So glad I asked this question! Thanks for all the great insight. I normally wouldn't have considered this route as an option as I feel using a broker is money well spent. Happened upon this site and noticed a yacht I was already looking at on "Yacht World" was also on this site. So is it safe to say the owner is trying to get rid of it "short sale" like a house subject to the banks approval?
My wife and I are done tire kicking and have the funds, just wanna make sure of any potential pitfalls if we consider this option.
Brad and Michelle................................................................
National Liquidators IS ON Yachtworld as National Yacht Sales. Once the boats have been repoed though, they are LONG past "short sales".
It's my experience that IF the person, or business who lost the boat doesn't fight ("friendly repossession"-the owner calls the bank first and gives it back) the process, it can be sold rather quickly (matter of 60 days), so one doesn't find the issues of neglect from sitting. IF they DO FIGHT the process-the boats can sit there for awhile.
In recent years they (National) has taken better care of the boats (remember NOT ALL are repo's!), putting plastic down over the carpets, covering the toilets so people don't use them, removing all the electronics and storing them inside their warehouse upon arrival. They haul the boats upon arrival, clean, and pressure wash the bottoms, install zincs, and even wash them every now and then. It's fresh water they sit in so that helps. They even keep the AC running 24/7 so there's no heat issues inside. This keeps the headliners up in the big boats where they were glued in (like Princess), keeps the mold and smell issues at bay, and makes the buying decision easier if one is not being baked.
I did several short sales with banks in 2008- one lender knocked off $200k to sell a 2000 5788 for $440k, and another knocked off $675k to sell a over customized 67' Chris Craft for $75k (out of Bankers mouth "We just got a Billion dollars in TARP funds what the f*** I care about $675k, just sell the boat". (both can be seen on my page on my site "boats sold")
To do a short sale one has to have a buyer ready to purchase. Also one has to have a loan with a bank where you can actually speak to somebody. In my examples, both loans were with the owners local bank where the borrowers had long time relationships. In the most extreme ($600k of OUR money to assist a German buyer) the banker not only forgave the loan, but refinanced his houses and cars to a lower interest rate.
It's really odd how pride will allow some sellers to not even consider this route even though the banks will gladly do it. I've since sold several other boats where the sellers had to dig into their pockets between $30k -$60k to make the payoff at the closing- even though I kept telling them "let me speak to your banker, it doesn't effect your credit scores or anything". They said "No, I'm afraid it will affect my credit".(so much for taking good advice) IF banks are taking free money, why shouldn't you? Especially when they're willing to do it. The threat of them having the boat come back as a repo (care and feeding) will motivate them to negotiate now versus in the future.
As to another reason people will let the banks have their boats instead of doing a short sale, or refinancing is if that the boats have expensive repairs needed, and they can't be sold on the Brokerage market (payoff too high, repair expenses too high), the owners can't use them due to these issues, so instead of throwing good money after bad making big monthly payments-they give them back to the bank in a "friendly repossession". I've seen them in MINT cosmetic condition, loaded with goodies, complete with the beds made up perfectly. The banks then WILL price them correctly and resale them, giving allowances to the buyers for repairs.
Hope this helps.
OH, they DO work with Brokers there, so you can have your broker come in and do normal brokering duties for you. Although it can be very frustrating. You don't have to go in blind. At the least hire a local surveyor to go do a pre-survey for you. They can tell you quickly if it's worth further pursuit.