Why would broker ask me not to disclose price paid to surveyor?

[Willy MC]

To: GOING WALKABOUT, re: false reporting of Sales prices
Soldboats on Yachtworld definitely has some selling prices that are improperly reported. The clue to most of them is when you see the Listed and Selling prices identical. When that happens, you need to contact the Selling Broker ( he's the one doing the reporting ) for an explanation. A common answer is that the Seller didn't want it reported. All of the Brokers I know are happy to report the actual selling price... before any survey adjustments... reason being that the two parties agreed to a Selling price based on what they thought the boat was....post survey reductions only bring it back to what they originally agreed to... I cannot tell you that all reported sales prices are done this way.... Let's get one thing understood, these comps are only guidelines... each Buyer decides for himself what the boat is worth to him and shouldn't go above what he thinks it's worth.
As far as the implied conspiracy to keep prices higher, I can assure you Brokers are not that well organized.... we only get paid if a boat is sold...when prices are too high, the Buyers hold back... in general, a Broker looks to selling a number of boats every year....there is no future in holding out for high prices while the boat sits there. Bottom line... the Buyers and Sellers control the market, they are the ones making the decisions... at times I find myself more of a referee than a salesman. Willymc

[Cadence]

You said cash. If you have a legit. surveyor I would tell him. Brokers are salesmen there can't be a positive side of it for you? JMHO Nice guys finish last.

[GoingWalkabout]

Originally Posted by faa50

Going Walkabout - your observations are dead-on and thank you for sharing your experiences.

One point that I may differ regards bankers and mortgages on boats. Financial institutions are at risk of loans being under collateralized due to fraudulent "sold" prices. Banks didn't hold the paper on real estate loans so in large part the financial institutions off loaded the risk of fraudulent sold prices or bogus survey valuations.

Financial institutions do not hold the paper (debt obligations) on boat loans but instead sell them to institutions who package them into a portfolio and then sell this bond to the unsuspecting public.

There is nothing inherently wrong or unethical in the above process, but until we hold financial institutions accountable for the loans they create this problem will persist.

IMHO, it is impossible to legislate ethics.

Hi faa50, I totally agree with what you have said about the "real" note holders. And yes I also agree about not being able to legislate good behavior. Legislation is no where near as effective as true market forces. But there is a place for legislation to provide for the proper functioning of markets. For example we saw how that monopolies had a big part to play in the Great Depression. Legislation followed that made collusive price fixing illegal along with other anti-trust legislation. So sometimes markets need to be corrected by legislation to provide for their proper working. At the end of the day a free and "open" market is the best mechanism for allowing competition and the laws of supply and demand to regulate prices. Anything less causes market distortions in the pricing formulae leading to negative real life market results.

regards faa50,
Chaya

[faa50]

Hi Going Walkabout - well said!!!!

Being a free-market-place kinda of guy, I prefer less legislation than more. Having said that, there is an important role for government. Requisite legislation that provides market place safeguards that we are unable to provide for ourselves and benefits society as a whole.

Market influences ensure these type of regulations are extremely difficult to write so as not to incur unintended consequences. And then there is the enforcement piece, but try we must. It can be done - this is probably what they mean about an evolving society.

[hellosailor]

My friend Pollyana says there's no mystery, the broker was simply being a gentlemen. He knew that if the surveyor heard the asking price, he'd guffaw with laughter, and when he finally could pick himself up off the floor and say to the buyer "No, really?!" the buyer's feelings would have been offended.


So the broker, being a professional and a gentlemen as they all are, was simply trying to ensure the buyer would not be offended by some crude and callous surveyor who lacked the discretion and self-control to avoid such a situation.


Since most boat sales involve sales tax and tax payments are based on bill-of-sale recorded sales prices, and these would fall into the category of "public records" in some if not all states, it would seem very possible for someone to do what has long been done in the housing markets. Go down to the courthouse (clerk) and copy down the past day or week's sales prices, and boat models. That doesn't give you "condition" but as any broker can tell you, they are all in mint condition anyway. of course these days many states simply sell access to these records in bulk, and a few clever folks have used cheap foreign workers to log in, screen after screen, inputting the captcha code or whatever else is intended to prevent bulk access.


Assuming they could get anyone to BUY the resulting data.

[Cadence]

Originally Posted by tomfl

Let's see if I got this right.

The surveyor is suppose to do research and come up with the selling price of similar boats to be used in determining the value of the boat. Seems to me any half way decent surveyor would be able to come up with the asking price of the boat being surveyed. Also seems any decent surveyor would know the price paid would be lower, or perhaps the asking price. Being fairly close to the buyer and seller seems any decent surveyor would be able to come up with something close to the price paid.

I do understand the theory of having the surveyor working in the dark so to speak so they come up with the best value of the boat. But if the surveyor is not doing that already I am not sure how decent a surveyor he is.

I think you may have a surveyor confused with an appraiser. I would rely on an surveyor from bottom side up. What is wrong with the boat or what is good, comps. on the market? He hasn't seen them.

[kapnkarl]

Should we have faith and trust in our fellow human beings and a belief that deep down, those people are deserving of that faith and trust?.. Yes. Are there times when some of those fellow human beings take advantage of our faith & trust as only we human beings have been known to do (from picking pockets to Ponzi schemes to politics & beyond)?.. Yes. Should we go into a boat purchase transaction with our eyes closed or wide open? We know the basket isn't full of bad eggs, but it's foolishly naive to think there can't be a bad one in there.

No one wants unending regulation. However, lack of controls in an industry can lead to some pretty under-handed dealings as we have seen time and again. So do we really need to discuss where someone's mistrust comes from? Sure, it's not impossible to have some hanky-panky going on in a real estate transaction, but I think it's generally more difficult (due to tightening industry controls) than it is in the boating industry. One can only hope that someday that will change.

A boat purchase often involves a large financial commitment. A buyer owes it to him/herself and family to take the necessary steps to protect their interests. Keep your eyes and ears open people! Ask questions, here and elsewhere. Of course this is all just my humble opinion, but didn't someone once say... "Let the buyer beware" (caveat emptor).

soapbox dismounted.

[Sailorbob8599]

The following is my first & only experience dealing with a Surveyor ... he was a hell of a nice guy.
I built my own boat from a bare hull & deck assembly. My insurance company requested a complete documented survey to establish a value.
After checking with other marine trades people as to who they would recommend, I decided on one particular fellow who seemed to be well accepted.
He came to the boat a couple days later and performed a 'preliminary' inspection ... because some non-structural work was still in progress eg: Mast & Boom painting and rigging, as well as mast wiring, followed by stepping of the mast.
Two months later, he performed the final inspection just prior to the launch.
I asked for his invoice and was told there was "no charge" ... to me. So did the insurance company pay his fee? ... Very strange.
I should point out everything used in the building of this boat was new. Access to the hull inside and out was all clean and easy to get to.
Only top quality parts and equipment were used for this boat and I had retained all 'cut-outs' from the hull and deck for this very purpose.
The only question he asked was, "Is this boat for sale?" ... to which the answer was "No" ... I was with him at all time and he appeared to be very thorough in his inspection, looking into all storage areas as well as the bilges, chain locker etc. He also checked all chain plates for backing plates ... it helped some that I had taken numerous photos during the construction over a period of years.

[captaindanger70]

What's the difference dude, the survey is your chance to make sure the boat is fit for your purpose and will hold up in bad weather. Engine machinery and other gear as well as deck joins tankage and misc. gear are what he does, price should not be his concern. If you pay 100 and his value is 80 than you guessed wrong or he did and you can talk to broker about that but hold it till after the sea trail and final acceptance of the vessel since if you are unhappy with the test sail all is off the table and your out. No matter what as long as you have a good surveyor you should rest assured that your boat is good for your intentions. After the senatorial and prior to sign off with all in hand you can offer a lower price based on sea trial and survey and by the way do not show the survey to the broker until you must to advance your position after all you paid for it and he doesn't know what you have found till he satisfies you or gets his own survey. This should lower your price paid by 5-10 percent or more depending on what the surveyor foundGood luck

[Fore and Aft]

As a marine surveyor, I always ask what you are paying for the boat before I even see it. That way I get a feel for what I am going to see before I arrive to do the survey. Usually the price you pay reflects on the condition of the boat. Very rarely do I see a bargain boat.
Thanks

[GoingWalkabout]

Originally Posted by faa50

Hi Going Walkabout - well said!!!!

Being a free-market-place kinda of guy, I prefer less legislation than more. Having said that, there is an important role for government. Requisite legislation that provides market place safeguards that we are unable to provide for ourselves and benefits society as a whole.

Market influences ensure these type of regulations are extremely difficult to write so as not to incur unintended consequences. And then there is the enforcement piece, but try we must. It can be done - this is probably what they mean about an evolving society.

Its refreshing to find here on CF a sailor who understands good economic and social theory.

[boatbrain]

Well, maybe this is a bit of topic drift but I read all of this and I still don't know how to tell - not even within say 50% - if I am paying the "fair market value" of a boat.

Watching Yachtworld, I see that boats offered at the average asking price for sisterships of the same year and equipment generally do not seem to sell. They just sit on the market.

Boats offered at about 1/2 the asking price of sister boats DO sell - though even then, by no means instantly or certainly.

A few boats at around the average asking price do sell. It's by far the exception rather than the rule.

Obviously, there is always interest in a "bargain" but there is less interest in project boats than ever. A real mess of a project boat - needs practically everything - even with a good hull of fiberglass and 40 to 50 feet long - might not sell at all -even for $10,000.

Overall, the prices of respected cruising boats from say the 70s are about 1/3 what they were ten years ago when I was last looking. But again, to figure out some particular boat which may have maintained more value - tough one - seems like teak decks, which some people did not like ten years back, are REALLY unpopular now .

Anyway, how do you know for sure? My strategy is just to lowball the heck out of everybody - if someone is on the low end of the market but also on the low end of upgrades -maximum of 1/2 the asking price.

No one has punched me yet, some maybe wanted to. But I am still looking.

[OutOfControl]

Quote:
Originally Posted by faa50
Hi Going Walkabout - well said!!!!

Being a free-market-place kinda of guy, I prefer less legislation than more. Having said that, there is an important role for government. Requisite legislation that provides market place safeguards that we are unable to provide for ourselves and benefits society as a whole.

Market influences ensure these type of regulations are extremely difficult to write so as not to incur unintended consequences. And then there is the enforcement piece, but try we must. It can be done - this is probably what they mean about an evolving society.
End Quote.

Originally Posted by Going Walkabout

Its refreshing to find here on CF a sailor who understands good economic and social theory.

You two need to get a room or maybe a cabin.

[er9]

Originally Posted by denverd0n

No, the seller won't say any such thing, unless you make the HUGE mistake of handing the survey over to the seller.

The survey belongs to you. It is yours. No one other than you and the surveyor needs to know what is in it. If you wish to show the seller some specific excerpts, in order to justify a renegotiation, that's fine. But you certainly don't share the entire survey with the seller!

As for telling the surveyor ahead of time what you are paying for the boat... I wouldn't. He should come up with an estimated value on his own, not base it on what you have agreed to pay. AFTER he has delivered the survey, if you want to talk to him about why there might be a difference between what you are paying and his estimate, then at that point telling him your price wouldn't hurt.

good info on who the survey belongs to thanks.

I actually spoke to the surveyor today just to take care of logistics. when we were done i told him about the incident. he told me he actually never asks what the purchaser is paying and said to be quite frank not only didn't he care he told me he would rather not know what i paid because being human, he couldn't guarantee that it wouldn't influence his decisions.

interestingly he did mention that a lot of brokers kind of non nonchalantly throw out the price of the boat in conversation hoping he will value it somewhere close.

i don't mean to bash brokers in this post by the way. i actually like the guy i'm dealing with. so no offense to any of you reading this post. i know we are all trying to earn a living.

[Sailorbob8599]

Originally Posted by boatbrain

Well, maybe this is a bit of topic drift but I read all of this and I still don't know how to tell - not even within say 50% - if I am paying the "fair market value" of a boat.

Watching Yachtworld, I see that boats offered at the average asking price for sisterships of the same year and equipment generally do not seem to sell. They just sit on the market.

Boats offered at about 1/2 the asking price of sister boats DO sell - though even then, by no means instantly or certainly.

A few boats at around the average asking price do sell. It's by far the exception rather than the rule.

Obviously, there is always interest in a "bargain" but there is less interest in project boats than ever. A real mess of a project boat - needs practically everything - even with a good hull of fiberglass and 40 to 50 feet long - might not sell at all -even for $10,000.

Overall, the prices of respected cruising boats from say the 70s are about 1/3 what they were ten years ago when I was last looking. But again, to figure out some particular boat which may have maintained more value - tough one - seems like teak decks, which some people did not like ten years back, are REALLY unpopular now .

Anyway, how do you know for sure? My strategy is just to lowball the heck out of everybody - if someone is on the low end of the market but also on the low end of upgrades -maximum of 1/2 the asking price.

No one has punched me yet, some maybe wanted to. But I am still looking.

Interesting comment. How will you feel come the day you want/need to sell your boat and some hard ass cheapskate offers half or less than your asking price? ... that's providing you did not jack the asking price far higher than it was really worth.
Every sailor on this forum knows (or ought to know) the value of his/her boat and the condition of said vessel too. I believe they have a right to realise fair value of their property by fair negotiation. People like you are the reason for depressed market prices.
If you were dealing with me I would tell you that you simply are not in the right income bracket to become a sailor of anything larger than an Optimist dinghy ... and end our dealings right there.