Boat Values - Know Before You Buy

I get calls or emails weekly from individuals that are in their final passage to boat ownership; finding and buying their dream boat. They want my counsel. And more often than not, most shoppers do not have a true understanding of used boat values and the prices they command. Most individuals are shocked to find boats cost as much as houses do. They are often taken back when I try to explain the reason a used boat is priced the way it is.

I want to give you a good idea of why used boats cost as much as they do so let's start from the top.

If you read other posts on my website, you will read about the absence of an official Yacht Blue Book. Yes, that's right, there is no such thing. There is one for automobiles but not for boats. If you call any used car dealer or bank in North America and name any production automobile, they will quote a value of within a few dollars of each other. This is due to the multi-billion dollar, organized wholesale car auction system. And there is also the Powerboat Guide, NADA and others that like to sell you their version of a boat Blue Book.

With over 2,200 boat manufacturers (USCG Listings) in North America there is no such wholesale market for used boats and the older a boat gets the bigger the price discrepancies. And keep in mind that boats and yachts are not built on an assembly line. I've been through my share of boat building plants including Hatteras, Bertram and Carver. Boats are built like houses, one step at a time. Very labor intensive, boats are built, cars are assembled. So you can easily see why new boats cost thousands, perhaps millions of dollars to produce. Powerboats cost more to produce than sailboats as they are more complex.

Generally speaking boats do not appreciate in value. But they do reach a point in their life where they do not loose any more value. Much like antique automobiles, the rarer a boat is, the more it will be in demand. A 40 year old Huckins will often bring more money today than when it was first commissioned. But boats generally depreciate about 10% a year.

So you are looking at that 1984 40 foot Albin trawler, with a single Lehman and 2 staterooms. What is it worth? What is a fair price? Simply speaking, that Albin is only worth what you are willing to give and the seller is willing to take. So where do you start?
Here is what you need to know when considering prices of used boats. The owner has established his asking price with consultation with his listing Broker based upon several factors. I do the same with my sellers.

• 
  In what condition is the boat? Good boats always command higher prices, always! A newer boat in poor condition will bring less than an older boat in good condition always!. By condition I am speaking of both cosmetics (cleanliness, gelcoat, paint, woodwork, canvas) and structural issues involving fuel tanks, rudder posts, blisters etc. The more upgrades and maintenance that has been completed, the more you should expect to pay as the owner knows this. He also knows that you will have already looked at the worn out boats and have rejected them too.
• How old is the boat? See above. This factored in but is not the deciding factor.
• How motivated is the seller? Some owners want to move their boat as quickly as possible and any thing close to an asking price might be acceptable. This doesn't happen often but it does occur.
• How many of these 40' Albins are there on the market? Remember, the more demand for the boat, the higher the price will usually be. And I find that most people will not travel far to buy a boat, so boats in California will not be in competition with East Coast boats.
• And lastly, and perhaps the most important factor in determining that asking price will be recent past sales history of similar makes and models. The recent past sales history is available only to Brokers however through our multiple listing service, YachtWorld. It will give me the recent demand for this 40' Albin and at what selling prices have been in different parts of the USA. It tells me what people are asking and what people are paying!

So when you are looking at this Albin and you have found at what seems to be a great boat for $50,000.00 and all of the others are in the $85 - $100,000.00 range, there is a reason for this. Remember, condition, condition, condition! Be carefull as new fuel tanks will cost you about $30,000.00 to replace, and rudder posts about $8000.00. But if you can live with the problems with the boat, then by all means buy it. I am just wanting you to know not to expect a problem - free boat for the low, low price; you'll pay for what you get.

So now you are thinking, are all used boat prices negotiable? Certainly they are. Everything has its selling price and neither the listing Broker nor the owner may know what that price will be. Only a serious buyer with money on the table will be able to find that out through negotiations. but I will tell you that as of 11/24/2008, boats are selling at about 15% off of asking prices.

Boats - Vessels of Fredom

Why do people adore boats? Why do people go to great extremes to own a boat? US country singer/songwriter Kenny Chesney has a song titled Boats on his new CD Lucky Old Sun. In the song he sings:

“Boats…. vessels of freedom, harbors of healing...boats, twenty years of a landlocked job was all that Tom could take sitting at his desk all alone and depressed (he) says this just can’t be my fate, went home that night and told his wife (that) you can tell all of your friends it's been real but it ain't been fun (so we are) gonna get us one of them…boats… vessels of freedom, harbors of healing...boats”

I’ve listened to that song a hundred times and it gets better each time. He found the words I’ve always known were there but never could quite find them. Good for him!

As a boater myself it sometimes becomes hard to explain to non-boaters what the love affair is all about. Perhaps it’s a sickness; at least it’s a bug. Some of us use our boats as a home, treating her like a member of the family. I do have a habit of talking to the Patricia Ann; she speaks back but in ways only I can hear. She has become a refuge of sorts, a protected harbor. Sleeping in a motel room when I’m on the road just isn’t the same.

I have friends that use their boats for an escape from life’s stormy weather, relying on their boats to unwind from everyday stress. They take their sailboats, trawlers or motoryachts out to feel the wind on their faces, the sun on their backs. Their boats bring them peace. Others friends, have their boats equipped to make a living from the sea, as do the many shrimpers and charter boat Captains that ply the waters of our Florida coast. Their boats become a life ring, protecting them from the “storm” that waits at the cabin door.

But as a full-time waterman, I can say it’s more than what it seems. Yes, it's a state of mind. Leaving the regular 9-5 world behind, knowing you have everything you need to sustain yourself and your crew for days and weeks on end. If I want to stay, I do; if I want to leave, I can do that too. Oh boats can be trouble and they take tons of work to maintain but us boaters consider it a labor of love. You just can’t place a price tag on the feeling when you are at the helm, everything works as designed, the air is crisp and the sea is calm. It takes only one good sunset to make it all worthwhile.

Mark Twain, an American author eloquently said “Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.”

So ask yourself, do you yearn for that feeling .

Spanish philosopher Jose' Ortegay Gasset once said, "Tell me the landscape in which you live, and I'll tell you who you are."

That pretty much sums it up. Fair winds.
Mike

First Time Yacht Buyer

If you’re a first-time used boat buyer the choice of used yachts available for purchase can be overwhelming. How do you make sense of all the models and styles out there?

The first time yacht buyer needs to avoid buying on emotion and take a hard look at what they intend on doing with the boat. Making the wrong choice will be a major disappointment in the long run and perhaps cost you thousands.

To start, are you a sailor or a motor cruiser? Some like the romance of a sailboat with the image of tropical islands in the picture; some don’t want the hassle of the sails, rigging etc. But a sailboat is very inexpensive to operate if your plans include traveling to far-away places. Still, power boating is not expensive if you choose the right boat. Powerboats generally come well designed with all of the creature comforts you could every need; generally more so than all but the largest of sailboats. And you don’t need to learn all of the sailing techniques either.

Once you have assessed your yachting preference you can then decide on what you intend on doing with it. Are you going to sail, cruise or fish from it? Of course, you could fish from anything if you wish, but yachts made for fishing are much different than those built for cruising.
How often will you use your new yacht? I always say that there are “boaters” and “boat owners”. Boaters use their boats; boat owners just like to say they own a yacht as their boats rarely leave the dock. Some boaters may be full-time liveaboards using their boats as their home every day. Others may just use their boats on nice weekends when time permits.

Next is the cost of yacht ownership. You must take this into consideration. The purchase price is almost like a down payment. Boating has its costs that you need to be aware of. If you are mechanically inclined, you will find that the costs are not substantial. Most boat owners do the majority of work themselves. I have posting at my Cruising Center website about the specifics of boating costs that breaks it down into each expense. Feel free to take a look.

So thus far we have determined what type of boater we are, so we know what style of yacht generally appeals to us, we know how much we expect to use it and about what to expect in the upkeep of her. So far so good!

Now comes the hard part; how to choose just the right one? I have developed a purchase checklist that I use with my customers to let them specify the critical features of a used boat. This allows them to choose features that they can live without and those that are features that are must-haves. That checklist then becomes the basis for the perfect boat search. When I am working with customers, I then look for used yachts that best meet the customer’s wants recognizing that boat purchases usually involve some compromise. Rarely do I find a used boat with all of the desired features.

In the looking phase, I always say that you’ll know it when the right boat comes along; it will “talk” to you. Any potential boat will have the lines, the feel and the character that appeals to you. Don’t settle for anything less than that pleases you.

But what about the cost of that used yacht? How do you know you are getting a fair deal? Borrowing from another posting at the Cruising Center about the True Value of Boats, good boats always command higher prices, always! A newer boat in poor condition will bring less than an older boat in good condition always! Never buy a yacht based upon the price alone or you’ll be selling it within 6 months.

And should you complete a survey, yes it’s always recommended. Choose a knowledgeable surveyor that has experience with your desired used boat. Ask him for references too. If you are working with a reputable Yacht Broker, he will recommend several top-shelf surveyors but will insist you choose the one you want.

And lastly, locate a Buyer’s Broker to represent you in your search, selection and purchase. It will save you lots of time, money and a lot of disappointment.

The author, Mike Dickens is a veteran liveaboard boat owner, Yacht Broker and owner/operator of Paradise Yachts.