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Old 14-12-2009, 09:16   #16
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Most insurance companies could care less what you paid for the boat. They want to know what the boat is really worth. Just because you paid 200,000.00 for a boat does not make it worth that it could be worth half that. The insurance company will use the price set by the surveyor. You did not get a survey when you bought the boat? guess what if you want insurance you will need one. I get calls all the time from proud new owners who find they now need a survey to get insurance. And boy are they unhappy when I find all this stuff that they should have gotten fixed before they bought the boat but now have to get fixed so they can get insurance.

Bottom line is get the survey to find the real value we use many sources including soldboats to determine the "real" value. We take into consideration condition add ons equipment condition and so on. Not an exact science but most surveyors with experience will hit it pretty close.

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Old 15-12-2009, 04:55   #17
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Going back to the NADA:

I looked at various boat models the other day that I liked. Some of these models had a fair number listed for sale on-line and the prices all looked to be reasonabale, both among each other and as compared to other makes/models. In general it seemed that NADA "valve" was only 60-70% of the listed sale price. I find it hard to believe that overall the sales history for the models I checked into sold for 60-70% of the listed prices, so I would still have to question the usefullness of NADA.
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Old 15-12-2009, 06:22   #18
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I find it hard to believe that overall the sales history for the models I checked into sold for 60-70% of the listed prices, so I would still have to question the usefulness of NADA.
The research you did to find the spread of the current market by looking at similar boats is really the best means possible to understanding prices and the one that matters. The guides are trying to give a long term risk assessment over time for those underwriting loans and insurance. They are the people that pay for the guide to exist. They can never snap shot the spot market for boat prices that well nor is that the goal.

You are trying to purchase one boat at one point in time. If you see what other similar boats are asking then you have the basis to make an offer knowing the facts that allow you to say "I can get the other boat for only a slightly less advantage than the one I really want." It means you know how high your offer needs to be before the other boat is the better deal. The ability to compute the "better deal" is about you, what you want, need, like and can afford and has no bearing on Guide values. The market of boats you can actually go to and purchase is your personal universe not all the boats ever sold. Knowing when the boat of interest is no longer your best deal leads you to the next boat you can complete a purchase. The research you do is your best assurance that you did just that.
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Old 15-12-2009, 08:47   #19
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When we were trying to buy a boat in 2005 we went to several companies specializing in boat financing. We wanted to make an offer on a 1997 Manta. The owner was asking 249K and the banks were saying about 160K of which they would loan 80%. This was in August. We split the difference and offered 205K at which the owner took great offence. Needless to say we never could come to an agreement. On September 15 of that year, I got a call from one of the finance companies and they told me that another model year had tripped over and the value had dropped 10% so they would now loan 80% of 144K. In 2005 new Mantas were going for over 350K, but I found that in 1997 they were selling new for less than the 249K being asked.

The issue is that boats are a depreciating asset like a car. If a new chevy was selling for 25K and you paid 15K for your 5 year old chevy, do you think the bank would loan someone 20K to buy it just because a new one now cost 25K. I think not. Most likely they would tell you the car is worth 7K and they would loan you 5K. Now someone might convince you that the car was worth 20K, but the bank would never loan you more than 5. In fact if I was the banker and knew you were paying 20K for a 5 year old chevy I probably would not even loan you the 5.

It ended up that we ended up buying a boat that the owner was asking book value for. We had no issues at all finding financing. The survey said it was worth about 25% more than the asking price and that the replacement value was nearly 50% more than what we paid. I never quite understood what the value of comparing this used boat to the price of a new one of the same model. Kind of like telling someone 7K for a 5 year old chevy is a good deal because a new one would cost 25K.

When it came to insurance all of the companies we talked to said that they would insure the survey value or the purchase price whichever was less.
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Old 15-12-2009, 13:09   #20
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BOAT VALUES, A crap shoot.

The toughest part of my job and the one that causes me more problems than anything else is putting a value on a boat.

Rub a dub dub Three Men in a Tub.
The broker, the buyer, the seller went to sea in a leaky tub.... the surveyor was left on shore arguing with the insurance adjuster cause he was the only one stoopid enough to put his valuation in writing.

If you call any car dealer in the country and ask " How much for a 1994 Chevy ?". They will come back with a price within a few dollars of each other. The dealers rely on the huge wholesale auction system which very effectively controls used car prices. Its worth what its worth ! The vast majority of car models sell thousands of units per year so comparative pricing is easy. But how do you compare prices on a Tanzer 29 when only two have been sold in the last three years and there was a 50% spread between those two.

I recently surveyed a Tanzer 29 and another Toronto broker had a pretty nice one listed at $24,900.00, soldboats.com showed only one sale in the last three years at $13,094.00 (pretty low). I valued this pretty good boat at $28,000.00 and got the broker ticked off because his client needed it valued at 33k (2k below its listing price) to get financing ....... the deal fell through. If I had upped the value and something happened to the boat, the insurance company would want to know why I over valued it. The last thing I need is a fight with an insurance company whose legal counsel has 200 names on the letterhead. Now the kind of dollars we are talking about in this instance are not likely to end up in court but you get the point.
Unfortunately there is no huge wholesale auction system to control boat prices and boats cannot be as easily shipped all around the country the way cars are so local markets can be very different. Some boat models are very desirable in the Trent but less so in Lake Erie. Lake Simcoe is a haven for wooden motor yachts with all their covered slips but you can't give them away on Lake Ontario.

The auto market has the "blue book" and the "black book" which give wholesale and retail prices for cars. This information is derived from that huge auction market we already talked about and its pretty accurate. We have similar guides in the boat business.

Each of the titles below is a link to that site.
BUC Value GuideYou can purchase this guide or get limited access to information for free on line. This is all US information and I have found the values to be generally quite a bit lower than most of the boats in the Canadian market. Carefully read the criteria for valuations and the exceptions that can make a big difference..NADA Marine
Appraisal Guide
You can get a lot of access to values on this site or purchase a more detailed guide but again it is US information and I find the prices on power boats to be very low and only recently have I found most sailboat values not too far off the mark in our market. Carefully read the criteria for valuations and the exceptions that can make a big difference..Computer Boat ValuesYou can buy this, the only Canadian guide I know of and quite a few of the banks and insurance brokers use it although I have found it to be somewhat erratic in its valuations. Carefully read the criteria for valuations and the exceptions that can make a big difference..www.soldboats.comNo link on this one because I couldn't figure out how to link it without showing my username. This one is on line and quite expensive but I think it's the most accurate way to go. Yachworld.com (The international MLS of boats) requires all the brokers to submit actual sales info when a boat is sold including location, asking price, actual selling price, how long it was listed for and you can even access the original Yachtworld sales page.They then re-sell this info on soldboats.com. Some people think the brokers inflate the selling prices and I'm sure that does happen occasionally but Soldboats says they have penalties if they are caught. I think they are pretty much on the mark. .Power Boat Guide
(Brokers Edition
)This guide has layout diagrams, a descriptive blurb and some basics specs but their valuations are right out to lunch.
And some other pricing sources……

Boat for Sale MagazineThis magazine has an on line "Value Guide" showing low, average and high prices for the Canadian (mostly Ontario) market. These values are asking prices not actual sale prices. These are simple averages of the prices of boats advertised in their magazine and bear little relationship to what boats actually sold for..Boat for Sale MagazineThis magazine has an on line "Value Guide" showing low, average and high prices for the Canadian (mostly Ontario) market. These values are asking prices not actual sale prices. These are simple averages of the prices of boats advertised in their magazine and bear little relationship to what boats actually sold for.
Brokers and sellers have very obvious agendas, they want the highest price they can possibly get and thats an honourable goal in a capitalist culture. The buyer wants the opposite and somewhere in the middle they generally meet up.

Surveyed .... Jeaneau 27. These boats were selling for about 17k at the time. The one I surveyed for insurance purposes was exceptional and I valued it at 21k. The owner had a fit. He had just spent 25k on racing sails ( I know, I know, its beyond me too) and wanted me to add 25k to his boat value. After being harrassed for more than a week I finally said " Lets go to your sailmaker together and ask him what these sails are worth today. Whatever he says they're worth I'll add to my valuation". Off we went and asked the sailmaker. His response .... " If you bring me a case of beer, I'll take them off your hands".

The broker knows that if he prices the boat too high there will be no shoppers and he often has to contend with a seller with unrealistic expectations. there are two sides to this coin .... What if the broker needs money that month and he needs to unload a couple of boats as quickly as possible to make the mortage payment. Canadian sellers have been slow to realize that boat values have crashed as the US economy has flooded the market with desperate sellers. The seller (as have we all) has often spent an ungodly amount of money on his boat and thinks he has increased its value. If a house seller spends 40k on a new roof do you think his house is worth 40k more than others on the street... Not a chance, its supposed to have a roof. If you spend 20k on a 1994 Chevy Impala, what do you have .... a really nice 1994 Chevy Impala.

A while back I surveyed a Bayfield 32'. They were selling for about 60k at the time. This one however was unique. In its 13 year life, the engine had never been commisioned, the sails had never been raised, the original wrapping was still on the head and stove. The couple had it shipped to their marina and came down every Sunday to sit in the cockpit with a glass of wine. This was a 13yr. old brand new boat ! I pulled a number out of the air and valued it at 74k. This was the first time I had ticked off the seller, the buyer and the broker at the same time. It had been sold for $94,000.00.

Occasionally, like the previously mentioned Tanzer a broker sells to a less than expert buyer for above market average. I can't fault him for doing the best for his client but the surveyor is the only one who has to put a value in writing and the only one thats going to end up in court if things go sour on an insurance claim.

I surveyed a Trojan Tri-Cabin that was sold for 38k. It was a dangerous piece of junk that I valued at 18k …….. the deal still went through. At the same time I knew of another Tri-cabin listed for 28k and in exceptional condition. It would have been a serious conflict of interest to inform my client that " Hey there is a much better boat 1 mile from here for 10k less". I had to bite my tongue all the way through that deal. I felt really bad about that one but getting into that kind of conflict could cost me my SAMS Accreditation.

Surveyors are supposed to appraise at "Market Value" what does this mean ? it could be reasoned that the boat is worth whatever someone is willing to pay for it and that is close to the definition of "Market Value" So if a buyer is willing to pay 40% over the average does that mean I'm going to value the boat at that ? Not a chance. This is where surveyors and brokers come into conflict.

The statement below is the definition and explanation I use in my survey reports

"Current fair market value" is the price, in terms of currency or its equivalent that a willing seller will accept for property from a willing buyer, neither part being under undue pressure to act in the matter.

This valuation opinion is intended for insurance and financing purposes only and is not intended to influence the purchase or non-purchase of the subject vessel at any value. The surveyor has no interest in the vessel financial or otherwise.

Valuation is primarily determined through www.soldboats.com but may also be derived from consultation with knowledgeable boat brokers, personal experience, current listings and available pricing sources such as Boat For Sale Value Guide, Computer Boat Values guide, N.A.D.A. Marine Appraisal Guide and /or BUC Value Guide. Boat values vary considerably due to local market demands and significant premiums may be paid for fresh water vessels in exceptional condition. Currency conversion is done on date of survey using XE - The World's Favorite Currency and Foreign Exchange Site

This week I surveyed a Hunter 30. There were 11 of these listed on soldboats.com with a low selling price of $12,000.00 and a high of $40,000.00. The owner of the one I surveyed was asking $43,000.00 and bragged that he had just spent 28k on it. This boat might have been worth 40k if he had spent another 50k on it.There were a number of serious issues covered up with bondo and new alwgrip. I valued it at 28k cause' I was feeling generous.

The broker, the buyer and the seller all have vested interests in the valuation but the surveyor is the only one going up on the stand to justify the value.

So what have you learned from my little rant ? Not much. I was just letting off steam after two arguments this week over valuations.
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Old 15-12-2009, 14:28   #21
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seems the rant point is that book valves and real values (ie what people are willing to pay) are way different

but still begs the question of why the book valves never match the sold history etc of a model, I belive they just list the valve as a % of what the boats are selling for and what they really mean is that it is the amount that a bank would loan on it
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Old 15-12-2009, 17:27   #22
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Disgusted with slimy sales games

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Valuation is primarily determined through www.soldboats.com but may also be derived from consultation with knowledgeable boat brokers, personal experience, current listings and available pricing sources such as Boat For Sale Value Guide, Computer Boat Values guide, N.A.D.A. Marine Appraisal Guide and /or BUC Value Guide. Boat values vary considerably due to local market demands and significant premiums may be paid for fresh water vessels in exceptional condition.

So, If I'm understanding this correctly, BUC and NADA are worth exactly that, (nada) to me, a potential buyer hoping to make a reasonable offer on a yacht?

Soldboats has the only info worth having but they want 400 (or there abouts) friggin dollars to access that info. WTF ?! Quick...someone call the rape crisis center! Are they crazy?
I'm generally a pretty honest guy but I'm thinking I could find a broker down on his luck who will access the info for me for 20 bucks. I don't know...is my perspective skewed? Is 400 dollars a reasonable price to tell me the actual selling price of a particular boat and how long it was listed...?

I'm looking at nada price of 28k low and 33 high but those same boats on yachtworld are asking average 50k for a 35 year old boat. I've seen people on here suggest that most will drop their price by 30% but I'm skeptical.

OK, just a little rant due to frustration. Sorry.
I'm determined to get that info from soldboats/yachtworld somehow and I aint paying 400.
Or I'll just hold my breath until I.......lol
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Old 15-12-2009, 21:25   #23
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I am so glad we have buyers and surveyors and insurance people on the CF. I am sure we have a couple of bankers in the woodworks somewhere. What a robust conversation this is. Depending on where you sit is how you feel about the issue.

I am a free market economist. Whatever the buyer and seller agree upon is great. Education by both parties results in quicker negotiation and perhaps a more fair deal but at teh end of the day the agreed price is fair.

Banks loan on risk. They have their game and they are pretty good at it. We may not agree but the game is pretty stable. I suppose that's why a large number of boats are financed by 2nd home mortgages. The home is a much more stable asset to repossess.

It is unrealistic for most people but the ideal way to buy your boat is cash. Unencumbered by debt is always better.

As far as insurance? It seems an easy game as it is also risk based.

Agree on a "replacement value" and with the same risk of loss it should be a fairly linear equation.

What is not so easy is liability with the large range of loss that can occur. But with a cap on coverage that is pretty much the same as replacement value.

It all seems way more complex than it needs to be.
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Old 16-12-2009, 07:40   #24
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I've seen people on here suggest that most will drop their price by 30% but I'm skeptical.
Be skeptical all you want, but it's true.

What happens is that sellers generally over-price their boats. Most have some emotional attachment to their boats. They've spent time and money on the boat and so--TO THEM!--it is worth more than the market will bear. They put a price on it. It doesn't sell. A year later they finally accept that they aren't going to get what they think it is worth, and so they sell it for 30% or 40% less than their asking price.

Buying and selling boats is drastically different than buying and selling cars or even houses. That is something that most first-time boat buyers (and even many second- and third-time buyers) have trouble wrapping their heads around.
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Old 16-12-2009, 09:26   #25
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Be skeptical all you want, but it's true.

What happens is that sellers generally over-price their boats. Most have some emotional attachment to their boats. They've spent time and money on the boat and so--TO THEM!--it is worth more than the market will bear. They put a price on it. It doesn't sell. A year later they finally accept that they aren't going to get what they think it is worth, and so they sell it for 30% or 40% less than their asking price.

Buying and selling boats is drastically different than buying and selling cars or even houses. That is something that most first-time boat buyers (and even many second- and third-time buyers) have trouble wrapping their heads around.
I think you are talking about something different. I can see that boats that stay on the market may have to be reduced but I think what the commenter and I feel is that if you go to the market today and make an offer for 30% less then the asking price you would have very few takers which in my mind would suggest that the good boats don't have to reduce as much as those not as well appointed.

I have only sold one but really didn't have to come down more a couple percent and that just to seal the deal and stop the back and forth.

Jim
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Old 16-12-2009, 09:59   #26
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Jim 3 years ago if you offered 30% less you would have been laughed at. I remember a time 10 or so years ago when there was a market for selling slots in the production line at Hatteras as there was a 2-3 year back log. Not boats just a place in line was going for 6 figures. Today the plant sits almost idle. But the cold reality is for the past year and a half it has been 30%. If you are a buyer now is the time. I am hoping by next summer things will be getting a bit better for sellers. Time will tell. This is why Buc and NADA are so off they do not react to a market that can change with the weather.

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Old 16-12-2009, 10:11   #27
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Don't forget that your actual purchase price is going to be used by the insurer to set the value of the vessel for insurance purposes. So if you shop around and haggle for the best deal, keep in mind that you've now set the bar low for the replacement value of that particular vessel....in other words, you shoot yourself in the foot for insurance purposes. Dammed if you do, and damned if you don't, apparently.
I'm not sure you're right about that, Not Sure. At least in my experience.

IMIS found me insurance for the amount I paid for the boat, plus the installed cost of the substantial upgrades that I made. All I had to do was give them a detailed listing of what I spent.
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Old 17-12-2009, 14:13   #28
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I agree with Hud on this. When I got insurance last year via IMS it was for a stated value that was more than what I paid for the boat. The insurance co of course wants a clean survey to justify the risk, but after that I doubt they care much within reason what you want to insure the boat for as they are going to charge a permium based on that dollar amount
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Old 05-04-2010, 13:29   #29
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Nada

The bank i use will only go by NADA and wont use the survey. I have tried to buy two boats recently and the NADA value was way, way lower than what any of these boats are selling for. Some boats arent even listed on NADA so i guess im out of luck.
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Old 05-04-2010, 14:55   #30
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Banks operate on lending policies. Policies these days are tighter. Polices can be fluid or not. Sort of depends on if they want to lend more or not and who writes the policy. With boats, if you look at it from a banker point of view they really "don't know nothing 'bout no boats". They want simple - look it up on the list and write down the number. They are bankers at the end of the day - could be worse.

For the most part they take a marine survey as written - could be worse. If they want to nit pick about lending money being conservative isn't a bad place to be these days. If you consider they used to lend 125% loan to value home loans, the retreat on boats is not being over reactive. Boat values are based on how you look at them. Lenders see a different view than buyers and sellers. All people involved want to see things the way they do. Bankers have the money. Buyers are sure they are being screwed, sellers are giving away the farm. Just ask them!

Marketplace forces are always fair and you don't need to know why - if you sign. If you sign, it means it was fair. Only a fool would do otherwise. It's not about the other guy it is about you. It's the only perspective when it comes to capitalism. It's about you!
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