18. Appraisal 401
Fair Market Value 403
Current Market Value 403
Oddballs and Custom Yachts 404
Appraisal Guides 406
Determining Original Cost 408
Extra Equipment 409
Learning about Equipment 410
Repair Costs 411
Geographical Considerations 411
Contingency Values 412
Excerpt: Chapter 18
Surveyors provide appraised values on pre-purchase survey reports because they are needed by banks and insurance companies who loan money and insure the boats soon after they are purchased.
About 95% of my clients purchasing boats call me to perform a survey, not an appraisal, which are two entirely different things.
But, given the fact that insurance companies and banks have come to rely on survey reports, we have become stuck with this long standing practice.
In essence we are suppling a free service to these businesses that ought to be commissioning their own appraisals, just like they do in their very own real estate business.
Never underestimate the ability of these outfits to squeeze a dime from someone else. Leave the appraisal out of your report and you're guaranteed to get two phone calls, one from a bank and the other an insurance company, asking you did not provide them with this free service.
Lately there have been a number of surveyors who have been certified by the American Society of Appraisers and who have raised a lot of questions about marine appraisals.
Some have suggested that all surveyors should employ complicated rules and formulae for appraising boats. Some have advanced the notion that all surveyors should have an ASA certification.
My view is that we should first understand that there is a world of difference between a survey and an appraisal. When a client calls asking for an appraisal, that is an entirely different function.
The vast majority of surveyors consider appraising the value in the course of a pre-purchase survey to be a secondary function. They do it only because banks and insurance companies request it, yea demand it.
The fee we charge is for surveying, not for appraising. I don't see how anyone could perform a proper appraisal in less than a half-day's time, and yet I don't know any surveyor who spends more than an hour or so doing it on a buyer's survey.
Very few of my clients ever even ask me about price (they've studied the market so they know what's available at what price better than I), so I consider my appraised value more in terms of providing a reasonable valuation for lenders and insurers and not as the formal practice of appraising the vessel's worth.
Given my druthers, I'd just as soon not place a value in my reports. If the client also wants an accurate appraisal, then I would charge an additional fee for the time it will take me to do the research. This almost never happens.
(Additional spaces are added for easy screen reading.)
- 2nd Edition
by David H. Pascoe
Publisher: D. H. Pascoe & Co., Inc.
David Pascoe - Biography
David Pascoe is a second generation marine surveyor in his family who began his surveying career at age 16 as an apprentice in 1965 as the era of wooden boats was drawing to a close.
Certified by the National Association of Marine Surveyors in 1972, he has conducted over 5,000 pre purchase surveys in addition to having conducted hundreds of boating accident investigations, including fires, sinkings, hull failures and machinery failure analysis.
Over forty years of knowledge and experience are brought to bear in following books. David Pascoe is the author of:
- "Mid Size Power Boats" (2003)
- "Buyers’ Guide to Outboard Boats" (2002)
- "Surveying Fiberglass Power Boats" (2001, 2nd Edition - 2005)
- "Marine Investigations" (2004).
In addition to readers in the United States, boaters and boat industry professionals worldwide from over 70 countries have purchased David Pascoe's books, since introduction of his first book in 2001.
In 2012, David Pascoe has retired from marine surveying business at age 65.