Is this a good time to sell my boat?
On top of these dismal overviews, the lenders have clammed-up, GE Capital has announced it will leave boat financing altogether, Key Bank has left the boat financing business, as the lenders shrink, rates will rise. Insurance companies are tightening their underwriting criteria. In the normal world we would call this part of the business cycle, after all the past 10 years have been relatively good. The good news here is that lenders are re-entering the Boat-Loan market, the lending criteria has tightened but loans are available. Lenders are looking for a 700 FICA, rates are fair, and typical loans call for 15-20% down. Some more good news is that a marine floor planning company is entering the extremely distressed floor plan market for boats, M&T is believed to be onboard. As a seller some of this is comforting, as a buyer happy days. Since our world is the brokerage market we will address that.
As sellers are seeing less showings, and therefore less offers, many are nervous. The typical first reaction is to drop the price, the buyers out there know their position and are taking advantage of it. As we know a boat won't sell until someone comes and looks at it (sight unseen buyers exist but are a very low percentage) the showings are still below what they were just 3 years ago. As always some boats tend to always sell, currently twin engines are a tough sell, and single engine trawlers are selling, Sport Fish boats are very hard to move, even at very low prices. With diesel prices so high the logic would seem to boost sailboats, that has not yet happened.
What is the answer? and what can we do to sell our boat?
The first approach is to go outside of typical markets, those of us few having an up year have found buyers from other states and countries, particularly Canada. This scenario has seemed to played out as the dollar has dropped significantly, 2 year lows against the Euro & Canadian dollar, as well as record highs for the Aussie dollar. As boats are a luxury, their always seems to be a market for boats. As timing is always the case in a boat purchase that reason can be a wind fall, a promotion, inheritance or whatever, these things are not tied to a specific up or down market. As far as finding these people, that is hard due to intense competition, their is always somebody desperate and selling well below what the market should be. Here is a list of things to do to be better prepared to sell your boat.
1). Have the boat looking like you will only get one shot at the sale.
2). Fix the things that you know don't work, and always intended to fix.
3). Have records, maintenance logs & manuals, have your answers ready, when was the bottom painted? when were the engines serviced? the rigging replaced, etc. not knowing some of these questions can completely turn a buyer off.
4). If you have a note larger then the value of the boat, consider taking the hit, we can do an analysis of how much you will need to come up with, and still come out ahead in the long run.
5). You will need to re-think how you price your boat. Because 3 other similar boats are asking X is not the reason to price yours at X. Determine how much you are spending to maintain the boat and using a simple (time value of money equation) you can see how effective it might be to take less. Sitting on your boat for 2 years is not the desired outcome.
6). In contrast to above simply dropping the price in itself is not always the answer. Many great boats at very good prices are not moving.
7). It is time to be creative, things like some partial seller financing, (we have done several of these & offer all the legal contracts necessary) slip transfers, liveaboards, offer to pay for the survey and haul-out (upon purchase, this idea sold one of our listings recently) perks always help, be creative.
8). Offer to assist in the transaction by spending a day or so out with the new buyer. What is being bought is a dream, not a commodity, treat the sale like that.
9) As we said before if no one comes to see your boat it will not sell. Our market research over the years has told us it takes an average of 5 showings to get an offer. Hence we must get the viewings, since calls are down we must be very skillful at getting someone out to see the boat, we have a very good technique for this.
10). If you commit to a broker give them the full facts and history as best you can, any miss-information will come back 10 fold. We recently delisted a boat because we found out it had been purchased in Florida and had hurricane damage, the boat is at another broker, for sale who is probably unaware of the damage.
11). Negotiate everything from price to brokerage commissions, if you have to take a hit why shouldn't your broker. The commission reduction could very well be what keeps your transaction in the positive.
Kensington Yacht & Ship Brokers