Prospective purchasers lament

[Boracay]

I am currently looking at yachts with a view to purchasing a cruising boat.
My current aim is something durable arround 45' and 15 tonnes.
The problems that I am encountering are:
1. There is little no documentation on the boats that I have seen. In a perfect world one would expect :-
i. Builder's Certificate
ii. Ownership history
iii. Maintenance history
iv. Gas fitters certificate
v. etc etc etc.
but I arrive to see the boat and there is noting. Even if I request it over the phone in advance - nothing!
2. Boats that I have looked at have been massivly overpriced. Most of the boats for sale in this part of the world have been for sale for a long time, for some of them it looks like years.
When I bring up the subject of a realistic price based on known sales I get the impression that negotiation is impossible.
3. Many of the boats have not had decent maintenance for quite a number of years. Again this is not reflected in the price!
Am I expecting too much here?

[CSY Man]

Uh, where is your part of the world...?

If a boat has been sitting for years without being sold and deferred maintenance piling up, it is certainly priced too high.

After all, the true value of a boat is what a buyer is willing to pay!

[irwinsailor]

I agree with CSY man. Make a lot of offers. Used BUC and NADA to support your offer. I for one do not agree with BUC and NADA prices but I will and did use it to my advantage.

[Alan Wheeler]

I don't know of any of that info being with a boat, unless the vessel is required to be in a full commercial survey.
As for price, get a full inspection and then submit an offer with deductions for required maintanance.

[Boracay]

I'm in Oz.
The problem with inspections is that they are expensive. I would really only have a boat inspected if the purchase price had ben agreed on, I intended to buy it, and had done my own exhaustive checks first.
Surveyors are not infallible, and their opinion only relates to the boat when it was checked.
I have not been able to get a boat to the stage where preliminary inspections are happening- ie second inspection, mechanic, rigger, sea trial etc.

[Boracay]

With regard to documentation I am finding that looking at a boat takes at least half a day, for a boat that is nearby, to a weekend, for a boat that is some distance away.
The state of the documentation should be a reflection of the state of the boat. Looking at it could save everyone a lot of time and money.
Checking the ownership history is necesary to be certain of title.
Looking at boats is expensive. My costs run from $10 for a nearby boat to $350 for one some distance away.

[Strygaldwir]

I look at the priceds of everything now a days and I think we are in a period of massive inflation. Inflation that no one seems to talk or care about. Yeah, the prices of autos and salaries my be constant but everything else seems to be much more significant. Fuel, houses, boats, food, rent, they all seem to be rapidly rising. I think we still expect things to cost what they did a couple of years ago, but that, in many instances, is not the case.

Meanwhile, I think you just have make as many offers on boats as you can. The nice part is you may find someone who shares your view of boat values. I did self surveys of the boats I looked at. I used a checklist of items, put them in a spreadsheet with estimated plus and minus values to try to normalize the costs of the different boats. I would then offer what I thought was appropriate. Utilizing this method, I still paid what I consider as $25,000 too much. But, I also got it at a lower relative price than any other boat I was looking at. But, what can I say, got the boat I wanted.


Good luck.

[ssullivan]

I am in the same situation. My "part of the world" is the Northeast, even going down to FL in the USA. I have a broker who had done me right in finding my first boat. He was very good at analyzing your needs and then sifting through listings to find the right fit at the right price. This worked when I was purchasing a coastal cruiser.

Now that I'm looking at blue water cruisers (or at least Caribbean capable) he can't find me anything I don't see on Yachtworld.

Regarding inflation, I wholeheartedly agree. It seems as though the recession and 9/11 drove down wages for many people (myself included) while inflation has been going on everywhere. Basically, it looks like it is costing more to cruise now (when you consider average salaries) than it ever has. (see below regarding cars... and then compare car prices to boat prices)

It's pretty hard to come by $100K these days. It takes quite a few years to save up no matter how little you spend on land-life requirements such as transportation and clothing. The crazy thing is you need $100K to buy a reasonably safe boat to cruise in.

Right now, we are looking at boats in the $60K (or more likely) $50K area because we simply can't muster up savings fast enough, and loans are not a great idea when cruising.

---An Interesting Excercise in Evaluating the American Standard of Living 1971 to 2000-----


In 1971, the average cost of a car in the U.S. was $3,430.

In 2000, the average cost of a car in the U.S. was $24,730.
(this article is the source of this data. Its source is the National Automobile dealers' Association.)

Adjusted for inflation to the year 2000 (using this calculator), the car in 1971 cost about $14,700.

So the price of the average car in 2000 is 7.2 times greater than the
price of the average car in 1971 in absolute dollars, and about 1.7
times greater in inflation-adjusted dollars.

There are two ways to look at what has happened to wages.

1. In 1971, the minimum wage was $1.60. In 2000 it was $5.15. So it rose
by a factor of 3.2 in absolute dollars. In inflation-adjusted dollars,
the minimum wage actually fell. Since the minimum wage acts as the foundation of the wage scale for the 80% of Americans who work in non-supervisory jobs, this is important. If the minimum wage is not rising, chances are that their wages are not rising either.

2. If you look at the "Average hours and earnings of U.S. production workers" in the World Almanac (whose data came from the U.S. Dept. of Labor), the average wage of a production worker was $127.31 per week in 1971, and $456.78 in 1999. In absolute dollars it rose by 3.58 times (roughly the same as minimum wage), but in inflation-adjusted dollars it also fell.

If you multiply $127 by 52 to get an annual wage in 1971, an average worker in 1971 made $6,620, or roughly two average cars per year.

If you multiply $456 by 52 to get an annual wage in 2000, a worker in
2000 made $23,750, or roughly one average car per year.

In other words, if cars are the measure, an average worker in 2000 can
buy only one half of what an average worker in 1971 could, in terms of
cars.

If cars are the measure, the standard of living of a typical American worker -- 80% of the population -- fell by 50%.


Do you know how they slipped this one by us? When women went to work outside of the home, it reduced the amount of money each worker needed to make to support the household. Companies were able to pay half what they used to, since each household has two incomes in this case. This turn of events lead to record corporate profits and a greatly increased productivity, since companies now have 2 workers for the price of one. We, the workers were shortchanged.

It's sad.

Gord... go ahead and delete this if it's too far off topic...

I just had to put in my 2 cents after inflation was brought up as it relates to blue water cruising. It's very close to out of reach for us Gen X and younger people.

[Strygaldwir]

I think if you replaced car with boat, or house for that matter, you might find a VERY similar thing happening. But there sure are a lot of people that have gotten ahead of the curve. I sit here watching all the 80-150 footers that go by. Driving down A1A seeing 1000's of condos going in at $1 million a pop.

I say, instead of our involvement in Iraq, we have a lottery. We give 1 million people in US a $50k sailboat. But, you have to be poor. i.e. only making $100k or so a year.


Boating for the masses!!! Arrise and sail!

[Alan Wheeler]

I guess it depends on what side of the fence you are on. I consider a boat to be something that depreciates way to much for what kind of investment it is. And I believe it should also be considered an investment, not a liability. Just as a house/land is. A boat should at the very least, maintain it's price from it's orginal purchase day. Wear and tear should then come off that price. So if one wished to keep up all of it's original standards, it should be worth the same price today, years later. Any additionals, such as safety equipment etc, would then add a small value. A brand spanking new model sold today, would then reflect todays prices.
But we see the market reflect several things. One is the price of new production line vessels drive down the market. The fact that there are more sellers than buyers, so price and demand come into play. Then on the other side of the fence, as a buyer, Price and demand come into play again. But the prices are held up by the brokers, not so much the owner( I think).

Two points Chris, just as thoughts and you may have done this anyway. I wonder if you approach a few brokers and say, I am a Buyer, not a tyre kicker. This is the type of boat I am looking for and price range. Find sellers that can supply me the required info and I will be looking at them seriously. It's probably not too much different than what you are already doing, except, what I am trying to say, is make the Broker work for you, not the otherway around. If that doesn't work, then they must really be fat cats riding a very boyant market in your area.
One other comment. I have a freind over here in NZ that is a trusted guy and a good Broker. He will go to work and to bat for you. If you want to contact him, Email me. It is not hard to buy from NZ. We buy Ausie boats and get them over here all the time. Going the other way would be just as easy. And it is a buyers market over here and you save 10% with the dollar imediatly.

[Boracay]

I possibly am a bit of a tyre kicker, but I find it hard to make a realistic offer when there are so many boats unsold.
In the days when real estate was worth buying I used to find a couple of houses that I liked, then track them through to sale. Then when I found a similar house I knew the price within a few hundred dollars and could confidently buy.
That procedure seems to have gone out the window with low interest rates. Now people seem to jump straight in with no concern for the lessons of history.
When I tried this with boats I found that the ones that I was targeting just did not sell, or sold after a long time for arround 3/4 of the asking price.
The only boats that sell well are well made fibreglass yachts with a very high level of interior fitout.
I have allowed a lot of time for my yacht purchase as the one rule seems to be that you will save more by walking away from a sale than by buying.
The market trend seems to be down, which makes a hasty purchase even less advisable.
I dont think that the brokers are doing well. Most seem to be really struggling financially, so I realy dont want to waste their time and money either.
I don't think that the brokers are doing anyone any favours by accepting overpriced listings. The market needs a certain level of sales to survive and I don't think that that is happening.

[BC Mike]

The purchasing power in relation to the gross domestic product has been reducing in most Western countries and will likely continue. It is likely will can not have all the money all the time and will have to share some with the developing countries. 75% of all US millionares are sole proprietors. They did it themselves.
Michael

[ssullivan]

BC Mike C once whispered in the wind:
The purchasing power in relation to the gross domestic product has been reducing in most Western countries and will likely continue. It is likely will can not have all the money all the time and will have to share some with the developing countries. 75% of all US millionares are sole proprietors. They did it themselves.
Michael

Michael,

I'd take that statistic with a grain of salt. True, 75% may be sole proprietors, but how they get from $0 at birth to $1,000,000+ has a lot to do with who their parents are and who they know socially. A business more often than not can't be started without seed money. They got that seed money somewhere.... this is a class issue. People whose families have been in the USA for a shorter period of time relative to the original Mayflower types have significantly less family assets. For instance, I have zip and so does my wife. We have had to truely start from scratch. No "angels" no "friends and family", etc... I'd like to see a follow on statistic that shows where the millionaires from your post got the startup capibal required to open their businesses.

[irwinsailor]

I did not make it through high school. We married at 19. We have 3 kids. My wife took care of them everyday while I worked. I lost my job at 43 and decided to retire instead of finding a new job. Bought our boat for cash and will start cruising this year. It was tough when I started as it is for most young people. I thought that the previous generation had it much easier than I did. I think I was wrong. It is tough getting started, but you must start.

[BC Mike]

I agree with ssullivan, statistics can be misleading and we do not know how they got started. But I think Bill Gates and Warren Buffett are just smart guys. The US is more gererous with venture capital than Canada. I also agree, and I tell my younger clients, that there is never enough money to meet all the needs. I must also admit that I bought a boat using my inheritance from my father. It was the $1500- Zodiac I mentioned in another post. The 75% are sole proprieters is from US financial news about one month ago, and the income to GDP is from Canadian financial news last week.
Michael