Market Value vs selling value

[flightlead404]

I would personally ignore, for the purposes of buying/selling, any value the surveyor puts the on report. You should have negotiated a price at that point, based on the purported condition of the vessel. The survey is to make sure the condition of the vessel is what it is being presented as, and there aren't hidden issues.

[boatman61]

Selling Value is what the owner thinks and really believes his boat is worth..
Market Value is the meeting point where a buyer's offer is as high as he can/will go.. but close enough for it to be the decider for the seller to swallow possibly imagined loss and accept..
Boats are complicated by emotions, wierd as that sounds... they kinda get under the skin and that has an effect on things, heart before head.

[Shrew]

The suggested value by the surveyor is really for the bank and the insurance company.

If you buy it for a $100K and the survey comes in at $75K, your bank and insurance company are going to be less willing to agree to the higher value.

Usually the surveyor asks the sell price and attempts to justify the sell price so as not to screw the buyer, who after all, is the person that hired the surveyor.

[Oohla]

FWIW I have a Sabre 42 CB from 1987 and I think it's a great boat. OK for offshore. I single hand and it's OK for that. I had a good surveyor and a good buying broker. Aside from an absence of obvious problems that any competent surveyor would find I would pay special attention to the age of the rig, the age of the sails, and most importantly the condition of the Westerbeke W46 that usually came with this boat. If the exhaust is not clear then a compression test by a diesel mechanic would cost about $400 but give you a sense of life expectancy. And if you do buy the Sabre you should know that the engine is a marinized Mitsubishi 4DQ5.

[boatpoker]

Originally Posted by Shrew

The suggested value by the surveyor is really for the bank and the insurance company.

If you buy it for a $100K and the survey comes in at $75K, your bank and insurance company are going to be less willing to agree to the higher value.

Usually the surveyor asks the sell price and attempts to justify the sell price so as not to screw the buyer, who after all, is the person that hired the surveyor.

I always specifically ask brokers and clients NOT to tell me the agreed sale price so I am not influenced by anything other than Fair Market Value

I have to admit it is not my favourite part of the job. I am currently dealing with a client that wants my $200k valuation upped to $250k because three of the same model are currently listed at $250k. There are no records of this vessel ever selling for more than $200k. He is not pleased that I refuse to up the value.

Check out this old article I wrote on Boat Valuations ... a crap shoot.

[Shrew]

Originally Posted by Oohla

FWIW I have a Sabre 42 CB from 1987 and I think it's a great boat. OK for offshore. I single hand and it's OK for that. I had a good surveyor and a good buying broker. Aside from an absence of obvious problems that any competent surveyor would find I would pay special attention to the age of the rig, the age of the sails, and most importantly the condition of the Westerbeke W46 that usually came with this boat. If the exhaust is not clear then a compression test by a diesel mechanic would cost about $400 but give you a sense of life expectancy. And if you do buy the Sabre you should know that the engine is a marinized Mitsubishi 4DQ5.

?? this looks like it might be posted in the wrong thread.

[maijipo]

I don't think so. I mentioned a Sabre in my shortlist above.

Concerning the price, the surveyor asked me.

I want to thank you all for brainstorming about the market price. I think I understand the use I can do with it.

Concerning the post mentioning insurance, that is exactly my concern.

Also yes the market was crazy. It seems in the last month that they are more boats available at a better price. The one we survey was listed at 150k then 130k then I reached an agreement at 100K, But since then other suitable boats came out with a better-listed price. That is why I am taking my time and eventually ready to lose my 2000$ survey investment if I can find another one we like at a better price. Concerning the survey, if the overall condition is above average, some moisture and delamination have been found around the companionway. Since these areas don't support anything the surveyor didn't list them as critical. What worries me is that in my 2 other boats older and cheaper (Tartan 33 from 1980 and IP 32 from 1990) I never had such issue. Is it related to the quality of the build? Just bad luck? All these are red signal lighting up in my head

[Stewie12]

Never a truer word was said,

So it really boils down to what you are able to negotiate with hopefully a motivated seller and what you are willing to pay.

[valhalla360]

Originally Posted by maijipo

After the survey should you buy about over his market value set by the expert?

I am a bit confused by the concept.

First the survey state that the typical value asked is between 125k and 150k for this type of vessel but then the market value is set to 90K. The survey didn't find any big issue and everything is above average. I signed for 100K.

I am interested to understand the role of the market value and if a buyer should even consider paying more than that value.

Thx you.

Normally, the survey is completed after an offer is made.

Assuming there is a loan, the bank will require the market value to exceed the loan, so if they have to repossess the boat, they can sell it for enough to cover the loan (or some percentage they determine is acceptable.). Also, your insurance will typically cap out at the market value.

Usually market values are inflated. It's wrong but the surveyor usually doesn't want to be the one who killed the deal and values on boats are very difficult to pin down. As long as it isn't wildly off, the bank knows the game that is being played.

If it's a cash deal, you can certainly pay more but unless there was something really special (ie: sentimental like it was your grandpa's boat from 50yrs ago) it rarely makes sense to pay more than market value.

[boatpoker]

Originally Posted by valhalla360

Usually market values are inflated. It's wrong but the surveyor usually doesn't want to be the one who killed the deal and values on boats are very difficult to pin down. As long as it isn't wildly off, the bank knows the game that is being played.

There are some surveyors like that but the ones that I know, respect and recommend don't play that game. We strive to come up with as accurate a "Fair Market Value" as possible and refuse to be influenced by brokers, buyers and/or sellers

[CommodoreDoug]

I can't confirm, but just an FYI- I've heard from a professional who worked on the Diva that he believes at some point the boat had been completely submerged. Inexplicable electrical problems led him to this conclusion. Curious what the survey may have revealed.

[bstreep]

1) There is a subscription mirror site to Yachtworld that has the sold boat database in it. That is what surveyors use (or should use) as one tool for their opinion of value. Asking prices are a lousy piece of data.

2) As I said before, one MUST have a definition of that value: There are lots and lots of definitions out there. People are shocked when I point to a real estate appraisal (I'm an appraiser) where the definition of value (as defined by FNMA) isn't what THEY or their real estate agent thinks it is! As I've also said before, most insurance policies in the US are Actual Cash Value, and that is defined by the jurisdiction in which the boat resides. It also might not be what you think it is!
3) If you get an ACV policy, and your boat is destroyed or heavily damaged... YOU will be required to prove that your boat was worth what it was insured for. Crazy as it might seem, just because your boat is insured for $500K doesn't mean they will pay you $500K for it. Ask me how I know...

[maijipo]

Originally Posted by CommodoreDoug

I can't confirm, but just an FYI- I've heard from a professional who worked on the Diva that he believes at some point the boat had been completely submerged. Inexplicable electrical problems led him to this conclusion. Curious about what the survey may have revealed.

Nothing like that. IT is true that the owner had a leak in the water tank and water has done some very minor damages on the floor between the owner's cabin and the galley. The damage is very minor. No electrical issue was found. All instruments, lights, heater, etc..were working correctly.

[MicHughV]

Fair market value ?? It boils down to this...what the seller is willing to accept..what the buyer is willing to pay...in that particular year...for that particular boat.

For instance...if the seller is " underwater"....ie, his mortgage payments exceed what the boat is valued at....he'll be a motivated seller..
If monthly slips fees and insurance are mounting up after the boat has sat for a year...he'll be a motivated seller..
etc...etc....
I can go and one over the myriad of things that can or will drive a boat price up or down.

Before even tendering an offer price, there is a lot to consider and requires a fair amount of due diligence.

[Island Time O25]

If the boat spoke to your heart and came up with a good survey, overpaying a bit (say 10%) over the FMV is not a big deal as you will long forget that overpaid amount but will be enjoying the boat for years to come. Rather than the other way around where you will be forever slapping yourself silly for a boat you let to have gotten away. We only get to go around once so don't let that 10% keep you from being happy. At least until you sell.