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Economics or Happiness (You Decide)

A would be client of mine (and a friend, although I’ve never sold him a guitar and never met him in person-the internet is a funny place) called me up to ask about a particular ’59 ES-335 he was thinking about buying. It had tons of issues-extra holes under the guard, removed Bigsby, heavy wear and probably BO. But he really liked it and was very concerned about overpaying for it. Nobody likes to overpay for anything but there is a limit, I think. Most vintage buyers have a pretty good idea about what a no issue guitar of a particular type should sell for-although I can think of a few dealers who take the term “should” to whole new levels. But we’ll leave that alone. What bogs so many buyers down is when they find a guitar they like-they like the way it plays, they like the way it sounds and they like the way it looks (and you can’t see under the guard anyway) but they hesitate. They want to know what each hole, each crack, each parts swap does to the resale value. I understand the desire to do this but you really can’t. If you assign a value to each issue, each hole and a value to each changed part, eventually someone will have to pay you to take the guitar off their hands. It’s a little like the reverse of building a car from parts-it’ll cost you ten times the cost of buying the already built car. The general rule about a refinished guitar is that it’s worth 50% of the value of an original. The general rule about a headstock break is the same. So, what if somebody has a 59 dot neck with a broken neck and a refinish for sale? Is it worth 25% of the value of a no issue one? And what if it has a Bigsby-that’s another 15-25% off. And maybe a few filled holes at $1000 each off. I’m not going to do the math (although I could) but you get the idea. There are diminishing returns here. In situations where I’m dealing with a severely impacted guitar, I often work backwards. If the PAFs are intact, that’s $3500 or so. Original parts can add up pretty quickly and even a refinished and repaired headstock husk has “old wood” value.

Pretty nice 61 dot neck, right? Look at the next photo to see why it was a $6500 61 dot neck.

Pretty nice 61 dot neck, right? Look at the next photo to see why it was a $6500 61 dot neck.

 

Yikes. That's pretty horrible. Same guitar as above

Yikes. That’s pretty horrible. Same guitar as above

About 2 years ago, I bought a 61 dot neck that had a headstock break and a Bigsby (and Grovers and a fair amount of wear). I sold it for around $7000 and made a modest profit. It was a decent sounding, decent playing guitar with a terrible repair-it was solid but really ugly and the front of the headstock was poorly re-veneered and painted with no inlay. Pretty cheap for a dot neck-the PAFs and the bridge were worth almost that much. Then the buyer did something sort of miraculous. He did something I almost never consider doing (because it’s usually a bad business decision). He made it into a project. He had a local luthier make a new neck for it using the original binding, fingerboard, inlays and truss rod. And he made a big ol’ 59 sized neck and the repair was just stellar. This was not a small investment either-close to $4000. So now it’s a renecked Bigsby ’61 instead of broken headstock 61 and his investment is around $11K. Is he nuts? I would have said yes at first look-at least from an economics standpoint. A reneck is still considered to be half the value of an original so, in theory, it was worth exactly the same as it was before $4000 worth of work. Except that it wasn’t. It looked perfect, it played beautifully and it now had the neck that everybody wants. When it came up for sale, I hesitated. can it really be worth that much? I remembered how good it sounded even with its broken neck and bought it back. It was a wonderful guitar-good enough to keep (if I didn’t already have a 58). With 59 dot necks well over $30,000 and approaching $40K or more, maybe this was an opportunity for someone to get a big old neck dot for well under half the price of a 59. I listed it at $14500 and had five potential buyers within a day. Four of the five were questioning my pricing and asking me to justify how a renecked 61 could sell for that much. My explanation was that if you want a dot neck with a big neck and you can’t afford a 58 or 59, you can buy a reissue or you can buy one with issues. A smart buyer saved a wad of cash over the cost of a 59. Was it a good investment? Well, the buyer traded it back to me months later for a big neck early 60 and I put it up again for the same price. Gone in a day, again.  The way I see it,  if you can get the guitar of your dreams for a price you are comfortable with that plays and sounds just like you want it to, the smart thing to do is damn the torpedoes and buy it.

And here it is re-necked, stop tailed and ready to rock.

And here it is re-necked, stop tailed and ready to rock.

5 Responses to “Economics or Happiness (You Decide)”

  1. Frank says:

    Often his kind of happiness doesn’t last too long and you find yourself looking at the issues, which seem to get bigger and bigger… (my experience)

  2. Rod says:

    Way back in 1974 I bought my (62?) 335 (number 96461) as my guitar for professional use. In those days, remember them, we could only afford one guitar. The neck was 1 9/16 at the nut, custom ordered?, and was very whippy but I liked the guitar overall. About 20 years ago I finally decided something had to be done and, as I will NEVER sell the guitar, affecting the value was not an issue. Accordingly, I had the neck replaced with a chunkier 1 11/16 by Sid Poole, a great UK luthier, sadly no longer with us, and have never, not for one second, regretted having it done. It looks great, plays beautifully and feels terrific. Apart from the effect on value, which is academic since I won’t sell it, what could be wrong with having it done? It was only after having it replaced I realised how much I disliked the 1 9/16 nut.

  3. cgelber says:

    Kinda makes my point better than I made it.

  4. Mike says:

    I think I would have done the same thing. However, I would have found a luthier that is highly restorations of Gibsons. That is where I and the owner differ. Not to say his choice was bad, it is just you want someone who has years of experience dealing with vintage instruments and thus knows how to mark it all come together.

    Bottom line, I would not hesitate in buying my dream vintage ES I even though it had to be restored to its previous glory. As Maestro Segovia said a guitar life is about 50 years.

  5. Rod says:

    Looks like it’s just you and me then Charlie….

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