NADA vs. YachtWorld - Grrrrrrr

[smj]

Originally Posted by casual

Throw all the books away,work with a Broker takes all of the personal feelings out of negoication,Offer no more than 30% of asking price.Remember every seller is building in wiggle room,you worked hard for your money,don't waste it.If you've not the Heart for negoication's work thru a buyers agent.

I find it humorous that people make statements like this. You offer what you think the boat is worth not 30% of any asking price. Would you feel good offering 30% of the asking price of a boat that was advertised for twice what it was worth? Or offering 30% of the asking price for a boat advertised for half it's true value. Do some research then decide what to offer. Save yourself, the broker and the owner the time of having to deal with an uneducated buyer.

[skipmac]

Originally Posted by smj

I find it humorous that people make statements like this. You offer what you think the boat is worth not 30% of any asking price. Would you feel good offering 30% of the asking price of a boat that was advertised for twice what it was worth? Or offering 30% of the asking price for a boat advertised for half it's true value. Do some research then decide what to offer. Save yourself, the broker and the owner the time of having to deal with an uneducated buyer.

[CarinaPDX]

When I wrote that some brokers here don't share commissions, I meant that they show their own listings and no one else's, and don't welcome brokers bringing in clients and asking for a cut. I don't think this is unusual - ads for boats sometimes include a phrase to that effect.

I have to admit to being wrong on the real estate thing in Oregon, whether because of bad memory or changes in state law I don't know. There is now a very formalized set of relationships under the law. As always, the seller's agent is obligated to act in the seller's interests. An agent who is helping a buyer is obligated to act in the buyer's interests, but only if a formal agreement is signed. There are many agents/brokers in Oregon who specialize in buying so as to avoid any appearance of conflict of interest. If an agent or broker is dealing with both parties, then disclosure must be given and the law requires that they not share certain advantageous information. Where agreements are not signed, it seems the default is this third status. So there is some protection for the buyer in any event, and a positive obligation on the part of an agent if the relationship is formalized. It makes a lot of sense, and is not as tilted as I had thought. Mea culpa...

[skipmac]

Originally Posted by CarinaPDX

When I wrote that some brokers here don't share commissions, I meant that they show their own listings and no one else's, and don't welcome brokers bringing in clients and asking for a cut. I don't think this is unusual - ads for boats sometimes include a phrase to that effect.

I have known brokers that really pushed their own listings, even if not the boat the buyer wanted, but have not heard of brokers that refused to sell other listings or would not allow other brokers to sell theirs. Not sure if that would even be legal in FL. I've been out of the business for 30 years so things may have changed.

Originally Posted by CarinaPDX

I have to admit to being wrong on the real estate thing in Oregon, whether because of bad memory or changes in state law I don't know. There is now a very formalized set of relationships under the law. As always, the seller's agent is obligated to act in the seller's interests. An agent who is helping a buyer is obligated to act in the buyer's interests, but only if a formal agreement is signed. There are many agents/brokers in Oregon who specialize in buying so as to avoid any appearance of conflict of interest. If an agent or broker is dealing with both parties, then disclosure must be given and the law requires that they not share certain advantageous information. Where agreements are not signed, it seems the default is this third status. So there is some protection for the buyer in any event, and a positive obligation on the part of an agent if the relationship is formalized. It makes a lot of sense, and is not as tilted as I had thought. Mea culpa...

I was in the position of listing broker and selling broker a couple of times and always thought it a tricky situation, basically an inherent conflict of interest. There are times when a seller may reveal his or her bottom line or the broker may know personal information that indicates a desperate seller. So how to deal with a buyer fairly without taking advantage of what you know about the seller. Sort of like insider trading on Wall Street.

[Sabbatical II]

Understand that brokers open their doors every morning to time wasters and dreamers who don't really have the cash to complete the sales they are enquiring about. Brokers also have to put up with owners with unrealistic hopes for what they're boat is worth and have lied about the past history of the boat. They can get a bit tired of being treated as untrustworthy. Most are just trying to make an honest living between buyers and sellers and sometimes neither is telling them the truth. I don't envy them. The broker I used to sell my last boat was personable and a joy to do business with even though it took over 12 months to get a sale and the deal price was only about 65% of what I started at. I would find a broker that has a large number of listings and one that I "connect" with at first meeting. Then tell him or her exactly how much you have to spend & what you want. A good person responds to be trusted with the truth and you will be a breath of fresh air to them. You should expect to get good service out of a broker that you treat well!

[nautical62]

If I do a search on car trader for Honda Civics within 500 miles of my home I get 5,000 results. If I do a search on boat trader for Hunter 31s within 1,000 miles of my home I get 9 results. If I do a search for less common boat like a Westerly Konsort, I might be lucky to find 1 or two in the whole country. 15 year old boats of the same model are also much more likely to vary greatly in condition than 15 year old cars.

The result is you simply can't expect NADA values for boats to reflect what any individual boat may or may not sell for the way you can with cars. Add to that Yachtworld listings are asking prices, not selling prices.

Personally, I'd put a bit more faith in BUC prices than NADA, but it's the same issue. What a handful of boats sold for across the country recently may not be very reflective of what any given model may sell for.

[Pblais]

15 year old boats of the same model are also much more likely to vary greatly in condition than 15 year old cars.

How about vastly different for sure.

Clue: In any situation where there are multiple available the one in best condition usually ends up costing less later on even if you pay more up front. Always negotiate for the better one even if you have to settle for the second best one. The downside after you buy it will always be less. On a 15 year old boat the downside could be 50% on top of the purchase price. The more you intend to use it and actually like the boat the more certain this is. You'll probably fall in love after you buy it and of course you are then screwed. Don't fall in love until after the wedding when it comes to boats.

[JRM]

I was one of the early participants in this thread, and I was so bummed because everything I looked at was either overpriced or junk. We recently bought, and as I told my broker (who represents me), "this is the first boat we looked at that I'm more interested in getting the boat than getting a great deal." The market being what it is, we got a good deal anyway.

It was an interesting process. Our offer was a shot in the dark because it involved owner financing. Also, there were *significant* spares and other gear involved. I think by being honest and fair we ended up getting it all (even the fishing gear, which would have taken no effort for him to remove) rather than having it parted out separate.

As it's turning out, many of the large scale projects I budgeted for are getting scratched off the list as we use the boat. It turns out the PO who did the refit (who wasn't the one we bought it from) was much smarter and more experienced than I. The more we use it, the more sense his decisions make, and the less things I want to change. That makes a good deal much better.

I think we ended up just under $1000 of BUC, and got all the goodies thrown in. So I guess it isn't always such a bad number after all.

JRM

[RELENTLESS 1]

As a response to who represents whom and what in a deal. I have been for 25 years a Commercial RE Broker and Investor. I worked for a National firm and it was a unspoken rule that there are 3 sides in every deal, Seller, Buyer, and Broker and despite the 'nobility' of the professional code - the Broker represents the Commission, his time and effort. For him it is a risk reward of maximizing $$ out for time in. Also keep in mind that loyalty is very low in the 'hired gun' type of brokerage which is what I believe most boat brokers are. In the firm I worked for we did not do Leasing - thus no regular repeat business from a customer, we did strictly sales. If a buyer was a once every 5 year buyer, there was not as much motivation to max out effort to grind for the best deal because there was only one carrot, so as the broker, ones' motivation was to keep that carrot from being peeled. Though it is true that I would like to get a deal done quicker and not waste time with unmotivated Sellers or unrealistic Buyers. Furthermore, if I am hiring a broker, I wouldn't want to do so thinking that said Broker has no 'influence' in the transaction. That only means I have made a poor choice and rather than a Salesman to Represent me I have hired a waitress to take my order. A good salesman can ferret out motivation, flexibility, create urgency and by doing so should add value to any deal. If he doesn't why are you paying him? Just go to the Sellers Broker directly.

I have been looking for a boat for about 4 months as I write this. I find it very interesting and encouraging to write my offers much lower than the current asking prices, especially for boats over 20 years of age. I expect this will ferret out the motivated from the unmotivated or overleveraged. I do hope to fall in love with the boat, but first it is a business transaction, (my tradeoffs are newer production vs. older quality) and as in any property I have bought I have to have an exit strategy. That means I have to be realistic and know as I go in what my 'owning loss' will be. In my case we are looking for a 35' or so Coastal Cruiser to sail for 2-3 years extensively, then step up to a 40-45 to do some long term cruising. So any boat over 20 years is going to be that much older and that much less 'attractive' assuming equal care, than a newer boat. I need to factor that into my purchase and my 'update/repair/ready for use' budget.

The approach above is also my framework for interviewing a couple of Boat Brokers and choosing one to find my boat. In my business RE Brokers that are 'dug in' to markets turn over deals that never hit the market and sell immediately to ready willing able CASH buyers. If anyone wants to recommend a Broker around LA I am all ears, as I am looking diligently for a 35 footer in the $40-80,000 range.

That's my first post, hope it is helpful and wasn't to long.

[capta]

I would highly recommend chuck@emeraldyachtship.com. He acted as my "buyer's agent" at no cost to me including his flight from Chicago to NYC and did a wonderful job FOR ME, not the seller.
Mention the Pearson 530 in City Island NY, by way of introduction.
Good Luck & hope to see you out sailing soon.

[David_Old_Jersey]

Originally Posted by Dawntreader2

That's my first post, hope it is helpful and wasn't to long.

Not too long .

And highlighting that the Broker is not only acting as Broker for the deal / Escrow Agent for the cash (usually with enough neutrality) but also as a Salesman (for vendor) and for own benefit is always helpful ....... as multiple hats does appear to come as a surprise to some, as is the fact their is usually a reason why someone is your new best freind.........

Anyway, hope your boat search goes well.


BTW, whilst I see no harm in making any offer you like - just be aware that some folks (a minority?) do price their boats to actually sell from the getgo! It's worked for me in the past (quick sale = low ongoing costs + new toy ).

[RELENTLESS 1]

Thanks for the quick response and encouragement.
I am in Los Angeles so I do appreciate the NYC lead as we do plan to buy the next boat on the East Coast and sail there spring through fall.

Yes, there are Seller's who are realistic from the 'getgo'. I have seen a couple of nice deals go down quickly. One was a steal at the listed price (brand new fully optioned yet 20% below 5 year old siblings and it sill closed 10% below list) sadly it was just not right for me (geographically undoable). But I have been tracking diligently the three or four we like, late model Bene/Jenn or maybe Catalina. But Sabre, Tartan, Ericson, Morgan are the preferred older boats.
Thanks again.

[Pblais]

The approach above is also my framework for interviewing a couple of Boat Brokers and choosing one to find my boat.

Boats are more about you than the broker. If you can't chase boats yourself then you'll never really be motivated. Asking another broker to low ball his way through your dream list of boats isn't very productive.

I am looking diligently for a 35 footer in the $40-80,000 range.

In the ten years I've been here that is exactly the typical boat buyer. I really think buying a boat to sell in 2 - 3 years is dumb. You'll take a serious beating. Sellers highly motivated means sellers that never really could afford to maintain a boat so the low ball offer ends up with a penalty you pay right after you buy the boat.

I'm all in favor of the all cash no messing around offer, but I really think it has to be for boats you have personally scouted out and wrote the offer on. There is nothing a broker can do for you that you can't do for yourself. The serious broker problem is 20% of the brokers actually sell 80% of the boats. It's a ratio that transfers to real estate as well. So why would a 20% broker want to waste time chasing your low ball offers like about every other newbie boat buyer? You ain't special. It means you get the rest of the 80% brokers working for you. I can assure you you can personally do better on your own than that.

Buy the boat you really want and skip the first boat you don't want to keep. The money you save will buy a better boat and / or let you fit it really nice. Older boats fitted out nice tend to cost at least 50% (70% is common) above what you pay for them. You also will spend at minimum 2 years finding all the things that need to be replaced plus add all the things you decide you want. The 2 - 3 year throw away boat is a waste of time and a huge money loss assuming you could sell it when you wanted to quickly. BETTER IDEA: Charter boats for 2 to 3 years and save many for the real boat. You could be sailing next week!

Another issue on the cash deal - Nobody sells a boat if it isn't cash at the closing so don't get too carried away. If you take out a loan you best have it pre qualified. Any seller that thinks you are stalling for financing will bolt.

[RELENTLESS 1]

Thank you PBlais

Points well taken. This is just the kind of feedback I am looking for. I know that just because I can rationalize my strategy to myself doesn't mean it's a good strategy as I think you have aptly pointed out. It's very easy to get opinions from fellow boater but really hard to get much in the way of reasoning. (see below)

The issue with chartering / joining a club is the same reason I didn't rent motor homes but bought a nice Diesel Pusher, it was mine to work on, take out when I wanted, didn't have to schlep gear back and forth and with two college kids still at home it's a nice getaway. Also we really want to be able to head out a moment's notice. I will share the advice with the Admiral as she is a bit hesitant to jump into 'the boat' and feels an 'interim' vessel to cruise locally and gain experience is the more prudent route.

My Father in Law - owner of 4 sailboats starting with a Santana 22 ending with a Peterson 46 before hanging up the foulies for a powerboat, thinks buying an older well maintained boat that has all the 'gear' is the better route. I listen to him but my ears perk up when I you say: "Older boats fitted out nice tend to cost at least 50% (70% is common) above what you pay for them. You also will spend at minimum 2 years finding all the things that need to be replaced plus add all the things you decide you want."

This statement Really resonates and concerns me. Could you elaborate on why it will cost so much or is it that if I spend $50K on a boat it's easy to drop another $25-35K upgrading? Some of the older ones I have looked at have newer or low hour motors, recent bottom paint, re-rigging, 5-7 year old electronics etc. I am really curious, what am I not factoring in? Would a Surveyor likely be able to tell me and would he also estimate "useful life" as subjective as that would be? I am really trying to do as much research upfront and become familiar with as much as I can about the individual boats I am looking at as well as realistic 'costs'.

Thanks again for the help. And I will get my pre-qualification done asap.

[Auzzee]

If you are selling, price your boat at what you think it is worth. There is little point in the 'start high' ethos. Once it's been advertised for several months with a regularly dropping price, seasoned boat seekers will give it a wide berth reasoning something must be wrong.

When starting at the price you think it is worth, don't then add the commission. That immediately makes it overpriced and puts the broker at a significant disadvantage. Ask the broker directly if he is confident selling the boat at the price you are asking.

When buying, don't try to thieve. Pay for a boat what you think it is worth. Putting in stupid offers brands you as a stupid person and no one likes to deal with an idiot. Also don't try to justify a stupid offer by telling the broker how much of a sh*t heap he is trying to sell. You're trying to buy the boat, so who looks like the idiot? The broker generally will be a boating pro with more miles under the keel than you.

Remember another dream boat is always for sale in the next marina. If you miss one deal, there will always be another and there is no need to become a nuisance by berating sellers and brokers.

Life is supposed to be funfilled and gratifying....for everyone!