Drastic reduction in secondhand boat prices ?

[alant]

Just your opinion. First it is not 10%, second the seller is competing in a market where not all boats are offered through a broker. The market sets the price, the seller decides whether he wants to retain all the sale value by putting in the effort to sell the boat, or forgo part of the proceeds by paying somebody else to sell his boat for him.

Removing intermediaries will not reduce the price of second hand boats in general. Intermediaries only exist if they perform a useful economic function of getting buyers and sellers together to achieve a mutually acceptable deal.

Well, a typical broker fee, is 8% plus 20% VAT, which = 9.6% if you want to be pedantic.

It is illogical & against all human nature, to expect any vendor, not to maximise his take which will include any fees.

 

[JumbleDuck]

Well, a typical broker fee, is 8% plus 20% VAT, which = 9.6% if you want to be pedantic.

It is illogical & against all human nature, to expect any vendor, not to maximise his take which will include any fees.

But why would the purchaser care about that? Who is going to view a boat and think "I'd offer £30k if this was a private seller, but it's a broker so I ought to offer a bit more"?

As far as I can see, the advantage to a seller in using a broker is principally reduced hassle. There may be a reasonable hope of selling for a bit more, thnks to better marketing, but I think I'd want to see some evidence of private sale vs broker sale achieved prices for some common classes selling in reasonable numbers before concluding that that effect is significant, or exists.

 

[Tranona]

Well, a typical broker fee, is 8% plus 20% VAT, which = 9.6% if you want to be pedantic.

It is illogical & against all human nature, to expect any vendor, not to maximise his take which will include any fees.

Yes, but not logical to assume that the resulting sale price is greater than the market price - that is what the buyer is prepared to pay. If the price does not yield what the seller wants after his expenses and the price does not meet the buyer's expectations no deal is done.

If the market were "efficient" enough to match individual buyers and sellers direct then intermediaries would not exist - but they do, and as they are not compulsory they only exist if they perform a useful function.

 

[chinita]

perhaps Chinita would like to buy it

No need.

The Buckinghamshire Centaur Massacrer has moved on.

For now.

 

[alant]

But why would the purchaser care about that? Who is going to view a boat and think "I'd offer £30k if this was a private seller, but it's a broker so I ought to offer a bit more"?

As far as I can see, the advantage to a seller in using a broker is principally reduced hassle. There may be a reasonable hope of selling for a bit more, thnks to better marketing, but I think I'd want to see some evidence of private sale vs broker sale achieved prices for some common classes selling in reasonable numbers before concluding that that effect is significant, or exists.

A buyer doesn't think "I'd offer £30k if this was a private seller, but it's a broker so I ought to offer a bit more", thats absurd!

However, a buyer, if the sale is thru a broker, will be aware that the fee must be paid for somehow.
Its a fixed cost, which whilst nominally being handed over by the vendor, is already factored into his selling price.
It makes little difference what the commodity is, any vendor will always try to maximise their return & this will be irrespective of market forces.
Any buyer understands this & if a broker isn't involved, will take this fee into consideration, when negotiating, by forcing the price down accordingly.

 

[JumbleDuck]

It makes little difference what the commodity is, any vendor will always try to maximise their return & this will be irrespective of market forces.
Any buyer understands this & if a broker isn't involved, will take this fee into consideration, when negotiating, by forcing the price down accordingly.

Bit of a contradiction there, old boy. You've got the buyer forcing the price down at the same time as the seller maximises his return.

 

[Seajet]

Yup, every weekend I consider it, and could probably afford somewhere up to around 20 in capital knowing I'd get a bit back at least. But that would be dwarfed by the cost of the hole in the water at a marina in less than 5 years. Moorings seem to be sold through some old boys network rather than the open market so I can't even figure out how you'd get one.

In short it makes sense to rent, which means I don't get to sail as much as I'd like.

A marina berth is an extravagant hole in the water for any size or value boat.

Moorings are not sold or let on any old boys network I know of, and ones which used to have a 10 year waiting list can now be had immediately, if one wants one and finds who runs them in the area you fancy.

As for brokers fees and their affecting prices, it has long been the case that one expects to pay a little more for a boat coming through a brokerage compared to a private sale, for the extra the buyer gets a little more security and hopefully proper legal arrangements.

 

[NealB]

..........Its a fixed cost..........

No it's not, it varies directly with the agreed price.

I also don't think your argument, in general, is correct. I'm looking at making an offer on a boat very imminently. Some of the boats are private sales, some through brokers. I will not be prepared to offer any more for the boats on brokerage.

 

[bedouin]

If buying thru a broker, where else can the 10% broker fee go?
The vendor has little choice but to build it into his price, which if accepted, the buyer pays.

I don't agree - the value of the boat is what the buyer will pay for it. Unless the buyer sees an advantage in buying through a broker then he will pay the same for a private as for a broker sale - so the brokerage costs will usually come from the seller who could have pocketed more through the private sale.

It is the seller who is benefiting from the broker - getting the marketing and someone to show the buyer around so it is not surprising that he picks up the bill.

 

[jonic]

I don't agree - the value of the boat is what the buyer will pay for it. Unless the buyer sees an advantage in buying through a broker then he will pay the same for a private as for a broker sale - so the brokerage costs will usually come from the seller who could have pocketed more through the private sale.

It is the seller who is benefiting from the broker - getting the marketing and someone to show the buyer around so it is not surprising that he picks up the bill.

The buyer also gets the advantage of a professional VAT status check, Title and mortgage history, RCD check, funds that are not held by the seller during any post survey dispute, a properly administered legal contract that ensures he can't be gazumped during his survey process, correct legal transfer of title and a properly audited and documented paper trail of the whole process.

Interestingly in the USA the buyer also employs a second broker to do the closing and legal paperwork, and the fee for both side's brokers - higher than here - is then split equally between both parties. Here in the UK the fee is lower and the seller pays.

 

[E39mad]

I am not in the camp of brokerage boats are more expensive than private sales. In this arena, the market dictates asking prices.

A vendor may use a broker because it could cost them a small fortune to get a viewing and possibly an overnight stay if they do not live locally to their yacht. The hassle factor as well as the cost/time of a viewing let alone a sale are just not worth it in many vendors minds hence why they use a broker.

 

[alant]

Bit of a contradiction there, old boy. You've got the buyer forcing the price down at the same time as the seller maximises his return.

How contradiction?

Isn't that how the marketplace has worked since time began?
It is called haggling!

 

[zzyyxx]

Moorings are not sold or let on any old boys network I know of, and ones which used to have a 10 year waiting list can now be had immediately, if one wants one and finds who runs them in the area you fancy.

Well, that's it really, how do you find this information? It seems to be the one thing even Google doesn't know.

Besides, isn't "if you know who runs them then you can get one" pretty much the definition of an old boy network?

 

[alant]

No it's not, it varies directly with the agreed price.

I also don't think your argument, in general, is correct. I'm looking at making an offer on a boat very imminently. Some of the boats are private sales, some through brokers. I will not be prepared to offer any more for the boats on brokerage.

No-one is forcing you to.
However, this "fixed cost" as a % will figure in the vendors calculations of acceptable return, whether you think so or not!

You statement "I will not be prepared to offer more", is balanced against the vendors " I will not accept less", which is what he wants in his pocket after all 'expenses' are covered. Whilst technically, brokers are paid by the vendor, this must be figured in the vendors price, otherwise its a loss in his mind.

You may find yourself paying more for that the boat being sold by a broker, because that broker has suggested/insisted the vendor presents the boat better, thereby allowing you to think its worth more. I know brokers, who have cleaned & polished boats themselves, unbeknown to the vendor just before a viewing, because they are in scruffy condition, with that same broker refusing to take on stock which is unacceptable, but which the vendor thinks is wonderful.

Its all a game, like horsetrading.

 

[alant]

I am not in the camp of brokerage boats are more expensive than private sales. In this arena, the market dictates asking prices.A vendor may use a broker because it could cost them a small fortune to get a viewing and possibly an overnight stay if they do not live locally to their yacht. The hassle factor as well as the cost/time of a viewing let alone a sale are just not worth it in many vendors minds hence why they use a broker.

What exactly is this nebulous "market"?

As you clearly have stated, "the cost/time of a viewing let alone a sale ----hence why they use a broker".
So that cost 'is' being factored into the selling price!

 

[bedouin]

No-one is forcing you to.
However, this "fixed cost" as a % will figure in the vendors calculations of acceptable return, whether you think so or not!

You statement "I will not be prepared to offer more", is balanced against the vendors " I will not accept less", which is what he wants in his pocket after all 'expenses' are covered. Whilst technically, brokers are paid by the vendor, this must be figured in the vendors price, otherwise its a loss in his mind.

You may find yourself paying more for that the boat being sold by a broker, because that broker has suggested/insisted the vendor presents the boat better, thereby allowing you to think its worth more. I know brokers, who have cleaned & polished boats themselves, unbeknown to the vendor just before a viewing, because they are in scruffy condition, with that same broker refusing to take on stock which is unacceptable, but which the vendor thinks is wonderful.

Its all a game, like horsetrading.

The market value of any object is set by the buyer, not the seller (except of course for insurance claims ) A boat may be worth more to the seller than the market value but that does not make that the market value.

I might want to sell by boat for £100K but that does not make that the market value (worst luck). This is asymmetric because a buyer has more options than the seller.

 

[jonic]

The market sets the price.

Otherwise it doesn't sell.

Period.

 

[JumbleDuck]

However, this "fixed cost" as a % will figure in the vendors calculations of acceptable return, whether you think so or not!

So will whether he has bought another boat, whether a storage bill is coming due, whether he needs the money to repair the car, whether his daughter has just started university and a host of other things. He's still only going to get what the buyer is willing to pay.

 

[Seajet]

Well, that's it really, how do you find this information? It seems to be the one thing even Google doesn't know.

Besides, isn't "if you know who runs them then you can get one" pretty much the definition of an old boy network?

No, you just ask around !

If you fancied a mooring in Chichester Harbour or the Solent ( a bit far for you ? ) I might well be able to point you in the right direction, having researched most deep water options when I had a fin keeler, and I know Chichester Harbour and its' options pretty well anyway.

Deep water or drying ?

If the boat can do it I'd recommend a half tide mooring, they're closer inshore and sheltered, easy to row to.

Things to always check with any mooring is car parking and is there a secure place to leave the tender; clubs tend to score well here compared to local authority moorings.

Deep water moorings are often in the middle of nowhere, rough enough to require a young lifeboat as a tender, a bit vulnerable to thieves, and the tender access at the shore is often tidally restricted so the cruiser may be bobbing away happily but one is just as restricted getting on & off as a half tide job...

 

[Lakesailor]

If the price does not yield what the seller wants after his expenses and the price does not meet the buyer's expectations no deal is done.

I am not in the camp of brokerage boats are more expensive than private sales. In this arena, the market dictates asking prices.

The market sets the price.

Otherwise it doesn't sell.

Period.

Hmmm. If a vendor has a boat with a broker and has a base price he will not accept less than he may find the boat is overpriced for the market when boker''s fees have been added.
The boat doesn't sell.

If he, instead, offers it for sale privately he can achieve his base price yet ask almost 10% less for the boat, which may bring the boat within the market price.
The boat does sell.

How difficult is that to grasp?