Drastic reduction in secondhand boat prices ?

[Tranona]

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.

But don't the solicitors draw up the particulars, circulate them to prospective buyers, sift the offers, advise the sellers etc as well as the simple bit (for them) of conveyancing? And I guess charge more than the £350 I paid for conveyancing when I sold my mothers house!

 

[JumbleDuck]

But don't the solicitors draw up the particulars, circulate them to prospective buyers, sift the offers, advise the sellers etc as well as the simple bit (for them) of conveyancing? And I guess charge more than the £350 I paid for conveyancing when I sold my mothers house!

They generally do offer what would in England be estate agent services, yes, although in my experience viewings and the like are generally arranged directly with the seller. In fact the role of the solicitors in Scottish property dealing is pretty close to the role of brokers in yacht dealing, which is probably the point I was trying, rather inefficiently, to make.

 

[Lakesailor]

More fool them in Scotland then. They still don't need to use them. This concept that only "professionals" can do the business is rubbish.
Yes get a solicitor to do the legal aspects (that is money well spent) but the rest is money for old rope.
The last house we sold using an estate agent we ended up doing all the chasing. I do mean all. Like chasing the purchaser, and their solicitor. The estate agents were rubbish. The only thing they lent to the deal was having a local office, as our home was in an area that people sought for a particular school and so prospective buyers would check in at their office on a weekly basis. I still think we could have saved the fee by advertising ourselves.

 

[Tranona]

They generally do offer what would in England be estate agent services, yes, although in my experience viewings and the like are generally arranged directly with the seller. In fact the role of the solicitors in Scottish property dealing is pretty close to the role of brokers in yacht dealing, which is probably the point I was trying, rather inefficiently, to make.

Still an intermediary between the principals in the transaction, which was my whole point. How do their charges compare with the combined charges of an estate agent and a solicitor?

The difficulty some people seem have with this concept and role of intermediaries in markets is separating their individual experience from the conceptual framework and seeing that although the transaction process uses different mechanisms (brokers, solicitors, agents, auction houses etc) conceptually they are the same - just in a different form. For example E bay is conceptually no different from an auction house except for the medium it uses to match buyers and sellers and set a price. Also like a broker it provides a mechanism for completing the financial side of the transaction. We see the same with crowd funding - an alternative to conventional fund raising aimed at small scale activities because costs are low compared with conventional investment bank fund raising.

The mistake some people seem to make is to assume that advertising your boat is all you need to do, and that the growth of the net for example has made other channels redundant. However, as John explains above it is only one part of the process. The big challenge is converting one of those many hits on a website to a paying punter. That is what paying the broker, estate agent, auction house or whatever to do - but if you can do it yourself good luck, there is always that choice.

 

[jonic]

Come on lakey

People don't need to use photographers either, but they do.

It's a free choice

 

[JumbleDuck]

More fool them in Scotland then. They still don't need to use them. This concept that only "professionals" can do the business is rubbish.

Don't forget that the purchase proceeds rather differently in Scotland. If the house is marketed as "fixed price", an offer at that price will (almost certainly) be accepted and a lower offer will be considered. If it's marketed as "offers over" it's a bit more complicated, because a closing date has been set. In either case, though, the purchase can go through very swiftly indeed. Normally you wait for "closing missives" to be exchanged, which is basically solicitors haggling about details, and that takes a few days.

When I bought my first house, though, there was no exchange of missives (that's very rare) and I was committed to buying less than two hours after the solicitor made my offer. In my current place it took eight days from viewing to acceptance in principle and then two weeks for missives as all sorts of things were sorted out with the council, SEPA and so on.

What all this means is that if a solicitor is handling the sale, s/he will only accept offers from other solicitors and s/he will be very careful to have accurate particulars of the property available to potential purchasers. And, given that those particulars exist, the solicitor might as well do the marketing as well (generally as part of a Solicitors Property Agency covering an area like "Glasgow" or "Fife"). And given that all that is happening, there isn't much scope for estate agents to stick their weaselly snouts in.

There is absolutely nothing to stop you doing it all yourself, and indeed my local paper normally has 4 - 6 adverts per week from owners selling houses directly, but in our particular system the use of solicitors as agents works pretty well.

Damn, what an essay. Has that bloody trawler been launched yet?

 

[Wooden Boat Fittings]

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.

Good advice, also, for the plans-producer I mentioned back in Post #36....

Mike

 

[Tranona]

Don't forget that the purchase proceeds rather differently in Scotland. If the house is marketed as "fixed price", an offer at that price will (almost certainly) be accepted and a lower offer will be considered. If it's marketed as "offers over" it's a bit more complicated, because a closing date has been set. In either case, though, the purchase can go through very swiftly indeed. Normally you wait for "closing missives" to be exchanged, which is basically solicitors haggling about details, and that takes a few days.

When I bought my first house, though, there was no exchange of missives (that's very rare) and I was committed to buying less than two hours after the solicitor made my offer. In my current place it took eight days from viewing to acceptance in principle and then two weeks for missives as all sorts of things were sorted out with the council, SEPA and so on.

What all this means is that if a solicitor is handling the sale, s/he will only accept offers from other solicitors and s/he will be very careful to have accurate particulars of the property available to potential purchasers. And, given that those particulars exist, the solicitor might as well do the marketing as well (generally as part of a Solicitors Property Agency covering an area like "Glasgow" or "Fife"). And given that all that is happening, there isn't much scope for estate agents to stick their weaselly snouts in.

There is absolutely nothing to stop you doing it all yourself, and indeed my local paper normally has 4 - 6 adverts per week from owners selling houses directly, but in our particular system the use of solicitors as agents works pretty well.

Damn, what an essay. Has that bloody trawler been launched yet?

Things can happen just as quickly and easily in our part of the kingdom - particularly if you sell through an auction. However the big difficulty in many transactions is the "chain" that is the purchase of one property is dependent on the sale of another and the desire of both parties to exchange on the same date. Add in the difficulties related to mortgages, particularly in the recent past and you will find that estate agents and solicitors spend more time holding chains together than selling houses or doing the conveyancing. But if like me when I was selling my mothers house as executor it can be easy peasy. First time buyer - bit of uncertainty getting their mortgage in place but then 3 weeks from signing the contract to getting the money. The estate agent earned their keep by finding us a willing and able buyer, who we never saw. Easy money for them compared with some deals, but they did what they were asked to do.

I am sure John will tell you about similar problems with holding together deals on boats - and some where he might feel (for a couple of nano seconds) that his commission was easy pickings!

 

[jonic]

Things can happen just as quickly and easily in our part of the kingdom - particularly if you sell through an auction. However the big difficulty in many transactions is the "chain" that is the purchase of one property is dependent on the sale of another and the desire of both parties to exchange on the same date. Add in the difficulties related to mortgages, particularly in the recent past and you will find that estate agents and solicitors spend more time holding chains together than selling houses or doing the conveyancing. But if like me when I was selling my mothers house as executor it can be easy peasy. First time buyer - bit of uncertainty getting their mortgage in place but then 3 weeks from signing the contract to getting the money. The estate agent earned their keep by finding us a willing and able buyer, who we never saw. Easy money for them compared with some deals, but they did what they were asked to do.

I am sure John will tell you about similar problems with holding together deals on boats - and some where he might feel (for a couple of nano seconds) that his commission was easy pickings!

Never had the easy pickings one!

I'm off to bed. Night all :sleeping:

 

[JumbleDuck]

Things can happen just as quickly and easily in our part of the kingdom - particularly if you sell through an auction. However the big difficulty in many transactions is the "chain" that is the purchase of one property is dependent on the sale of another and the desire of both parties to exchange on the same date.

I think the lack of chains is a big advantage of the Scottish system, or at least for some people. When my uncle went into a home his house was sold to a couple who then couldn't sell their own - they had left themselves three months but in the meantime the market crashed. They ended up paying through the nose, as the contract they had so cheerfully signed specified that if they didn't have the money on the due date they had either to pay 15% annual interest on the agreed price until they could pay or be responsible for all the costs involved in putting the house on the the market (it was a private sale) and meet any shortfall in a final sale price to someone else. It took over six months more ... ouch.

The other big disadvantage of our system is that because any offer may lead to a binding contract at once, you have to get a survey done before offering. We had friends in Edinburgh who had ten surveys done, at ~£1k a time, before getting an offer accepted. That too was not uncommon in the boom years. Ouch, again.

Has anyone thought of craning it onto a low loader to get it to a crane which can, erm, hang on, have I got that right?

 

[Deleted member 36384]

…… The other big disadvantage of our system is that because any offer may lead to a binding contract at once, you have to get a survey done before offering. We had friends in Edinburgh who had ten surveys done, at ~£1k a time, before getting an offer accepted. That too was not uncommon in the boom years.

Not anymore! The seller must have a Home Report commissioned and made available to all. It's a poor system, the survey is of a poor quality done to a minimum standard; a subject for the Lounge.

 

[BrianH]

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.

In Italy, when I was interested in a boat under local brokerage, I was informed that I would have to pay an equal 4% as the owner. When I declined - the price was anyway too high and my offer had been refused - the broker said he would lower my fee to 2%. Still no deal and the boat was still on the market 5 years later, gradually dropping in price to less than I had previously offered.

EU membership has allowed other brokers into the market - Schmidt & Partners in particular - and the seller only fee has taken hold to break the original convention. The broker I was dealing with for the aborted sale has since gone out of business.

 

[Tam Lin]

Have had very little to do with yacht brokers but my recent experience was not good. I popped in to an East Coast brokerage on the off chance to see a boat which was on their website. They didn't know where the boat was. They took my email address and promised to contact me. They didn't. By chance I saw the boat on ebay, it was still in the boatyard. I bid for it and won it at much less than it was up for. Their loss. (If they weren't dealing with it any more, why didn't they just tell me?)

 

[alant]

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.

As an example, a fellow forumite continued to reject sensible offers (categorically stating 'don't approach the broker I have it with), whilst paying a monthly storage charge (the same yard can't understand either, since a 6 month fee would be much lower) & patently unable/unwilling to travel down from up north, to give the boat the attention it needs, consequently still unable to sell at the 'market value' several potential purchasers have considered reasonable. He thinks the broker fee could be eliminated, by selling himself, at the same time as racking up substantial costs in travelling/yard fees/etc.

The vendors 'market value', is based upon comparison of published selling prices (not actual purchase prices) of similar boats, forgetting, that condition will vary. The buyers 'market value', is based upon what he is prepared to pay, which has little to do with this "market sets the price" concept!

Boats are not 'tins of baked beans', where prices are set by the manufacturer.
Their prices (from the buyers aspect) will vary & depend upon such things as age, keel type, condition of sails/engine/rig/windows/hull, location, etc. Whilst it is easy these days to use a spreadsheet, to help with a buying decision, don't forget, that those so called "market values", if feasible, are based upon 'selling prices', not what the vendor finally achieved, often far from initial expectation.

 

[alant]

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.

As usual, patronising waffle we expect from you!

 

[alant]

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.

Presumably, gliders have air worthyness requiremnts, which can identify more specifically its condition & thus more closely its value?

 

[alant]

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 am saying, that brokerage fees, like any other 'costs incurred', will be factored into the vendors price.
Which you must agree with, since you've stated exactly the same above!

 

[NealB]

As an example, a fellow forumite continued to reject sensible offers (categorically stating 'don't approach the broker I have it with), whilst paying a monthly storage charge (the same yard can't understand either, since a 6 month fee would be much lower) & patently unable/unwilling to travel down from up north, to give the boat the attention it needs, consequently still unable to sell at the 'market value' several potential purchasers have considered reasonable. He thinks the broker fee could be eliminated, by selling himself, at the same time as racking up substantial costs in travelling/yard fees/etc.

The vendors 'market value', is based upon comparison of published selling prices (not actual purchase prices) of similar boats, forgetting, that condition will vary. The buyers 'market value', is based upon what he is prepared to pay, which has little to do with this "market sets the price" concept!

Boats are not 'tins of baked beans', where prices are set by the manufacturer.
Their prices (from the buyers aspect) will vary & depend upon such things as age, keel type, condition of sails/engine/rig/windows/hull, location, etc. Whilst it is easy these days to use a spreadsheet, to help with a buying decision, don't forget, that those so called "market values", if feasible, are based upon 'selling prices', not what the vendor finally achieved, often far from initial expectation.

You seem, to me, to have given an excellent example to illustrate that it is the vendor who will pay the brokerage fee. ie No brokerage, no fee to pay by anyone, compared against trying to get a higher price through a broker, but buyers not willing to pay that higher price.

 

[jonic]

Does anyone know what this thread is actually about now?

Here is something for you all to ponder.

I have been in this business for 10 years.

Buying and selling yachts used to be a rather gentlemanly process with concerns about sail area, ability to go to windward and load carrying capacity etc being the main topics of conversation.

In recent years there has been a development. There is now a small section of the yacht buying fraternity who have no interest in things like that whatsover. In fact they seem to know very little about sailing altogether.

Their primary rather ugly motive seems to simply be how much can I screw out of the owner, yacht broker, surveyor and anyone else in the process.

The actual boat gets totally forgotten.

Fortunately they are less interested in the type of boats I sell, but I hear it from other sectors of the market.

Just an observation.

 

[NealB]

jonic....I've been involved with boats since the early 60's.

Your backward looking, rose-tinted, spectacles seem to be working well!