Drastic reduction in secondhand boat prices ?

[Seajet]

small section[/B] 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.
/QUOTE]

I know someone like that; loves to screw people over and brags about it afterwards, the boat seems to be completely irrelevant and soon forgotten !

A very nasty, negative outlook on life IMO.

 

[JumbleDuck]

Exactly my point, The property programme has created the mindset of (totally unfounded) mistrust.

It has also used a different pricing model's dynamics.

At the height of the property bubble, most houses in Edinburgh were sold "offers over" and would go for 20% to 40% over the O/O price. Now most houses are sold "fixed price" and they typically go for 20% under the asking price. Conclusion: it's a crazy, crazy market from which no conclusions (except this one) can be drawn.

 

[Tranona]

Erm. Isn't this merely the expression of the boat being more than the market will bear? The buyer is basing his offer on what he thinks he wants to pay. If the vendor wants more than that there be no sale. isn't that market forces?

It's no good saying that it's all the fault of the telly that someone expects to pay less than what you think he should pay.
The plain fact is he has the money and he wants to spend it on something he feels comfortable paying for.

The fact that others will pay more doesn't mean that he is wrong. Merely that at that moment there is a buyer who will pay more. Tomorrow there may not be.

Take the boat to auction and find the true value.

Think you misunderstood the point I was making. It tends to be the owner who has unrealistic expectations. You can see it more with those selling privately where often to use alant's words prices seem to be plucked out of the air.

You are right about auctions. However the number of people interested in and prepared to buy a particular boat on the spot is small so difficult to create the competition between buyers that sets the price.

 

[obmij]

If anyone did say that to you then they were either having trouble paying their rates and staff and needed sales at any cost, or were overvaluing and flattering the owners in order to sign up the listing ahead of other brokers. Then they would encourage low offers in order to lower the owners expectations.

Both reasons totally wrong and fortunately I and the groups I work with do not mix in those circles.

It's quite easy for anyone to verify. Just make a few calls, wander around a few marina onsite brokerages..

You obviously have a specialised market and breath rarefied air. Good for you, it must be a pleasant way to do business.

I have no axe to grind against brokers, and I think the marine industry as a whole compares well to other sectors, but it could definitely be improved by access to accurate pricing information.

So why not?

 

[Tranona]

I am constantly amazed at the way art has become a store of value for the rich. Anyone know what level of commissions are normal in the art world? Especially at auctions?

15% is common and a buyer premium of up to 10% so the auction house takes roughly 25% of the total price. Plus VAT of course. Puts a brokers 8% (if he is lucky) in perspective.

 

[Lakesailor]

Think you misunderstood the point I was making. It tends to be the owner who has unrealistic expectations. You can see it more with those selling privately where often to use alant's words prices seem to be plucked out of the air.

You are right about auctions. However the number of people interested in and prepared to buy a particular boat on the spot is small so difficult to create the competition between buyers that sets the price.

Yes. I see what you are saying when you explain. Auctions tend to be for cheaper boats. I have bought well at auctions, but again some reverves seem a bit optimistic.

 

[jonic]

You obviously have a specialised market and breath rarefied air. Good for you, it must be a pleasant way to do business.

Yes I am fortunate to be in a particular niche, which by the very nature of the people involved, means we are generally dealing with enthusiasts and adventurers who are primarily interested in the yacht's capabilities. :encouragement:

But even I have noticed this "how much can I screw them for" attitude creeping in on occasion. :disgust:

 

[Tranona]

You only have to look at a couple of episodes of Flog It on the box to understand how prices are established in a (relatively) open market. You will also see why this type of market place is not suitable for selling boats, particularly when the auction house takes 15-25% out of the transaction, compared with 5-8% in yacht brokerage.

Doubt one can really improve the efficiency of the current market methods. The messiness comes from the diversity of product, participants and particularly the fact that most people only participate a small number of times. So each transaction tends to be high value and high risk involving discretionary expenditure. This leads to a great deal of angst about "getting a good deal" whereas rationally, particularly at the lower end of the market the ongoing costs of running a boat dwarf the capital cost. So fighting over 10% on an old Centaur is a fraction of the annual running costs. However, who said owning a boat is a rational activity!

 

[alant]

It is (or should be) if the original asking price is based on a good understanding of the market. That is the whole point that John is making. If you set the asking price in the right range, the price achieved should be close.

The problem with boats is that many sellers (and buyers) are unrealistic, particularly in a thin market as we have now. Not only does potential supply exceed demand but the number of transactions is low so getting up to date sale prices is difficult. So sellers tend to base their price on out of date information and buyers think they can screw prices down because everybody says it is a "buyers market". Result is both parties fail to agree, so no sale.

It is noticeable, that you keep mentioning "asking price", because this is easily found in adverts, but doesn't confirm 'actual' purchase cost. At odds with house sales, where actual purchase price, can easily be confirmed online, thereby more realistic.

 

[Tranona]

It is noticeable, that you keep mentioning "asking price", because this is easily found in adverts, but doesn't confirm 'actual' purchase cost. At odds with house sales, where actual purchase price, can easily be confirmed online, thereby more realistic.

That is true and is an information gap that is difficult to fill. In John's example there was a 10% difference between the highest and lowest selling price of comparable boats. You see ranges of asking prices typically in a range of +/- 10% and even greater where a boat has a long production run. This difference depends on all sorts of factors such as condition location equipment etc plus of course the owners motivation to sell. Recent figures I saw for sales in France which Sybarite posted showed an even wider range of prices for comparable boats.

The relationship between asking and selling prices can be very distorted particularly in the lower price ranges. An example. A Halmatic 30 which typically have asking prices in the £17-25k range. One near me offered at £19k but survey shows serious structural work required estimated £4-5k so may sell eventually for 10-12. Such a sale will seriously distort average selling prices for that model.

So, knowing sale prices is useful but the information needs to be treated with caution. Pretty useful for looking at high volume reasonably new boats where there are lots of sales and little difference in spec etc but less useful in older or more unusual boats.

You also have to consider the motivations of buyers and sellers. A seller may reject an offer because he would rather keep the boat even though he knows what the monetary value is. Equally some buyers think that all sellers are desperate to sell. Setting an asking price in the right range should just be seen as indicating the boat is for sale. Bit more like an auctioneers estimate. The actual sales price is only relevant to that transaction but does provide some sort of guide.

Not very satisfactory for those who prefer certainty, but that is just how it is.

 

[jonic]

That is true and is an information gap that is difficult to fill. In John's example there was a 10% difference between the highest and lowest selling price of comparable boats. You see ranges of asking prices typically in a range of +/- 10% and even greater where a boat has a long production run. This difference depends on all sorts of factors such as condition location equipment etc plus of course the owners motivation to sell. Recent figures I saw for sales in France which Sybarite posted showed an even wider range of prices for comparable boats.

The relationship between asking and selling prices can be very distorted particularly in the lower price ranges. An example. A Halmatic 30 which typically have asking prices in the £17-25k range. One near me offered at £19k but survey shows serious structural work required estimated £4-5k so may sell eventually for 10-12. Such a sale will seriously distort average selling prices for that model.

So, knowing sale prices is useful but the information needs to be treated with caution. Pretty useful for looking at high volume reasonably new boats where there are lots of sales and little difference in spec etc but less useful in older or more unusual boats.

You also have to consider the motivations of buyers and sellers. A seller may reject an offer because he would rather keep the boat even though he knows what the monetary value is. Equally some buyers think that all sellers are desperate to sell. Setting an asking price in the right range should just be seen as indicating the boat is for sale. Bit more like an auctioneers estimate. The actual sales price is only relevant to that transaction but does provide some sort of guide.

Not very satisfactory for those who prefer certainty, but that is just how it is.

Indeed.

There are many variables including condition, age and equipment.

I had a look at the entire last years trading and the boats sold either at or very close to asking price or an average of between 3% and 7% off after survey, depending on what was agreed between the vendor and buyer in terms of post survey repair. But if a large problem is found that can, as Tranona points out, distort those figures.

As I have said before there isn't in used yacht sales the same pricing dynamic as house sales (i.e. the price inflation) that gives room for the big % discounts. The yacht has only ever gone down. So if the broker is doing his pricing job properly - and not over pricing just to land a listing or an upfront non refundable advertising fee - the yachts will actually trade in a fairly tight range.

You sometimes read comment on here that a boat is still for sale some months later so therefore is "overpriced".

What those people do not know, and let's be honest how would they, but the current reported average brokerage time is 331 days.

Now that's a broad brush average across Europe and all classes of boats. But it is not unusual for a sale to span an entire season.

I am pleased to say I often very much buck that trend! http://jryachts.blogspot.co.uk/2013/12/lagoon-400-sold-in-under-month.html

If a yacht is for sale for a long time and it is priced within the selling range it will simply be because there are no participants in the market for that class of boat. It becomes a waiting game. On some yachts there may literally be just a handful of buyers per year.

What you can do if the seller is in a hurry, is analyse the trading range as much as you can for that class- let's say for this example a 45' Dufbenmoodyrassy then re-price to the 40' Dufbenmoodyrassy range in order to increase the number of market participants.

The thing is - unlike housing - most sellers do not NEED to sell so are quite prepared to wait for the buyer to enter the market place, which he always will do in time.

Good brokers understand this dynamic and are well aware that just placing some ads is not going to cut it. There may be six boats for sale but only 3 may find a home over the year. A good broker will be on the phones, out meeting face to face on the dock and networking like crazy to ensure it is your boat one of those buyers chooses.

 

[Birdseye]

We bought our old girl towards the end of 2011. We probably paid a little more than we could've got away with, but then I've always been naff at haggling. But at the time we were happy to pay the money.

I think we must've bought at the end of the higher prices, as now we see similar boats, potentially in better condition going for 20% less.

At the end of the day, we were happy paying for what we got.

+1

 

[Birdseye]

I suspect that the crucial factor is the extremely high cost of keeping a boat in much of the country. As Dylan's saga has shown, there are plenty of good Centaurs knocking around for £5k - £7k, which is a cracking starter boat[1] for the cost of a newish second hand VW Polo. The killer is that once you have it you're looking at another £4k - £5k per annum just to keep the damn thing in a marina[2] for which you can have a cracking good charter somewhere with much nicer weather than here. As you say, there are alternative ways of going sailing now and, speaking as a boat owner, owning boats is a daft way of doing it. Fun, but daft.

[1] A Centaur as a starter boat? When I were a lad you worked your way up: Mirrror, Enterprise, Leisure 17, Corribee, Warwick, Pageant, Centaur. When you got to Centaur you'd made it.

[2] Other berthing options are available, of course, but many cheaper options have been marina'ed out of existence.

Nonsense. There are lots of cheap moorings and marinas around if you look for them. No way should someone with a 5k centaur be paing 5k for the berth. That would be ridiculous but then as you point out, owning a boat is financially ridiculous.

Trouble is so many things we spend on are daft really.

 

[JumbleDuck]

Nonsense. There are lots of cheap moorings and marinas around if you look for them. No way should someone with a 5k centaur be paing 5k for the berth. That would be ridiculous but then as you point out, owning a boat is financially ridiculous.

Trouble is so many things we spend on are daft really.

I did say "in much of the country". Sure, still some cheap places about, but they're getting fewer.

 

[alant]

That is true and is an information gap that is difficult to fill. In John's example there was a 10% difference between the highest and lowest selling price of comparable boats. You see ranges of asking prices typically in a range of +/- 10% and even greater where a boat has a long production run. This difference depends on all sorts of factors such as condition location equipment etc plus of course the owners motivation to sell. Recent figures I saw for sales in France which Sybarite posted showed an even wider range of prices for comparable boats.

The relationship between asking and selling prices can be very distorted particularly in the lower price ranges. An example. A Halmatic 30 which typically have asking prices in the £17-25k range. One near me offered at £19k but survey shows serious structural work required estimated £4-5k so may sell eventually for 10-12. Such a sale will seriously distort average selling prices for that model.

So, knowing sale prices is useful but the information needs to be treated with caution. Pretty useful for looking at high volume reasonably new boats where there are lots of sales and little difference in spec etc but less useful in older or more unusual boats.

You also have to consider the motivations of buyers and sellers. A seller may reject an offer because he would rather keep the boat even though he knows what the monetary value is. Equally some buyers think that all sellers are desperate to sell. Setting an asking price in the right range should just be seen as indicating the boat is for sale. Bit more like an auctioneers estimate. The actual sales price is only relevant to that transaction but does provide some sort of guide.

Not very satisfactory for those who prefer certainty, but that is just how it is.

If that Halmatic 30, is the same one I've seen, its down to £13000 as seen, as their bottom price.
Soft roof under mast step found during recent survey.

 

[alant]

Nonsense. There are lots of cheap moorings and marinas around if you look for them. No way should someone with a 5k centaur be paing 5k for the berth. That would be ridiculous but then as you point out, owning a boat is financially ridiculous.

Trouble is so many things we spend on are daft really.

Can you please send a few of these up to the Solent then.

 

[[70521]]

Are they all stupid?

No, but have better things to do with their time.

 

[Tranona]

If that Halmatic 30, is the same one I've seen, its down to £13000 as seen, as their bottom price.
Soft roof under mast step found during recent survey.

Yes, that is the one. Looks OK otherwise but not seen the extent of the mast step problem. No doubt a competent DIY could do the repair for less than the yard estimate. Whether the £13k is achievable depends on finding somebody prepared to take the risk and really wants the boat.

I used that example just to illustrate that looking at selling prices on their own can be misleading. If a model has a large turnover and is fairly new then they tend to sell in a narrow range - like my Bavaria 37 where both asking prices and selling prices (as far as I can see) are in a +/- 5% of the average because there is less variation in condition and equipment and they were only made for 3 years, so little variation. 30 and 40 year old boats, particularly those built in relatively small numbers show much bigger variations. You might only get 2 or 3 comparable boats changing hands each year. Halmatics fall into this category. There are just 2 listed for sale on Yachtworld.com. Similar age, both with modern engines and well equipped, but big difference in asking price £20k against £25k! May well be that the reasons for the difference become obvious on close inspection or the selling price may end up similar. Who knows?

 

[Babylon]

I'm wading in on page 7….

As I'm neither selling my boat nor buying another one, the question of market prices is academic to me.

She's 27ft long, 31yrs old, sleeps three and stands me in at about £45,000 over the last 7 years, but is probably only worth £33,000 (a good price for her age due to new engine etc).

My annual costs (including Hamble mooring, local club membership, insurance, and essential annual maintenance) don't exceed £1,800pa, which are easily absorbable within my relatively modest income.

Now that the worst of my post-divorce financial and business crises are over, I don't need the capital, nor am I the sort of person to get anxious if I'm not seeing a paltry 2.5% annualised return on my possessions.

If I sold her - say to buy her slightly bigger sister, the Vancouver 32, of similar age - then my issue wouldn't be money (aside from having to find another £15k or so), it would be the TIME I'd need to commit to selling her, finding and buying her sister and then bringing her up to standard.

If I was in my mid-40s looking to getting into yacht ownership (as I was seven years ago), I'd most likely go down exactly the same route, but if she needed to sleep more I'd go straight for a 30-32ft boat, probably a Westerly or similar.

… In the meantime, bring on the summer!

 

[costadelrica]

The best advice I was given & i tell you about it too : friends of my parents advicedd me "Calculate the cost per day if you want, but never, ever, ever calculate the cost per mile." Amazing!!