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

[er9]

title should have said 'price paying'...

my offer on a sailboat was accepted, i arranged for survey and haulout for next week.

My broker called me later in the day after confirming all this and asked if i would not disclose the amount i'm paying for the boat to the surveyor. he did not demand it just asked if i wouldn't mind. he stated it would allow the surveyor to place a more fair value on the vessel if he didn't know the amount i'm paying.

it sounds good and it makes some sense, the broker seems like a decent guy and i dont feel like he's trying to con me in any way, i like him but it just seems a bit odd to ask.

this is my first boat though and i really have no idea how the industry works. any insight or idea why he might ask such a thing? seems there has got to be more to it than stated.

[zboss]

Ignore him... do what you want and feel is right.

I would add - the insurance company you plan on using will request a copy of the survey upon which the surveyor will place a value on the boat. That is pretty much a big factor in what the insurance company will take into consideration at when determining insurable value.

If the insurable value is less than the price you are paying then if the mortgage company see this then they will ask you to put more money forward and make up the difference (I am assuming you are mortgaging it).

The reality is all these players are sitting their with hands out waiting on your money - they all collaborate to take the money out of your pocket. IMO - unless there is a huge issue, such as a cracked hull, a survey is almost worthless since pretty much everything you see on the boat will need replacing anyhow and you should just assume it if its more than 2 years old.

[er9]

Originally Posted by zboss

Ignore him... do what you want and feel is right.

I would add - the insurance company you plan on using will request a copy of the survey upon which the surveyor will place a value on the boat. That is pretty much a big factor in what the insurance company will take into consideration at when determining insurable value.

If the insurable value is less than the price you are paying then if the mortgage company see this then they will ask you to put more money forward and make up the difference (I am assuming you are mortgaging it).

The reality is all these players are sitting their with hands out waiting on your money - they all collaborate to take the money out of your pocket. IMO - unless there is a huge issue, such as a cracked hull, a survey is almost worthless since pretty much everything you see on the boat will need replacing anyhow and you should just assume it if its more than 2 years old.

no i'm paying cash...not sure if that makes a difference one way or the other. yeah i know he will give an estimated value still trying to figure this one out though.

[svGenesis]

I think it makes the surveyor use his best unbiased judgement which is exactly what you want. If you were getting a loan you want him to establish a higher value or at least the purchase value so there would be more loan value.

[Jim Cate]

It is just possible that the broker reports false prices to Soldboats (I think that is the name) organization, and does not want the surveyor to rat him out. Soldboats is the group that publish actual selling prices to subscribing brokerages, and there have been reports that many of the values are inflated above reality. Dunno why, perhaps trying to inflate selling prices for later transactions.

Sheer speculation, all the above.

Jim

[bobofthenorth]

I wouldn't trust most brokers as far as I could throw them with my good arm in a sling and surveyors even less. I absolutely would not give the broker the sale price. Make him do at least a minimum of actual work to come up with some comparable sales so that you have at least a semblance of an objective price estimate. In our case the broker disclosed the price to the surveyor and - not too surprisingly - his price came in at the purchase price to the penny.

[Sun and Moon]

If you tell the surveyor the price you are paying, that will likely be the value he suggests for the boat. If you don't tell him, he will go on Yachtworld and find out what the asking price for the boat was, and that will likely be the value he suggests. Then when you complain that X,Y and Z need to be fixed or the boat discounted, the seller will say "your surveyor said the boat is worth way more that you are paying, so we're not fixing anything". So it's to the broker's advantage to keep the surveyor in the dark, and it's to your advantage to tell the surveyor everything you know, assuming you trust your surveyor.

[er9]

Originally Posted by svGenesis

I think it makes the surveyor use his best unbiased judgement which is exactly what you want. If you were getting a loan you want him to establish a higher value or at least the purchase value so there would be more loan value.

yeah i agree...if i did disclose it i would politely tell the surveyor i would after the inspection and his estimation. the broker did tell me he (the surveyor) would ask.

the surveyor i chose does do surveys for insurance company claims and seems to have a reputation for telling it like it is. why i chose him as i want to know the whole truth about the boat i'm about to buy.

i may or may not disclose it. we'll see pending a few more opinions. i dont know what it actually matters to the surveyor anyways but i definately dont want to piss him off?

[er9]

Originally Posted by Sun and Moon

If you tell the surveyor the price you are paying, that will likely be the value he suggests for the boat. If you don't tell him, he will go on Yachtworld and find out what the asking price for the boat was, and that will likely be the value he suggests. Then when you complain that X,Y and Z need to be fixed or the boat discounted, the seller will say "your surveyor said the boat is worth way more that you are paying, so we're not fixing anything". So it's to the broker's advantage to keep the surveyor in the dark, and it's to your advantage to tell the surveyor everything you know, assuming you trust your surveyor.

interesting....i absolutely have no problem walking away from this sailboat. i have a pretty decent understanding of sailboats structurally and mechanically and think i have a pretty decent idea of the major issues. i did discount those issues heavily in my offer...unless there is something structural or major beyond my ability to discover i think i'm getting a pretty fair price....but i definitely dont want to handicap myself either...

[WindwardPrinces]

Originally Posted by Jim Cate

It is just possible that the broker reports false prices to Soldboats (I think that is the name) organization, and does not want the surveyor to rat him out. Soldboats is the group that publish actual selling prices to subscribing brokerages, and there have been reports that many of the values are inflated above reality. Dunno why, perhaps trying to inflate selling prices for later transactions.

Sheer speculation, all the above.

Jim

I would guess this. Why else would it matter? As long as the boat is valued at or above the sales price, everyone will be happy.

If you choose not to tell the broker, it would be interesting to check soldboats.com and see what if reported price turns out to be the listed price.

[darylat8750]

It may be some sort of personality issue between the broker and the surveyer. Just out of crankiness I might not tell the broker what the surveyer says it is worth.

[GoingWalkabout]

Originally Posted by Jim Cate

It is just possible that the broker reports false prices to Soldboats (I think that is the name) organization, and does not want the surveyor to rat him out. Soldboats is the group that publish actual selling prices to subscribing brokerages, and there have been reports that many of the values are inflated above reality. Dunno why, perhaps trying to inflate selling prices for later transactions.

Sheer speculation, all the above.

Jim

Jim. Very good point. I wouldn't be digging too deep on this since a lot of people have a stake in keeping prices high. For instance you have a massive pleasure charter business that is built on pro forma resale figures to convince new boat buyers to buy and put these gleaming shinny new boats into their charter programs. And then at the end of 5 years they will have a boat worth x that they can sell into the used market. If the true market sale price at the end of the 5 years is significantly less than the pro forma charter companies figures would not be as attractive in their sales pitch.

Then you have existing regular boat owners who don't want to see the price fall out of their "investment". So they keep silent about the problems and reality of supply and demand in the resale market. Its like everyone has a vested interest in keeping an image of X dollars for a re sale when the reality is that it will only ever get Y dollars.

A good illustration of what could be going on is take a look at the Mercedes sales model. Mercedes through their dealers would do everything to support the resale market of their cars and work on keeping pre owned car sales values high. This was and I think still is part of the new car sales pitch. The prospective new car buyer was told the Mercedes is a great investment, look at how much this model sells for in the second hand market. This would give the new car buyer more confidence in paying that high up front new car price feeling they will get a lot of it back when they go to sell or trade in the car.

In the age of the internet it is a whole lot more difficult for the pre owned market prices to be "fixed' in the car industry. From what I am seeing it is a lot easier to "fix" the pre-owned boat market. Not that I am saying that it is going on but I have serious suspicions.

A fixed, rigged or otherwise less then honest boat market in the end of the day does no one any good. It leads to pre owned boat sellers listing their boat for what could be a totally unrealistic price and having that boat sitting and not selling for months and even years.

An artificial market also has a flow through to new prices. It allows boat builders to get higher prices than they otherwise should get for their product.

For me a free and open competitive market that is based on true supply and demand is the best pricing model for all concerned. And of course competition will sort out the good from the bad. The good will survive and the bad will fall by the way side.

It is my opinion that clarity and reality needs to be instilled into the boating industry. In particular truth about the real price of preowned boats would be a good starting point. Dishonest game playing at the end of the day does no one any good.

I didn't mean to write so much and I could be way off track about the boat industry. But then again I my instincts are telling me that Im not.

Perhaps we should talk with Zillow and see if they would be interested in entering the boating space. That would sure shake things up.

[faa50]

In response to the post regarding brokers reporting falsified sold prices to Soldboat (which is owned by Yachtworld and thus creates a conflict of interest).

Less than a year ago, I was shopping to purchase an Island Packet 485. At the time I was shopping, prices on these boats were dropping significantly and new low sold prices were being established.

I was speaking to several large brokerage firms on the East coast and were being offered these boats by brokers for sometimes more than 10% off listing price. A large brokerage had offered me a particular IP 485 at an unadvertised price, never before sold price, however when I learned who the listing broker was I decided to pass on the offer.

A couple months later I was speaking with another broker at this same firm and he shared how the boat in question had actually sold for a lower price than shown in Soldboat because the owner's of the brokerage wanted to keep Island Packet boat prices up.

I notified Yachtworld of the fraud but never heard back. I've been told when Yachtworld finds a broker falsifying sold prices, they do not allow them to advertise on Yachtworld. Really? Seems a huge conflict of interest to me expecting them to "police" themselves.

I shared this information with another prominent Island Packet dealer hoping he would do the right thing and report the brokerage. Unfortunately, the Island Packet dealer did not report the false price.

As consumers in an unregulated industry it is increasing difficult knowing who to trust and what data is accurate.

[WindwardPrinces]

Originally Posted by faa50

As consumers in an unregulated industry it is increasing difficult knowing who to trust and what data is accurate.

There isn't a publicly-disclosed price, and I'm not sure how trustworthy soldboats.com is. It's in the broker's interest to report the highest price possible, and who checks the prices for validity? Nobody.

For soldboats.com to really be valid, they should doublecheck their prices with the person who sold the boat. If it doesn't match the broker-reported price, it should be thrown out.

[admiralslater]

my surveyor asked me what I paid for the boat ,but only after he delivered the completed survey,and the broker said nothing either way about talking to him. this might be a mountain/molehill senario