I am looking at a 1983 Newport 30 and just received the inspectors survey. The "current Market Price" that he has quoted is under the asking price. Should I offer the "current Market Price"? with the understanding that there are numerous items that need to be repaired in the report.
inspectors estimated current market value vs asking price
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Welcome to the forum!!
You have a contract based on the agreed purchase price. Now that you have a survey you can request a "Repair Allowance" for the items to be repaired in the survey. If Seller agrees then the purchase price can be reduced by the amount requested in the repair allowance (usually based on quotes) OR you can decline to purchase the boat based on the survey, UNLESS you have already approved the survey contingency.
Never seen a marine surveyor's report state a lower market value than the Seller / Buyer agreed purchase price.........that is a new one.
You have a contract based on the agreed purchase price. Now that you have a survey you can request a "Repair Allowance" for the items to be repaired in the survey. If Seller agrees then the purchase price can be reduced by the amount requested in the repair allowance (usually based on quotes) OR you can decline to purchase the boat based on the survey, UNLESS you have already approved the survey contingency.
Never seen a marine surveyor's report state a lower market value than the Seller / Buyer agreed purchase price.........that is a new one.
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The asking price is what the seller hopes to get for the boat knowing that he will not get the asking price, especially for an older boat. Offer what you think the boat is worth not what anyone else says.
Pay attention to the surveyor's report and the importance of the items he says need repairing. Some items are not consequential and will need replacing, but are more likely just deferred maintenance items, like replacing hoses. Others are consequential and may mean you will have to spend a lot of money to repair.
Pay attention to the surveyor's report and the importance of the items he says need repairing. Some items are not consequential and will need replacing, but are more likely just deferred maintenance items, like replacing hoses. Others are consequential and may mean you will have to spend a lot of money to repair.
Agree, most of the surveys I have seen, the market value is substantially higher than the asking price and agreed purchase price.
Ignore the surveyor’s estimate -that’s not his area of expertise. The only thing of importance here is the cost of repairs cited as necessary by the surveyor.
Agree with Don S/V ILLusion............and will add.......... your purchase offer, based on your view of the market and the boat's worth to you, is what counts AND you always have the option to request a Repair Allowance if you find undisclosed repairs (not ordinary maintenance items like bottom paint job), albeit do not assume the Seller to agree. In my case, I requested repair allowances on my last two boat purchases and the Sellers agreed since the repairs were compelling and undisclosed.
This is why. When you go to insure the boat, especially an older boat the insurer will want an independent evaluation of the boat's value, based on its condition and his prior experience. In come cases the surveyor may have access to the Yachtworld.com's data on the asking and selling prices and time on the market.
You mention the surveyor's value is lower than the asking price, how much lower? A couple of hundred bucks is no big deal, several thousand bucks is a different matter. Have you asked the surveyor how he came to his evaluation of market price? It would be good to know.
Offer what you feel the boat is worth and try to be objective and dispassionate about the purchase price.
I’m sure you appreciate the difference between an insurance valuation and actual market value, the latter being the important consideration in a purchase.
The best practice IMO is to get an insurance quote on the boat b/f you offer anything. The INS agent can tell you what the boat is likely worth (wiil be insured for) based on age, model, and market (to some extent.) Offer near that amount unless you feel the boat is in good enough condition with enough upgrades to offer more.
Offer is contingent on you being satisfied with the condition of the boat following survey. If you are not, you can ask for an cost adjustment based on what might need to be done to the boat, etc. Unfortunately, you really have no “power” to make a new offer after a surveyor tells you that the market value is, in his/her opinion, less than what you might already have offered on the boat. The market value is whatever a buyer will pay for the boat. If you pay the asking price, then that is the market value at that moment.
The last two years has seen the boat market follow the used car market into supporting much higher prices for old boats than before. Sometimes 30 to 40% higher than what an INS company will insure it for (agreed hull value). A bank will lend only about 80% of the survey estimate, but normally do not lend at all for boats more than 30 yr old. If the price (offer) you agreed to pay is much higher that those benchmarks, you likely will not get a “full” loan or “full” insurance, etc.
So if you don’t like what you are seeing, reject the boat. Move on. Start over again and do it right this time!!
Offer is contingent on you being satisfied with the condition of the boat following survey. If you are not, you can ask for an cost adjustment based on what might need to be done to the boat, etc. Unfortunately, you really have no “power” to make a new offer after a surveyor tells you that the market value is, in his/her opinion, less than what you might already have offered on the boat. The market value is whatever a buyer will pay for the boat. If you pay the asking price, then that is the market value at that moment.
The last two years has seen the boat market follow the used car market into supporting much higher prices for old boats than before. Sometimes 30 to 40% higher than what an INS company will insure it for (agreed hull value). A bank will lend only about 80% of the survey estimate, but normally do not lend at all for boats more than 30 yr old. If the price (offer) you agreed to pay is much higher that those benchmarks, you likely will not get a “full” loan or “full” insurance, etc.
So if you don’t like what you are seeing, reject the boat. Move on. Start over again and do it right this time!!
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That boat is nearly 40 years old. By 30 years, ALL of the deck hardware should have been re-bedded. By now the standing rig should have been replaced at least (!) once. Yeah, really.
*By comparison, in 2021 we replaced the second full set of standing rigging on our '88 boat.
IF the seller starts 'walking sideways' when asked about such normal albeit labor -intensive Preventative Maintenance, adjust your offer by about 10K. Or walk away.
If this clarifies your buying vision to the extent that you realize that a ton of used boats have a negative 'value', you are gaining wisdom.
While the Market will certainly determine the price of every used sailboat, you are not obligated to spend naive and ridiculous amounts of Your Money to play along.
Price is Not the same thing as Value.
Aside:
Insurance companies just want to reduce their chance of paying out for a repair or a loss. Like, reduce to near zero.
When they have documentation from a respected surveyor, and major maintenance documentation, they will agree to a value apropriate with your $$ investment. After all, they are really insuring an object, expressed as insuring your tied-up money. (Let's not call it an "investment".... )
Another way to view it is that if you buy an older boat and spend 10K on it, that's the extent of your loss if it gets totaled due to the mast falling down, collision damage, fire damage, or flooding, or the old engine seizes up.
Now if you buy a fixer upper with 'good bones' and invest 50K in a restoration, AND your surveyor backs you up, you can reasonably ask for an insured "agreed value" of 60K. You will likely get it. As long as the chance of paying out is remote, the insurer just charges XX per thousand of value, and they make money and you sleep well at night.
Further Sidebar: the sailboat boom in the 70's and into the 80's produced a LOT of low quality fiberglass boats, and they are not very good/economical candidates for restoration. Especially so the ones at the bottom of the list. While we can all spend our boat BUC's however it makes us happy, spending money on restoring a solid Swan is always more defensible than throwing money at one of the flimsy low end boats. (And even the guy with that Swan will never get all of his dollars back, either!)
*By comparison, in 2021 we replaced the second full set of standing rigging on our '88 boat.
IF the seller starts 'walking sideways' when asked about such normal albeit labor -intensive Preventative Maintenance, adjust your offer by about 10K. Or walk away.
If this clarifies your buying vision to the extent that you realize that a ton of used boats have a negative 'value', you are gaining wisdom.
While the Market will certainly determine the price of every used sailboat, you are not obligated to spend naive and ridiculous amounts of Your Money to play along.
Price is Not the same thing as Value.
Aside:
Insurance companies just want to reduce their chance of paying out for a repair or a loss. Like, reduce to near zero.
When they have documentation from a respected surveyor, and major maintenance documentation, they will agree to a value apropriate with your $$ investment. After all, they are really insuring an object, expressed as insuring your tied-up money. (Let's not call it an "investment"....
)Another way to view it is that if you buy an older boat and spend 10K on it, that's the extent of your loss if it gets totaled due to the mast falling down, collision damage, fire damage, or flooding, or the old engine seizes up.
Now if you buy a fixer upper with 'good bones' and invest 50K in a restoration, AND your surveyor backs you up, you can reasonably ask for an insured "agreed value" of 60K. You will likely get it. As long as the chance of paying out is remote, the insurer just charges XX per thousand of value, and they make money and you sleep well at night.
Further Sidebar: the sailboat boom in the 70's and into the 80's produced a LOT of low quality fiberglass boats, and they are not very good/economical candidates for restoration. Especially so the ones at the bottom of the list. While we can all spend our boat BUC's however it makes us happy, spending money on restoring a solid Swan is always more defensible than throwing money at one of the flimsy low end boats. (And even the guy with that Swan will never get all of his dollars back, either!)
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I'm with Don ... the surveyor has done you no favor. You can do what you like, but the best way to piss-off the Seller is to start quibbling over price based on the survey. Sure, it's a tactic that many endorse ... when they are buying. It's great to puff out your chest as a tough negotiator, until you don't get what you really want. That Newport 30 in Texas looks like a pretty nice boat for $17,000 on the surface. Only you know the condition and what repairs are going to be needed. You can blow the deal or make the deal now ... it's in your hands. You aren't going to find anything that is 40 years old and perfect. Spending money after the purchase is in your future anyway you look at it, and the amount you spend can very quickly add up to your initial purchase price, so you may as well figure that in. I'd guess that you could quibble over $500 to $1,000 if there isn't anything that really tells you to run away.
My understanding is that Newports have a pretty good reputation ... now that I think of it my Uncle had that model boat that they bought new in the early 70's or late 60's. It had to have been the 30-1 built from 68 to 72. I loved that boat and sailing with them in Chicago was one of the reasons I love sailing. It seems to have great tankage for a 30' boat. It may be a gem ... don't let what a surveyor says about price blow your deal. There's my heart talking. (that's what really matters to me when I make a purchase like this).
My understanding is that Newports have a pretty good reputation ... now that I think of it my Uncle had that model boat that they bought new in the early 70's or late 60's. It had to have been the 30-1 built from 68 to 72. I loved that boat and sailing with them in Chicago was one of the reasons I love sailing. It seems to have great tankage for a 30' boat. It may be a gem ... don't let what a surveyor says about price blow your deal. There's my heart talking. (that's what really matters to me when I make a purchase like this
).
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Yes. What a restored boat might be insured for is ultimately a negotiation between the owner and the insurance underwriter. But here we’re talking going into a purchase agreement as things stand presently, etc.
Well, the asking and inspectors prices are 4,800.00 different. The asking is fair and the repairs are fairly inconsequential. new cutlass bearing, a few inoperable seacocks and new main chain plates, the navigation lights don't work, the fresh water intake hose is broke and the tank is disconnected and other various hoses need replaced. oh, and the prop shaft packing needs replacing.
The surveyor used recent sales of similar boats and the repairs required.
IMHO, $17K would a big price for that or similar boat. But, I’ve recently seen Newport 28s of similar age in apparent good condition being offered in the range of $12K - $15K. So that price is not completely out of the “market range.”
Well, replacing the seacocks could cost $2,000 to $3,000, depending. New chain plates? Sir, that would likely not be an “inconsequential” repair. The fact that the seacocks were allowed to “freeze” tells you that the boat has not been properly cared for. You appear to be entering the denial stage of a potentially bad deal. Forgive.
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Thank you, and while I said inconsequential, there are a few item of serious consequence and a failed seacock and the is one of them. Thank you for the estimate, that will help in my "negotiations".
Absolutely correct!
The chainplates are a hunk of metal, relatively cheap and not any real consideration. Rather, it’s the labor, effort, time and most importantly, the consequential deck or hull damage resulting from inadequate maintenance of the chainplates that will add up. Not “Inconsequential”.
Better to get an estimate from the local boat yard. You have haul out, blocking, cost of the seacocks and other materials, labor, and the ever present “environmental fees.” However, you might find someone willing to do “in the water replacement.”
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So, there are some wet and delaminated areas in the area of the chain plate. how big if a deal is this? they are small, but there.