Cruisers Forum
 


Join CruisersForum Today

Reply
 
Thread Tools Rate Thread Display Modes
Old 23-06-2016, 19:10   #16
Registered User
 
Scout 30's Avatar

Join Date: Oct 2014
Location: Florida
Boat: Scout 30
Posts: 2,355
Re: Survey valuation versus typical sale price?

Quote:
Originally Posted by jrbogie View Post
the price that the seller agrees to accept is the value of the boat. i like these easy ones.
I think you've got that backwards. The price the buyer agrees to pay is the value of the boat.
__________________

__________________
Scout 30 is offline   Reply With Quote
Old 23-06-2016, 20:39   #17
Registered User
 
buzzstar's Avatar

Join Date: Apr 2012
Location: ashore in So Calif.
Boat: No more boat (my medical, not the boat's)
Posts: 1,271
Re: Survey valuation versus typical sale price?

Quote:
Originally Posted by Scout 30 View Post
I think you've got that backwards. The price the buyer agrees to pay is the value of the boat.
Do either of you think it might be mutual agreement that is needed, at least to establish a sale price?

I do not want to go too far into the possibilities beyond that, but one example could be a buyer who knows he can resell the same boat on the same day for considerably more.

All detail aside, I recall a definition of value (it may have involved valuation for tax purposes) that went something like: The amount a knowledgeable, willing, and motivated seller would be willing to take to transfer an interest in an asset, and the amount a knowledgeable, willing, and motivated buyer would pay to acquire that interest, or in the absence of an actual transaction or transactions, an estimate or estimates of that amount by a person or persons familiar with the asset and the existing market or markets for such assets.The estimate or estimates may involve a range.

'Nuff said.
__________________

__________________
"Old California"
buzzstar is offline   Reply With Quote
Old 23-06-2016, 22:15   #18
Registered User
 
Scout 30's Avatar

Join Date: Oct 2014
Location: Florida
Boat: Scout 30
Posts: 2,355
Re: Survey valuation versus typical sale price?

Quote:
Originally Posted by buzzstar View Post
Do either of you think it might be mutual agreement that is needed, at least to establish a sale price?

I do not want to go too far into the possibilities beyond that, but one example could be a buyer who knows he can resell the same boat on the same day for considerably more.

All detail aside, I recall a definition of value (it may have involved valuation for tax purposes) that went something like: The amount a knowledgeable, willing, and motivated seller would be willing to take to transfer an interest in an asset, and the amount a knowledgeable, willing, and motivated buyer would pay to acquire that interest, or in the absence of an actual transaction or transactions, an estimate or estimates of that amount by a person or persons familiar with the asset and the existing market or markets for such assets.The estimate or estimates may involve a range.

'Nuff said.
That's basically a description of market value. The seller needs to be knowledgeable in that he needs to be willing to accept what the market will bear. Therefore the market determines the item's value. The buyer only needs to be competitive with the market.
__________________
Scout 30 is offline   Reply With Quote
Old 24-06-2016, 07:48   #19
Senior Cruiser

Cruisers Forum Supporter

Join Date: Aug 2009
Location: between the devil and the deep blue sea
Boat: a sailing boat
Posts: 17,314
Re: Survey valuation versus typical sale price?

Quote:
Originally Posted by Scout 30 View Post
I think you've got that backwards. The price the buyer agrees to pay is the value of the boat.

You both do!

Actually, by the book, it is the spot where the seller's and the buyer's greed curves meet.

https://en.wikipedia.org/wiki/Supply_and_demand

However, note that it is not about the value but rather about the price.

At times, items are mis-priced. We know this when arbitrage opportunity appears. Buy it from John and sell it to Peter immediately. Pocket the difference.

Cheers,
b.
__________________
barnakiel is offline   Reply With Quote
Old 24-06-2016, 08:38   #20
Registered User
 
Scout 30's Avatar

Join Date: Oct 2014
Location: Florida
Boat: Scout 30
Posts: 2,355
Re: Survey valuation versus typical sale price?

Quote:
Originally Posted by barnakiel View Post
You both do!

Actually, by the book, it is the spot where the seller's and the buyer's greed curves meet.

https://en.wikipedia.org/wiki/Supply_and_demand

However, note that it is not about the value but rather about the price.

At times, items are mis-priced. We know this when arbitrage opportunity appears. Buy it from John and sell it to Peter immediately. Pocket the difference.

Cheers,
b.
Price is just a way to quantify value. It is true that no transaction takes place without a meeting of the minds. It's also true that market value is governed by supply versus demand.

With manufacturing the hope is that market demand will generate a value that exceeds the cost to produce the item. If, as in the case of Island Packet, the cost to build exceeds the market value it's tough to stay in business. The seller can set a price base upon cost + profit but it it's more than the market will bear there will be no sale.

However, in this case we're talking about a used boat. Basing the asking price on the depreciated replacement cost would be unreliable because estimating depreciation is unreliable. That means comparable sales are the only reliable way to estimate value other than just putting it on the market & see how much you can get. Of course that's not the same as selling to a friend which is not an arm's length transaction.
__________________
Scout 30 is offline   Reply With Quote
Old 24-06-2016, 10:02   #21
Registered User
 
tomfl's Avatar

Join Date: Apr 2012
Location: Florida
Boat: Seawind 1000xl
Posts: 1,959
Images: 10
Re: Survey valuation versus typical sale price?

Quote:
Originally Posted by hamburking View Post
My personal experience is the survey value is usually at least DOUBLE the actual selling price.
I doubt that is the case in many sales.

One thing to consider is the price point a boat sells at. Once the boat price gets above a certain level many buyers will get insurance for the boat/hull. The insurance company will require a survey to justify the amount the boat is insured for. If someone paid $US100,000 and tried to get insured for $US200,000 I doubt that would fly with the insurance company if that company wanted to stay in business.

On the other hand if a boat sold for $US5,000 and the survey said it was worth $US10,000 it may well be that insurance would not be a consideration.

Another consideration is the NADA (or similar) value for a boat. Several years ago I was looking at Corsair trimarans. They are listed at the NADA site and their price was far lower than any boats I saw advertised. I called my insurance company and discussed this. Turns out the NADA prices are based on how large a loan you can get to buy the boat. The insurance company (also my credit union) also mentioned they would loan more than the NADA value. I did spend about 10 minutes on the phone with the insurer before I finally got to their "boat expert" who seemed to have more than a basic knowledge of what boats really sell for.

The thing is there are at least three classes of boats; production boats like the Corsairs (and many motor boats) that have lots of sales and it is not that hard to set a value, boats with smaller sales numbers where the value is often a function of how well the boat has been maintained, and the super yachts where if you have to ask you can't afford it.
__________________
tomfl is offline   Reply With Quote
Old 24-06-2016, 10:06   #22
Senior Cruiser
 
Cheechako's Avatar

Cruisers Forum Supporter

Join Date: Aug 2006
Location: Skagit City, WA
Posts: 19,369
Re: Survey valuation versus typical sale price?

My impression is surveyors $ value are quite high. maybe they mean replacement value. Check the wording.
__________________
"I spent most of my money on Booze, Broads and Boats. The rest I wasted" - Elmore Leonard











Cheechako is offline   Reply With Quote
Old 24-06-2016, 10:13   #23
Registered User

Join Date: Feb 2014
Location: St Augustine, FL
Boat: 1995 Privilege 51
Posts: 285
Images: 3
Re: Survey valuation versus typical sale price?

Great info, thanks for all the input.

Obviously, between friends it is tough to determine a 'true' value since the product is not on the open market and does not experience normal market forces. We are just trying to determine a 'fair' value. And frankly, I'm trying to see what I could see it for in a year if I had to. Trying to understand just how much under-water that may be. It's also a bit of a tough discussion because they are not leaving the boat willingly (i.e. health issues).

This boat is well equipped and recently re-outfitted. It was ready for a Panama Canal/Pacific crossing. I'm not sure how much that plays in the valuation. I am speaking with the surveyor on Sunday.

Finally, the true value in this particular boat is the experience and knowledge of its current owner, and his willingness to continue to mentor me before and after the transfer of ownership. Unbelievably great people.

~ Following Cs ~
__________________
FollowingCs is offline   Reply With Quote
Old 24-06-2016, 10:56   #24
Registered User
 
Scout 30's Avatar

Join Date: Oct 2014
Location: Florida
Boat: Scout 30
Posts: 2,355
Re: Survey valuation versus typical sale price?

Unless the surveyor has access to a database of closed sales it's most likely he's estimating a depreciated replacement cost. This is something that's very difficult to do accurately & is irrelevant anyway. All you care about is market value. You really need a professional with access to this kind of database & experience in catamaran valuation. Here's one company that specializes in cats that might be able to help: The Catamaran Company - Catamarans For Sale. Caribbean Sailing, Virgin Island Sailing Vacations and Yacht Charters World Wide. Lagoon Catamarans For Charter, Crewed and bareboat charters worldwide, charter operater of lagoon catamarans. VOYAGE charte
__________________
Scout 30 is offline   Reply With Quote
Old 24-06-2016, 11:21   #25
cruiser

Join Date: Oct 2015
Posts: 285
Re: Survey valuation versus typical sale price?

Quote:
Originally Posted by jamhass View Post
When we bought our boat, we had agreed on a price (subject to survey ) before the survey, having considered prices of competing boats. We then negotiated down based on the survey results. Both parties were happy with the results.

+1, and one reason why you want a good surveyor
__________________
AD28 is offline   Reply With Quote
Old 24-06-2016, 12:51   #26
Senior Cruiser

Cruisers Forum Supporter

Join Date: Aug 2009
Location: between the devil and the deep blue sea
Boat: a sailing boat
Posts: 17,314
Re: Survey valuation versus typical sale price?

Quote:
Originally Posted by Scout 30 View Post
Price is just a way to quantify value. It is true that no transaction takes place without a meeting of the minds. It's also true that market value is governed by supply versus demand.

With manufacturing the hope is that market demand will generate a value that exceeds the cost to produce the item. If, as in the case of Island Packet, the cost to build exceeds the market value it's tough to stay in business. The seller can set a price base upon cost + profit but it it's more than the market will bear there will be no sale.

However, in this case we're talking about a used boat. Basing the asking price on the depreciated replacement cost would be unreliable because estimating depreciation is unreliable. That means comparable sales are the only reliable way to estimate value other than just putting it on the market & see how much you can get. Of course that's not the same as selling to a friend which is not an arm's length transaction.
Yes.

This thought of yours: "... It's also true that market value is governed by supply versus demand. ..." caught my attention as it got me re-thinking: a s/h boat market may in fact be somewhat removed from what some economists think when they use the word market. Not that it is not one. Just that it is so far from efficiency that we should (?) not be too quick at expecting the price to reflect the value. The objects are too few, too varied; and the transactions are too rare and the information about the prices agreed is often NOT available to other market participants ... and ... ;-)

A market yes, just a most inefficient one, perhaps.

b.
__________________
barnakiel is offline   Reply With Quote
Old 24-06-2016, 13:10   #27
Registered User
 
Scout 30's Avatar

Join Date: Oct 2014
Location: Florida
Boat: Scout 30
Posts: 2,355
Re: Survey valuation versus typical sale price?

Quote:
Originally Posted by barnakiel View Post
Yes.

This thought of yours: "... It's also true that market value is governed by supply versus demand. ..." caught my attention as it got me re-thinking: a s/h boat market may in fact be somewhat removed from what some economists think when they use the word market. Not that it is not one. Just that it is so far from efficiency that we should (?) not be too quick at expecting the price to reflect the value. The objects are too few, too varied; and the transactions are too rare and the information about the prices agreed is often NOT available to other market participants ... and ... ;-)

A market yes, just a most inefficient one, perhaps.

b.
It is a small market which makes it tough to estimate value but it still has to be done if you're going to buy it. The thing to do is estimate the quality of the boat & then compare it to sales of cats that are as similar in size, quality & condition as can be found. List prices of similar cats can also be useful but mostly to develop the upper limit of value. Called the principle of substitution: if you're interested in boat A & comparable boat B, which is basically the same, is listed at X amount boat A cannot be worth more than X amount.
__________________
Scout 30 is offline   Reply With Quote
Old 24-06-2016, 13:13   #28
Senior Cruiser
 
Cheechako's Avatar

Cruisers Forum Supporter

Join Date: Aug 2006
Location: Skagit City, WA
Posts: 19,369
Re: Survey valuation versus typical sale price?

Let's face it, surveyor evaluations are for insurance. If you want an accurate value look at past sales or broker who has nothing in the game.
__________________
"I spent most of my money on Booze, Broads and Boats. The rest I wasted" - Elmore Leonard











Cheechako is offline   Reply With Quote
Old 25-06-2016, 11:45   #29
Registered User
 
tomfl's Avatar

Join Date: Apr 2012
Location: Florida
Boat: Seawind 1000xl
Posts: 1,959
Images: 10
Re: Survey valuation versus typical sale price?

Quote:
Originally Posted by Cheechako View Post
Let's face it, surveyor evaluations are for insurance. If you want an accurate value look at past sales or broker who has nothing in the game.
A lot of surveys are for insurance purposes. The thing is insurance companies would not stay in business very long if they insured boats for double, or more, what the boat was worth. So insurance companies have a vested interest in insuring boats at a value that is at least in the ball park of the value of the boat.

The thing is lots of folks who are paying lot five figures for a boat don't insure them except for liability if it is required (something required in some places); so the survey value of the boat is moot. On the other hand if a boat cost more than say $US100,000 the owner may well insure the boat as the loss would be a big hit. But if you buy a boat for $US100,000 and try and insure it for $US250,000 the insurance company might well decline.

On the other hand the purpose of a lot of surveys is to get a list of potential problems with the boat the buyer and present to the seller so they can say lower the price based on these problems. Often times the surveyor will greatly inflate the cost of dealing with those problems. Not to mention that it is common for the buyer to somewhat ignore problems they can live with. I know plenty of folks in BKH who buy ice every day and put it in a non working fridge to keep food cold. Same goes for new sails. Many boats never leave the harbor so the running rigging may be a disaster but sails are never raised. How many times have we seen an outboard powering a boat with a non working inboard?

I would bet in most cases a surveyor by talking to the client knows if they want a realistic value for insurance or something else.
__________________
tomfl is offline   Reply With Quote
Old 25-06-2016, 12:21   #30
Registered User
 
Scout 30's Avatar

Join Date: Oct 2014
Location: Florida
Boat: Scout 30
Posts: 2,355
Re: Survey valuation versus typical sale price?

Quote:
Originally Posted by tomfl View Post
A lot of surveys are for insurance purposes. The thing is insurance companies would not stay in business very long if they insured boats for double, or more, what the boat was worth. So insurance companies have a vested interest in insuring boats at a value that is at least in the ball park of the value of the boat.

The thing is lots of folks who are paying lot five figures for a boat don't insure them except for liability if it is required (something required in some places); so the survey value of the boat is moot. On the other hand if a boat cost more than say $US100,000 the owner may well insure the boat as the loss would be a big hit. But if you buy a boat for $US100,000 and try and insure it for $US250,000 the insurance company might well decline.

On the other hand the purpose of a lot of surveys is to get a list of potential problems with the boat the buyer and present to the seller so they can say lower the price based on these problems. Often times the surveyor will greatly inflate the cost of dealing with those problems. Not to mention that it is common for the buyer to somewhat ignore problems they can live with. I know plenty of folks in BKH who buy ice every day and put it in a non working fridge to keep food cold. Same goes for new sails. Many boats never leave the harbor so the running rigging may be a disaster but sails are never raised. How many times have we seen an outboard powering a boat with a non working inboard?

I would bet in most cases a surveyor by talking to the client knows if they want a realistic value for insurance or something else.
The question is are surveyors qualified to estimate market value. I doubt that most surveyors have access to a database tracking closed sales.
__________________

__________________
Scout 30 is offline   Reply With Quote
Reply

Tags
cal, price, sale, survey

Thread Tools
Display Modes Rate This Thread
Rate This Thread:

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
No insurance, no survey - no survey, no insurance cyclepro General Sailing Forum 45 15-08-2016 07:00
Boston Whaler versus Albury versus ??? Magor Powered Boats 3 26-02-2014 12:43
Yacht Valuation Mike Rogers Dollars & Cents 10 04-11-2010 13:02
Valuation of boat for VAT purposes espresso Europe & Mediterranean 5 05-01-2009 10:55
Typical offering price vs. asking price? elf Monohull Sailboats 11 08-08-2007 04:51



Copyright 2002- Social Knowledge, LLC All Rights Reserved.

All times are GMT -7. The time now is 07:40.


Google+
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.
Social Knowledge Networks
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.

ShowCase vBulletin Plugins by Drive Thru Online, Inc.