Boat Prices vs. Book Value

[Budds Outlet]

I am curious as to why a number of different boats in the 40 foot range are listed on Yachtworld for $100,000 to $130,000 when they "booked" in NADA at roughly half that at $50,000 to $60,000.

NADA books my boat at about what I think it would sell for while Yachtworld listings for my boat are typically twice or more than what I'd expect to be able to get out of the boat.

Are the Yachtwold brokers trolling for suckers or is NADA completely uninformed?

[ksanders]

The price a boat sells for is determined by how much a ready willing and able buyer will pay for the boat; and what a seller is able to sell the boat for.

The asking prices on yacht world are a little higher than what a seller hopes to sell the boat for.

The sellers asking price is often influenced by what is owed on the boat. Low down payment long term boat financing, securing an asset that is going down in value, is a recipe for an upside down seller that cannot sell his boat for what a buyer is willing to pay.

Try this sometime...

On a late model boat, take the price of the boat new minus 10% for a down payment. Get out your loan calculator and figure out based on the age of the boat what you'd owe on it today.

Now compare that number with the average yachtworld asking price.

Bet they're in the same ballpark.

The best deals out there are often when a seller can sell the boat for whatever he wants because he owns the boat free and clear, and he actually wants to or has to sell the boat in a short time period.

Repos come to mind but they are risky. Estate sales. Owners getting to old to boat. These are all good selers from a buyers standpoint.

[Marin]

Boats sell for whatever the market will bear. This can sometimes have no relation to what they are worth from a totally objective viewpoint. And since boats are not only a "toy," they also represent an image, life style, or whatever romantic reason a buyer has for buying a boat, it's very hard to apply any sort of "what it's worth" formula to the price a person is willing to pay.

Sometimes they'll pay as much for the hoped for experience as they are for the boat itself. Or more. Witness the dreamers who pay thousands of dollars for something a totally objective person would cut up for firewood.

I suspect the NADA people are trying to apply an objective formula to calculate the value. I suspect the Yachtworld listings contain the "dream" value they have learned that potential buyers will be willing to pay for.

That's my take on it, anyway.

PS- Or not. I just read KSanders post above and what he says makes sense, too.

[FF]

I am curious as to why a number of different boats in the 40 foot range are listed on Yachtworld for $100,000 to $130,000 when they "booked" in NADA at roughly half that at $50,000 to $60,000.

Some folks think it is still 2006 and dream of bygone days.

As brokers get a chunk of the pie , they will list whatever an owner wants, hope springs eternal.

With enough QE , in a few years they might see their price , but gas will be $15 a gallon too.

[Woodsong]

Asking prices don't always reflect reality. As well, NADA and other valuation services rarely hit the mark, in my opinion, when it comes to larger boats, especially larger and older boats. I MUCH prefer to go off actual sold boat data and real world comps. More accurate and definitely more helpful. Most times I don't even bother to look up NADA values. So I think the situation is 2 fold...sellers that are out to lunch on what today's real FMV is, and NADA not doing a good job quantifying the unique options and scenarios associated with larger boats. Actually, it is probably a 3 fold situation with the 3rd issue being brokers who accept ridiculous listings. I've learned such out of touch with reality listings are a total waste of time for all parties and never lead to good things.

[Blue Heron]

Determine what your ball park is and STICK to it. Plenty of boats out there.

[angus99]

Originally Posted by Woodsong

I MUCH prefer to go off actual sold boat data and real world comps. More accurate and definitely more helpful. Most times I don't even bother to look up NADA values.

For those of us not in the business, is there a way to find FMV or real-world comps?

[Budds Outlet]

Originally Posted by angus99

For those of us not in the business, is there a way to find FMV or real-world comps?

That's my question also. I was under the impression that NADA was real world comps but either that is not the case or there are some real sky high listings on Yachtworld.

Part of my concern is that if I finance a portion of the purchase my credit union will be looking at NADA value and finance based on that. It could substantially impact the interest rate I would be quoted. If I put down 50% based on Yachtwold listing price but the NADA indicates only half of the Yachtworld price as the NADA value, my credit union will consider this a 100% loan to value and jack up the interest rate.

The alternative is to base my offers on the NADA price and risk insulting the broker and/or seller. What do folks see as the risk to that?

[CPseudonym]

Originally Posted by Budds Outlet

Part of my concern is that if I finance a portion of the purchase my credit union will be looking at NADA value and finance based on that. It could substantially impact the interest rate I would be quoted. If I put down 50% based on Yachtwold listing price but the NADA indicates only half of the Yachtworld price as the NADA value, my credit union will consider this a 100% loan to value and jack up the interest rate.

Apples and oranges but I have used Kelly Blue Book to purchase late model vehicles from private parties selling cars they where upside down in.

Example: Guy had a pickup for sale at $14,900(loan payoff amount). I called my credit union and asked what the maximum they would finance? They quoted me $9,600 max. Took this information to the seller and he realized he could not realistically expect a higher sale price. He accepted my $9,600 cash offer. Closed the deal in his bank and we where both happy, and he learned a valuable lesson about financing vehicles without a substantial down payment.

[Pineapple Girl]

Try looking at BUC value. I think you can get a couple of BUC values free and they have a subscription if you want more... Supposedly that is more accurate than NADA on older boats and is what marine lenders tend to look at. Not sure if you could get your CU to look at that instead of NADA? Or try a marine lender like Suntrust Bank. I'm going off what I was told by a boat loan broker, Trident funding, regarding NADA vs BUC. Maybe someone like Tony could explain what BUC is and why it is (if it is) more realistic.

[yachtbrokerguy]

I do not buy any of the "BOOK VALUE" guides, they are not accurate enough to use except for boats under 25 feet less than 5 years old. As a broker I look at a professional version of Yachtworld and I can see the original listing date and price and the date of the most recent price reduction. There are many boats on Yachtworld that have been on the site for years at an unrealistic price.

One way to get some closer estimates of value is to ask some of the brokers that use this forum, we have access to another part of yachtworld which is soldboats.com. Send a pm and I will do some quick research. However it will only be an estimate without seeing the actual boat.

[DavidM]

Having spent about a year as a boat broker several years ago, this is what I learned about Yachtworld, NADA, KBB and BUC prices:

The Yachtworld Soldboats feature, only available to brokers, is the only source of real world (almost) sales prices. The others are mostly BS and use a formula based on new prices and age.

Any broker should be happy (particularly on a weekday) to look up the Soldboats data for a boat that you are interested in. If he won't, call another broker, there are plenty.

Sometimes new boat dealers pad the prices of that model when they sell it used. If you do some research and see who the dealers are of the boat you are interested in, you can avoid their price fudging. Only compare prices from an age range close to what you are looking for and boats that have sold during the last 12 mo. The older the boat, the more maintenance and condition plays than actual age. The market has dropped dramatically over the last 4-5 years and looking at a 2-3 year old sales price is worthless.

In general Yachtwold listings sell for 5-15% less than asking. That doesn't mean you can't find a guy who listed it for the moon and finally got real and accepted an offer 35% lower. But usually that guy drops his price along the way and finally sells it in the 5-15% range.

Yes, if you go to a bank, credit union, etc yourself, they will only allow 80% of NADA, BUC or KBB. But don't do that. Work with a yacht financing broker. Your yacht broker will advise you who. They have deals with some of the national or regional banks who understand boats, loan values and risks. And they are almost always cheaper as your local bank really doesn't want to lend on a boat.

But at the end of the day, what a boat sells for is what it sells for.

David

[mahal]

Just like in real estate, it doesn't cost the buyer anything to be represented by a broker. Mine was very valuable to me.

[Woodsong]

As also said by yachtbrokerguy, the "book" values on larger boats are useless. Ski boats, small boats- ok they are good for that. Most marine lenders will go off the condition and valuation survey more than book value. Larger and older boats have too many complex and unique systems that the book valuation services can't capture. I don't use BUC or NADA so can't really get into the nuances between the two.
There is no service available to the general public to accurately value larger and/or older boats. Access to the sold boats data side of yachtworld as a broker is by far the best method out there and yes, most brokers will take a moment to pull data for buyers . I am pretty sure any of the brokers here on TF, myself included, are happy to do that as it only takes a few clicks of the mouse to make it happen.

[angus99]

Thanks to all who had anything to do with this thread.

[yachtbrokerguy]

[QUOTE=
Are the Yachtwold brokers trolling for suckers or is NADA completely uninformed?[/QUOTE]
The original poster asked a good question ,yes NADA is uninformed due to statistical formulas rather than real world data, and brokers are not trolling for suckers.
When most brokers take a written listing agreement from an owner, the seller writes in the asking price in the agreement. The broker tells the seller his estimate of value but often will take an overpriced listing with the hope that the seller will become realistic within a few months, same as with real estate brokers. Sometimes they do not get realistic.
If a broker is trolling for suckers he will not last long in the business. Years ago before we had so much information on the internet, buyers did not have the knowledge available. Now many of my clients will have better knowledge of a particular boat model than I have as they have been researching that model. Brokers get boats sold by using their knowledge and experience guiding buyers through the process of decision making, negotiating, and getting the paperwork done correctly.
Rather than trolling for suckers a good buyers broker will be working in the buyers interest to get a good deal for his client. Repeat business and referrals is the way to sucess for yacht brokers, accountants, contractors, and thousands of other professions.

[Budds Outlet]

I do want to be clear that I am not questioning the integrety of yacht brokers. My choice of words may not have been the best. Having spent over 35 years brokering, buying and selling real property I can tend to express my thoughts using slang that is not always appropriate or well received outside my circle of associates.

What I am trying to gain is an understanding of how asking prices on Yachtworld relate to actual sale prices. Because my state publicly records the sale price of all real property transactions it is fairly easy to see how the market is shopping different types of property. I am not seeming to find that type of information on boat sales.

Yacht broker input is what I'm seeking and I sure hope I didn't offend anyone.

[refugio]

Originally Posted by yachtbrokerguy

...but often will take an overpriced listing with the hope that the seller will become realistic within a few months...

Or years:
Wolfe Marine Sales, Inc. (Seattle, WA)&

[Woodsong]

Budds Outlet- no offense taken by me whatsoever! Sadly, it seems a distrust of the brokerage industry is often well deserved. However, finding an ethical, honest, and professional yacht broker is truly a great find. I've not personally met yachtbrokerguy myself yet but he (based on what I've gleaned online) and others in our industry are dedicated to professionalism and treating others right. Not all of them are- some are 10,000 times worse than used car salesmen, but there are great yacht brokers out there to be found and are value added components to the buying and selling process.

BTW, refugio, the link you posted- that boat has been on yachtworld since October 2010. It is very handy being a broker to be able to see that fact while the general public just looks at it and realizes it is severely overpriced. Us brokers know not only it is over priced but we also know how long it has been advertising it's "overpricedness."

[honeybadger]

[QUOTE=Budds Outlet;99108]I am curious as to why a number of different boats in the 40 foot range are listed on Yachtworld for $100,000 to $130,000 when they "booked" in NADA at roughly half that at $50,000 to $60,000.

NADA books my boat at about what I think it would sell for while Yachtworld listings for my boat are typically twice or more than what I'd expect to be able to get out of the boat.

My local boat yard had a trawler i was looking at , Called the broker to show the boat all these claims of new power and all, The " New engine" looking like a replacement that they didnt clean before install, Then was informed that none of the gauges were hooked up or working,The Fly bridge was built from aluminum and had what i would call enough damage to replace it or remove it, Interior wood work was in need of refinishing it was dated and the galley was in need of a up grade, Single diesel, generator looked like it was used as a boat anchor, out side looked great new paint and bottom paint, No bow thruster no up grades, the broker tells me the owner is ready to sell, $59,000 i laughed then ask really he said once its all put together its well worth $70,000 i said well i see a boat with loads of work question the engine and generator and wiring when he wants to take $30,000 let me know. Broker was well i dont see that happening ? it may have sold for that 5 years ago in that condition but not today where is the reality ? same as my house its about $50,000 less than the value was 5 years ago do the boat brokers think boats do not apply ?