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  #1  
Old 08-14-2006
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broker VS. by owner

I have to let go of my 2005 Catalina 36. I have never sold a boat.
Trying to decide if I should sell it through a broker at 10% commission or on my own and pocket the commission.
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Old 08-14-2006
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I'd give it a shot on your own if you've got the time. You can split the 10% with the buyer if you want and that might make for a quick sale. I think it really depends on your personal situation.
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Old 08-14-2006
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I prefer dealing directly with the owner, but don't expect to keep that 10%. The buyers aren't stupid either. How soon do you need to sell it? Can you go show the boat and deal with multiple inquiries by just lookers. If you put a high price on the boat and list it yourself the buyers will just laugh at you. Brokers also have Yachtworld and you won't, so their exposure will be much better. I have bought and sold boats on craigslist, but they were less expensive. You are also in the realm of financing, which a broker can help the buyer with.
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Old 08-15-2006
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Yes, you can sell the boat yourself...but you should ask yourself a few questions first.

1) Do you have the time and patience to deal with showing the boat to multiple buyers? Does your schedule give you the flexibility to do so?

2) Do you have to sell the boat quickly, yet want to maximize what you can get for it? A broker can help get your boat in front of more eyes than you probably could alone. He can also tell you what to do, to show the boat off in the best way, to make it appear as appealing as possible.

3) Buyers aren't stupid...if you're not using a broker, they'll want a piece of that 10%... and a broker can often get you a better price than you could yourself.

4) The legalities and red-tape of selling a boat can be enormous. A broker will handle the paperwork, and will be responsible for getting the money to you. A good broker can also weed out the lookie-lookies...who aren't serious or financial able to buy the boat....which you would probably end up wasting your time on.

5) What is your time worth. How many hours would it cost you to pay for what the broker would cost? Can you see selling the boat in less than that time?
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Old 08-15-2006
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I have sold several boats, one through a broker and one on my own. The first lesson I learned selling a boat on my own is that a sea trial is allowed after there is a contract. You would be shocked by the number of yo-yos out there who will waste your time just for a ride. Also, if a prospective buyer asks for a survey offer to split the cost on the first one so that you have a reliable survey to show other potential buyers.
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Old 08-15-2006
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In addition to the advice above I would add that it makes sense to try to sell on your own if:
1. The boat is popular and a known model (yours is!)
2. You use the broker fee you are not paying to make your deal irrisistable. Don't plan on pocketing it!
3. You understand what boats like yours have SOLD for...not the listing price and are prepared to undercut that SOLD FOR price.
4. The boat is in a PLACE that is easily seen and visited by prospective buyers...like Annapolis, SanDiego etc. . If there's foot traffic, that's even better. No one is gonna visit "Hicksville" to see just ONE Catalina.
5. Spend some $$ to advertise her in the local sailing rags...Spinsheet, Soundings etc. Not everyone shops on-line and those that do will gravitate towards yacht-world which you can't use.
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Old 08-15-2006
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Question who does the seller work for ?

Before becoming a broker I bought three boats and sold two, all through the same broker. Obviously I was satisfied with the results. Now of course I am left with one boat, which is a good thing.

When approaching a large decision such as selling a boat, I first try to think strategically about it. Here the choice is whether or not to hire a broker to assist. The seller has more work to do if the broker is not hired. While the seller hires the broker on a commission basis, who really pays the broker ? As someone else previously noted, since the buyers tend to pay much less for a non-brokered boat, the difference in price that goes for a brokered boat pays the commission and it tends to be all from the buyer's funding. So without a broker the seller must do more work, which is really a favor to the buyer who returns the favor by paying less for the boat. Does that make sense ? That's pretty sweet for the buyer. The seller ends up working for the buyer for free and the buyer pays less !

Doing the "broker's work" in fact involves a maze of details which are sometimes quite a burden. It also involves scheduling and performing showings which tend to be on the weekend. Sadly some of those showings may even be no-shows on a weekend, so there you are missing a sailing opportunity and a showing at the same time !

So what incentive is there for a seller to not use a broker ? In theory a lower sales price should attract more buyers and offers. Most of the buyers these days come from the on-line multiple listing service (yachtworld.com) and repeat loyal customers to the brokers. Both of those sources are only available to brokers. There are several scattered on-line for sale by owner (FSBO) websites but their search engines and inventory pale in comparison to yachtworld.com. To confuse things even more, some of the non-yachtworld.com websites include brokered listings and not always explicity. The multiple listing service broadcasts to over 1500 brokerages as well as untold numbers of web surfing buyers. Brokers as well as FSBO sellers can both advertise in the local publications. Overall the FSBO exposure will be much less than the brokered traffic. Other problems I've found in calling FSBO listings is that the boat is already sold but still listed, return calls take a long time, there is only an email address which discourages some buyers, or the boat location is not included in the listing.

On the plus side the buyers for a FSBO listing may be more motivated by the lower price and that would be an advantage in the scattered on-line listings and local publications. If you study the FSBO listings you will see that the asking prices are often just as much as or even much more than the brokered asking prices for the comparable vessels. Unfortunately, over priced FSBO listings will suppress traffic and offers, and market value based offers that do come in will seem to be "low-ball" to these over priced sellers and likely to be rejected.

What the FSBO seller needs to leverage the situation is business intelligence. Without a broker's sold pricing info, the best the seller can do is lower his asking price 10% under the going rate on yachtworld.com. There is more to it than that though since comparable listings sometimes need to be adjusted based on other factors such as relevant upgrades. Those factors are more the business of a professional broker than a seller. Even some brokered sellers will insist on an unrealistic asking price, so the listing will sit idle until reality sinks in and the price is reduced.

Summing up, for a FSBO seller to make best advantage of not using a broker, the asking price must be realistic and lower than the brokered comparables, the seller must be concientious about advertising in the disadvantaged ways available, and the seller must be willing to work free for the buyer to complete the deal. All this must happen while competing for buyers with the efforts and resources of professional yacht brokers.

Last edited by captnnero; 08-15-2006 at 06:13 PM.
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Old 08-15-2006
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Exclamation boat birthdays

This is a follow-up to my last post. Concerning depreciation, consider this very real scenario. A seller decides to sell without a broker. The boat sits on the market without success for some months. Then towards the end of the summer the seller decides to use a broker instead. Many sellers do not realize that most boats experience an automatic 6% depreciation that rolls through the fleet when the new model year boats come out every September. The seller's boat has a birthday and it's nothing to celibrate when it's for sale ! So before you know it the boat just dropped another 6% in real value right out of the seller's pocket. It's ironic when the seller's original motivation to go without a broker was to "SAVE 10%". This unfortunate scenario can sometimes be avoided by taking advantage of the vast marketing and other advantages of using a broker to accelerate the boat sale process.

Last edited by captnnero; 08-16-2006 at 04:42 AM.
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Old 08-15-2006
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There is a boat a boat on the market I would buy tomorrow if it were properly priced, it has been on the market for over 2 years. Your costs, slip rent, insurance, depreciation and maintenance do not stop just because you decide to sell your boat. When this particular boat does sell it will probably go for market value or less, with no recovery for the years it has spent idle. Properly priced boats sell fast. So, if you are really serious about selling your boat then you should go about it aggressively. There is a lot of wisdom in what captnnero said.
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Old 08-15-2006
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costs, costs, costs

Quote:
Originally Posted by Gene T
There is a boat a boat on the market I would buy tomorrow if it were properly priced, it has been on the market for over 2 years. Your costs, slip rent, insurance, depreciation and maintenance do not stop just because you decide to sell your boat. When this particular boat does sell it will probably go for market value or less, with no recovery for the years it has spent idle. Properly priced boats sell fast. So, if you are really serious about selling your boat then you should go about it aggressively. There is a lot of wisdom in what captnnero said.
Thanks Gene. You make a very good point about costs other than "paper" depreciation. Having a professional broker can sometimes help mitigate those typical boat costs. Some brokerages have established relationships with strategically placed marinas in heavy traffic markets (Annapolis, for example) such that their brokered boats get a much better rate whether in the slip (best for selling) or on the hard (best for cost). Such benefits can extend beyond those rates too, such as when you need a launch or short haul for the survey and sea trial. Try getting a quick lift job when it's peak launch or haulout season as a regular owner. Sometimes it's like, hey, get in line. Then the whole deal goes on hold until you can get your hands on a boat lift.

Another sad aspect about boats for sale is that when they don't sell right away the maintenance tends to get way behind and that of course lowers market value and complicates and reduces the likelyhood of the sale. The hull gets dull looking. Unused running rigging lines get stiff. Deck leaks appear or get worse. The whole vessel gets dirty or musty. Odors appear from head plumbing hoses. I know of a case when the head odor got to the point that one potential buyer wife had to use the stern rail as if seasick if you know what I mean. So much for that showing ! The wasps and bees move in where ever they can outside. I had a personal experience with that once, what a surprise !

I like Gene's use of the phrase "go about it aggressively". Time is of the essence. People often are making two boat payments until the old one sells. A couple of times when transitioning vessels we owned two boats for a while. Our priorities immediately became fixated on the boat for sale, to the point that we would at least rinse the decks when a showing was scheduled soon.
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