Drastic reduction in secondhand boat prices ?

[Tranona]

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!

All your contradictory ramblings are demonstrating that you have little idea how markets work. Suggest you do a basic course on markets and then you might understand how prices are determined and the role of intermediaries in creating and sustaining markets.

Look around you and try and identify any significant market where transactions are direct from principal to principal. Intermediaries exist in different forms - dealers, auctioneers, agents, brokers call them what you will they create spaces where buyers and sellers meet and facilitate the flow of information that enable those buyers and sellers to arrive at a price for the transaction. In most cases the cost of the intermediary is borne by the seller as it is his cost of entering the market, but equally some costs are met by the buyers in some markets. Think auctions, where the auctioneer takes a cut from both the seller and the buyer - his reward for creating the basis for the transactions. When you then see commissions of 15% from the seller and 10% from the buyer you realise how efficient the yacht market is. Even more so when you consider that you also have the option to piggy back on the structured market and buy or sell direct. However, this method does not suit everybody, nor does it guarantee the best deal for both parties and I would suggest that without the structured market to provide a framework, the "direct" market would collapse.

It may well be that the structured market will change with the growth of communications based market spaces, but exposure of your offering to a wide number of potential buyers is only part of the transaction process and there will still be a role for somebody to carry out all the other processes required to complete a complex and high value transaction successfully. You can see this already with some intermediaries deconstructing the process and offering the service for discrete activities as stand alone items. However, there will always be transaction costs in some form or other, so suggesting prices for buyers will automatically fall without an intermediary just does not stack up.

 

[Tranona]

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?

Not difficult at all - the big word is "IF". Advertising and selling your boat yourself is not a cost and effort free activity. There is no compulsion to use a broker - but many people do. They have just the same choice as the person who chooses to sell direct, but they don't preferring to pay somebody else to do it for them.

I wonder why? Are they all stupid?

 

[JumbleDuck]

However, this method does not suit everybody, nor does it guarantee the best deal for both parties and I would suggest that without the structured market to provide a framework, the "direct" market would collapse.

There is no such thing as a glider brokerage, to the best of my knowledge, but the sailplane market seems to work very efficiently for things with prices in the same general range as yachts. It would be interesting to know what proportion of yacht sales go through brokers. I'll hazard a guess at 25% by number and 75% by value.

I think yachts sold through brokers probably do go for more than private sales, but only because brokers will, if they are any good, reach more potential buyers.

 

[Lakesailor]

They have just the same choice as the person who chooses to sell direct, but they don't preferring to pay somebody else to do it for them.

I wonder why? Are they all stupid?

For the same reason that most people sell their houses through estate agents. They have been led to believe it's the only way.

 

[richardbayle]

All your contradictory ramblings are demonstrating that you have little idea how markets work. Suggest you do a basic course on markets and then you might understand how prices are determined and the role of intermediaries in creating and sustaining markets.

Look around you and try and identify any significant market where transactions are direct from principal to principal. Intermediaries exist in different forms - dealers, auctioneers, agents, brokers call them what you will they create spaces where buyers and sellers meet and facilitate the flow of information that enable those buyers and sellers to arrive at a price for the transaction. In most cases the cost of the intermediary is borne by the seller as it is his cost of entering the market, but equally some costs are met by the buyers in some markets. Think auctions, where the auctioneer takes a cut from both the seller and the buyer - his reward for creating the basis for the transactions. When you then see commissions of 15% from the seller and 10% from the buyer you realise how efficient the yacht market is. Even more so when you consider that you also have the option to piggy back on the structured market and buy or sell direct. However, this method does not suit everybody, nor does it guarantee the best deal for both parties and I would suggest that without the structured market to provide a framework, the "direct" market would collapse.

It may well be that the structured market will change with the growth of communications based market spaces, but exposure of your offering to a wide number of potential buyers is only part of the transaction process and there will still be a role for somebody to carry out all the other processes required to complete a complex and high value transaction successfully. You can see this already with some intermediaries deconstructing the process and offering the service for discrete activities as stand alone items. However, there will always be transaction costs in some form or other, so suggesting prices for buyers will automatically fall without an intermediary just does not stack up.

Bloody well said. Totally agree.

 

[Lakesailor]

Financial Adviser

 

[Malo37]

All your contradictory ramblings are demonstrating that you have little idea how markets work. Suggest you do a basic course on markets and then you might understand how prices are determined and the role of intermediaries in creating and sustaining markets.

Look around you and try and identify any significant market where transactions are direct from principal to principal. Intermediaries exist in different forms - dealers, auctioneers, agents, brokers call them what you will they create spaces where buyers and sellers meet and facilitate the flow of information that enable those buyers and sellers to arrive at a price for the transaction. In most cases the cost of the intermediary is borne by the seller as it is his cost of entering the market, but equally some costs are met by the buyers in some markets. Think auctions, where the auctioneer takes a cut from both the seller and the buyer - his reward for creating the basis for the transactions. When you then see commissions of 15% from the seller and 10% from the buyer you realise how efficient the yacht market is. Even more so when you consider that you also have the option to piggy back on the structured market and buy or sell direct. However, this method does not suit everybody, nor does it guarantee the best deal for both parties and I would suggest that without the structured market to provide a framework, the "direct" market would collapse.

It may well be that the structured market will change with the growth of communications based market spaces, but exposure of your offering to a wide number of potential buyers is only part of the transaction process and there will still be a role for somebody to carry out all the other processes required to complete a complex and high value transaction successfully. You can see this already with some intermediaries deconstructing the process and offering the service for discrete activities as stand alone items. However, there will always be transaction costs in some form or other, so suggesting prices for buyers will automatically fall without an intermediary just does not stack up.

Apologies but the above is total waffle.

 

[FullCircle]

Apologies but the above is total waffle.

Incisive reply. Respect.

 

[Tranona]

For the same reason that most people sell their houses through estate agents. They have been led to believe it's the only way.

Some they are all wrong and you are right?

 

[JumbleDuck]

Some they are all wrong and you are right?

In Scotland, and particularly the east of Scotland, very few houses are sold through estate agents.

 

[Seajet]

With respect to Lakesailor that's not what he's saying is it ?

Just pointing out that people have options, in the case of houses not exercised enough; my girfriend is selling her rather valuable house and the estate agents stand to make a fortune just for making some nice brochures, but she is too traditional thinking to try selling it herself which would save the price of a very good car.

 

[Lakesailor]

Some they are all wrong and you are right?

In your quest to show me and everyone who disagrees with you to be wrong you have misunderstood what I said.

They have been led to believe it's the only way.

That is. Just to make it perfectly clear. There are other ways to sell house, cars, boats etc.
If you don't agree with that you have been completely taken in. I have sold several boats and three houses without the help and attention of agents.

 

[E39mad]

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!

NO - it is not factored in. The price is what the market is prepared to pay - simples!!

You are saying it costs more to buy a brokerage boat because of the added fees. Well a private vendor also has fees which can vary depending upon where they live in comparison to the boat, the number of adverts they place etc etc. In some private sale cases it may eventually cost more than a brokerage fee!!

 

[Tranona]

In your quest to show me and everyone who disagrees with you to be wrong you have misunderstood what I said.

That is. Just to make it perfectly clear. There are other ways to sell house, cars, boats etc.
If you don't agree with that you have been completely taken in. I have sold several boats and three houses without the help and attention of agents.

If you bothered to read what I wrote you will see that I always stress that people have a choice and many people choose to
use an intermediary. What started this discussion was a statement saying that if there were no brokers prices would be lower.

What I, and others are saying is that there is no evidence to support that statement.

This does not mean that sellers might not gain a better net price by taking on the marketing themselves but but there is no guarantee. Just because you and others prefer to use this option that does not mean it is right for everyone.

 

[freddy the frog]

presentation

NO - it is not factored in. The price is what the market is prepared to pay - simples!!

You are saying it costs more to buy a brokerage boat because of the added fees. Well a private vendor also has fees which can vary depending upon where they live in comparison to the boat, the number of adverts they place etc etc. In some private sale cases it may eventually cost more than a brokerage fee!!

I think when selling a boat the presentation is the key, houses are no different. If i was looking to buy i would rather pay a little more for a better example.
If you are selling present the boat well, make it smell nice, declutter etc maye replace any manky items burst fenders tatty mooring lines give it a good kerbside appeal, first impressions are everything.
Nothing wrong with selling privately, sold my last boat through a very well known broker, was on the market fo a year or so lots of lookers so i was told, a freind of mine berthed nearby witnessed a couple of these viewings broker unlocked the boat walked off and lit a fag up and just hovered nearby till they finished looking no attempt to go throuh the boat with the potential client. The broker showed no interest at all. They are being paid to sell your boat after all.
We got a viewing on a saturday when i was on board i took the client all over the boat showing every datail and how things work that customer put a deposit down and bought it. Next time i will sell my current boat privately.

 

[Tranona]

In Scotland, and particularly the east of Scotland, very few houses are sold through estate agents.

But they still use an intermediary in the transaction.

 

[jonic]

I think that a critical point that is being missed here is that a large proportion of the professional yacht brokers work, over and above an estate agent for instance, is that in addition to the marketing, viewings and negotiations he also has a similar role to the two conveyancing solicitors in a property sale. I have files as thick as you like on some really complicated yacht sale transactions, and colleagues who are property solicitors are amazed at just how much work and man hours are involved.

There is the initial due diligence which due to the archaic nightmare of the UK boating registration and VAT processes can be extremely long winded.

There are no central databases to consult on the VAT and RCD, two forms of registration or no registration at all! So it often relies on painstaking detective work and original document paper trails.

Owners are often oblivious to the problems that may be attached to the boat due to a previous poorly handled amateur broker or private sale.

In the last few months I have had to have owners put a boat through the RCD that they thought was exempt, uncovered a 20 year old charge still on a boat that everyone was convinced was clear, found problems with estate sales where the deceased still effectively owned the boat after it had been sold on, dealt with inter family transfers of boat shares that were not legal, and worked directly with HMRC on boats that had been imported and not VAT paid.

And that's before we even started on the photography, specification and buying the advertising let alone getting on the phones and doing the mail outs.

Then comes the viewings, offers, negotiations, sale and purchase contracts, receipted deposits in trust accounts, working with the surveyor, working with the finance house, more due diligence, complying with the anti- money laundering legislation, drawing up the completion documents, collecting the balance and finally going to exchange and handing over clean title.

... and it's not over yet because then there is helping with the registration, radio license and EPIRB registry etc.

But I am a full service broker, who has been trained and qualified in all the above and via my professional association has access to a board of marine specialists and marine lawyers should I need it.

Not all yacht brokers operate the same way but the vast majority of professional organisations do.

That is what the seller is really paying for and the buyer is getting all that benefit too.

There are ALWAYS more boats for sell than buyers, which is why the market is not liquid with a rapid turnover.

All things being equal, including price, a professionally handled brokerage boat that has had the correct due diligence will generally come to the front of the queue, especially when we start to move above the £60-70k mark.

 

[freddy the frog]

Do you look over the boat and make recomendations to the client about the boat that you are taking on to sell i,e giving it the wow factor, as i have said previous first impressions are important, i see so many tired looking boats up for sale looking neglected and not preped for sale.
We are talking thousands and i feel the broker should recomend this to the client if he expects to sell the boat.
Tired and neglected boats will not acheive their full asking price or anywhere near it.

 

[jonic]

Yes.

On occasion I have asked them to commission an independent pre-purchase survey too.

 

[JumbleDuck]

But they still use an intermediary in the transaction.

They use solicitors, yes, but then so do English people, I believe. Estate agents only really do marketing, don't they, leaving the legal boys, or the conveyancers, to do the intermediary stuff.