Help! Sanity check - poll

[MapisM]

Ok, here's the scenario: boat sold from the administrators of a bankrupt dealer.
She's on the hard, and can be inspected but without turning on and testing anything - which means that the thing is sold as seen.
Now, obviously she can be bought for less than the market price of an equivalent boat, otherwise it would be hard to understand why anyone should take the risk of finding that one engine is stuck or whatever.
BUT the big question is, how much less do you folks reckon that the risk is worth taking?
Thanks in advance for your vote! :encouragement:

 

[PowerYachtBlog]

Do not stick to the bank demands. You have the right IMO to try the engines and generator are at least working.

For me if at least I do not test the engine on the hard the risk is not worth taking, especially with boats 50 feet plus with two big lump of iron costing anything to repair from 10k plus.

 

[MJGH]

Ok, here's the scenario: boat sold from the administrators of a bankrupt dealer.
She's on the hard, and can be inspected but without turning on and testing anything - which means that the thing is sold as seen.
Now, obviously she can be bought for less than the market price of an equivalent boat, otherwise it would be hard to understand why anyone should take the risk of finding that one engine is stuck or whatever.
BUT the big question is, how much less do you folks reckon that the risk is worth taking?
Thanks in advance for your vote! :encouragement:

Bit of a difficult one without knowing what % of the value a duff engine (or two) would represent.
My feeling would be a maximum offer of 50% if feeling brave or 40% with a slightly more sensible head on.
At the end of the day you pays your money and takes your chances and sometimes it works in your favour.

 

[MapisM]

Wow folks, you were faster in replying than I was in completing the post with the poll!
Anyway, in reply to your questions:
@PYB: it's not a bank repo boat, it's being dealt by a judge - that's his way or no way... :ambivalence:
@MJGH: good point, I reckon that the value of one new engine (12V stuff, so pretty substantial!) in this case would be well above half of the whole boat price. Probably somewhere between 60 and 70%....

PS: just to get the ball rolling, I threw in my vote.
Gut feeling tells me that at 50% it might be worth considering...
...but I'm more interested in your unbiased views, of course!

 

[jrudge]

Suppose is it a judgement based on how old the boat is and how well ( from what you can see) it has been maintained.

If it is subject to a judge etc it is quite possible the guy had no money. If it looks poorly maintained then the odds of a bigger problem become real.

Can you ask around and find out who looked after it before it was impounded and ask them for a view. Or find the last owner?

 

[jfm]

If there is a major engine failure then several people must already know, including (say) the crane operator or boss of the yard where she is sitting now. So I would say go and do some digging and pay a few people for their time. ASSUMING that sort of enquiry produces an ok answer, even:"All I know sir is that 4 months ago the skipper drove her into our crane slings and she was fine," then I'd bid 35% below market price so I voted 25% above. "Market price" of course might be a low number for a big olde flybridge even with 2x working engines.
The judge is going to take the highest bid, so what he thinks doesn't count - what matters is what other bidders think. I think most boat buyers happen not to be trigger happy cash burners at the moment of boat buying, so they will tend to bid around -40% or -50%, hence my suggestion of -35%

 

[AndieMac]

I like the idea of some locally acquired information at boatyard level, yard workers generally don't mind sharing info, particularly if it's got some "gossip" value.
It's difficult for people to make calculated suggestions without actually knowing all the facts about the subject, but also very understandable if there is a potential bargain to be had, you would need to play your cards very close to the chest, so to speak.
Depends on how important winning the tender is to you, as jfm implied.

 

[lisilou]

I'd ask around locally. Someone's bound to know the boats history then, based on that I'd take a punt on 50% or walk away.
L

 

[Pinnacle]

Please tell us it's not wooden!

 

[MapisM]

Thanks everybody for your contribution.
It's nice to see that my 50% gut feeling is shared by most - also because that rules out this potential headache, at least for the moment.
In fact, the starting bid price will be somewhere around 30% less what I would consider a fair market price for the thing.
Which doesn't mean it will be sold of course, and if not, they should arrange a new auction with a lower starting bid, which might make it more interesting.

But just for the records, in reply to the points raised:

I did try to ask around, and according to the few who know a bit of the boat history, she seems kosher, sort of.
Taken in p/x from the now bankrupt dealer 6 years ago (no less!), running normally back then, and advertised at 3 times the price at which she will soon be auctioned - 'fiuaskme, no wonder that they didn't shift her (as well as several other boats) and eventually went belly up...!
Since then, she was put on the hard, winterized (allegedly), and left collecting dust, sun and rain. Though I must say that the gelcoat and all exterior stuff withstood such beating amazingly well (just as one example of what I said in the other thread about older boats being built better - memo to self: don't forget to follow up on that... ).

@Jfm, re. "what the judge thinks doesn't count": 100% agreed, when talking of the price. Of course that will depend on what other punters (if any!) are willing to offer.
When I replied to PYB that it's "his way or no way", I meant that he sets the rules, i.e. only allowing inspections but without turning on anything - let alone seatrialing the thing.
And he has the right to establish a starting bid obviously, but he must progressively lower it, till she remains unsold.

@AndieMac, re. how important the thing is to me: not that much, TBH.
I mean, she's a lovely boat in more ways than one, and could be appealing at the right price.
But if there's one postulate I'd suggest everybody to bear in mind when looking for a used boat, it's that there's no such thing as a lost opportunity. Ever.
There are only other opportunities you are not yet aware of - lot of them! :encouragement:

@Pinnacle: nope, no worries P, a proper plastic fantastic tub!

 

[Spi D]

But then again - the judge is there to sell it best possible.

He might just be open for a negoriation on terms and conditions. I did it once, helping a friend in a similar case: No test/trial, but the lawyer committed to ensuring that the engine was in good order - or would bring it to the state of being.

That ended up costing the heirs of the estate almost the full agreed value of the boat - to my friends benefit.

 

[oldgit]

Sold as seen and Lying

Price depends also on who else is likely to bid on the boat.If a popular sellable boat a dealer is far more likely to enter a decent bid knowing he has the facilities to get it up and running in house and get it out again at a quick profit. He may even "know" the boat.
A lost and lonely old crock unloved by all will only attract those looking for an absolute give away and they will bid accordingly ?

 

[Deleted User YDKXO]

To be honest Mapism it is difficult to give an opinion without having more details about the boat itself because my first thought when buying a boat is always how much will I get for it when I sell it and how easy it would be to sell and that obviously depends on the manufacturer and the model. Also how do you define market value? Nobody really knows what boats actually sell for. FWIW I would be thinking about market value -30% for a popular model and -50% for a less well known model as maximum prices I would pay. You've got to be realistic about it. If you are looking at the boat there will be others sniffing about too looking for an apparent bargain

With regard to the condition and if it was me, I would pay for a surveyor to do a hull and limited equipment survey. Surely he will be able to test electrical items? I would also pay for an engineer to inspect the engines and generator irrespective of whether they can be turned on. At the very least he can get an oil analysis done which should tell you if the engines are completely seized or not or if the oil has excess contaminants of one sort or another, indicate an impending problem. What you don't know of course is how long the oil has been in the engines because it needs to have been in the engines for at least 30hrs running time to reflect the condition of the engines. Do you have any idea when the last service was done? Apart from this, the engineer might notice something you've missed or he might have access to the engine manufacturer's service records

In the end buying any boat is a lot about gut feeling. Gather as much information as you can but if your gut feeling tells you that you don't have enough information or there is something about the boat that doesn't add up, walk away. Better to lose a good boat than buy a dud one

 

[Divemaster1]

MapisM,
If these are older engines, eg DD's which I may know something about, and the boat otherwise is brilliant, I would take the following approach/reasoning.

Asking price minus 10-20% ...

Then knock off the cost of a engine re-build ...

If you use a reputable company for re-build, you need to calculate with around €2,200 per cylinder (or around €25 - 26,000 per engine).

An oil analysis of something that has been standing still for a while will have metal debris sunk to the bottom of oilpan and not suspended in the oil, so limited value ... a Visual inspection of cylinder bores etc., is feasible and could give an indication, but not a guarantee of a healthy engine.

Better to take an approach of;

"As you cannot test, you have to assume worst case scenario and that the engines need a re-build"

 

[Trundlebug]

By way of an example with a happy ending, a good friend of mine has a boat which was bought almost unseen as a repo from the authorities as it had been used as a drug runner (quite a few years ago now).

I don't know the details or the figures involved but although he bid a big discount on normal market price, it was still a sizeable sum to lose if the boat turned out to need extensive work.
His bid was accepted and luckily it turned out to be a fantastic boat, with relatively little work required.
He renamed it, very appropriately, "The Longshot".

 

[MapisM]

Haha, I suppose that knowing what that boat was used for, the assumption of proper maintenance was a reasonably safe bet!

Thanks also to the latest posters for the additional suggestions, all valid points.
I'll bear them in mind for if and when the auction will reach a sensible price - at the moment, my guess is that the minimum bid of the first one will not attract a crowd of punters...!