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Old 04-30-2017, 09:11 AM   #1
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Negotiated Sale Price vs Survey's Est. Fair Market Value

I'd like to hear from folks who have paid for a survey only to find that, while the surveyor rates the boat "above average", the estimated fair market value is below the negotiated selling price. Has your experience been estimated FMV is over, under or right on the price negotiated?

Also, if you bought the boat for more than the surveyor's estimate could you insure the boat for the higher price?

Thanks
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Old 04-30-2017, 09:20 AM   #2
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Greetings,
Mr. cc. Welcome aboard. "Fair market value" based on what? NADA book or the like? I wouldn't go by "book" value. The numbers seem to be arbitrary, at best. Insurers take the surveyors' estimate to be the actual "value" in all cases I know of.
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Old 04-30-2017, 09:36 AM   #3
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Any time a surveyor has attempted to place a value on a boat we have had surveyed, they simply look for sales of like boats. That may be the current market position of a boat but without seeing the other boats, who knows what the real condition of those boats were.
We've successfully lobbied for higher values with the surveyor when they came to our boats as he boats were exceptionally clean. These values were used for insurance values.
All I'm saying is that the number assigned is driven by a particular surveyor and may not be a perfect snapshot of the value as their bias is obviously built in.
An unusual boat might come up a little short for these reasons...
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Old 04-30-2017, 10:21 AM   #4
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It MIGHT be coincidence, but of the five boats I've bought, all valued for the purchase price by the surveyor...
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Old 04-30-2017, 10:33 AM   #5
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My surveyor asked me what I WANTED to value it at. I'm not sure they're the best source for true valuation..
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Old 04-30-2017, 10:48 AM   #6
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How would the surveyor know the sale prices of comparable boat? Is there a service that collates these numbers from public records like a home? Given how many years boat languish without selling all they can go by is the pretend asking price.......

Is there a Zillow for boats? It sure isn't Yachtworld!
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Old 04-30-2017, 11:09 AM   #7
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Originally Posted by Woodland Hills View Post
How would the surveyor know the sale prices of comparable boat? Is there a service that collates these numbers from public records like a home? Given how many years boat languish without selling all they can go by is the pretend asking price.......

Is there a Zillow for boats? It sure isn't Yachtworld!
"Soldboats" but it's a broker only service..
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Old 04-30-2017, 11:12 AM   #8
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Is there a Zillow for boats? It sure isn't Yachtworld!


Actually, it sorta is.

Soldboats.com is the subscription side of yachtworld.com and among other things shows sold prices as reported by the brokers. Most surveyors, brokers and I assume insurance brokers are members, amateurs need not apply.
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Old 04-30-2017, 11:18 AM   #9
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I wonder if the OP is asking two questions:

1) what to do (if anything) when the surveyor's valuation of the boat is less than the negotiated value? If so, do you try to renegotiate the sales price?

2) insuring the boat at purchase price, if higher than surveyed value?

Jim

p.s. seems to me if one is having difficulty in finding the market value of a specific boat, then maybe having a buyers broker would be helpful.
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Old 04-30-2017, 11:43 AM   #10
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Quote:
Originally Posted by Moonfish View Post
It MIGHT be coincidence, but of the five boats I've bought, all valued for the purchase price by the surveyor...
My experience also. In fact, when we sold the boat for less money two years later, the same surveyor repeated a value identical to the contract price we agreed to sell for.

Mighty swami, will you please look into your crystal ball and tell me what the boat is worth?
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Old 04-30-2017, 11:55 AM   #11
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Last year the surveyor valued our boat at $10K Less than what we agreed to pay. He used sold boats. I had my buyers broker also give me data from sold boats. I derived a higher figure, after adding in equipment others didn't have and downgrading for a paint job I knew the boat would require as well as for new batteries and new exhaust elbows. The surveyor left out what for me were significant issues.

For example, the PO left about $$5-$6K in spares and two brand new props. The surveyor added no value for these saying, who knows if you will ever use any of it. I have of course used it plenty, and will, I am sure be going back to the 15-or so tupperware totes for other things. The surveyor also didn't add as much value as I would have for such things as stabilizers (hydraulic and flopper stoppers), extra generator, extra ice maker in flybridge, two ACs in fly, etc. The boat came with a ton of other extra equipment that I thought had value and that I would have had to ad, if it were not there. The broker did not seem to think that it added much to the value.

Lessons learned by me. I was told by the buyer during the handover, that he was going to keep the boat had I tried to stand by the surveyor's price. (Who knows how he would have felt two or three months later.) I suspect (now) that I might have gotten the boat for $10K less had I held fast and decided to wait. (Again, who knows. The PO's broker told my broker that the boat would be listed for $30K less than the listing price if I walked, which I thought was a threat with no teeth.)

In the end, I remembered what a friend and real estate broker told me when we were buying a house in 2000 for a bit more than a quarter mil. I was fussing about $10K and he said $10K in a couple of years will seem like chump change. Who is to say, he said, if the house is really worth what we agreed to pay or $10K more or less. After having lived a few years more I tend to agree.

Now to your other questions. Our insurance company would let us insure the boat for $15K more than the surveyor stated. We were told to keep track of receipts and or get the boat resurveyed after a paint job. BucBoats listed our boat's value, without all the extra gear, at almost twice the price we paid, as did BoatUS, which will also give you an estimated value. Our POs had the boat surveyed for insurance five months before we bought and the value came out at more than $50K more than we paid. So, as you can see, a big range of values from professionals.

Boats are so individual, from equipment to condition and previous care, that assigning values, in my mind, is pretty subjective.

If you have a buyer's broker, he or she ought to be able to provide sold boat data. Sometimes notes about the boat's condition or special conditions of sale are noted. If you get that data, you will also see high prices for boats that were part of a trade in and you will see some lower prices where POs were in a hurry to sell.

Good luck,
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Old 04-30-2017, 12:02 PM   #12
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I'm one of those "weirdos" that would be happy as a clam if the prepurchase survey came in for less than agreed purchase price. Inasmuch as any sane purchase offer is subject to survey I would renegotiate for a lower price.
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Old 04-30-2017, 12:12 PM   #13
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I think Bruce had the best take on this issue. Surveyors (and some do belong to Soldboats) are just people, trying to look at actual sales data for boats that they probably haven't seen and comparing them to a boat they just finished surveying.

A really clean boat with lots of good equipment on it, should be valued more than the average, and if you get a chance you could make that point to the surveyor before he casts that number in stone.

Also the surveyors number vs the agreed price between the buyer and seller can vary negatively in a rising market and positively in a declining market.

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Old 04-30-2017, 01:01 PM   #14
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Any sort of additional "stuff" that can be removed is usually not part of the FMV, as it can be sold off as it is not part of the vessel so to speak. So while it may have value to you, the bank doesn't want to finance it, and the insurance company doesn't want to insure it. Banks and insurance companies are pretty clear on this.

For instance, we left with at least $10k in extras onboard for this trip, the insurance puts the stuff under personal property, not increased hull value.
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Old 05-01-2017, 05:36 AM   #15
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Most surveyors have a hard enough time finding the true condition of the boat.

And they claim to be trained to do that.

How and where are they supposed to get expertise in market values?
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Old 05-01-2017, 05:55 AM   #16
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A boat is only worth what someone is willing to pay for it, and if you have negotiated a price than that is the value to you.

And further to Gordon's comments, a lot extra's may be valuable to one person, but may not have the same value for someone else. I often think unless the extras are nearly brand new they probably don't add a lot of value, but will make it easier to sell. But if they look old and run-down they could also be a liability.
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Old 05-01-2017, 06:00 AM   #17
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Quote:
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Most surveyors have a hard enough time finding the true condition of the boat.

And they claim to be trained to do that.

How and where are they supposed to get expertise in market values?
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Old 05-01-2017, 06:09 AM   #18
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A definition from Wikipedia:
Fair market value (FMV) is an estimate of the market value of a property (asset), based on what a knowledgeable, willing, and unpressured buyer would probably pay to a knowledgeable, willing, and unpressured seller in the market.

So, just an estimate and a deal between two people who both think its ok, for the particular asset. Its not something scientifically or mathematically absolute! Sure, one or both may be using 'similar' assets to reach their decision, but would still have to adjust for specific differences in age or condition.

A marine auctioneer and certified valuer I know was quite blunt when valuing my boat: no-one can value a boat, particularly an older boat, within +/- 20%. He deals with unrealistic vendors all the time - boat won't sell (overpriced or a real PoS) but the auction, and online auction process brings them to reality. They either sell for what the market will pay, or continue to sit until something external forces the issue.

For the OP, add up the extras that are coming with the boat that the surveyor is ignoring - if its more than the difference between purchase price and survey valuation you are clearly in front. Who cares if the insured value is a bit less? If its really out of whack then don't buy or renegotiate. But really, trying to finesse it to something like $10k is not realistically achievable if the boat is over, say, $100k. Re-read post #11 for some comfort if you wish!
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Old 05-01-2017, 06:46 AM   #19
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Quote:
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Most surveyors have a hard enough time finding the true condition of the boat.

And they claim to be trained to do that.

How and where are they supposed to get expertise in market values?
So true FF. My insurance co requires 5 yrly surveys now because of its age. The time before last, after the detailed survey, I asked him what he made the market value at, as the insurance co wanted the survey partly to have that assessed. His response was "I'm a surveyor, not a broker. As it had cost me about $800 I was not amused.

So, 5 yrs later, the next time, I warned the surveyor re the need for a market value as well for the insurance co, so he did a thorough survey, condemned our perfectly good gas cooker as no longer acceptable, as it did not have flame out protection, but when it came to the market value, he clearly just looked up the local boat sales rags and then quoted a value about half what we had her insured for. So that was not a warm fuzzy experience either.
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Old 02-09-2019, 03:58 PM   #20
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Unfortunate value at survey

Made an offer on a trawler with the asking price of 95k, they accepted 65k, surveyed at 37k. Boatus would only insure for surveyed value, had to pass and I loved that boat!
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