Archive for August, 2011

Survey Importance

August 13, 2011

By far the most important factor in the purchase of any brokerage/used vessel is the survey and sea trial portion. The boat you are about to purchase is not new and in most cases without any warranty. The seller of that boat has told us about what he did to take care of it and there may be some records to support his ownership history but regardless its BUYER BEWARE.

Many vessels may have been on land for months or even longer and its the time they go back in the water and systems are brought back that you see leaks, failures, and various defects that can cost money and lessen the enjoyment of your new purchase. As brokers in this transaction we do not have the luxury or authority to make repair decisions or put the boats through a pre-sale inspection. In many cases we will commission a boat and run most systems prior to survey but we are not going into anywhere near the depth of a SAMS (Society of Accredited Marine Surveyors) Surveyor nor do we have the mechanical aptitude and to spot the early signs of what could be a bigger problem.

The inspection process should be one you treat as the most important part of the purchase. The surveyor you hire should be one you have chosen with care as they are your eyes and ears for every mechanical and structural part of the boat. While your broker may provide a list of surveyors to choose from that choice is yours and be weary of anyone who tells you that you can only use one particular surveyor.

While at the dock and underway the surveyor will be observing and probing for the issues that are present, confirmation of systems performing as they are designed, and the overall health of the boat and its components. Engines, AC/Heat, Generator, Hull & Decks, are all complicated systems and ones that in a survey hold the most importance.

While we strive to have all buyers happy with the boat they take delivery of problems due occur in the first 60 days when boats are put back into service. Many times the buyers come back to us with a feeling of remorse over the fact the boat has issues or mechanical systems failed. Again these are used boats and the systems most likely would have failed for the previous owner regardless. The surveyor you have hired will hopefully spot the issues before purchase so that you can make an educated decision or negotiate repairs into the purchase but sometimes things just happen.

Buyers we have found focus on the purchase price and naturally try to buy as much boat as they can without factoring in the cost of owning boats includes hundreds to thousands a year in upkeep for things that break. The first 60 to 90 days are probably where most of the latent systems will have issues and cost a buyer money. So make sure at survey time your  surveyor digs and probes and that you educate yourself to the best purchase you can make. Despite all of the factors discussed there are times when “stuff happens” and you have to chalk it up to the cost of experiencing the joy that comes from being on the water.

To Document or Not To Document?

August 5, 2011

One of the more frequent questions Knot10 is asked by a potential buyer is “what is the difference if I Coast Guard document the vessel vs. registering it with my DMV (Department of Motor Vehicles) or DNR (Department of Natural Resources), and do I need to do it”……. let me give you the quick answer

An undocumented vessel is registered by the DMV and does not have a marine certificate issued by the U.S. Coast Guard.

A documented vessel is registered and issued a marine certificate by the U.S. Coast Guard

Generally, you need to one or the other, and some states still in addition to Coast Guard documentation require registration of the vessel (not numbers though)

Why Document Your Boat

  • For commercial-use boats, documentation is required to avoid fines.
  • A documented boat is easier to sell, buy and/or finance, because its ownership is incontrovertibly established.
  • Many lending companies and individuals require documentation as a condition for financing boat purchases because documented boats are eligible for a First Preferred Ships Mortgage, the safest form of security a lender can have on a boat.
  • Bills of Sale, Mortgages and other instruments of title are recorded with the National Vessel Documentation Center.
  • When cruising in foreign territory or U.S. waters, it gives undisputed identity.
  • It gives authority to fly the yacht ensign of the U.S.

Documentation Requirements

  • The vessel owner must be a US citizen (native-born or naturalized) or the corporation must meet Coast Guard citizenship regulations.
  • The vessel must be a minimum of 5 net tons displacement by a formula computed by the US Coast Guard. Usually a boat measuring 25′ (LOA) by 8′ (beam) by 5′ (depth, not draft) — power or sail qualifies for documentation.

Cost of Documentation

  • $150.00 if you do it yourself, $300-500 if a document agent does it for you.

For more information access the Coast Guard web page at:

http://www.uscg.mil/hq/cg5/nvdc/nvdcfaq.asp#01

Style Not Brands For First Time Buyers

August 3, 2011

For those who are selling their boats or contemplating in doing so in the under 35’ segment consider the following …. Here is some food for thought as we learn and study the buying habits of newer boaters, who maybe moving up to a bigger boat from something in the 20-26’ range or may be buying their first boat. This detail is part of the decision-making process when we do a pricing analysis of our boats in determining how big of a market we want to attract….let me explain….

 

We as consumers are generally stuck on brands we believe in, I love a GMC product you may like a Ford or Nissan….I believe in the IPhone while others like the Blackberry….when the first time pre-owned boat shopper comes to us and this happens more often than not we ask them what are they are looking for …….and they tell us a boat size NOT A BOAT BRAND…or they say to us an express boat, a bow rider, a center console, a flybridge…… AND NOT for example Sea Ray or Cruisers, Boston Whaler or Pro-Line, Silverton or Carver they are looking at a generic boat style. When they use the Yachtworld search engine in more cases than not they will search the same way. In short the used boat market in a large segment of first time buyers is lumped into the style of boat and not the brand. When we are looking at the market analysis  in deciding where we should price our boats we have to look at the entire market and compete with other brands that may be more generously priced and find the sweet spot that will attract our buyers. We have to remember most of the buyers start out searching a size and price boat and we hope they stop at ours look at the details and with our photography and description we count on them picking up the phone and take the next step to talk to us or write us…..but size and price is the first determining factor and they will pick the low hanging fruit….. it is human nature.

Here is atypical example of a search for a 32’ boat

 

  Length Boats Year

Current US$

Codes

Location

Brokerage

32′ Bayliner 325 CRUISER 2005

59,000

P U T G FG

Sale Pending Sassafras Harbor Marina Yacht Sales

32′ Cruisers Yachts 320 Express 2005

93,000

P U T G FG

Rock Hall, MD Knot 10 Yacht Sales

32′ Four Winns 328 Vista 2005

109,000

P U T G FG

Balitmore, MD Coastline Yacht Sales

32′ Rinker 320 Fiesta Vee 2005

87,500

P U T G FG

Edgewater, MD Hawk’s Yachts
 

       

   

 

When you the seller  look at where your boat’s price should be or thinking of reducing the price on the listing also consider your boat against the other brands not just Sea Ray against Sea Ray, but Sea Ray against Chaparral, against Regal, against Cruisers, against Four Winns and price intelligently, the Knot10 team will guide you.