Boat value – a seller’s perspective

[Presentation]

I was talking to a individual about his ‘for sale’ boat.

When we got to the price point the seller insisted the asking price was fair since that is what he owed on the boat. :huh:

I don’t see how his loan balance has anything to do with the boat value.

I asked him to give me a call when he gets it paid off then I’ll buy it from him using his above valuation method.
:thumbsup:

 

[comsnark]

Same problem in the car market.

You can also wind up that way in the home market. If you bought with minimum money down in the last 12 months. . you could easily have a "negative equity" situation. Which is quite ugly.

 

[BrentJones]

I deal with these kind of people all day in new home sales. When we sell display homes, we sell it as if you were selling your own home. Homes generally appreciate, so along with the neighborhood appreciation is how we price them. So when people ask if we sell these homes at a discount because they are now "used" I ask them if they plan on selling their current home at a discount because it is used.

 

[SearayPaul]

A lot of the used boats that are available at this time have their pricing set based on the outstanding loan value. A lot of people have purchased boats with little down and payments forever. They now want out of that two or three year old boat for a variety of reasons and are finding themselves upside down.

They are trying to sell there depreciating asset by a variety of methods in the hope that a buyer will be found to rescue them from a bad situation. While they wait for a sale their maintence, depreciation, and taxes continue on the vessel. Unfortantly this compounds their problem. They refuse to or can not do the one thing that will sell the boat, which is to price the boat appropriately.

I currently am watching a boat which is in great shape at this time and has been on the market for a little over a year by owner. The owner can not let the boat go because he is upside down and he is sure it will sell shortly. I hope so but I will not be the buyer.

Presentation you did the right thing by selling your boat first and then establishing your budget. Your good planning will be rewarded as long as you do not get a bad case of boat fever.

 

[Nehalennia II]

................ Your good planning will be rewarded as long as you do not get a bad case of boat fever.

as we all know though Paul, there's no cure for that yet :smt009

 

[Dave S]

If someone truly wants to sell their boat, reality will set in sooner or later if their asking price is too high.

The other problem that I see is that many sellers did not negotiate enough on price when they bought their boats new in the first place and therefore paid too much on the front end. Thus they have priced their (now used) boat too high as well. That's especially a problem on one and two year old boats.

 

[comsnark]

Well. . . .I shopped new before going used. I think it is harder to figure out what is a "fair value" for a new boat. I still have not found a "kelly" book for new boats.

The MSRP I found to be fantasy pricing.

And. . .it is not like there are hundreds of boat dealers to choose from. I found ONE crownline dealer in PA and ONE in NJ. Not easy to get a real read on the "real" price, without making a bonafide offer.

This was one of two factors that pushed me into the used market.

The other factor, of course, was the price was much lower :grin:

 

[Turtlesboat]

when I was shopping for a boat, different dealers approaced it diffferent ways. when talking financing, one dealer was all about a low monthly payment with little down and spread over a long time. Another dealer actually worked through the whole thing to find a combination that wouldn't leave me upside down. This also reflected the used prices in both areas. There is a used 2003 280 in my marina for sale where the buyer is looking to get a price that is 20k over the price I paid for mine. It's because he's upside down. no one has even looked at the boat in over a year. He didn't want to hear that he had it way overpriced, all he could think about was getting out even.

 

[ruf1967]

Brent,

So you're saying that if I were to purchase say a 3000 sq ft home brand new (2007), the price per sq ft would be the same if I found an identical older home (we'll say 10 years older)?

 

[Hampton]

ruf,

I don't think that's what he meant. You don't get a break for a used home - you pay a premium for a new one.

 

[Nehalennia II]

Well. . . .I shopped new before going used. I think it is harder to figure out what is a "fair value" for a new boat. I still have not found a "kelly" book for new boats.

here is one NADA from Boats.com

 

[comsnark]

Hmmm. Must be a stupidity factor in the new home buying.

I would rather have a used home than a new home because;

1) newer invariably means lower construction quality. (although. . we seemed to have bottomed out about a decade ago, now that most people realize that styrofoam is not a "superior" house sheathing material)

2) Landscaping is complete!

3) You KNOW how the house has settled and you KNOW if the basement will be wet before you buy.

4) Don't have to deal with the builder B.S. (oh sorry. . .we will be 2 monthes late. Did I say 2 monthes? I meant 4 months. Oh. . the floor will cost you extra. What, you wanted the drywall spackled? That is non-standard and too late now)

Of course, used houses have their own issues -> but on balance, I would not give a new house a premium.

 

[BrentJones]

Brent,

So you're saying that if I were to purchase say a 3000 sq ft home brand new (2007), the price per sq ft would be the same if I found an identical older home (we'll say 10 years older)?

That is partially true, and it may also be true that you pay a premium for a new one. Markets are different throughout the country. Where I sell, a used home that is 10 years old may very well cost just as much as a comparable new home, but comparable is an important word. Everything has to be taken in to account to determine a fair price. I have a lot of people who come in and say they are done looking at used homes because people are asking too much. Outdated items and mechanicals that are on their last leg are items that are considered in the negotiation, just like a boat. But generally, prices of used homes keep up with prices of new home.s When materials go up, it cost more to build, so people are able to ask more for their used home too. Included features in new home have also increased. Ten years the majority of new homes didn't come with house wrap, engineered flooring, vinyl soffits and aluminum fascia and many other things. That has also changed the pricing of homes. These things are expected in homes now.

Comsnark, it sounds like you have had a bad experience building a new home. I'm not sure which era you think construction quality really dropped off, but I think it is natural to think, "things used to be built better back then." But you ask an engineer, architect or anyone in trades and most of them will tell you that that is not true, except maybe for some old timers. Through the years building materials have changed because of all kinds of reasons, but not to get away from a good material. I don't have too many customers who request aluminum wiring, iron plumbing or steel windows to name a few. Research continually improves the quality of indoor air, efficiency and durablility. We now have to construct a home with walls that can withstand the force of a 90mph wind gust for 3 seconds.

Your number 2 item is laughable. Maybe I'm a landscape snob, but most used homes I see, the first thing I would do after moving in would be rip out the landscaping and that goes for a lot of higher end homes too.

As for settling, codes have become so strict that soil compaction tests for new developments have to be done before the first foundation goes in. And often time on each foundation after that. Most cracks in new homes are from shrinkage from curing and is exceptable and expected. You of course are going to have your exceptions when out ot the ordinary circumstances arise. You are more likely to get water in an older home than a new by far. Depending on how old your talking, older homes typically don't have a foundation drain tile with a sump pit. My mom's home which was built 35 years ago has flooded a few times because she doesn't have drain tile.

Now for your fourth issue, this is where a feel you've been burnt. There is always some bad apples in any industry, but the builders I have worked for a very good a keeping schedules on time. Some circumstances out of their control has pushed back construction sometimes, but most of my delayed closings have been because the customer drug their feet. And I don't know of any builder that hides what you get for what you pay. Everyone wants the best, but no one wants to pay for it. It's rediculous for the builder to charge for that, but when they sell their own home it's a different story. Just like in any business transaction, get it in writing.

Sorry to completely get off the boating subject. I know we've been warned to stay on topic and I will accept all punishment for this violation.

 

[RiverRat]

And we can't forget... Location, Location, Location! :wink: :grin:

 

[devilrays]

I know what you mean. I have been looking for a long time for a 260DA and found an '03 with only 110 hours on it and I thought I got a great deal at 44k. The boat looked like it was knew and runs great. The surveryor even said I'm getting a great boat at even a better price. I just had the boat detailed last week and haven't had a chance to see it yet, since our friend Barry visted Tampa Bay last weekend. I'm hoping for sunny skies this weekend.

 

[ruf1967]

There are pros and cons to everything but it does sound like the guy is trying to get out of an upside down situation. See if you can get him to tell you if he ever put a down payment on the boat when the loan began and what the interest rate is.

 

[RT 240SD]

I'm looking at a similar situation. The seller of the boat I am interested is way upside down (too long of a note etc) and is priced above market. I can't deny him that he should get high book for the boat as it is perfect, but he's about 10% above that mark. We'll see if he can figure it out, it will be a shame if it doesn't work out.