Valuing an older catamaran

[cwjohm]

I think I have a good handle on the valuation of catamarans up to 7-10 years old, but how would you go about valuing a catamaran that is 20+ years old, been well looked after, has new standing rigging, sails, motors and the glass has been two-packed i.e. the boat presents almost as a new boat.

To be clear, I am not asking how one would go about verifying the quality and sailing capacity of the boat as this is relatively straightforward (for me anyway) but rather how do I put a valuation on such a vessel given that quality and sailing capacity checks all of the boxes.

Especially interested in those who have purchased cats of this vintage. How did you arrive at your valuation / purchase price.

[boatman61]

Usually the seller places his value on a boat.. the buyer then comes along and looks at the boat.. compares it to others of similar age and if in better order places a price on it relative to what he has in his pocket..
After that its down to where two folks can be mutually happy.
A buyer has no choice in a boats value.. beyond his ability to pay.

[44'cruisingcat]

Originally Posted by boatman61

A buyer has no choice in a boats value.. beyond his ability to pay.

I disagree. The seller sets an asking price, but it's the buyer(s) who decide(s) how much the boat will actually sell for.

As a buyer you have to decide what is worth more to you, age or condition.

IMO an older boat in excellent condition is worth more than a newer boat that has been neglected. A newer boat well looked after is worth more again.

[cwjohm]

I agree with 44. Having sold several cats and being involved with many more the seller sets a price usually unrealistically and then relies on the buyers to provided feedback as to the market price, which he/she accepts over time. Some sellers take years to accept the market.

I also agree that you can use other sales as a benchmark. In this case however, the boat is not a production boat and there are not a lot of valid comparisons other than length and type. In addition I suspect the sellers are just as confused as to the correct valuation.

[rallyman1122]

Originally Posted by 44'cruisingcat

IMO an older boat in excellent condition is worth more than a newer boat that has been neglected. A newer boat well looked after is worth more again.

I agree with 44 on this point (and many others). The value of any boat, be it a mono, a cat or a tri, is in the the love and care bestowed upon it. A poorly maintained boat, brought back to a reasonable condition, will bring nasty surprises into your life much more often than a well maintained boat.

[Factor]

A surveyor can undertake a valuation, usually primarily for insurance purposes. A competent broker, particularly when it comes to older custom boats can do the same, but there are many brokers who wouldn't know a Kelsall from a Crowther, so it depends on the design to an extent.

[cwjohm]

Andrew

I have found surveyors valuations to be questionable. I find it puzzling that insurance companies actually give credence to these valuations but I suppose they have to hang their hat on something.

As far as brokers are concerned you are correct that there is a lot of variance in boat knowledge. The problem is that I can talk to various brokers and valuations can differ by hundreds of thousands of dollars, depending on their bias.

As I guess you would know as much as anybody the traditional process of seller dropping price waiting three months, dropping price, waiting three months and so on, is somewhat inefficient. In the case of production boats, even low volume production boats like Outremer, you can make a reasonable stab at valuation based on like sales and reasonable depreciation rates for that type of boat. Non production boats are however, a lot harder to value. Older, non production boats are extremely difficult to value.

What I was hoping for was an example of an older non production boat that someone purchased and some ideas as to their strategies for valuing said boat.

[Factor]

Originally Posted by cwjohm

As far as brokers are concerned you are correct that there is a lot of variance in boat knowledge. The problem is that I can talk to various brokers and valuations can differ by hundreds of thousands of dollars, depending on their bias.

Production Boats -particularly those that sell in reasonable volume in a particular market are pretty easy, I think I could estimate the price of a 1998 SW1000 to within $10,000 of its final sell nine times out of ten.

As I guess you would know as much as anybody the traditional process of seller dropping price waiting three months, dropping price, waiting three months and so on, is somewhat inefficient.

Absolutely agree, its why my recommendation is to hit the market with a fair price and stay solid, the boat will sell quicker and the final sell price will be closer to the ask. Sadly whilst some owners understand this many don't and many owners simply want to start high and hope. I track the list/sell price and time on market of boats over many many years. There is a direct correlation between % drop in price and time on market.

Non production boats are however, a lot harder to value. Older, non production boats are extremely difficult to value.

Agree, but a knowledgable person can get you there, the issue with older non production boats is that the market for them is much smaller. So finding a knowledgeable buyer is harder and increasingly so.

What I was hoping for was an example of an older non production boat that someone purchased and some ideas as to their strategies for valuing said boat.

a ten year old Arber recently sold for within 2% of its asking price and within 3 weeks. Sensible seller, broker who knew an Arber from a tree doctor and a knowledgable buyer, of course some are easier eg Pescott Whithavens are always in demand and fairly easy to sell and value.

[boatman61]

Originally Posted by 44'cruisingcat

I disagree. The seller sets an asking price, but it's the buyer(s) who decide(s) how much the boat will actually sell for.

As a buyer you have to decide what is worth more to you, age or condition.

IMO an older boat in excellent condition is worth more than a newer boat that has been neglected. A newer boat well looked after is worth more again.

No.. its the seller who decides.. all a buyer does is make an offer then waits and see's if he is told to take a hike.

[44'cruisingcat]

Originally Posted by boatman61

No.. its the seller who decides.. all a buyer does is make an offer then waits and see's if he is told to take a hike.

When the buyer makes an offer, it's him who is setting the actual price.

The seller can decide whether or not a sale takes place.

If the seller doesn't accept a buyers offer, there's no sale.

Of course both parties have to agree, but for a sale to take place the seller has to agree to a buyers offer.

[44'cruisingcat]

Originally Posted by Factor

a ten year old Arber recently sold for within 2% of its asking price and within 3 weeks. Sensible seller, broker who knew an Arber from a tree doctor and a knowledgable buyer, of course some are easier eg Pescott Whithavens are always in demand and fairly easy to sell and value.

Have to say, we were surprised by how low the asking price was. We thought they could have gone for a fair bit more. Certainly no surprise it sold fast and with little haggling.

[boatman61]

Originally Posted by 44'cruisingcat

When the buyer makes an offer, it's him who is setting the actual price.

The seller can decide whether or not a sale takes place.

If the seller doesn't accept a buyers offer, there's no sale.

Of course both parties have to agree, but for a sale to take place the seller has to agree to a buyers offer.

An intelligent seller will price his boat above what he really would accept..
I know I do be it boats, bikes or cars.. that then gives me haggle room to work in.. and on occasion I get a pleasant surprise bonus..

[Four Coconuts]

I think a contributing factor would be financing- I don’t believe you can get financing for a cat over 15 years old- not from any of the mainstream companies. This immediately decreases the pool of buyers, so I would say if you attempt to use a straight line depreciation method there would have to be cliff at the sixteenth year.

[cwjohm]

Agreed that the Arber was pitched at a good price. Not my cup of tea but good value nonetheless.

If one compares equivalent spec production boats this price was around 30% of new price including duty and taxes, and about 50% of the equivalent category boat of around 3-5 years.

I do not think there is much depreciation from 10-20 year old, so would it be reasonable to put a valuation of say 25% of new equivalent boat price, or say 45% of equivalent second hand sales 3-5 year old, or is this too simplistic.

[44'cruisingcat]

Originally Posted by boatman61

An intelligent seller will price his boat above what he really would accept..
I know I do be it boats, bikes or cars.. that then gives me haggle room to work in.. and on occasion I get a pleasant surprise bonus..

Sure, that's normal and expected.

But the point is, the seller can stick whatever price he wants on a boat, but only the market (buyers) will decide what it's actually worth.