'Opinion of Value'/surveyed value vs sale price

[thingsweregood]

Hi all,

 

I'm in the market for a NB and have recently been talking to someone with one for sale. They sent me a recent survey from about a year ago (of course, I'd get my own survey if I got to the stage where I wanted to put in an offer!) and it seems to be very thorough, which is great. However, it also has an 'opinion of value' stating that it's 'current open market value' is in the region of about £6-7k less than the price it's advertised for sale at.

 

Is this normal? Is there a difference between a valuation for mortgage/insurance/'open market' purposes vs what you would reasonably expect to sell a boat for, perhaps taking into account other more superficial interior design aspects?

 

Thanks in advance

[LadyG]

Value is in the eye of the beholder.

No doubt prices have risen over the last year.

No doubt most people ask for a discount, therefore many vendors will allow for this by adding on 5 to 10 percent. 

A lot depends on circumstances of vendor, to some folks, they have tired of the boat and looking at a big cost eg marina fees, CRT fees, even BSC costs with horror. 

The owner may have spent a lot in 12cmonths, and wants some back. 

Boats move, prices vary eg. London premium. 

PS unlikely 'marine mortgage' comes in to play. I believe some people borrow cash to build some property enhancement though. 

Edited February 16, 2021 by LadyG

[Alan de Enfield]

2 minutes ago, thingsweregood said:

Thanks in advance

 

Prices have gone up by 'a lot' in the last year. Yesterdays prices are yesterdays prices.

More disposable income

No foerign travel

Staycations

 

Boats are selling even before they are advertised, if they are 'reasonably priced' and in good condition they will sell within hours.

Look at the number of 'projects / horrors' people are asking about on the forum, they have then bought them and then ask about 'replacing rotten flooring', or re-wiring etc etc.

 

It is a sellers market.

[Athy]

Yes, the market is buoyant at the moment.

Yes, many people do tend to add a bit to their asking price so that they can knock the bit off again when negotiating.

[frahkn]

37 minutes ago, Alan de Enfield said:

 

Prices have gone up by 'a lot' in the last year. Yesterdays prices are yesterdays prices.

More disposable income

No foerign travel

Staycations

 

Boats are selling even before they are advertised, if they are 'reasonably priced' and in good condition they will sell within hours.

Look at the number of 'projects / horrors' people are asking about on the forum, they have then bought them and then ask about 'replacing rotten flooring', or re-wiring etc etc.

 

It is a sellers market.

Exactly this.

 

My boat was built in 2003 and I bought it (third hand) in 2013. If the original bill of sale is to be believed the boat had lost £87k in the intervening ten years.

 

If I were to sell my boat now, I would take it back to the broker who handled my purchase (Rugby Boat Sales) and offer it at whatever price which they suggested.  I would be quite surprised if this price was not greater than the sum I paid seven years ago and even more surprised if it didn't sell quickly.

 

I have spent money on it since but not in the expectation that this would be recoverable.

Edited February 16, 2021 by frahkn

[ditchcrawler]

1 hour ago, LadyG said:

Value is in the eye of the beholder. 

and seller, they are not always the same

[Athy]

13 minutes ago, ditchcrawler said:

and seller, they are not always the same

Of course not: we've recently been watching Drew Pritchard's antique-hunting programmes, and his first valuation is rarely the same as the seller's!

 

[Bee]

Much the same as buying a house I expect. Everything we or our sons have ever bought have always been valued a bit lower than the asking price (and usually the selling price too)

[thingsweregood]

2 hours ago, Alan de Enfield said:

 

Prices have gone up by 'a lot' in the last year. Yesterdays prices are yesterdays prices.

More disposable income

No foerign travel

Staycations

 

Boats are selling even before they are advertised, if they are 'reasonably priced' and in good condition they will sell within hours.

Look at the number of 'projects / horrors' people are asking about on the forum, they have then bought them and then ask about 'replacing rotten flooring', or re-wiring etc etc.

 

It is a sellers market.

Yeah, I definitely don't want to buy something sight unseen & not carefully considered. But you're right, things do go very quickly at the moment.

[Richard10002]

There seems to be no doubt that prices have increased significantly during the past year or so.

 

We paid the £18k asking price for our boat in 2011, (45ft cruiser Stern, Built 2000 Gary Gorton shell). I asked the surveyor if the price meant that there was something wrong with it... was I missing something? He said that if I didnt buy it, he would!! The hull was as thick as when new, and there were just a few very minor issues. He valued it at £26k.

 

It's probably a bit better in terms of specification and comfort now, (a decade later), but not in any particular value adding way. My guess is that it would sell for between £30k and £35k in todays market - although I have no intention of selling.

 

Ignore the valuation on the survey... it's out of date, and irrelevant. Concentrate on the condition and compare it to other boats you could buy today to get an indication of value.

[thingsweregood]

5 minutes ago, Richard10002 said:

There seems to be no doubt that prices have increased significantly during the past year or so.

 

We paid the £18k asking price for our boat in 2011, (45ft cruiser Stern, Built 2000 Gary Gorton shell). I asked the surveyor if the price meant that there was something wrong with it... was I missing something? He said that if I didnt buy it, he would!! The hull was as thick as when new, and there were just a few very minor issues. He valued it at £26k.

 

It's probably a bit better in terms of specification and comfort now, (a decade later), but not in any particular value adding way. My guess is that it would sell for between £30k and £35k in todays market - although I have no intention of selling.

 

Ignore the valuation on the survey... it's out of date, and irrelevant. Concentrate on the condition and compare it to other boats you could buy today to get an indication of value.

Good advice, thank you.

[Dr Bob]

We sold a boat in May last year - just after the first lockdown. Sale agreed in Feb at pre covid prices but contract delayed due to lockdown. By the time we got the money I reckon prices had gone up by 10%. They have not stopped there.

Good boats are in demand so it wouldnt surprise me if prices have gone up 10-15% since Jan 2020. The broker will be expecting you to knock off £2-3K for all the things that are wrong with it which a new survey will unearth.

If you like the boat, buy it quickly.

[enigmatic]

Nerdy technical answer: An "open market" valuation typically assumes there is a balance between supply and demand and no pressure to sell. When I worked for a company that did aircraft valuations we actually gave separate "base" and "current market valuations", with the current market valuations reflecting what people were actually paying in the last couple of months.

 

As other users have pointed out, there's a lack of supply for narrowboats right now so people will ask for more. That doesn't mean they won't accept a lower offer though.

Much as boats are selling fast, it's not all boats, and some people expect to negotiate when they choose the price.

 

Boat valuations are very subjective compared with aircraft anyway because most of them are unique and different people have very different priorities.

[Cheshire cat]

The way I read the OP's question they were stating that the surveyor said the boat was worth £6K or £7K less than the for sale price. In order for the surveyor to make that statement they need to be up to speed with current values. I agree with everyone else that values have gone up and are likely to stay there until summer 2022

 

As Lady G says it is all about value in the eyes of the purchaser. Shouldn't really be a problem if they are paying cash up front.

Totally different of course if we are talking housing and you're wanting a 95% mortgage.

[Richard10002]

13 minutes ago, enigmatic said:

Nerdy technical answer: An "open market" valuation typically assumes there is a balance between supply and demand and no pressure to sell. When I worked for a company that did aircraft valuations we actually gave separate "base" and "current market valuations", with the current market valuations reflecting what people were actually paying in the last couple of months.

 

As other users have pointed out, there's a lack of supply for narrowboats right now so people will ask for more. That doesn't mean they won't accept a lower offer though.

Much as boats are selling fast, it's not all boats, and some people expect to negotiate when they choose the price.

 

Boat valuations are very subjective compared with aircraft anyway because most of them are unique and different people have very different priorities.

 

I would have thought that an "open market valuation" is what you are calling a "current market valuation", based upon market circumstances and conditions at the time, and assuming a reasonable amount of time to negotiate and complete a hypothetical sale.

 

Any other type of valuation assumes conditions that aren't applicable at the time, or special conditions that might be specific to the buyer and seller, or both. For example, over the years in the property market, I have been asked to provide an "open market valuation", along with a "forced sale valuation", the latter being where where a seller has to be certain of sale within a short space of time, which may, or may not, be specified.

 

 

 

 

[enigmatic]

26 minutes ago, Richard10002 said:

 

I would have thought that an "open market valuation" is what you are calling a "current market valuation", based upon market circumstances and conditions at the time, and assuming a reasonable amount of time to negotiate and complete a hypothetical sale.

 

Any other type of valuation assumes conditions that aren't applicable at the time, or special conditions that might be specific to the buyer and seller, or both. For example, over the years in the property market, I have been asked to provide an "open market valuation", along with a "forced sale valuation", the latter being where where a seller has to be certain of sale within a short space of time, which may, or may not, be specified.

 

You may be right about the terminology in this instance: either way the market a year ago was not what it is now!

 

We did the base value for the accountants and lenders and insurers and the current market value for how much people would have to pay to actually buy it, both assuming sale was on an open market with no strings, but one taking into account recent market events and the other not. 

Not sure whether boat surveyors make different sets of assumptions for different purposes or not as I didn't ask for a valuation when buying mine, but they could be different again.

 

But obviously boats are much less predictable in their values than aircraft even before considering all the alterations people make. Yours has probably doubled...