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Old 11-03-2010, 09:21 AM   #1
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I recall that a few years ago, when looking to buy a house, after a few months of watching the market I had enough knowledge to have a pretty good guess at what a house would sell for at auction. That was enough time to develop the confidence to bid for myself.

Yachts, I'm discovering, are a whole different kettle of fish.

I've been researching the used boat market for many months now, trying to develop a deeper appreciation of why one boat is worth more than the next – and I'm still frequently perplexed.

Now it's true this is all desktop research and I don't necessarily know the final selling price (just the advertised price) but I'm still amazed that two boats that seem nearly identical in terms model, year of manufacture, fittings etc, can have widely divergent asking prices.

Until I get better at valuation I'm quite hesitant to become a serious bidder. Do others find this as perplexing as I do and does anybody have any advice about learning all this? Are there any rules of thumb to know or are there any good articles, books about valuation. I'd appreciate any advice..

By the way, if it relevant I'm looking for a cruising yacht, around the 40ft mark.

Cheers, Mike
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Old 11-03-2010, 11:03 AM   #2
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Mike,

A very good series of questions !!

The boats :-

"2 x identical 40ft cruising sailboats built in the same yard, sold on the same day. Equipped with identical sails, engine etc. Both come on the market on the same day 9 years later in the same town. Both are in similar condition. One is offered at $149,000 - the other is offered at

$120,000."

Here's a stab at answering :- First,the reason for the difference in asking price may have nothing to do with the boat or its age and condition. The difference may have been arrived at by the present owners whose own financial needs are the determining factor, The owner asking for $120,000 may need money in a hurry, while the owner asking the higher price may have no financial need but is no longer interested in keeping the boat and therefore willing to wait.

A website like Yachtworld is probably a good place to research what is on the market, where and at what asking price.

Where a cruising boat is located may also have a bearing on the asking price.

Another factor is whether tax has been paid - 2 identical boats - one in Florida and one in the BVI (only the Florida boat - tax paid)

Whatever, the best bet is probably to determine where you want to keep the boat or where you would like to go cruising from -- then research the type of boats that would easily fit into your budget - start by looking at the boats that are in the higher priced bracket - working your way down to apparent bargains.

In the end it may pay to consult a BUYERS broker.
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Old 11-03-2010, 12:44 PM   #3
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Some boats are "rode hard, put away wet". Pictures won't tell you the whole story, and sometimes the defects, flaws, and damage are not easily noticed. And the newer you are to boating, the less educated is your eye for value in a boat.

For that matter, a well-shown boat isn't going to show its damage or defects as glaring problems - our eyes catch the nice things first, whether it's a house or a car or a boat. For houses, a Cable TV show like "Designed to sell" shows how a poorly shown house can become a hot item (I know, not in the current market, but I have faith that things will change again one of these days.)

Many years ago a Frenchman neighbor in St. Martin bought a Boston Whaler sailing catamaran. We hadn't known that Boston Whaler even made sailing cats so I looked it over very carefully. Since it was kept on the beach behind our building, I saw it every day, yet it took more than a week for me to notice that there was a significant defect in its construction - one of the fittings for a shroud on one of the pontoons was placed incorrectly - the boat was not symmetrical. Once I figured out why it didn't look right, that's all my eye saw, yet it took some time for me to figure it out, and its owner had not seen this problem when he bought the boat.

In the US, tax is not a factor in the price of the boat, since where you will be keeping and using the boat will determine if, and how much, sales tax you will have to pay. It would be a factor if the boat were an EU boat, though I can't offer any advice there.

Sometimes location of the boat is a significant issue. When we still lived in Boston, a boat broker friend of ours said that she got a lot of California sailors coming to New England to buy a new boat, because the boats were in much better condition, had been used so much less for their age. In CA, boats were in the water and used 12 months a year. In New England, maybe 5 months, usually less, then they were hauled out of the water for winter. I'm told that boats in Alaska don't show the corrosion and wear that a boat in Florida or the Caribbean will show. Even stainless steel will corrode, but not so visibly in fresh water lakes and places where the salt water isn't as salty, as in Alaska during sailing season.

Another factor in asking price is often the electronics on the boat. If you aren't planning on crossing oceans in the next year or two, I'd consider most electronics as having zero value to you. Two or three years down the road you will start looking for new gear anyway, and electronics changes significantly every year.

Color of a boat - dark colors fade, sometimes significantly, which doesn't show up in photos of the boat.

Probably a good idea is to not go too far afield in looking at boats until you have a strong like for a particular model boat, then shopping for the best value can be done efficiently.

Good luck.
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Old 11-03-2010, 08:51 PM   #4
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There is very little which is objective about yacht valuation. This is even more subjective than purchasing a house, car, or anything else tangible which should have an objective value. Great stats available on "asking" prices via Yachtworld though. When we were looking, we were told to ignore new listings (less than 6 months old) and check prices on boats listed for more than a year. We saw many prices cut in half from the original asking price. It all depends on how motivated the buyer really is.

Almost universally, a yacht in excellent condition will be an excellent bargain. Refitting and repair are not cheap. Unless you're into elbow grease and DIY, go for the best boat (condition of hull, interior, engine, and rig) you can afford and the only thing you really do want to discount is the value of the electronics (as JeanneP already said) since the old owner will have paid way more than the electronics are worth in today's market.

A local broker or surveyor can help you out since they will have details of recent sales. While they may not tell you what each boat sold for, they can advise you on what to expect in the present market.

Fair winds,
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Old 11-04-2010, 05:21 AM   #5
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This is all very helpful advice, thankyou. Regards, Mike
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