Asking Price vs Selling Price - Caribbean Cats?

[talus]

Popycock (good word hey). There is a saying in Canada that when the US catches a cold Canada gets the flu. Well, right now the US has pnemonia! We are seeing a "dead cat bounce" in stocks that is boosting some markets but overall the trend is down. There is still a lot of downward pressure on this market.

[CortoMaltese]

About prices there is something that i really can't get and hope someone could help me to understand.
I'm looking for a few models and one is the FP athena; the price of this boat starts from 130.000$ to almost 250.000$ (and we re NOT talking of later ones).
Now here is my question: who is the drunk?
I can't imagine a number of upgrades (mybe i'm wrong on this one) or issues that can justify all this difference.
so......are those who are selling high thieves?
are the cheap ones just a piece of junk?

opinions?

PS: said that, how much do u think an average condition FP athena around 2000/01/02 vintage should cost?

[Palarran]

Originally Posted by talus

Popycock (good word hey). There is a saying in Canada that when the US catches a cold Canada gets the flu. Well, right now the US has pnemonia! We are seeing a "dead cat bounce" in stocks that is boosting some markets but overall the trend is down. There is still a lot of downward pressure on this market.

Poppycock is a good word and I completely agree that the US has pneumonia. I'm from Michigan and it's more like a heart attack here. Quad bypass surgery is required to save the patient. But what the heck, it's been worse (just not in my life time).

Looking at the BIG BIG picture - even if the world economy recovers, peoples psyche has been diametrically altered from the pre-recession heyday. Second homes, $100,000 BMW's, Planes, club memberships, etc, are on the wane. People are saving, paying off mortgages, and making safe market investments. Non-income producing assets like a boat are tough to swallow. Even if you chartered it out, they are a loosing proposition now (may have always been).

So, I see the prices of catamarans in the caribbean coming down quite a bit more. Maybe 30 to 50% from the average listing on Yachtworld. Timing is everything. The best time to make offers is March or April as the boats are going into a 6 month hibernation period. But, what the heck to I know?

[sailvi767]

I have sold more then a few boats in m life. The last was a 50 Beneteau coming out of charter. I knew the value of the boat and priced it accordingly to sell fast. If someone made me a crazy low offer I discounted it. The boat sold for a reasonable price quickly. Offering some 30 percent or more below the asking price would simply insure I did not reply. Not long ago I had a car for sale. It was worth around 28,000 given it was in perfect shape. I asked 28,500. The first buyer to come and look at the car drove it and then said I will give you 18,000.00. I said I am sorry not interested thanks for looking. He said are you not going to counter. I said no there was no counter to his offer. He said well give me a counter. I said ok 29,000. He said thats crazy your only asking 28,500. I said no more crazy then your offer of 18,000. The price to you is now 29,000.00. Both sellers and buyers should keep things realistic. The car sold the next day for 28,200.00. The buyer offered 27,500 which was a reasonable start.

[Augusto]

I am going to miami next week to view a few boats. Does any one have an idea how much a survey, with hullout, costs for a 44ft Cat?

[Palarran]

Sailvi, with all due respect, that was then and this is now - A house worth $200k in 2007 is worth $140 now - take it or step aside because someone right next door will sell for that price. Cars - check the internet. My buddy has a SL500, wanted to trade it in. Paid $90k for it, can only get half. It's two years old and has 15,000 miles. Very few buyers and a glut of product.

Are boats selling? Yes. Are a ton of then not, Hell yes. Will someone eventually breakdown and sell for a much lower price then what was being asked two years ago. Double yes.

So, back to the original question, the difference between asking and selling price and lets use your Beneteau 50. There are 110 of them for sale right now and they range from $585k to $85k. A lot on the market and huge range. Again, someone is going to sell well below whatever the market is to get rid of theirs.

This is of course, IMO.

[talus]

rigmarole is correct. The price is set at the margin.

If you don't want to sell your car for less than $28,000 that is fine (and that car may be a deal at $28,000). However, I am absolutely sure someone else out there has a car exactly like yours and is willing to sell for less.

Buyers never "have to buy" they want to buy. Sellers do not always want to sell but some certainly MUST. That is the difference.

Those that must sell will price accordingly or miss out on offers and delay their sale. There is nothing wrong with a high asking price...but you had better be prepared to wait for that buyer who feels your item is worth it. If I am making an offer with my research done, I'm going to know what every other comparable is worth and bid accordingly. The higher the asking price, the more candidates there are to choose from.

As for a low-ball bid. Buyers might not find many sellers that want to play, and time becomes an issue. On the other hand, a low bid just might get you "in the game" with someone that needs to sell.

Of course everyone hates rejection. Even buyers don't like having their offer rejected. And this is where the whole sordid offer/counter-offer becomes the land of brokers. Brokers love to be the "insulation" between buyers and sellers. They want to spare everyone involved the insulting, dirty, peasant task of dealing --- all for a measly 10% of course.

We westerners are loath to make offers. We like price tags. When was last time you walked into Wal-mart and asked for a discount? But our western world is quickly changing. Frugal is in. Discount is in. Yes, there will always be those with the "flashy" items but more and more, less is better...and gaining respect.

Yachtworld is so successful because it helps bring buyers and sellers together. Yachtworld also lowers prices. Yes, you can bet it is bringing prices down - as well as speeding up sales. Remember when you had to have a stock broker to buy stock? Then the internet came along -- with $40 trades. Next came the discount trader pricing and $5 trades, and now "free" trading in some cases. The same is happening with many items, boats included.

The more boats that are listed, the more we can all compare and shop -- from the comfort of home. Without emotion clouding our judgment. We can do our research, watch for trends, then hit the docks and bid accordingly, with or without a broker.

And remember "...opportunities are like buses, there's always another one coming." - Richard Branson

[ColdFusion]

[QUOTE=talus;337066]

Great post

[Augusto]

I must agree with Rigamarole and Talus, there is no rush to buy a boat. Houses/condos might be an investment, boats are not. Boats are usually place on or near SALT water which has an in-credible power to ruin all sorts of equipment when not properly used and cared for. Worse than a heavily used boat is a scarcely used one.
The cost of caring for a boat is large, beside the opportunity cost. Therefore I firmly believe prices will continue to come down not only because there little demand but also because the unused boats will continue to deteriorate on their slips.

[sailvi767]

You have missed one key point. I priced the boat at the correct price for the market at that time. The buyer who purchased the boat started about 10 percent below my asking price. That was a reasonable start for a correctly priced boat. We ended up about 6 percent below my asking price at closing. I got a couple of stupid offers that were just a waste of everyones time. If I have something priced correctly according to the market at the time and someone comes to me with a offer 30 percent below that number I am not going to give the offer any credibility.

[CortoMaltese]

Originally Posted by sailvi767

You have missed one key point. I priced the boat at the correct price for the market at that time. The buyer who purchased the boat started about 10 percent below my asking price. That was a reasonable start for a correctly priced boat. We ended up about 6 percent below my asking price at closing. I got a couple of stupid offers that were just a waste of everyones time. If I have something priced correctly according to the market at the time and someone comes to me with a offer 30 percent below that number I am not going to give the offer any credibility.

Don't want to be polemic, but how can u say that? As i said in an earlier post very often there is a huge difference in price between very similar boats. Is that maybe caused by the fact that the sellers boat is always the best?
For what i'm reading, making a 30% + less on asked price is faisable and it's a way to open dances.

[Augusto]

Sailvi, I have to raise the point that there is not such thing as correct price. For example today RIMM the company that makes Blackbeery dropped 16% in the market, so yesterday's price which eas correct then is no longer correct, and todays first offer was 13% yesterdays closing price. All I want to make clear is that price not only depends on what you believe what you are selling is worth but also what others are willing to pay. So if tomorrow everyone decides that CATS are not safe (just for an example) all CATS become worthless. To bring my pojnt to reality I believe that there are a lot os would be sailors that bought boats for the thrill of having one, but dont really enjoy it, that are now needing to sell the boats, also the increase in fleet size from the Charter companies will now have to come down with demand. This selling pressure will continue for a while. Why do you think the S&P500 dropped to 700 points back in march? Desperate sellers, some need cash more than others. On top of that waiting for a buyer in the boat market costs a lot, and that is what I was referring on my first post, the opportunity cost and maintenance cost of an unused boat.
I also agree with CortoMaltese that all offers are the beginning of a dance, a courtship, a negotiation that if managed correctly buy both sides might end up in a deal. Never get offended by an offer.

[talus]

This reminds me of a housing post I just read...at Chart of the Day.

Not that many months ago the median price of a house was around $255K. Today we [the US] are somewhere south of $180K, and falling.

What changed?

Supply changed. Demand certainly changed. Available credit definitely changed. However, possibly most importantly, perception changed. Note: that is not likely the order of events and many of those changes occurred simultaneously.




The increase in popularity (demand) and initial lack of supply as major manufactures spooled up production lines to build Cats several years ago resulted in those vessels holding their value relatively well. Cat prices (all boats really) managed to hold quite a bit of value as free credit allowed many to make purchases they would not have otherwise.

Today, Cat prices are falling as excess inventory enters the market from the charter companies and those owners who are required to liquidate in order to maintain other commitments. Manufactures have also lowered prices in order to rid themselves of inventory and maintain their production lines (notice how the new Lagoon 400 went from ~395K down to ~315K on the first 5 boats - that's a 20% reduction).

The wildcards in this game will be the price of oil and strength of the US dollar. Oil prices being critical to all phases of construction. And demand from the US consumer weakening, resulting in less production with greater per-boat development costs.

Regardless, until the downward pressure on the US economy ceases, boats (being luxury items) will continue to see price decreases.

Oh ya, and Augusto is correct - price is a state of mind.

[Augusto]

Talus,

Great chart, it shows that the price action of a durable item such as a house can be as volatile as a stock. The difference is that stocks get a new price everyday, they trade everyday, and a house will only have a new price once is sold. Houses are also unique so each owner believes his house is better so the price will not get affected, until he tries to sell it.
Not long ago if you wanted to buy a Ferrari, a Porsche or a Lambo you would have to put your name on a waiting list, pay full price upfront, and wait 6 to 8 months for delivery. Today you get discounts and can chose you car in a filled parking lot. (I myself dont have any of these cars BTW). Boats are not a necessity item, buyers now will be people like myself that want to take a sabbatical and go for a circumnavigation. There are few sailors like me. Most of the sailors out there are well to do people that bought large vessels for weekend sailing trips. Nobody needs a 40+ feet cat to sail on a weekend, people bought these boats because they could. Some of them now cannot afford the maintenance.
Another point is also the fast depreciation of boat equipment, a brand new E120 (dont know why someone has to buy the best/top model of anything) costs upwards of USD 4000, how much would you pay for a used one after 1 year? After 2 years?
I believe the large size vessels still have a lot of price drop to do, who needs a 45ft CAT? I want one, but I could also settle for keeping my money on the bank, rent a beach-front house in the Caribbean, and charter a cat once in a while.

[Palarran]

Talus, I'll second Augusto, that's a great chart. I've been buying foreclosed real estate for the last year and some of the deals have been simply unbelieveable. More like going back to 1970 era prices. My business partner and I have a saying "Put some lipstick on the pig" then we rent the homes. 100% payoff in less then 10 years.

Buying a x-charter cat is somewhat akin to that. I expect the boat to have some cosmetic inperfections. But I also expect to get that boat for a substantual discount. Think about a Lagoon, Leopard, of Fountaine Pajot mid 40' cat and what the ask price is on these. It's around $350,000. Some as low as $250k, some as high as $450k. That dollar amount buys a lot of real estate right now - a whole lot.

I'm flying to Tortola and St. Maarten the second week of February to meet with brokers and check out charter cats. I really hope there will be a good deal then.