Purchase price for 34 MKII

[Agweiss]

I'm in the market for a used Catalina 34 MKII, in the early 2000 range.  The NADA website values the boat in the mid-50's, and the two banks I've talked to won't loan more than $70,000 for a boat that age.  However, most of the boats listed are significantly more expensive.  I'm wondering what other people's experience has been.  Did you pay more than what the bank would loan for your boat, or did the seller come down to the amount the bank would loan?  Any thoughts on price range for a boat of this vintage?
Looking forward to joining all of you
Avrum Weiss

[tommyt]

IF YOU CAN FIND A BANK THAT WILL SELL YOU A 2000+ c34 IN GOOD CONDITION FOR $70K, BUY IT. iF NOT, FIND THE EXTRA CASH TO FIND ONE. REALITY IS THEY WILL COST MORE!

[KWKloeber]

  I'm wondering what other people's experience has been. 
Avrum Weiss

What I can relate is only my own experience whilst brokering and representing both sellers and buyers.

1) there is only ONE true value of an individual vessel, no matter what NADA, or Yachworld, or the seller says.  That's what on any given day, under any given circumstance, a buyer is willing to pay.  Sometimes that's more than what the boat next door sold for, sometimes it's less.

2) Owners are a lot more proud of their sweat and tears than are the buyers.  Most vessels for sale are way overpriced to start with, compared to the buyers's expectations.  Remember that the buyer determines the value.  The seller can only control how quickly he unloads the vessel.

3) Most vessels start out way overpriced due to brokers being liars.  Would you list your boat with a broker who told you "I can get you "X"?  Or the broker who tells you "I can get you 1.5X"?  Neither are true - only the buyer can tell you what you will get for it.

4) If a buyer says "I will never sell for less than 'Y'...",  s/hes either a liar or a fool.  If s/he won't come down $500 below 'Y' and would rather pay for another year's slip and maintenance -- then s/he's a fool.

5) A vessel isn't like real estate.  Toys can very quickly be broken or totaled, and worth zero so, if i were a banker, I wouldn't loan money on one if the buyer isn't willing to put substantial equity into it.  In that case as the lender I'd suggest s/he needs to a) find a relative with money, b) find a smaller toy, c) get realistic, d) find another vessel with different circumstances (i.e., fire sale, widow's sale, project boat, etc.)

6) Try to close a deal with your best price before any haul out or survey or sea trial.  The price can only go down, not up, after that point.  I brokered a trawler for my bro (buyer) and it sold for 16k less than any comparable sale, then after the haul he got another 3k from the seller due to some equipment that needed to be replaced, minor blisters, and, etc.  After that he gave me back half the split-commission, which I never asked for. and saved him another 5k.  In reality he was originally ready to buy her at the asking price, but in the end motored away with 24K in his pocket.

7) Many "sellers" aren't serious - it doesn't coat a dime to list a vessel with a broker and pipe dream that what you'll get will may for your 3-footitis.  So, if you aren't convinced that the seller is serious, walk away and find another that is. 

Good luck in your quest,
Ken

[Agweiss]

Thanks Ken.  Helpful info.
Avrum

[Clay Greene]

You might consider talking to a broker to assist you in finding a boat.  A broker will have access to the selling prices for boats listed on Yachtworld, which will give you a more accurate value than the list prices.  When I was looking at Mark II C34s, the boats in my admittedly small sample size were selling between 10 and 15 percent below list price - that may give you some idea if you are looking at Yachtworld listings.  $70K for any 2000+ Mark II boat seems really low to me. 

In my experience, a lender is going to look to the surveyor to make sure that the boat has sufficient value to collateralize the loan in case of default.  The surveyor is going to compare the boat to comparable boat sale prices. 

[KWKloeber]

selling prices for boats listed on Yachtworld, which will give you a more accurate value than the list prices.  
In my experience, a lender is going to look to the surveyor to make sure that the boat has sufficient value to collateralize the loan in case of default.  The surveyor is going to compare the boat to comparable boat sale prices.  

Again, only from personal experience.....

The brokerage I worked for (before going independent) did not go back to YW and report any sale prices.  That was common practice among other brokerages we knew.  There's no benefit to the brokerage to do that, as it lowers the apparent values of the other vessels they are offering (and thus their commissions.)  Brokerages don't negotiate against themselves.  We understood that that's what generally happens with NADA also.  Car dealers gain no benefit either from reporting actual sale prices.  Don't get me wrong - there's a benefit from using an honest and forthright broker to make a deal go smoother and bring in qualified buyers.  But it always isn't what it appears to be, so use a trusted broker and not the one who repeats what you want to hear.

In reality, the surveyor (as was my case) asked "what are you buying this for?"  And that's the value (plus of minus) that he reported on my survey.  

It's cruel, cruel world out there.

Ken

[Stu Jackson]

The surveyor is going to compare the boat to comparable boat sale prices. 

Not quite true, at least in my experiences (three boats:  Catalina 22 - 1981 boat in 1983, no survey, 2 year old boat in pristine condition; Catalina 25 - 1981 boat in 1987, no survey, knew what I was looking at; Catalina 34 - 1986 boat in 1998, surveyed by a great fellow after seeing many, many others over the course of an entire year (!) and having had this fellow survey one other that I'd put an offer in on but failed the survey).

In reality, the surveyor (as was my case) asked "what are you buying this for?"  And that's the value (plus of minus) that he reported on my survey.  

Given the above comments, this is the reality, surveyors don't look up prices, unless you're somewhere strange.  Please tell us about it.  My surveyor said: "This boat is in excellent condition for its age and condition and warrants the asking price of $XYZ.00."

Surveyor's jobs are NOT to establish price, but rather to confirm or deny.

We would be extremely grateful if someone would refute this reality.   Like, a surveyor.

Experience indicates otherwise.

Ken's advice is very, very good.

[Noah]

Both my current and previous boats were purchased through CA licensed brokers as well as "professionally" surveyed by surveyors that I selected, not the broker or seller. The surveyors were "recognized" by my insurance company. The brokers provided me historical comps ,with their sale prices, during the search and offer/purchase process. Both surveyors also provided their own value comps and previous sales info as part of their surveys--establishing both "fair value and replacement" cost. Of my two "recent" boat purchases, I financed the first one, with no issues with the bank accepting the purchase price/value, albeit it was pre-recession. Fortunately I was able to pay cash for my 1990 C34.  Note: Brokers in CA and Florida are licensed and regulated (I don't know what other states). This may have had an impact on my positive results??

However, as always, there is no substitute for doing your homework in both processes. Prior to buying my C34, I educated myself on this particular class/year boat. The info and support I found on this website, put me way ahead! Thx!

[KWKloeber]

The brokers provided me historical comps ,with their sale prices, during the search and offer/purchase process. Both surveyors also provided their own value comps and previous sales info as part of their surveys--establishing both "fair value and replacement" cost.

Note: Brokers in CA and Florida are licensed and regulated (I don't know what other states). This may have had an impact on my positive results??

Hey Noah, 

Unless things have changed in a while, thoshey  were the only two states that we dealt with that licensed brokers.  We actually partnered with licensed brokers in those states because it was such a PITA on the left and right bottom coasts.

Licensing may have something to do with what's reported, or also regional expectations (insurance companies etc.)

Below is a  summary of the requirements from the Ca DBW site, and if that's all there is-- it's pretty much bare bones - not anything specifically that has to do with reporting.  So I'm thinking it's more custom than requirement.  I personally would put less stock in a surveyor's valuation - mainly because can be biased by a limited database, or biased by (not being a broker -- though some are also) the surveyor not knowing the ins and outs/circumstances of the deals, even if they have access to all prior sale prices.  I would expect that a broker would have the best better handle on "value" (which again can mean different things depending on the circumstances.)


Brokers:

* should work in complete honesty. The Division of Boating and Waterways conducts criminal background checks on brokers and salespeople before they are licensed.
* must pass a three-hour written examination and post a $15,000 surety bond before they receive their licenses.
* must have a working knowledge of English, understand the principles of the boat brokerage profession-such as certificates of ownership, certificates of number, security agreements, bills of sale and other documents needed to register, number and transfer titles to boats.
* For undocumented boats, must understand certificates of ownership, certificates of number, security agreements, bills of sale and other documents required to register, number and transfer title.
* For documented boats, must understand that the transfer of title will comply with federal law as the U.S. Coast Guard administers it. Brokers must also understand maritime and admiralty liens, as well as mortgaging and transferring title to documented vessels.
* must understand agency contracts, as well as listings and deposit requirements.
* must have a general knowledge of the equipment legally required to be on boats.
* must understand their legal and ethical obligation to buyers and sellers.
* must have a general knowledge about boats.
* must supervise their employees' sale activities-or risk losing their surety bonds if they're caught defrauding or making misrepresentations to customers.

I'd be interested in hearing others' experiences re: valuations and surveyors?

Cheers,
Ken

[Clay Greene]

I completely agree that surveyors base their valuation opinion on the transaction price - it works the same way with home appraisals in my experience.  They find out what the transaction price is and then then offer their opinion that the boat/house has sufficient value to justify the transaction (or not).  My point was that in my experience the lenders/insurers look to the surveyor for that opinion rather than basing their underwriting decision on the NADA, BUC  or similar guides.  This was toward the larger point that I would not look to the NADA guide as the determining factor for the transaction price on a particular boat or to determine whether a lender will issue a loan for x dollars on y boat.

I looked at my most recent NAMS surveyor's report and it indicated that the valuation was based on the inspection of the boat and a comparative sales analysis.