Buyers: Focus On The Boat Not Year

January 20, 2012

When you set off to shop this year for your next boat or first boat for that matter try to keep a focus on the boat in front of you as opposed to any barriers you may have mentally put up.  We hear initially from buyers a very strict criteria “I only want to look at boats 2006 or newer”, or “I won’t look at boats older then 2000 model year”. We know from doing this every day that its the care and maintenance the current owner has given the boat that makes this difference between a diamond and a dog.

While you do need to have search criteria, putting up a model year barrier before deciding which boat model you find the most appealing can be a mistake. Why? SImply put because we see many times a 2002 boat that is so well kept that it out shows and outshines the same 2004 or 2005 boat. Assuming the boat is older then 1 or 2 years neglect knows no model year. A 2006 boat with canvas that was never put up or never cleaned will have more wear and tear then a 2002 boat that was shed kept and babied by it’s owner.

Until you figure out which exact boat is the boat you want DO NOT restrict your model years to a barrier. Once you do however determine that a 340 Sea Ray for example is the correct boat then by all means approach it in the following manner.

Determine the model year ranges where the manafactorer made significant changes. You may find that in 1998 cherry interior was not an option but that in 1999-2002 the boat was built the exact same way. If you decide “I won’t look at boats older then 2000” you may miss the best deal or cleanest boat which in this case a 1999 would be the exact same boat as the 2000-2002.

In closing pay close attention to the one or two models of boat you determine is right for you and once you do focus less on the model year and more on the specific boats you look at.

 

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We Are Ready For 2012!

December 31, 2011

Our sales team is prepared and extremely excited to kick off the New Year.

Many of our customers have expressed an interest in listing their boat in the New Year. By preparing to go on the market early in January, you will be best positioned to capture the initial buyer interest that the New Year will bring.

We anticipate good times ahead and have a lot of optimism for a strong 2012. All our offices are open Monday, January 2nd, and we will be ready to answer any questions or show any of your boats.

We wish each of our friends, family, and colleague’s success, prosperity, and good health in the New Year. The best is yet to come!


 

A Slower November Across The Board

December 10, 2011

As Reported From The Trade Journal Soundings:

Brokerage sales for November were lower this year, compared with November 2010 and seasonally, according to U.S. members of YachtWorld.com reporting in the proprietary database Soldboats.com

The number of boats sold declined 7 percent, from 1,936 boats a year earlier to 1,805 in November. The total value of boats sold fell much further, by 49 percent, from $387 million to $199 million.

Those who read news about this market every month will recognize that the valuation of sales in November 2010 was extraordinary and that this November’s results were similar to those of September ($196 million) and October ($259 million). However, sales were down for every size range.

Sales of boats 26 to 45 feet were down 4 to 5 percent, and sales of boats under 26 feet were off 9 percent. Bigger-boat categories declined the most, with boats 46 to 55 feet off 11 percent, at 117 boats, and boats over 55 feet off 16 percent, with 65 boats sold.

All size ranges recorded lower values, especially boats over 55 feet, where the total value of boats sold declined to $59 million from $231 million a year earlier. A significant part of that decrease was the result of a 50 percent drop in superyacht sales (boats over 80 feet); eight boats were sold in that size range, down from 16, for a total value of $21 million, compared with $79 million a year earlier.

Through November, 27,091 boats have been reported sold, a decrease of 3 percent, or 831 boats, from 2010. Despite the lower value of sales in November, valuation for the year was up 5 percent, at $3.11 billion in sales.

A more detailed report summarizing recent U.S. brokerage sales will appear in the January issue ofSoundings Trade Only.

— John Burnham

One Day You Will Be A Seller

December 10, 2011

Time to state the obvious. Almost every buyer for a house, boat, plane or large capital purchase has had and will have the upper hand for some time to come. Deals are incredible and abundant in all asset classes. In our world we push to drive sellers to the lowest prices so buyers can see the opportunity right in front of them increasing our chances of capturing the one or two buyers that may be shopping. Bottom line is 2012 will likely continue to be a better market for buyers then sellers.

That said buyers who are purchasing brokerage boats at times should look at the transaction from the perspective of the seller as one day you will be on the opposite side of the transaction. In a few cases this year we’ve sold the boat to a buyer only to have the boat back in 6 or 9 months as the buyer decided to move on to something else.

After contracting the boat at probably a price 20 to 30% below market and in some cases even more, a survey is done and report is issued. Please as a buyer keep the perspective that you are not buying a brand new boat. The 2006, 2007, or 2008 boat you are buying for $105,000 is selling new for $334,000 at the boat show which is why you decided to stick to pre-owned. The items of essential repair at a survey are typically not ones that a seller will have issue with and a repair or credit for the repairs can most times be worked thru. It’s the demand for latches, zipper fixes, coffee pots, and non-essential items that can lead to a deal going bad.

While I can already hear the buyers words “hey that’s what I want or I’ll go onto another boat” just keep a slight bit of perspective that 1,2 or 3 years down the road you may be on the selling side. It’s not a new boat but a boat you paid a great price for and deserve good karma to go along with it.

What Is Your Boat Saying

October 17, 2011

WHAT YOUR BOAT SAYS TO A BUYER WHEN THEY LOOK AT IT:

-Black Mold On Canvas: Look up when you walk on your boat. Does your canvas look as if it’s a tropical jungle with really thick mold? It says I have not been to the boat in 6 months and have not noticed it. Mold= lets look at another boat

-Lift The Lid: If you have not been to the boat in 4 months lift the lid on your heads and you see stagnant horribly stained heads that again tell a buyer this is a boat that is left behind by the owner.

-Carpet Staining: Walk down into the salon and get greeted by carpets that look dirty and stained can instantly harm all the good work you’ve done in the cockpit. At your house you’d hire or rent an industrial steam vac and spend 3-4 hours getting it right. There is no reason you can’t do the same on your boat and greatly improve the look of your carpets.

-Engine Rooms: It usually follows suit that I can look at the inside, canvas and overall condition and then pull the hatch up to what looks like a crime scene in the engine room. Again these are tight places and hard to get to but companies exist that will come in and spend a few hours cleaning up years of grime and neglect.

Chalky gelcoat, un-repaired zippers on canvas, sunpads on the bow left out for years all hit buyers immediately when they board your boat. I cannot explain how much money this adds up to in a buyers mind versus a mint condition boat.

Just recently I showed a boat with several of these factors. The buyers are going to buy this model boat. We have the same boat priced $20k higher 2 hours away for them to which I said why not buy this one as it has everything you want but just needs some TLC and probably $3-4k of work to get the canvas right and few other items corrected. “No way the buyers said, it looks like they where really rough on the boat and I have no idea how they maintained it if they would leave it like this. We don’t want to buy a boat and immediately have to spend time and money fixing it. We want a turn key boat at the price we’ll pay or we will just keep looking. There are plenty of them out there and till we find the right one at our price we’ll just wait.”

Just like housing this is a competition against other boats. If you want to sell you need to compete to win on your boats condition. Spending time and money to improve your boat today is not a suggestion but really necessary to make sure it stands tall. If you did what we do 7 days a week you would see time and time again a boat that would only take $1000-$3000 to look great have buyers tell us “that boats worth $40,000 (listed for $70k) or $450,000 (listed for $600,000). While not true we hear this all the time.

In conclusion in a buyers market buyer’s want their cake (price) and to eat it too (condition). The boats we are selling the fastest have stepped up to compete on both accounts and crossed the finish line while those that don’t buyers simply send to the back of the line.

Annapolis Boat Show Was……GREAT!

October 17, 2011

We just finished up what we would have to say was a very positive boat show in Annapolis. There where large solid crowds, even Thursday which is typically really slow was better than usual. The most noticeable thing was the lack of negativity upon people we encountered. I did not hear any mumbling about gas prices, how bad the economy is etc etc. The other nice thing to report is that we encountered plenty of people who said “I’m looking for ……” which is a solid buying signal that we heard far more than “just browsing I’m not buying anything”. While many buyers are still selling their current boat or shopping at a slower pace then you or I would like it was all positive and we really came away from this show with great vibes that boaters are thinking about that next boat.

THE TIME IS NOW

September 27, 2011

THE TIME TO BUY IS NOW! In early fall most boaters are making end of season plans which for those selling boats means writing checks for storage, winterization, and commitments to marina slips for next season. That is hard cash that an owner cannot re-coup. For that very reason we find owners as motivated as they will ever be from the end of September to the end of October. Depending on the size of the boat these amounts can be anywhere from $2000 to $7500.
Purchasing in the fall versus spring is a lot like buying a convertible car in the spring versus going into winter. Expectations and motivation is quite different from what we encounter in the spring from an owners mindset. I know having bought a convertible for my wife in the spring that I over payed because I had to have it and the dealer knew it and that if I did not buy it the next guy would.

So as a buyer know that in the next 4-6 weeks you have as much of an upper hand on a seller if you want your pick of the nicest boats combined with buying as low as you can. That said I can assure you it will be the longest winter of your life waiting to get your new purchase in the water and enjoying the season of 2012.

Ads have to be consistent to pay off and it takes time!!

September 6, 2011

Here is some data that shows as we have grown so too has our ancillary ability to drive more people to our listings, ads, and offices. We have heard many buyers comments about “I shop on your site all the time”, “Knot 10 has great prices”, “Knot 10 has such a good selection”, “I have your website in my favorites” etc.. This brand awareness and what others call Q rating is a culmination of many forces coming together which get stronger the longer there in place. Doing print advertising EVERY ISSUE not randomly, attending 5-6 boat shows every year, sponsoring events, having retail locations, and giving away hats and tee shirts with our creative brand all have the impact of increasing visibility. The benefit of that visibility is not something you see in a week, month or year but now after 3 years +  is something we can easily quantify the impact of statistically and mentally.

 

People ask sometimes “I have not seen my boat in your PMY ad”,  “How come my boat has not been shown more”, “is there anybody buying boats”, or “why am I not in every print ad” which are all valid and legit questions. One key point to keep in mind is that not every boat fits exactly with the advertising in certain places versus others. The most important factor to keep in mind is the results of what constant advertising and brand awareness has done which is drive higher and higher numbers of buyers to our website. What we know statistically is that people come in looking at one boat and then look at others in its class or price range around it on our site directly. That benefit filters across all boats with Knot 10 whether advertised in print or not and the page stats have grown and should continue to reflect this as we continue our dedication to advertising in print, boat shows and face to face at Marina’s and Yacht Club events. Here’s some #’s that illustrate the point. This shows a comparison of web traffic to our boats in 2011 Months versus 2009.

Bi-Weekly Listings Newsletter

September 6, 2011

Sign up for our newest addition to market leading communication which is our bi-weekly listings newsletter. Keep up with the latest listings as we will simply send them right to your inbox. Knot 10 is coming into the part of the year where we list the most boats and if you want to stay updated click the link below.

http://bit.ly/knot10newsletter

 

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.