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]

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]

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]

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]

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]

...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]

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 ?

 

[THD]

Refugio-your link is pretty interesting. As it happens, I know the owner of "Paspatoo" pretty well. It is an interesting and fascinating boat. Admittedly, way overpriced at $1.5M. As the owner is a pretty idiosyncratic guy, the boat is as well. Has some very interesting features and very interesting solutions to some problems. For instance, the owner thought the engine too load so had the entire engine covered in a custom "sound blanket" suspended over the engine on wires. It is a really funky vessel. I would also bet it has not had 100 hours on it in the last ten years. The owner spends almost obscene amounts each year keeping it up, but he can well afford to. So, while it is overpriced, no buyer should look for the owner to greatly reduce the price, he has no financial need to sell. Also interesting to note that it is not a documented vessel, quite rare for a boat that size.

 

[rjwilliams11741]

NADA "book" prices vs. reality

Even back in the early 2000's when the boat market was fairly hot the NADA prices were way out of line with reality for 30' and up Yachts. Yachtworld's prices, even today are much more in line. Go to a broker you trust and ask him / her to run sold prices for boats that are comparable to what you are looking for. I frankly have absolutely no idea where and how NADA determines their values unless they smoke something funny before they sit down and run their values. Even the finance folks a good laugh from their valuations.

 

[Art]

For smart buyers, choosing, paying for, and owning a boat, car, house, motorcycle, plane... etc all have four easy steps (regarding 2012 / 13):

1. Only choose an item that best fits your needs (the buyer must thoroughly define ALL their “needed parameters” very well before commencing any product search)
2. Only pay the amount that you clearly have mathematically determined you can afford for ANY item
3. Know before any purchase that owning the item is what you REALLY want to have occur... definitely for the short and possibly for the long term
4. Shop for the item under guidelines of #’s one, two, three

Be prepared to NOT fall in love with any item prior to the purchase and then for at least a short period of time after initial ownership... because... you need to be a hard-nosed dealer to make sure you get the best price you possibly can for a good product. Forget about list prices, asking prices, comparables and other $$$-valuation BS - - > Simply offer the lowest price you feel might be entertained by the seller. If your offer is not entertained, then kick that item to the curb and find the next similar item to offer on. This is a buyer’s market - Period! There are hundreds/thousands of every type item for sale; often needing to be sold by the current owners. Play “Hard-Ball”. The correct item at the correct price will eventually be yours. But, expect that you may need to put some time and effort into your search.

Get It On! In 2012 / 13 - - > Lucky Buyers!!

Sorry sellers – This is currently the name of the game!

 

[marinetrader]

NADA - National Automotive Dealers Association........the name says it all. They have no clue about boats.

 

[JD]

NADA - National Automotive Dealers Association........the name says it all. They have no clue about boats.

They sometime don't have a clue about cars and truck either.

 

[honeybadger]

So true JD i was able to talk my mother out of her Mercedes E320, One owner low miles and garage kept, No way would i have paid what they claimed it was worth . I Guess boats are the same.

 

[RickB]

... do the boat brokers think boats do not apply ?

It is really a stretch for me to defend boat brokers but there are many times I wish a buyer had involved a broker before buying a nightmare that probably would not have gotten past a broker.

The idea that the price is some scam by the broker to gouge an unsuspecting buyer is also not quite accurate. Very often the owner demands the broker advertise a ridiculous price and a hungry broker will succumb to the pressure just to get the listing rather than tell the owner to get real. Brokers don't make money by listing boats, they make it by selling boats.

We see it a lot in the big yacht business, an owner will ask for about 4 times what the boat is worth, then turn down an offer of twice what it finally sells for a couple of years later after paying a fortune for moorange and maintenance. Or, the owner won't listen when the broker tells him he has to lower the price, then finally dumps the first broker and turns it over to another broker who sells it for what the first broker told the owner it should be priced at. The first broker usually gets stuck with all the costs of advertising and owner education and the next broker looks like a hero ...

The only deals that are good for everyone are those that involve an educated buyer, seller, and broker. If one of those is missing, it's a crap shoot.

 

[JD]

So true JD i was able to talk my mother out of her Mercedes E320, One owner low miles and garage kept, No way would i have paid what they claimed it was worth . I Guess boats are the same.

The problem is they get the numbers from the their dealer base. The reporting system was horrible and unreilable but I'm not sure they have fixed it.

Not unlike some boat dealers that overstate their products sales price for the report in hopes of keeping their numbers up it is a bigger joke on how they get the numbers from the dealers. Keep in mind that a boat dealer as compared to a car dealer sells way fewer boats a month. So that means that a boat dealers sales manager may not mind taking thirty minutes out of his month to report the numbers on a form and submit it. A car dealer on the other hand that sells 500+ used cars a month sales manger does not nor will do it. So when they get beat up about it they sit down and fake a few numbers to get their factory rep off of their back. I know because I have been on both sides of that game. Getting the numbers and giving the numbers.

 

[Larry M]

This pretty much sums it up.

I Want To Sell My Yacht | Xtranormal

 

[Art]

This pretty much sums it up.

I Want To Sell My Yacht | Xtranormal

Larry - Perfect! :lol: