat values?
 
#266 ·
I would bet dollars to donuts she has not bought a boat, and probably will never buy a boat. She enjoyed all the attention from mentioning Sabres and Swans, but bailed when some questioned her commitment to actually buying a boat.

Posts are revealing as to who is really serious about actual sailing and who enjoys virtual sailing and craves attention.
 
#267 ·
I don't necessarily think she was craving attention. She seemed more in love with the process of buying a boat, rather than actually owning a boat.

Endless tweaking of spreadsheets and doing ressearch, etc. She should just be a yachtbroker instead of an owner.

If she buys a boat this spring, well good for her. :)
 
#269 ·
It's lot cheaper to have a "plan".
She obviously enjoys searching for a boat. Nothing wrong with that. A little bit like 'reading' a Playboy magazine. Ultimate safe sex. And very affordable.
I like looking at the boats for sale as well. I do it all the time. I'm probably 3 years away from buying my 'retirement' boat but in the meantime I keep sailing the smaller boats I have had for years. Looking at boats for sale is fun. Almost therapeutic. :)
 
#271 ·
Everyone has different priorities.

A bit more than 3 years ago I purchased my first "big" boat...one with a head and galley, etc. A bit more than 1 year ago, I put that boat up for sail and purchased a bigger one.

Financially, not smart. Not smart at all. The $s I spent on upgrades to the first boat were (not surprisingly) not recouped. But I have ZERO regrets. I figure those $ bought me an education. I learned what I liked and did not like in a boat. What was important to me and what I wanted to avoid. I began learning about boat systems and how to diagnose problems and fix them (or find the right person to help.)

Mostly, however, I SAILED! I initially pulled the trigger after a short search of a few months. My free time is limited, but I got on the water as much as I could. That's the real reason for no regrets. I had a sailboat. It's a boat, not an investment.

Now, there's lots of folks much smarter than me who could have figured this all out without following the path I did and saved some $ in the process. So, I don't offer this up as a model, just to say I am ok with the path I took.

All that said, I think looking at boats for sale is blast. I'm sure I'm on yachtworld at least once a week. I'm not going to buy a third boat (yet...my wife's making me type this) but it is fun to look.

Everyone has to find their own way to happiness. I hope Julie finds hers...
 
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