Regarding appraisals in general, there is no “policy” for appraising repossessed boats, but there are certain guidelines that are followed by surveyors and brokers when they are evaluating the market value for any boat. Valuation usually starts with the sale price for similar boats. The legal definition of fair market value is the price that a willing buyer and a willing seller are able to agree upon. However, the purpose of a surveyor’s appraisal is to educate a buyer so that he or she can competently negotiate with a seller. As such, a surveyor should never rely upon the agreed upon purchase price for the transaction in question to establish market value for that particular boat.
Assuming an appraisal is being conducted prior to a sale, the appraiser will look to one or more industry sources, such as the “soldboats.com” database and the “BUC” guide to find recent sales of comparable boats, and adjust those numbers for the condition of the boat and the current status of the market in general.
However, for a boat that has been recently sold, the most reliable source of market value for that boat is the purchase price. This is the number that is usually relied upon by insurance companies and county tax assessors to determine the value of a boat, even if it is significantly below the “real” market value.
If a boat owner disagrees with a valuation, he or she should first share with the surveyor any evidence he or she may have regarding value. But if the surveyor refuses to change his opinion, there’s not much that can be done about it. If our reader feels strongly about the value, he should probably hire another surveyor to get a new appraisal.
Our reader was also interested in bringing a possible legal action against the surveyor for an unreasonable appraisal. But, based solely on what he shared with us, he does not appear to have a case.
Appraisal is the product of a person’s opinion — it is not a science. And, by definition, a buyer hires a surveyor to render an opinion about the condition and value of the vessel.
In other words, our reader hired the surveyor to render an opinion and, in fact, the surveyor rendered his opinion. In other words, he did his job.