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Re: [SabreSailboat] Re: Current Brokerage Market

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  • Alan Pressman
    I ve been out of the loop attending the Miami Boat Show and haven t had chance to see the latest string on buying a boat and the role of the broker. Good
    Message 1 of 37 , Feb 20, 2013
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      I've been out of the loop attending the Miami Boat Show and haven't had chance to see the latest string on buying a boat and the role of the broker.  Good traffic in Miami, lousy weather (cold at 58 degrees, brrrrr) and I got to see a decent number of the FSSOA, the Florida Sabre Sailboat Owners Association.

      Many interesting points raised and I'll try to comment on a few.

      Yachtworld has become the defacto International Multiple Listing Service (MLS) for the recreational boating industry.  In order to get a boat listed for sale on this site, you must use a "member" broker.  95% of all recreational boats sold in North America over 30 feet are sold through this site according to data I've seen.

      Boats less than $40 or 50K asking are often not listed here as there are fewer brokers who will handle a sale with a price point lower than this amount, so for the older boats you may find them on other sites.  (These boats are often difficult to finance, insure and pass survey too.)

      In the current market (in the Southeast but probably this holds for other regions) a "good boat" well priced and easy to see (all three key components) is selling in about 10-11 months on average.  A year and a half ago this was up to about 13 months, so sales are improving (in some market segments) but prices continue to trend lower.  Remember, these boat are not investments but are consumption and you can expect values to drop each year on late models 5-10% per year, and in older models where much of the depreciation has run its course, abut 2-5% per year.  (Also depends on the builder/brand too.)

      Sabre sailboats have traditionally held their value much better than other builders' models and this means cost of ownership is much lower than say a Hunter or Beneteau, although the price to get in for a given LOA is a bit higher.  Given the dearth of new Sabre sailboats being built, this is bad for those of us who love to see these beauties on the water, but probably a positive thing for those who own a Sabre sailboat, as with fewer boats available, they will become dearer.

      As many of you know, I am a broker.  I am continually dismayed at what I perceive to be the boat buying public's view of the yacht broker profession.  If they ranked us nationally, we'd be rated lower than politicians and lawyers!  And unfortunately, there are too many brokers who do nothing to dispel this image and seem more like used car salespeople than professional brokers to me. 

      So what to do when you want to buy a brokerage boat?  You can contact the listing broker and hope for the best.  In some cases you will be rewarded by candid reports of the boat you are looking for, but in many cases you may be disappointed.  Think about it.  If you call on a listing, that broker doesn't know you from Adam.  He/she has one chance to get you to come and see his boat. How candid of an appraisal do you think you will get?  Maybe good, maybe not...depends on the broker.  If you are able to find a broker that you feel can add value and advice, and be a consultant in your quest, you may be better served by using his/her services during this process.  

      Why is a broker better able to get a realistic view of a listed boat than a consumer?  Think of it this way.  If you call a broker he/she may tell you what they need to tell you to get you to come and look at a boat.  The broker only gets one shot at your business this way.  If your "buyers' broker" calls on your behalf, professional courtesy is likely to come into play.  If I call on a Sabre in Maine (or my friend Allison in California), that broker is more likely to give me the "skinny" since he/she may be calling me next week on my Florida listed Sabre.  Neither of us wants to make the time or expense to travel to see a boat that does not have the potential to meet our buyers' needs.

      And remember, the process of buying a boat is much more than showing a boat to a buyer.  Planning out the process of the sale is key with dates, terms and conditions that can affect the deal.  Survey and sea trial has the potential to create additional challenges.  If you don't have a firm agreement prior to making a deposit and undertaking the expense of survey and sea trial plus yard haulout, what protection do you have that a seller won't withdraw and sell his boat to the next guy that offers a thousand dollars more?  Who holds the deposit?  The seller or your brokers' escrow account?  Who insures that the guy who is selling the boat actually owns it?  Who insures that the loan is paid off and does not travel with the boat as a lien?

      Pricing;  Can you offer 10% below asking price without offending?  What about 20% below or even 25%?  Depends.

      If you are working directly with the seller and no broker, it is pretty easy to offend a seller.  Working through a broker puts a level of insulation between the two parties, and a good broker is skilled at making a lowball offer seem less offensive and more palatable.

      But what about the asking price itself?  A good broker will share selling information (from actual data) with the seller and also with a buyer.  Informed parties are better equipped to come to a meeting of the minds than uninformed parties.

      If a broker agrees to list a boat that is significantly higher than the market price would suggest, that broker is not only wasting his or her own time, but the time of the seller.  But condition of a boat will be a significant factor in price, regardless of an overall market average price.  Yes there may be boats out there with asking prices 20% higher than the boat is worth, but in my experience, there will be few if any showings until the boat is priced more in line with market pricing.  If someone is really ready to give a boat away, the price will most likely have been reduced (and your broker can tell you this but you won't be able to find this out on your own as a Yachtworld searcher) so the real "deals" may already be priced to reflect this.

      Ok, I am long winded and have already rambled on for too long.  For those who reached the end, I would like to say that much of this treatise may seem self serving, but my intention was to try to help the members of this group have a reasonable understanding of the buying and selling process and the broker's role in all of this.  If I've caused offense, my apology in advance.  For those who were aided in any way, I am glad that you may have found this helpful.

      Alan
      Windswept S 34 #430 The last one!
      Sarasota, FL
      941-350-1559



      On Sun, Feb 17, 2013 at 3:00 PM, ajlorman <ajl@...> wrote:
       

      I just had a contract accepted on a boat (not a Sabre) whose asking price was reasonable and the contract price was 8 percent less than the asking price. There are still plenty of boats out there whose owners think it is still 2007, price-wise, and their boats are not selling. I put an offer in on the boat I'm buying the second week it was on the market. Since I've been watching YachtWorld prices for a while, I have to say that I've noticed that the boat of any particular model that sells first seems to be the one with the lowest asking price (barring unusual situations like storm damage). I second the comments about having your broker run a soldboats.com report. It makes it a lot easier to negotiate when you can point to the prices paid for the same boat for the past year or two.

      Al Lorman

      --- In Sabresailboat@yahoogroups.com, Ken Young wrote:
      >
      > Any broker using Yachtworld also has access to the companion but limited access site Sold Boats that repoorts asking and sold prices, location, and time on the market.  In my expereince most brokers will run a report for you as part of the negotiation process.  Brokers also use Sold Boats as they calculate asking prices. 
      >  
      > Ken Young
      >
      >
      > ________________________________
      > From: Brooks Wright

      > To: "Sabresailboat@yahoogroups.com" Sabresailboat@yahoogroups.com>
      > Sent: Thursday, February 14, 2013 9:12 PM
      > Subject: Re: [SabreSailboat] Current Brokerage Market
      >
      >
      >  
      >
      > Scott,
      > Yeah, that was actually the first thing I looked at when I got the letter, the length of time it took to sell a boat.
      >  
      > Brooks
      >
      >
      > ________________________________
      > From: Scott
      > To: "Sabresailboat@yahoogroups.com" Sabresailboat@yahoogroups.com>
      > Sent: Thursday, February 14, 2013 6:34 PM
      > Subject: Re: [SabreSailboat] Current Brokerage Market
      >
      >  
      > I've been getting the same letter semi-annual from Denison for a year or so now. I figure they get the address thru CG Docu records. I concur with the price discounts seen, but I find it more interesting to look at how long a particular boat was on the market.
      >  
      > Scott
      >
      >
      > ________________________________
      > From: Brooks Wright
      > To: "Sabresailboat@yahoogroups.com" Sabresailboat@yahoogroups.com>
      > Sent: Thursday, February 14, 2013 6:24 PM
      > Subject: Re: [SabreSailboat] Current Brokerage Market
      >
      >  
      > I recently received a letter (don't know why) from Denison yacht sales. On the back was a list of recent used sabre sales with
      > all the pertinent data. A quick analysis of their figures shows the highest reduction in price was 13%. Most were in
      > the 10% or less range.
      >  
      > Brooks  
      >
      >
      > ________________________________
      > From: navip11
      > To: Sabresailboat@yahoogroups.com
      > Sent: Thursday, February 14, 2013 4:07 PM
      > Subject: [SabreSailboat] Current Brokerage Market
      >
      >  
      > We are contemplating "moving up" from our current 30mk3. As part of my exploratory research I have obviously browsed yachtworld. While I am sure there is no general rule of thumb, I am curious from those who are in the know, how much less than listing price boats are going under agreement. I ask this because last time around I found myself not searching above our "target" purchase price. Later down the line I spoke with brokers of a few of the boats that were "Above our price range", finding out that they sold for less then we paid for ours... I realize that every sellers situation is unique and motivated seller is desirable but sometimes that motivation is hard to measure when a broker is involved. Any insights would be appreciated. AJ
      >





    • Alan Pressman
      I met a guy at the Miami Boat Show last week who saw me wearing my Sabre hat and commented that the price of the 92 Sabre 34 on my brokerage board display was
      Message 37 of 37 , Feb 22, 2013
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        I met a guy at the Miami Boat Show last week who saw me wearing my Sabre hat and commented that the price of the 92 Sabre 34 on my brokerage board display was unrealistically high.  Well he's right.  In order to let #430 go, I'll need a premium as she is a premium boat.  And then I'll need another 100K for a Sabre 402.  Besides, I am planning to take her to the Bahamas this spring and will need her.

        He owns a Sabre 36.  He told me he has bids out on three separate Sabre 34's all storm damaged in the NY/NJ area.  He expects to get them for $2500-3500 each and will do a quick recondition and put them back on the market at $25K each for a quick expected profit.  I'm a bit skeptical.  My experience with reconditioning boats is the more you dig into the boat, the deeper (and more expensive) you get, and the "paper" profit shrinks rapidly.  So if he puts three boats on the market at 25K that may be worth 35K in a "normal" market is the supply of boats less or is the supply greater. Are prices firmed up or are they lower?

        I read in Boat US monthly that 65,000 boats were lost in Sandy.  I'm not sure how much impact this has on the overall market.  Some will "take the money and run" as was pointed out by another post so they won't create new demand.  And any impact would likely be more regional for some boats moreso than others.  (Catalinas/Hunters are a more local buy due to the large supply whereas Sabre/Island Packet buyers will travel greater distances since there are less available.) 

        Boat inventory is not like housing inventory.  Personally, I don't see much of an argument on either side of a fluctuating market where prices are firming or weakening given outside (e.g. storm related) factors.  

        There are so few really good boats out there (Sabre Sailboat of a given LOA for example) and of the 65,000 lost, how much impact does this have on the selling prices for the remaining Sabres on the market of the same LOA, which is probably not more than a handful anyway.

        My take on this, is that if you see a boat than can work for you, don't assume it will be there for an indefinite period of time or that you can wait until the owner gets tired of waiting for a buyer and offers a sacrifice selling price.  If you find a good one, make an offer on it, and do your best to get he boat you want at a price you can live with.  Remember, you are looking to buy a boat--not a deal.  After 5-10 years of ownership, maintenance, upgrades, insurance, storage, etc. a few thousand dollars (or a few percent) one way or another is probably not a good reason to miss a great boat at a price you can live with.

        Alan
        Windswept S 34 #430
        Sarasota, FL


        On Thu, Feb 21, 2013 at 2:09 PM, Dave Lochner <davelochner@...> wrote:
         

        Allan and Alison,


        I'm wondering what the effect of natural disasters, i.e., hurricanes, have on the value of good undamaged used boats. It would seem that after an event like Sandy that used boat prices would be strong and higher than before Sandy. Post Sandy, we presumably have a period of higher than normal demand and lower than normal supply, that should lead towards paying a premium for a good used boat. If that was the case, then if you are buying it might be a good idea to wait a year or two to let the market settle down and a good time to sell if you don't mind being boatless for a while.

        Dave


        On Feb 21, 2013, at 9:25 AM, Alan Pressman wrote:

         

        I'm not sure how one would time the market for a used boat.  Timing markets usually indicates buying when prices are low and selling when prices are rising and near the top.  It might work for equities, and used to work for real estate in Florida, but boats virtually never go up in price so how would one time the market?  A better boat market usually means there at least buyers in the market looking to buy and a poor market indicates virtually no buyers ready to buy.  But premium prices?  I just don't know...


        Alan
        Windswept S 34 #430
        Sarasota, FL

        On Wed, Feb 20, 2013 at 9:14 PM, Dan Trainor <dptrainor@...> wrote:
         

        Hard to know if we are at the bottom of the market, in terms of boat pricing.  I know from reading this thread I have learned its regional too.  I have never been a "market timer" in my finances and I have been served well with that philosophy.   But always it is interesting to know what people think about where we are.  At the end of this summer, I plan to sell Sabre 32 (such a great boat experience for me for last 10 years - I had a Sabre 28 before that for 5 years) and move up to maybe a Sabre 362 or 402.  Don't know yet, but looking forward to it, as I an am hooked on the Sabre line of sailboats and also I plan to retire soon and cruise around. So I am excited!  But timing the market - makes no sense to me. Sorry, just rambling... Dan


        On Wed, Feb 20, 2013 at 8:50 PM, john kalinowski <sabre32sailor@...> wrote:
         

        Nice write up Alan

        Went to the Boston show yesterday.
        Was like a morgue.
        Most the brokers looked broken though they tried to put on a brave face.
        Sounds like you were at the better show.

        A 3rd weekend snow storm in a row is not going to help those folks working the Boston snow come Saturday.

        --- On Wed, 2/20/13, Alan Pressman <alanpressman@...> wrote:

        From: Alan Pressman <alanpressman@...>
        Subject: Re: [SabreSailboat] Re: Current Brokerage Market
        To: Sabresailboat@yahoogroups.com
        Date: Wednesday, February 20, 2013, 11:07 AM


         

        I've been out of the loop attending the Miami Boat Show and haven't had chance to see the latest string on buying a boat and the role of the broker.  Good traffic in Miami, lousy weather (cold at 58 degrees, brrrrr) and I got to see a decent number of the FSSOA, the Florida Sabre Sailboat Owners Association.


        Many interesting points raised and I'll try to comment on a few.

        Yachtworld has become the defacto International Multiple Listing Service (MLS) for the recreational boating industry.  In order to get a boat listed for sale on this site, you must use a "member" broker.  95% of all recreational boats sold in North America over 30 feet are sold through this site according to data I've seen.

        Boats less than $40 or 50K asking are often not listed here as there are fewer brokers who will handle a sale with a price point lower than this amount, so for the older boats you may find them on other sites.  (These boats are often difficult to finance, insure and pass survey too.)

        In the current market (in the Southeast but probably this holds for other regions) a "good boat" well priced and easy to see (all three key components) is selling in about 10-11 months on average.  A year and a half ago this was up to about 13 months, so sales are improving (in some market segments) but prices continue to trend lower.  Remember, these boat are not investments but are consumption and you can expect values to drop each year on late models 5-10% per year, and in older models where much of the depreciation has run its course, abut 2-5% per year.  (Also depends on the builder/brand too.)

        Sabre sailboats have traditionally held their value much better than other builders' models and this means cost of ownership is much lower than say a Hunter or Beneteau, although the price to get in for a given LOA is a bit higher.  Given the dearth of new Sabre sailboats being built, this is bad for those of us who love to see these beauties on the water, but probably a positive thing for those who own a Sabre sailboat, as with fewer boats available, they will become dearer.

        As many of you know, I am a broker.  I am continually dismayed at what I perceive to be the boat buying public's view of the yacht broker profession.  If they ranked us nationally, we'd be rated lower than politicians and lawyers!  And unfortunately, there are too many brokers who do nothing to dispel this image and seem more like used car salespeople than professional brokers to me. 

        So what to do when you want to buy a brokerage boat?  You can contact the listing broker and hope for the best.  In some cases you will be rewarded by candid reports of the boat you are looking for, but in many cases you may be disappointed.  Think about it.  If you call on a listing, that broker doesn't know you from Adam.  He/she has one chance to get you to come and see his boat. How candid of an appraisal do you think you will get?  Maybe good, maybe not...depends on the broker.  If you are able to find a broker that you feel can add value and advice, and be a consultant in your quest, you may be better served by using his/her services during this process.  

        Why is a broker better able to get a realistic view of a listed boat than a consumer?  Think of it this way.  If you call a broker he/she may tell you what they need to tell you to get you to come and look at a boat.  The broker only gets one shot at your business this way.  If your "buyers' broker" calls on your behalf, professional courtesy is likely to come into play.  If I call on a Sabre in Maine (or my friend Allison in California), that broker is more likely to give me the "skinny" since he/she may be calling me next week on my Florida listed Sabre.  Neither of us wants to make the time or expense to travel to see a boat that does not have the potential to meet our buyers' needs.

        And remember, the process of buying a boat is much more than showing a boat to a buyer.  Planning out the process of the sale is key with dates, terms and conditions that can affect the deal.  Survey and sea trial has the potential to create additional challenges.  If you don't have a firm agreement prior to making a deposit and undertaking the expense of survey and sea trial plus yard haulout, what protection do you have that a seller won't withdraw and sell his boat to the next guy that offers a thousand dollars more?  Who holds the deposit?  The seller or your brokers' escrow account?  Who insures that the guy who is selling the boat actually owns it?  Who insures that the loan is paid off and does not travel with the boat as a lien?

        Pricing;  Can you offer 10% below asking price without offending?  What about 20% below or even 25%?  Depends.

        If you are working directly with the seller and no broker, it is pretty easy to offend a seller.  Working through a broker puts a level of insulation between the two parties, and a good broker is skilled at making a lowball offer seem less offensive and more palatable.

        But what about the asking price itself?  A good broker will share selling information (from actual data) with the seller and also with a buyer.  Informed parties are better equipped to come to a meeting of the minds than uninformed parties.

        If a broker agrees to list a boat that is significantly higher than the market price would suggest, that broker is not only wasting his or her own time, but the time of the seller.  But condition of a boat will be a significant factor in price, regardless of an overall market average price.  Yes there may be boats out there with asking prices 20% higher than the boat is worth, but in my experience, there will be few if any showings until the boat is priced more in line with market pricing.  If someone is really ready to give a boat away, the price will most likely have been reduced (and your broker can tell you this but you won't be able to find this out on your own as a Yachtworld searcher) so the real "deals" may already be priced to reflect this.

        Ok, I am long winded and have already rambled on for too long.  For those who reached the end, I would like to say that much of this treatise may seem self serving, but my intention was to try to help the members of this group have a reasonable understanding of the buying and selling process and the broker's role in all of this.  If I've caused offense, my apology in advance.  For those who were aided in any way, I am glad that you may have found this helpful.

        Alan
        Windswept S 34 #430 The last one!
        Sarasota, FL



        On Sun, Feb 17, 2013 at 3:00 PM, ajlorman <ajl@...> wrote:
         

        I just had a contract accepted on a boat (not a Sabre) whose asking price was reasonable and the contract price was 8 percent less than the asking price. There are still plenty of boats out there whose owners think it is still 2007, price-wise, and their boats are not selling. I put an offer in on the boat I'm buying the second week it was on the market. Since I've been watching YachtWorld prices for a while, I have to say that I've noticed that the boat of any particular model that sells first seems to be the one with the lowest asking price (barring unusual situations like storm damage). I second the comments about having your broker run a soldboats.com report. It makes it a lot easier to negotiate when you can point to the prices paid for the same boat for the past year or two.

        Al Lorman

        --- In Sabresailboat@yahoogroups.com, Ken Young wrote:
        >
        > Any broker using Yachtworld also has access to the companion but limited access site Sold Boats that repoorts asking and sold prices, location, and time on the market.  In my expereince most brokers will run a report for you as part of the negotiation process.  Brokers also use Sold Boats as they calculate asking prices. 
        >  
        > Ken Young
        >
        >
        > ________________________________
        > From: Brooks Wright

        > To: "Sabresailboat@yahoogroups.com" Sabresailboat@yahoogroups.com>
        > Sent: Thursday, February 14, 2013 9:12 PM
        > Subject: Re: [SabreSailboat] Current Brokerage Market
        >
        >
        >  
        >
        > Scott,
        > Yeah, that was actually the first thing I looked at when I got the letter, the length of time it took to sell a boat.
        >  
        > Brooks
        >
        >
        > ________________________________
        > From: Scott
        > To: "Sabresailboat@yahoogroups.com" Sabresailboat@yahoogroups.com>
        > Sent: Thursday, February 14, 2013 6:34 PM
        > Subject: Re: [SabreSailboat] Current Brokerage Market
        >
        >  
        > I've been getting the same letter semi-annual from Denison for a year or so now. I figure they get the address thru CG Docu records. I concur with the price discounts seen, but I find it more interesting to look at how long a particular boat was on the market.
        >  
        > Scott
        >
        >
        > ________________________________
        > From: Brooks Wright
        > To: "Sabresailboat@yahoogroups.com" Sabresailboat@yahoogroups.com>
        > Sent: Thursday, February 14, 2013 6:24 PM
        > Subject: Re: [SabreSailboat] Current Brokerage Market
        >
        >  
        > I recently received a letter (don't know why) from Denison yacht sales. On the back was a list of recent used sabre sales with
        > all the pertinent data. A quick analysis of their figures shows the highest reduction in price was 13%. Most were in
        > the 10% or less range.
        >  
        > Brooks  
        >
        >
        > ________________________________
        > From: navip11
        > To: Sabresailboat@yahoogroups.com
        > Sent: Thursday, February 14, 2013 4:07 PM
        > Subject: [SabreSailboat] Current Brokerage Market
        >
        >  
        > We are contemplating "moving up" from our current 30mk3. As part of my exploratory research I have obviously browsed yachtworld. While I am sure there is no general rule of thumb, I am curious from those who are in the know, how much less than listing price boats are going under agreement. I ask this because last time around I found myself not searching above our "target" purchase price. Later down the line I spoke with brokers of a few of the boats that were "Above our price range", finding out that they sold for less then we paid for ours... I realize that every sellers situation is unique and motivated seller is desirable but sometimes that motivation is hard to measure when a broker is involved. Any insights would be appreciated. AJ
        >










        --
        Dan







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