Appraised value lower than offer

[kerslaks]

We are working on the purchase of a 390DA and we have just received the surveyors report.

I am concerned because the report appraised the boat at $7500 less than our offer.

How much weight should I put on the appraiser's assessment of value? I realize that he has the advantage of looking at comparable sell prices, something I don't have access to.

Is it reasonable for us to reduce our offer based on this appraisal?

 

[Hampton]

Depends on the terms of your offer. Frank W may chime in with some very good advice on this topic. Search his name and brokering/buying.

 

[mwph]

Was anything major uncovered during the survey? How far under the asking price was your offer?

To answer your question - In my opinion, Yes, It is reasonable to reduce your price based on the report. Especially if any unknowns were revealed.

ps... +1 on searching Frank's posts. Thats always a good idea. Hell, half his stuff should be mandatory reading!

 

[Larry]

My interpratation of any purchase agreement is that it is alway contingent on a satisfactory survey, unless there is some other arangement ahead of time. I would say that a survey is a valuation as well, and if the surveyor feels that the value is less then the agreed price, it is his obligation to note it as such, then this will be negotiated and if terms are not met, than either party can terminate the agreement at this point.

But I would pass this to Frank as well.

 

[kerslaks]

We are already $20K under the asking price. And that was less than Nada.

The only real surprise uncovered was a football size set of deep gauges in in the blue gelcoat on the starboard side. This boat was at a residence so we weren't able to see the starboard side until the boat was hauled. We were also surprised to see how extensive the fading was on the blue gelcoat overall.

And yup, I am a regular reader of Frank's posts. All the way back from when we bought our 280 in 2004. That was back during a previous incarnation of this board.

 

[Larry]

We are already $20K under the asking price. And that was less than Nada.

The only real surprise uncovered was a football size set of deep gauges in in the blue gelcoat on the starboard side. This boat was at a residence so we weren't able to see the starboard side until the boat was hauled. We were also surprised to see how extensive the fading was on the blue gelcoat overall.

And yup, I am a regular reader of Frank's posts. All the way back from when we bought our 280 in 2004. That was back during a previous incarnation of this board.

Remember, in this market throw away the book and asking price is just an asking price, today 20% under asking for an offer is the norm.

 

[sprink56]

"My interpretation of any purchase agreement is that it is always contingent on a satisfactory survey"

I remember when I consulted Frank as I was making my offer, he drove this point home with a sledge hammer. This is a big reason you get a survey...if the survey doesn't hold up, you deduct $$$ from your offer based on defects found in the survey and amend your offer....what Frank refers to as "taking another bite out of the apple".

Once you amend your offer and it is not acceptable to the seller...your offer evaporates and your deposit is returned.

Do not get trapped into thinking you have an obligation to pay more than the survey values the boat...keep looking.

I predict that your seller will accept your offer and you will buy a boat at the price you decide to pay....if after you "look under the skirt" and decide you want to buy this boat.

I have completed the course by professor Frank Webster entitled "Buying and Selling a Boat A~Z":thumbsup:

There is a sticky on the home page of this site that touches some of Frank's philosophy with regard to buying and selling boats.

John F

 

[Blueone]

In this market I would use it to your advantage... I was on the other side of this selling my house where I kept getting offers higher than the appraised value....ended up selling it for the appraised value because the buyer couldn't get a loan for the higher price

Take advantage ....your buying a boat

 

[The Bill Collector]

We purchased our boat 2 1/2 years ago in a far different market then today..... We paid $35,000 less then the appraised survey amount. So, make a deal that is to your advantage and throw caution to the wind !!!

 

[Henry Boyd]

First off did you get a a report from a certified appraiser? The main body here in the US is ASA (American Society of Appraisers). These folks must complete formal training, adhere to a legally binding code of conduct, and pass regular qualification tests. A report from an ASA certified appraiser will have legal authority over the work of a non-certified person. The only exception is in the case of persons who have demonstrated specific expertise with a unique, or rare, asset class. An example of this could be something like vintage airplanes. In an example closer to home, should your boat suffer a major loss catastrophe and you have a dispute with the insurance as to its value, an appraisal by an ASA appraiser will stand up in court, over the opinion of say a boat broker.

ASA appraisers charge between $5k and $15K for appraisals on commercial marine equipment for the projects I work on, so if you didn't spend a couple grand just for the 'appraisal', then you got a market valuation report

A valuation report provided by a surveyor will not generally have the same stature as an appraiser's report in that it is inherently biased towards you, his client and the buyer. It is also not based on a supportable quantitative analysis. You can take it for what it is, market information, but not a strict determination of value. These things are generally qualitative opinions, and you have probably heard the line about opinions.

You sound like some defects turned up that you did not see prior to making the offer. I can't judge the impact of these, nor any other things the surveyor may have found.

It sounds like you are in for some re-negotiation. The thing to keep in mind is that your surveyor's opinion is just that, an opinion. The definition of value is what a willing buyer will pay to a willing seller, and a willing seller will accept from a willing buyer in an arm's length transaction. It does not include the opinions of third parties, so if you aren't comfortable with the price for the boat, its time to walk away.

Henry

 

[kerslaks]

Late last night we received an new survey report. The surveyor amended the value of the boat to be more inline with the NADA value, he increased the appraisal by $28K.

He said that he had used the trade-in value by mistake.

This new price is more in line with the original results of the survey, he placed the boat in average condition, with nothing below average and no major deficiencies.

However, it seems like when he saw the price that low the comps should have raised a flag. I am starting to wonder how credible this guy is. Should I ask him for a list of the comps he used?

 

[unklbuck]

First of all, you should thank your surveyor for saving you at least 7500. how much did his survey cost you?

Second, you should moan at your surveyor for not finding at least another 10k of boo boos that you could negotiate with the seller.

Already $20k under the asking price means nothing. If you are purchasing a 1-3 year old boat, I would want to know how much off the original selling price are you? An older boat, get your broker to run a report on the recent sales of a comp listing.

If you can't do that, I will get it down for you.

It's your money, negotiate another 10k off, look at it as your fuel budget for next season and enjoy the heck out of the boat.

You sound guilty that you should come off that asking price. When i saw the deep scratch, the fading gelcoat, the survey report, i would have been thrilled to have the opportunity to go low again. What, you are worried that you found the best deal in America on a 39' used sea ray and that you are going to lose it now? Hopefully, you are not treading in those waters.

 

[unklbuck]

guess i should have read your last email.

Go lower on the offer anyway because of that newly discovered work of art on the starboard side.

 

[Southpaw II]

All of this boils down to the language and terms of the offer you submitted. But, based on what we see here, it seems you have the opportunity to lower your previous offer based on the newly discovered and previously unseen condition of the hull.

First, decide if you really want the boat, and try to keep the emotion out of it. It still is a buyer's market out there. Generally, the longer you shop, the better deal you will find.

If you still want the boat, offer what it's worth to you based on what you have seen in the marketplace.

Don

 

[mwph]

Late last night we received an new survey report. The surveyor amended the value of the boat to be more inline with the NADA value, he increased the appraisal by $28K.

I say run, not walk away. This is just unacceptable BS. My only experience with a surveyor was not great but didn't try to pull any **** like that. So he is saying he was off by $28k? I'll bet there are a dozen uncertified guys on this board that could survey the boat & not be off by $28k. Sounds to me like the seller or broker got in his ear.

 

[rcknecht]

What Henry said... The Surveyor 's guess at the price is just as good as your own... What really counts is the what needs to be fixed that you did not know about, and is the seller willing to drop his price to cover those repair costs... You have as much access to prices as any surveyor... Judge by what you said, I would look to lower the price by the cost of the gel coat repair...

 

[Pseudomind]

Late last night we received an new survey report. The surveyor amended the value of the boat to be more inline with the NADA value, he increased the appraisal by $28K.

He said that he had used the trade-in value by mistake.

This new price is more in line with the original results of the survey, he placed the boat in average condition, with nothing below average and no major deficiencies.

However, it seems like when he saw the price that low the comps should have raised a flag. I am starting to wonder how credible this guy is. Should I ask him for a list of the comps he used?

This sounds strange to me! :smt100 What year is this boat? As I was once told a boat purchase is a business deal and not an emotion purchase. Matter of fact my surveyor told me that as he has a high reputation in the Tampa, Florida area. I used him for two surveys.

I am just saying sounds strange, and for my money I would like to know more about the football size hull issue. I may be wrong, but I would like some good moisture testing performed.

Best of luck :thumbsup:

 

[kerslaks]

Thanks for putting things in perspective for me unklbuck. There are plenty of hungry sellers out there. However, they generally asking a lot more though as their list price.

The only real issue I have right now is the lack of comps to base the price on. The boat surveyed well and the hull doesn't scare me too badly. The scratches are just that, they are pretty shallow and look like dock rash.

Can anyone recommend a good source of comps for me? I don't have ready access to sell prices only list prices. I wouldn't mind paying for a valuation survey based on the original survey report. (If that makes sense.)

 

[skolbe]

Ultimately, my concern with the repair of the gel coat is that it is challenging to repair the colored hulls for the long term. So, even if it blends good now. It may not look good 5 years down the road.

 

[Redhook98]

Ultimately, my concern with the repair of the gel coat is that it is challenging to repair the colored hulls for the long term. So, even if it blends good now. It may not look good 5 years down the road.

Ask Spikedaddy99 what happens when they could not match his gelcoat after our fateful Aqualoopza trip last year..... His 2007 320 Pewter Gray boat is now Maroon (Awlgrip. It's beautiful by the way. Good choice).