Boat Purchase: Offer Amount Question...

[speedoo]

The OP has said this is his first boat, so resale value of the boat he buys has to be a primary consideration, because it is very likely that he will want to sell this boat at some point. So what will this boat be worth in say five years?

IMO, it won't sell for $10k, especially not in this market, but probably not in a more normal market either. The seller will probably soon regret his failure to negotiate... winter will soon be here which means the market will be even worse for sellers.

[barnakiel]

Nice boat!

But which way is the front ? Or else why is the wheel 'backwards'???

;-))))

I really like the boat. And she is a yawl which has its good sides too (cruising).

[Cheechako]

yea, it's hard to say once you get down to 10K if the whole thing is solid, and the diesel is new, sail shape?? etc might be OK... it is a character boat!

[S/V Illusion]

Having been debated for 3 pages (thus far), I went back to look at the original question and am reminded we're talking the difference between $10 and $15k here. Should be a straight-forward way here how to end the value debate. If the engine is in fact new, it alone is worth close to that much. Sounds like analysis paralysis here.

[ad_astra]

The broker told me the engine was rebuilt, not new. Still a major plus point to consider...

[hellosailor]

The question would seem to be, first, what does $10-15k buy in a boat of this size and what condition?

Arguably a lot of 28'ers with running engines and useable sails.

So, what does this boat offer that makes it equally or more attractive than any other boat for the same money? When other boats would have the advantage of being much much easier to sell, i.e. Catalinas and Pearsons and other popular name brands can easily sell in 90 days. A Paceship....apparently takes a year or two longer to flip, regardless of the merits of the boat.

Stowage, deck plan, wheel, cabin layout, blessed by the Pope...whatever it is that's special about this one.

[Jake Tanley]

What I find ironic, is that the ad states: "PRICE REDUCTION-OFFERS ENCOURAGED"

[AdventureBoy]

My economics proffesor often said the "price of something has nothing to do with the value" in your case the book value "but rather the price it can be sold for"

[rover88]

A fundemential of valuation is the "law of substitution". It does not matter the lack of comparables (same model) but rather what would a boat of "similar" age, quality and utility sell for. The three recent sales I am familiar with (my own and two friends) leads me to believe that 60-70% of a "market" asking price is a typical sale price in this financial downturn. When a broker is involved that may not be the case. Don't get too set on one boat. There are lots of deals out there that would be good subsitutes for you and your enthusiasm for one particular boat can lead you to overpay. Also keep in mind that the purchase price is but a fraction of your long term investment. In one year I have already put an additional 50%+ of the purchase price in making my boat "mine".

[bobfnbw]

When I purchased our E40, the owner had it listed for 75K. These boats at this age go for between 60-100K. The boat looked sound, but I knew there would be problems with fuel and water tankage, and general updating, plus other issues.
I offered 45K, expecting to come to a agreement around the mid 50's to 60K.
The owner refused. He had a note on the boat for 63K I believe. There was no going around that. Either I walked, or renegotiated in my own head what I believed the boat was worth, TO ME. We settled on 65K. Then he tried to nickle and dime me with outboard, spare parts etc. I refused to negotiate those items and said I would walk. And I meant it. In the end we came to a understanding.
Would I do anything different again? Probably not. While it was not my "dream boat", there was a lot going for her, including 2 nice staterooms, and a good cockpit. I knew I would have to spend a lot to get it how I wanted her, but after looking at many many boats over the years, I knew what I wanted and how long I would keep her.
I see people buying up over and over. starting at 25', then 30, then 35, then 37. First a sloop, then ketch, then back to sloop, then cutter...
That is fine for some, but the cost is considerable. Boats are generally not asessts. They do not usualy go up in value, unlike houses have, or did. They are only worth what a buyer is willing to pay for it, assuming you can FIND a buyer. As the years go on, there are more and more used boats on the market. Some in deplorable condition, but many in ok condition. That can only bring the price lower over time.
For me, I plan to spend at least the purchase price upgrading her. She will never be worth to another buyer what I will put into her. Some would say that is foolish. I really don't care. In the end, she will be our home, and will be asked to cross oceans, sit for many years in the harsh sun, acid rain, and store our limited possisions safely. She will be our home, our shelter, and our base of world operations. She will supply us with water, electricty, hot water, food, and shade. Hopefully she will take us to the ends of the earth. When I am done traveling due to age, health, or just tired of it, I will try to pass her on to the next family, for as much as I can, but hope that if I cannot, I can walk away, knowing that the value I obtained from her, to me and my family, was more than the purchase price and all upgrades. It is not a financial investment, it is more than that. What price can you put on your dreams? Your goals, your aspirations?
So, while some say, look at the boats purchase as a investment, and not to pay more than so much of what a book says it worth, I say, that only matters if you have limited interest in what that boat represents to you.

We all paid a lot of money investing in things over the years, many of which were disapointing. Don't let your dream be that way. Its not a investment in money.

Bob

[osirissail]

Upside-down loans like "bobfnbw" are common in a financial downturn. Back in the early 1990's just about every boat for sale in Florida had an "upside-down" loan making the asking prices and final acceptable prices impossible. You had to wade through a lot of good boats for sale to find one that could actually be sold. The banks would only give you loans based on the current market value not the decade(s) ago price.
- - Hurricane Andrew solved much of the problem with upside-down loans as each boat was required to be insured for at least the outstanding bank loan amount. Many hundreds of boats were "anchored" out with small inadequate anchors and subsequently the Hurricane solved the loan problem for the owner. And just after that the insurance companies found out and now insurance rates have sky-rocketed.
- - As was mentioned by others, boats do not "appreciate" in value over time like real estate. So "over-paying" for a boat above current market should be carefully evaluated. Emotional aspects like the utility of the boat for your usage, the layout of the interior and small extras that a former owner has added and how well the boat was maintained versus other similar boats, can justify the "extra" needed to close the deal.
- - But in general, on average, boats are listed for half-again what they are worth. This is the "bargaining room" in the price between what amount is desired and what amount will constitute the "bottom line." "Nickel-dime-ing" is very common in "bottom-line" purchases. An astute buyer will have closed off all those possibilities with a good - complete - listing of what his offer is for, the boat plus other equipment. And after a buyer's survey - the cost of correcting any problems affecting the sea-worthiness of the boat.
- - The seller tries to get extra money by "nickel-dime-ing" and the buyer tries to lower the price by items surveyed out as un-seaworthy. Standard tactics which any good broker will guide you through.
- - Boats under $20K and especially under $10K are totally "emotional buy" valued boats. These are in my book, "beer money" boats. The owner can afford to walk-away from the boat (abandon it) and the buyer can usually buy it using a credit card. In Florida, at least, such boats are available "for free" if you will pay off the back dockage or boatyard storage costs. I sold a couple of my "teaching" boats in a yard sale for $5K each. The trailers and outboards were worth more than the boats. It is all a matter of - in this price range - how much effort you want to put in to "find" such a boat.

[jkleins]

Originally Posted by osirissail

- - Boats under $20K and especially under $10K are totally "emotional buy" valued boats. These are in my book, "beer money" boats. The owner can afford to walk-away from the boat (abandon it) and the buyer can usually buy it using a credit card. In Florida, at least, such boats are available "for free" if you will pay off the back dockage or boatyard storage costs. I sold a couple of my "teaching" boats in a yard sale for $5K each. The trailers and outboards were worth more than the boats. It is all a matter of - in this price range - how much effort you want to put in to "find" such a boat.

I can't agree more. When you go to sell a boat in this range you will probably find a lot of people that just like the look of the boat and will write the check right there. Having a nice looking boat with a pretty clean interior and a nice looking engine room like that will probably sway more buyers then the brand or selling price of other similar boats.
Spending hours/days researching a 10-15K purchase is not for everybody. There is just too much information out there to wade through. Just look at how people buy used cars. They go to the lot and find the best one they like in the immediate area. Used car salesmen would be broke if everyone paid as much attention to their purchases as we do here on the forum.
Your probably much more dependent on luck when you go to resale in this price range (where you live, who walks by the dock and sees your sign, etc) then on the actual value or purchase price of the boat. I would worry less about resale of a boat like this and more about usability for your purpose and the enjoyment you will get out of it compared to others you have seen.
People warn against emotional buying all the time but sometimes there is just not enough information or predictability in a situation to use anything but emotion.

Jim

[jpemb7]

Well, the boat is still for sale and the price has dropped.
I used to own a Compass 28 (Australian design) with a long keel /rudder configuration like that. Whenever I backed out of the marina berth with a bit of wind the owners of the other boats would race to their bows to fend off. They didn't know which way the boat was going to go and neither did I. My wife would run from one end of the boat to the other like some crazy woman screaming at me. " Jim!...Back!...Forward...!..Jim! We'd work our way from one end of the marina to the other like a pinball. I tried to look calm as the other owners looked to me anxiously, desperately hoping I knew what I was doing. But of course, I didn't.

Jim

[boatman61]

You could always check this Pearson 30 @ $10,900 out at www.towndock.net
2 boat owner and wife says one has to go. Excellent condition. New sail cover, genoa reconditioned June 09, main servicable, storm jib, roller furling, 1 year old bimini, Yanmar diesel, lazy jacks, mast steps to spreaders, carry-on a/c, rail mounted grill, 2 anchors. Cutlass bearing, rudder bushings and packing replaced in 2004. I would rather see the boat sailing than sitting at the brokerage dock. Current Lady is on the cover of the latest 'Carolina Currents' magazine. See the listing on Yachtworld and call Knute at Whittaker Creek 252-670-3759 or email wcyh@whittakercreek.com.
or there's a 1984 Pearson 27 for $7,900.... nice looking in pic's
Phil

[tallyhorob]

AS a person once said to me, houses and boats do grow on trees.

There will always be a death, a divorice, a job lost, a move. Any reason for someone to need to sell a house or a boat, so always think with your head. Another good deal is just arond the corner.