Buying before Selling?

[JohnP]

Lots of folks on this forum are looking for new boats.**I myself do look pretty regularly, always searching for the perfect boat. I have a price range in mind and it seems over the last year or two lots of boats are becoming reachable. If that trend continues it would appear further down the road I could even do better. I think there are way too many boats for sale compared to the number of people who can really buy them. Anyone serious about switching boats should probably sell their old boat first.* If the new ones I have in mind are coming down I am sure mine is dropping at least as much.

If you price your boat right it will probably sell, but the right price is probably much less than anyone really wants to think about.

Priced at market value, or so you think, could take a long time to sell.* Of course during that time your next boat will probably*depreciate*also.

If you buy before you sell you will own two depreciating "assets" with double the expenses.* In effort to*stop the bleeding you will probably sell the old boat for even less.* This will set the bar even lower for others who wish to sell.*

Over the past few years I have witnessed many new(to them)* boat owners beam about the steal they just got on their new boat.* Then they load it up with lots of toys and a year later it is for sale for less than they paid for it.

Okay I am pessimistic,* but the only reason I can think of for buying before selling is the "I got to have it now" syndrome and the"I can afford it so why not".

I am not sure if anyone will have any comment about this "rant"** but if so I would like to know if buying before selling makes sense.

Happy New Year*** JohnP*** IG32* #25**** "Adagio"*** Toms River* NJ

-- Edited by JohnP on Thursday 30th of December 2010 10:31:56 PM

 

[Carey]

JohnP wrote:

Lots of folks on this forum are looking for new boats.**I myself do look pretty regularly, always searching for the perfect boat. I have a price range in mind and it seems over the last year or two lots of boats are becoming reachable. If that trend continues it would appear further down the road I could even do better. I think there are way too many boats for sale compared to the number of people who can really buy them. Anyone serious about switching boats should probably sell their old boat first.* If the new ones I have in mind are coming down I am sure mine is dropping at least as much.

If you price your boat right it will probably sell, but the right price is probably much less than anyone really wants to think about.

Priced at market value, or so you think, could take a long time to sell.* Of course during that time your next boat will probably*depreciate*also.

If you buy before you sell you will own two depreciating "assets" with double the expenses.* In effort to*stop the bleeding you will probably sell the old boat for even less.* This will set the bar even lower for others who wish to sell.*

Over the past few years I have witnessed many new(to them)* boat owners beam about the steal they just got on their new boat.* Then they load it up with lots of toys and a year later it is for sale for less than they paid for it.

Okay I am pessimistic,* but the only reason I can think of for buying before selling is the "I got to have it now" syndrome and the"I can afford it so why not".

I am not sure if anyone will have any comment about this "rant"** but if so I would like to know if buying before selling makes sense.

Happy New Year*** JohnP*** IG32* #25**** "Adagio"*** Toms River* NJ

-- Edited by JohnP on Thursday 30th of December 2010 10:31:56 PM

In my mind there is only one justification for owning two boats. That is when the boat you absolutely lust for is available, and selling the old boat is not a deal breaker. Such was the case with me when I bought the boat I have now. My old boat was a Bayliner worth under thirty thousand dollars, and sat on a trailer in my yard til it sold. Would I pay moorage on two boats. NO!!!

*

 

[Woodsong]

buying before selling only makes sense if you can truly afford it and don't care what you sell your first boat for. I did the 2 boat owner thing back when we bought our previous boat....had one boat on 2 different lakes....used boat #1 for weeknight sunset cruises as it was only 10 minutes from the house, boat #2 on the weekends as it was 45 minutes away. Did that for about 6 months before selling boat #1. That was before the market collapsed. If you price boat #1 right it will be gone quickly. The trick is making sure you understand what the real FMV of your boat #1 is prior to buying boat #2 so that you can correctly calculate that price into the overall deal. Biggest problem is when you are still in fantasy land on boat #1's value which is often the case these days due to how much boat prices have dropped.

 

[JohnP]

Carey, I am glad it worked out for you, we have all seen boats sit in people's yards for years, and they get pretty sad.


Woodsong,* You get it, the price is the only thing people respond to in this economy.It is a lot easier to sell first to know where you really stand.

JohnP

 

[markpierce]

Sell your boat cheap and quick, and get on with your life.

-- Edited by markpierce on Friday 31st of December 2010 12:02:48 AM

 

[Carey]

markpierce wrote:

Sell your boat cheap and quick, and get on with your life.

-- Edited by markpierce on Friday 31st of December 2010 12:02:48 AM

I'm totally with you on that one Mark. Start at a reasonable price, and get ready to take the offer.

*

 

[Woodsong]

markpierce wrote:

Sell your boat cheap and quick, and get on with your life.

-- Edited by markpierce on Friday 31st of December 2010 12:02:48 AM

excellent words of advice! *Sure beats dragging it out for a year or more in this market!

 

[Marin]

My wife and I were the beneficiaries of the "buy before selling" philosophy. The previous owner of our boat purchased an almost-new GB46 in Vancouver, BC. He still owned his much older GB36. As he was running his GB46 down the coast to his home port in Alameda, CA, he contacted his broker and told him to put his GB36 on the market. The broker contacted the GB dealer in Bellingham and asked if they knew anyone who might be interested in an older GB36. If they didn't, the selling broker would list the boat. An hour after the Bellingham broker got the fax with the boat's specs, we walked in the door.

Our offer was contingent on the boat passing our inspection, a sea trial, and engine and structural and systems surveys. It was relayed to the owner who was somewhere off the Washington coast. The offer was accepted and we flew down to Alameda to check out the boat.

The boat was not a steal, but we paid about $20,000 less than GB36s the same general age were selling for in our area at that time. Part of this was because boat prices are significantly lower in CA than in WA because the cruising waters up here are better so the demand for cruising boats is much higher (so say the brokers, anyway). And part of it was because the owner didn't want to own two boats and was very motivated to let the GB36 go. This was in 1998 when the economy was ripping right along very nicely so it was not a factor in the lower price.* Boat buying activity was very high.


-- Edited by Marin on Friday 31st of December 2010 01:28:37 AM

 

[KJ]

John, I am a prospective buyer*and plan on*buying a trawler this summer or late fall.* I can give you my perspective of the buyers side of the market. Although my experience is not as in depth as most of the members here, it is actually from someone that's going to be buying.* I just did a quick survey of the members to get some idea of what folks were paying for boats.* You can see the response under the "Money Matters" topic.
The average was amount paid was about 75% of asking price, however this included some folks that bought their boats in a different economic climate, so take it for what it's worth.**Some of the members said that if they were to buy the same boat today they would offer/pay a lot less than they did.* I have been doing the buyers two-step:
checking the pages daily to see what's out there, checking asking prices against retail published prices, checking the quality of interesting boats, and talking with as many brokers that are willing.*It seems that the most of the brokers know that their clients boats*are way over FMV but are reluctant to insist on realistic pricing*because they might lose the sale altogether.* I have had serious interest in several boats that have since been sold. I asked a broker about one of the boats and he said that*it was a quality boat with no major problems, and that it sold for less than half of asking price. I didn't know if I should believe that so I asked a couple of other brokers and they said if the owner was tired of carrying it,*yeah it could sell for that.* When I see a boat that I like,*I bookmark it, even if it's way over my budget.*If*a boat that I am interested in gets sold I feel bad about it,*but then*sure enough, pretty soon another good one comes along.* I think a lot of the buyers out there are willing to do the leg work to find the right boat for the right price. Most of them are not ready to "fall in love" with one boat, so , unfortunately for the seller, they are willing to walk away from your boat and move on to the next boat. I think a lot of buyers today are pretty well informed. I have already gotten tons of really good info from this forum that I will use when I make my buy.
I am confident that with the*help of a buyer agent I will find the boat I want for pretty close to what I*want to pay. Call*me a*"bottom feeder" if you will, but I think getting the most boat for my money kinda makes a lot of sense. I'm sure there are some folks here that will disagree with everything I have said, but it's*only my humble opinion.* KJ
*

 

[Marin]

KJ wrote:

...but I think getting the most boat for my money kinda makes a lot of sense. I'm sure there are some folks here that will disagree with everything I have said, but it's*only my humble opinion.* KJ

There is a famous piece of advice that's been expressed in various ways by various people. I first saw it in a story in Boy's Life magazine back in the early 1960s.** The advice was "Buy the smallest boat you can afford."* In this case, it was advice from an experienced young local sailor to a new fellow in town who knew nothing about sailboats but wanted to buy one.* He was telling the experienced fellow about a big sailboat he'd found for a very low price and this was the experienced sailor's caution.

The logic behind the statement "Buy the smallest boat you can afford" is that if you have x-number of dollars, the smaller the boat you buy the better condition it will be in, or the newer it will be, which often amount to the same thing.* Buying a bigger boat for the same x-dollars will generally get you an older one, or one that needs a lot of work and is an ongoing source of problems, which also often amounts to the same thing.

The advice still holds in our slower economy.* All that's changed are the prices that have mostly all been shifted to the left.

This advice does NOT mean you should buy a boat that's too small for what you want to do with it.* But when you determine exactly what you want to do with a boat, then buy the smallest one that will do all those things for you.

But the bottom line is that it doesn't matter what anybody else thinks of your boat buying decision.* The only thing that matters is if you are happy with your decision.* There is all sorts of advice that can be given, much of it worth heeding.* But in the end, if you are happy with the boat you bought and are getting what you want out of boating from it, then what you paid is totally irrelevant--- it will have been worth it to you.


-- Edited by Marin on Friday 31st of December 2010 01:53:53 AM

 

[KJ]

I've heard both axiom's, "buy the smallest boat you can afford" as well as*"buy the biggest boat you*can afford". I*was not intending to imply that when*said*I would like to get the most boat for my buck,*that I meant the largest boat I could afford.* Of course a smaller boat of a higher quality makes more sense than a crappy large one.
However, all things being equal, I would probably go for the larger boat for several reasons.* A lot of folks on this forum seem to be quite happy with*their smaller (very subjective) boats, but some folks say they would like to get a larger boat.* I think it's an individual thing, like the*one screw vs. two thing.*

 

[markpierce]

Let's not turn simplicity (buy the*smallest or no,*buy the biggest)*into nonsense.

 

[Marin]

KJ wrote:A lot of folks on this forum seem to be quite happy with*their smaller (very subjective) boats, but some folks say they would like to get a larger boat.* I think it's an individual thing, like the*one screw vs. two thing.

Yes it is.* Not long after we acquired our GB36 we decided we wanted a larger boat.* Our favorite in the GB line is the GB46.* We came very close to making offers on GB46s during the first few years we owned ur GB36.

Today, after twelve-plus years of owning our old GB36, we would not want a boat one inch longer.* I am not retired and I'm having too much fun at my job to want to right now. So retirement and the time to screw around with a boat a lot are some distance off.* So we do not want to take care of one more inch of boat.* We don't want to wax one more inch of hull, we don't want to wash one more inch of deck, we dont' want to refresh brightwork on one more inch of exterior trim, and we don't want to pay for one more inch of moorage.

We sometimes debate over what we'd do if we won the lottery or I sold the book rights for a movie for a million bucks or whatever.* Sometimes we say we'd buy a bigger boat, specifically a Fleming.* But most of the time we decide that we'd send our boat up to one of the yards in Vancouver, BC and have it totally returned to new condition.* Strip the hull and repaint it, re-engine it, new generator, whatever it took to make it a brand new boat.* And then keep using it for another twelve or twenty years.

We'd be putting WAY more into the boat than the boat was worth, or ever would be worth.* But it would still be a lot less than buying a Fleming.* Even a used Fleming.* Plus we know what we've got with this boat and, design aesthetics aside, it suits our requirements extremely well.* Bigger would just be bigger.* It wouldn't necessarily be better.

The only way we'd buy a bigger boat is if we were willing to spend the money to have everything--- and I mean EVERYTHING--- hired out.* Wash, wax, polish, brighwork, change the oil, rebuild the toilets-- everything we do now done by somebody else.* We'd just show up and use it.* Something breaks on a cruise, we'd have a mechanic and the parts flown in on Kenmore Air.* If we ever get a bigger boat, all I'm gonna do is drive it.

*

 

[KJ]

markpierce wrote:

Let's not turn simplicity (buy the*smallest or no,*buy the biggest)*into nonsense.

Nonsense?*

 

[FF]

"The logic behind the statement "Buy the smallest boat you can afford" is that if you have x-number of dollars, the smaller the boat you buy the better condition it will be in, or the newer it will be, which often amount to the same thing. Buying a bigger boat for the same x-dollars will generally get you an older one, or one that needs a lot of work and is an ongoing source of problems, which also often amounts to the same thing."

I would disagree with this , depending on the vessels intended use.

A larger boat is usually the better offshore platform , and will frequently have the proper sized engine , tankage and range to actually go cruising.

If your a M>M (marina to marina inshore) a fully polished show place could be very nice.

If some distance , independance and daily marina fees are not in your lifestyle a big simple boat might be a better choice.

Every boat is like a battery , some are fully charged , some pretty run down , when you find the scantlings ,style , equipment and condition that suits your intended goals its time for the surveyer.

 

[JohnP]

Yes, The decision to buy or sell is clearly up to the individual.** No two of us have the same personal circumstances.

If I were buying and my budget was 100k* I would be looking in the 150k range at least and keeping track of each perspective boat. Also I would be interested in the mindset of the owner.* I guess I would be a bottom feeder.

If I were selling I would price my boat below the competition in hopes to have her be the next one sold of that particular model.

I would also be realistic,* if a jaunt around the globe is not in the cards I doubt if I would tie up the funds to purchase and maintain an expedition yacht.

I would sell before I buy.* Trade in or donate.* I do not want two boats. Unless they are of two different types.***

For now I will just be a dreamer (lurker) on yachtworld and watch the direction of the market.


JohnP******** IG32* #25***** "Adagio"*** Toms River*** NJ

 

[Navigator]

We are firmly in the buy before you sell camp. The builder gave us too good a deal to pass up in addition to allowing us to defer the final payment 'til 6 months past the build completion date should our existing boat not sell. This allows us to continue to enjoy our current boat while we wait for our new one to be built. An added bonus has been the appreciation of the Oz dollar (our contract is in US$'s) so we are another 20% better off than when we signed the contract.*As it looks like the US is in for at least another 12 months of pain*there will be some even more*incredible deals on offer which more than make up for the reduced selling price of an existing boat.

 

[JohnP]

Navigator wrote:

We are firmly in the buy before you sell camp. The builder gave us too good a deal to pass up in addition to allowing us to defer the final payment 'til 6 months past the build completion date should our existing boat not sell. This allows us to continue to enjoy our current boat while we wait for our new one to be built. An added bonus has been the appreciation of the Oz dollar (our contract is in US$'s) so we are another 20% better off than when we signed the contract.*As it looks like the US is in for at least another 12 months of pain*there will be some even more*incredible deals on offer which more than make up for the reduced selling price of an existing boat.

Wow, Just took a brief gander at your website- will definately check it out more.* You guys have a Great* 2011**** John and Miri*** IG32 #25 "Adagio"

*

 

[Baker]

The number one point that y'all are missing(especially the OP) is buy the boat "right" in the first place. If you truly buy it right, you can then sell it "right" even in this market. I ALWAYS make sure I buy a boat that is desirable to a wide audience. And by that, I mean a unique boat....not a cookie cutter.(Hey that would be a good name for a cutter sailboat). My current boat is going to survey today. While a Mainship Pilot 30 is far from unique, the tan gelcoat is rare and that is what makes the boat look so damn nice. It looks like a much more expensive boat than it is....just classy looking. The same boat in white gelcoat just looks like another.....boat. I can't tell you how many times people stop by our boat to tell how nice looking it is. Anyway, blah blah blah. The potential new buyers love it and hopefully nothing major pops up out of the survey. I could go on and on but don't have the time. Will revisit this topic when I get to my destination.

 

[Moonstruck]

To my eye, you are correct, John.* Here is a picture of my Pilot 34.* It sold quickly when I sold it, and it seems to have sold rather quickly again.

This picture is looking down the gunnel toward the bow.* It shows the antique white gelcoat.* That was over a flag blue hull.* I cruised it many miles, and was asked several times if it was a Hinckley.* That is pretty good for a Mainship.* Point is the antique white gelcoat gave a much richer appearance.

 

[Woodsong]

Baker wrote:

The number one point that y'all are missing(especially the OP) is buy the boat "right" in the first place. If you truly buy it right, you can then sell it "right" even in this market. I ALWAYS make sure I buy a boat that is desirable to a wide audience. And by that, I mean a unique boat....not a cookie cutter.(Hey that would be a good name for a cutter sailboat). My current boat is going to survey today. While a Mainship Pilot 30 is far from unique, the tan gelcoat is rare and that is what makes the boat look so damn nice. It looks like a much more expensive boat than it is....just classy looking. The same boat in white gelcoat just looks like another.....boat. I can't tell you how many times people stop by our boat to tell how nice looking it is. Anyway, blah blah blah. The potential new buyers love it and hopefully nothing major pops up out of the survey. I could go on and on but don't have the time. Will revisit this topic when I get to my destination.

John, congrats (hopefully!) on the sale of your mainship! *Cookie cutter boats (sea rays, etc.) are sold strictly on price. *When you have 50 of the same model out there for sale, all similarly equipped, either the price or the location of the boat will get it sold.*You are correct about buying the boat right, aka at the right price. *What you elude to as well is equally important and that is not only sales PRICE but sales VOLUME of a particular model. *After having my previous boat take forever and a day to sell due to limited interest from the market (even though it was truly a great boat!!), I personally learned the value of buying not just a boat that fits my needs, but also one that has a proven history of transactions so that I can sell if I ever decide to get a different *boat.
There are some nice boats I passed on due to the fact that they are lucky to have one sale of that make/model per year. *Some boats if you buy them you ought to stick a for sale sign on it the day after you close b/c it may take 2 years to find someone interested in buying. *

*

 

[Codger2]

Moonstruck wrote:Here is a picture of my Pilot 34.*

Certainly one of my all time favorites at 34'.* Good looking, single engine and a
good turn of speed. Was yours a hard top?


*

 

[Moonstruck]

It was a hardtop.* Here is a picture at anchor.

 

[Codger2]

Moonstruck wrote:It was a hardtop.* Here is a picture at anchor.

Again, a damn good looking boat and about the best 34 footer I ever saw. Better
(IMHO) than the newer 34. The cabin was cozy, swivel mount TV and a great little
dinette and galley. Why Mainship changed the design after a relatively few years is
still a mystery to me. I've often thought I'd sell SeaHorse and get me one.


*

 

[Steve]

Never, ever, do it , boat or house.
Steve W.

 

[JohnP]

Steve wrote:

Never, ever, do it , boat or house.
Steve W.
Steve-* I agree 100%**** JohnP

*

 

[Marin]

FF wrote:

"The logic behind the statement "Buy the smallest boat you can afford" is that if you have x-number of dollars, the smaller the boat you buy the better condition it will be in, or the newer it will be, which often amount to the same thing. Buying a bigger boat for the same x-dollars will generally get you an older one, or one that needs a lot of work and is an ongoing source of problems, which also often amounts to the same thing."

I would disagree with this , depending on the vessels intended use.

A larger boat is usually the better offshore platform , and will frequently have the proper sized engine , tankage and range to actually go cruising.

You obviously missed the point that "buy the smallest boat you can afford" does not mean to buy a boat too small for your purposes.* If you need a large, ocean-going boat, then buy a large, ocean going boat.* But for a given amount of money, a smaller "large, ocean going boat" will most likely be in better condition than a larger "large, ocean going boat."* Unless you're buying brand new.

Now I admit that this advice is aimed at people who are going to buy an off-the-shelf boat and use it as-is.* It probably does not apply to someone who's going to buy a beater boat and re-engine it with a self-marinzed engine out of a '63 Ford Falcon that they found in a wrecking yard and use panels from a discarded aluminun oil company billboard to fabricate a cabin.


-- Edited by Marin on Friday 31st of December 2010 02:28:27 PM

 

[Marin]

Old Stone wrote:

Hey - Watch the comments about the '63 Falcon. After all, if it's a Ranchero, one could always modify the bed to be a new dinghy. No wasted parts that way! Now float that in your pipe! Chuckle, chuckle

I completely missed the potential of the bed.* Perhaps John should create a whole new forum category-- Junk Yard Trawlers.

*

 

[koliver]

I am in the buy before camp. We did that only once, but when shopping for the right boat, we were in no hurry at all, as we still owned a perflctly capable boat that we still liked and planned to use. It was sail, and we were looking to move to power. We looked at boats over a three or four month period. We rejected the one we bought, and came back to it later, after finding nothing we liked any more for the price. We paid roughly twice as much for this boat as we thought we would get for the old one, and we were prepared for 9 months of double moorage costs before getting rid of the old one. In fact, our estimates were right on, as we got what we had paid for the boat 6 years before, after exactly 9 months on the market. So be realistic about the price for the old one and the time it takes for the buyers out there to get to yours.
the other 2 transactions were, first time buyer, and trade in.

 

[Forkliftt]

Geez Marin- that hurts. BTW- when did you see my boat? I thought you had not been any further "south" than South Carolina!