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Old 16-10-2012, 16:40   #16
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Re: Sailboat pricing

Hey Z1K, how many banks/lenders have you shopped? Please take the time to shop your loan scenario. Get creative.
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Old 16-10-2012, 16:41   #17
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Re: Sailboat pricing

Here's a thought: look for a different lender.

I have bought two boats in the last 10 years. They were not nearly as big, nor as expensive, as the one you're looking at, but in both cases we had to finance a significant portion of the cost. We went to our local credit union -- not one of those big soulless institutions, but a small community bank. There was no problem securing a loan based on the purchase price. The collateral was the boat.

There are so many reasons to abandon the big banks. This is another one.
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Old 16-10-2012, 16:55   #18
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Re: Sailboat pricing

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Originally Posted by dsmastern View Post
I read it years ago, and saw quite a few flaws too.

I just have never saw any good reason to get into debt over something like a car, motorcycle or boat that loses it's value so rapidly.

I'll just stick to paying cash.

(And yes, my house, motorcycles, cars and boat are all debt free.)
Ok I see your point now. I believe these things don't really lose much value, but mainly suffer from wear. A well cared for home doesn't suffer from wear, and goes up in value as a simple result of inflation.

If a boat, car, or motorcycle were kept in perfect condition, would it go down in value? Or up? History shows that cars and motorcycles (at least) go up in value -- in many cases.

The exception appears to be in the area of style. Older boats are "obsolete" because they lack the modern design features that people like today.

I believe that if you buy a 20-30 year old boat which has been well maintained, and continue to maintain it well, and is a style which has had continuously strong demand, then that boat will never really depreciate.

If you are using such a boat, then the boat only really costs you according to it's use.

A brand new boat depreciates for two reasons - style and wear. Since you have practically no maintenance costs for the first X years, though, you are not really "depreciating", but rather paying the cost of wear that occurs from usage.

The real loss comes when you own a boat that you are not using, yet it wears out anyway due to exposure to weather and water. I don't have a problem getting into debt over a boat that is an important part of your lifestyle, but agree that a boat you are not using is a terribly expensive liability, and owing debt on it just makes it worse.
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Old 16-10-2012, 17:01   #19
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Re: Sailboat pricing

It depends a lot of the boat and seller, but figure on closing the deal at 30% less than asking... maybe 20%.... as I said... depends on a lot of things. You could always write a deal based on "buyer obtaining satisfactory financing.." like is always done in Real Estate. Make offers, Agree on a price, survey, obtain financing... if the financier wont finance the boat, put pressure on the seller to cave in some... (he's already spending the money in his head at this point!)
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Old 16-10-2012, 17:02   #20
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Re: Sailboat pricing

Just to add to this side discussion, I have made money on my last 5 motorcycles and now I am actively flipping around 3 cars per year. I plan to make money or at least break even on my next boat purchase.
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Old 16-10-2012, 17:11   #21
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Re: Sailboat pricing

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Just to add to this side discussion, I have made money on my last 5 motorcycles and now I am actively flipping around 3 cars per year. I plan to make money or at least break even on my next boat purchase.
It can be done.... I did it on 1 out of 7 boats. Bought for 65k, put 70k into it and sold for $165k less commission. But spent a couple years of work on it my self too. The basic boat needs to be a desireable type bought at a very very good price. Dont buy a cement boat for nothing and put 40K into it!
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Old 16-10-2012, 17:13   #22
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Re: Sailboat pricing

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Originally Posted by ArtM View Post
SNIP
There are many homeowners and boat owners that will throw out a price on their home or boat, which at this age often have significant variations from the "norm", looking for that "perfect buyer" who absolutely needs a boat exactly like that one,
SNIP
There is almost no one "who absolutely needs a boat". Maybe some commercial guys who already have a client booked but those are few and far between.

There is also a significant cost with owning a boat. Even if you store the boat in back of your house at a dock you own there is the opportunity cost of not being able to rent that dock space for a positive income stream. Every day/week/month/year you do not sell the boat you have for sale it costs money.

This is why I posited the emotional/logical split between buyers. A logical buyers knows there a lot more sellers who will wind up lowering their prices because at some point the cost of owning a boat will be so great that not selling it is no longer an option. The buyer also knows (with almost no exceptions) buyers don't need to buy but at some point sellers need to sell.

As one poster said you can always make an offer and see what happens. This is probably the best way to determine if the seller is logical about selling or is emotional about selling.
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Old 16-10-2012, 17:14   #23
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Re: Sailboat pricing

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I've just never understood the whole idea of getting into debt over a depreciating liability.

What's the point?



Absolutely correct! It's like taking a loan and paying interest on a tire. The problem is far too many people live on credit and think nothing of assuming a loan regardless of the fact it depreciates. That it does depreciate only makes it more wasteful.

As though a boat was a necessity...
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Old 16-10-2012, 17:18   #24
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Re: Sailboat pricing

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It can be done.... I did it on 1 out of 7 boats. Bought for 65k, put 70k into it and sold for $165k less commission. But spent a couple years of work on it my self too. The basic boat needs to be a desireable type bought at a very very good price. Dont buy a cement boat for nothing and put 40K into it!
Buy a desirable boat in a poor market and sail it to a strong market. Depending on how well you beat up the seller you should be able to make a profit.
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Old 16-10-2012, 17:22   #25
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Re: Sailboat pricing

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There is almost no one "who absolutely needs a boat". Maybe some commercial guys who already have a client booked but those are few and far between.

There is also a significant cost with owning a boat. Even if you store the boat in back of your house at a dock you own there is the opportunity cost of not being able to rent that dock space for a positive income stream. Every day/week/month/year you do not sell the boat you have for sale it costs money.

This is why I posited the emotional/logical split between buyers. A logical buyers knows there a lot more sellers who will wind up lowering their prices because at some point the cost of owning a boat will be so great that not selling it is no longer an option. The buyer also knows (with almost no exceptions) buyers don't need to buy but at some point sellers need to sell.

As one poster said you can always make an offer and see what happens. This is probably the best way to determine if the seller is logical about selling or is emotional about selling.
I'm always thinking about cruisers and cruising lifestyles, and sometimes am thrown when someone makes counterpoints that are based on non-cruising usage. Your comments seem to be more relevant to someone who owns or wants to buy a boat for recreational purposes.

A cruiser does "absolutely" need to have a boat, and a cruiser living on his boat never "needs" to sell it unless he is no longer cruising.

My thinking on this is that there are people who live in a home or on a boat who will list it on the market at some outrageously jacked up price because (a) it costs nothing to do so, and (b) they have an outside hope that there is some buyer out there that wants a boat configured precisely as their boat is configured, and such a person will gladly pay the full retail value of that boat and all of it's accessories.

They then will take that money and turn it into another home or boat that meets their needs which is either larger, newer, or cheaper than the one they just sold.
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Old 16-10-2012, 18:31   #26
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Re: Sailboat pricing

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There is almost no one "who absolutely needs a boat". Maybe some commercial guys who already have a client booked but those are few and far between.....

This is why I posited the emotional/logical split between buyers. A logical buyers knows there a lot more sellers who will wind up lowering their prices because at some point the cost of owning a boat will be so great that not selling it is no longer an option. The buyer also knows (with almost no exceptions) buyers don't need to buy but at some point sellers need to sell.

As one poster said you can always make an offer and see what happens. This is probably the best way to determine if the seller is logical about selling or is emotional about selling.
Yeah, some of us think that after buying and selling several boats we are less emotional or romantic about a boat.... but then one comes along that tugs at the heart strings... and there are no "perfect" boats around when you're looking.... still, it's good to be willing to "walk away"... However, there have been a couple I wish I hadnt .....in retrospect...
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Old 16-10-2012, 18:58   #27
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Re: Sailboat pricing

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Comments? I would imagine that no loan company is going to lend such a substantial percentage of a boats value that there becomes a real risk of the owner throwing the keys at them and walking away. This was after all the pernicious behaviour that inverted the home loan market just a few years ago.
I wonder how many boat keys were actually thrown between 2008 and now...

I am sure the boats all defaulted before the houses...

In terms of financing toys there are cases where leverage may make sense. It is a balance of debt/equity ratio, loan servicing (interest), cash flow and so on.

Debt is not inherently bad because it allows one to enjoy now what one may not be able to afford to buy outright.

The conventional wisdom in the US is to finance your house and your car. Why? If I am debt free, high income and low asset financing a large boat to live on may make perfect sense for me.

In general, however, I definitely don't finance toys.
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Old 16-10-2012, 19:03   #28
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Re: Sailboat pricing

I have bought boats, sold boats and make no claim at understanding the boat market. I do however understand micro economics in a general way since I was a real estate appraiser for 20 years. Houses are different than boats, however many of the same economic principles apply. I worked primarily in the rural and vacation real estate market.

In the 1980s and 90s I noticed some interesting things about the economics of value, marketing, and sales prices. It didn't seem to matter if the house for sale was rural, estate, vacation resort, or retirement market,this seems to be true for all. If the house was put onto the market with a price over 20% of market value, then in 80% of the cases, it would stay on the market for at least two years and end up selling for at least 20% less than what the market value was originally. I do not know how this relates to boats, but I have a good idea that it does.

I am in the market for a boat, and I am primarily interested in looking at boats which have been on the market for at least a year, preferably two years. I figure that the the owners of the boats which have been on the market for two years will be much more willing to entertain an offer which promises to take the problem off their hands.
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Old 16-10-2012, 19:38   #29
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Re: Sailboat pricing

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Originally Posted by CCBullseye View Post

SNIP

I am in the market for a boat, and I am primarily interested in looking at boats which have been on the market for at least a year, preferably two years. I figure that the the owners of the boats which have been on the market for two years will be much more willing to entertain an offer which promises to take the problem off their hands.
I am in the market for a boat and have been looking for several months. I know of three boats I looked at that have definitely sold. All three had a very low asking price and all three sold very quickly. I looked at one of the boats, spoke to the owners of two of the boats (both for sale by owner) and the broker selling the other boat. The broker was very up front about why the boat sold, it was in good shape and priced to sell.

I know of several boats that have been advertised for many months, or even years, and are still for sale with no reduction in price.

So my thought is spend lots of time looking for boats that have just come on the market and are realistically priced, check them out, and if they pass my first once over eye balling, see about insurance and then make an offer. If there is a counter offer try and reach an agreement.
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Old 16-10-2012, 21:04   #30
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Re: Sailboat pricing

We have been eyeing Island Piglets for a while now and around a year and a half ago a 98 IP45 was at our dealer for $229K. After 6 months we looked at it and were told the owners would probably take $200K, six months ago the boat sold for $170K. This was with most of the similar boats in the US listing for $250K. So you never know what the buyer will take.
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