You find yourself in misery each day because your yacht has languished on the market week after week and month after month. Offered here are some facts that may be the reasons buyers are staying away.
Here are the eight most common reasons why yachts don't sell and what you can do to remedy them.
1. Your yacht is overpriced.
- Optimistic yacht owners love to quote the old adage, "There’s a buyer for every boat". But more often than not, they leave out the qualifier, "at a willing buyer's price". Actually it is buyers, not sellers who determine the market value of a yacht. You can set a listing price the same as or above comparable yachts on the market, but at some point it will be up to you, the seller, to accept what a buyer is willing to pay. In the current market, the boats priced below the rest of the pack are the boats attracting buyer activity.
- Overpricing is the most common reason a yacht doesn't sell. When you set an unrealistic price, it sets in motion a string of events that works against you. Here's why: Most yacht brokers, and hence most qualified buyers, will see your new offering price within thirty days. If it's overpriced by as little as 10%, it will be duly noted and the interest in your yacht will decline, especially if you indicated no interest or intention of coming off your asking price. You may have already priced many qualified buyers away from an interest in your yacht. And many buyers, who intend to finance, will find the inflated value will not appraise at the right value according to their surveyor or financial institution.
- Some sellers have a loan balance that suggests a higher asking price in order to produce net proceeds to pay off the boat. The sellers of properly priced boats will benefit from overpriced listings like yours to help them sell their own boat. The competing yacht brokers show prospective clients your listing with the words "See what they’re asking. Now let's take another look at that first yacht I showed you".
- Keep in mind you want to compete with the other boats available that are similar to yours. If your boat remains on the market for too long, buyers and other agents begin to wonder if there aren’t other more serious problems or reasons your boat isn’t selling. Yacht brokers and buyers become aware it's been on the market a long time and it becomes "shop-worn" and suddenly no one is even looking at it.
2. Your yacht doesn’t show well.
- This is as important as proper pricing. Your used boat is competing against shiny new yachts sitting in showrooms with attractive new gadgets and manufacturers’ price incentives. Let's face it, even the best older yacht needs a little fixing up if it hopes to attract a buyer. The best part is most of the work will be cosmetic and relatively inexpensive, such as new carpet or clean-up the existing interior, a few attractive decorative pieces, new throw pillows and bed linens, and a thorough cleaning of the galley, heads and bilges. Be sure and make everything sparkle. And "wow" the boat looks good enough to reconsider keeping her!
- A good experienced yacht broker can advise you where your time and money will be best spent. Price and condition are two things the seller can address before offering their boat for sale. If your boat smells fresh and looks fresh, these are the seller's best "leg up" on the competition. So, if it’s time to wax the boat and refinish the bright work, it’s time to do it. It’s the best return on your investment.
3. You have a lousy listing agent.
- Yes, they do exist. Yacht brokers who mislead, misbehave and misrepresent. Their bad advice can cost you money and time in addition to the annoyance of keeping the boat ready to show seven days a week. The yacht broker from hell will tell you it's OK to overprice your boat. "List your boat with me and here's what I'll get you for it".
- Then not market it properly, fail to qualify potential buyers, be unresponsive to other brokers (if they sell their own listing they don't split the commission) and keep you totally out of the loop throughout the process. And worst of all, if your broker is abrasive, selfish, arrogant and difficult to work with, other brokers may not want the hassle of showing any of his/her listings to their prospective buyers.
4. Docked at a remote location.
- One of the most difficult things about selling a yacht is to get prospective buyers to travel to a remote place to see "just one" yacht. A good yacht broker will tell you that keeping your yacht in The Hamptons in the middle of Winter will not help the sales effort. He or she should offer to arrange dockage for you in the major marketplaces of the Annapolis area or South Florida at a favorable price and good location. Unless you are willing to compensate a buyer by reducing your price dramatically, bring your yacht to the market place where it will sell.
5. Engines and generators have high hours.
- Many prospective buyers shy away from a yacht with high engine hours. In many cases this is because of misinformation about the number of useful hours an engine or generator will endure.
- If you are the owner of a high-hour yacht, do your homework. Obtain from the manufacturer the average useful life of your particular engines and generator. Then arm your yacht broker with this and all pertinent maintenance information about these power plants. A good and knowledgeable yacht broker will ask you about these records and the mechanical overhaul documentation if applicable. The good news is most reputable dealers of engines and generators keep these maintenance records on file for up to ten years.
- Properly maintained "high hour", diesel engines are in many cases in better condition than very low hour, poorly-maintained engines. Be sure and detail the engines, generators with fresh paint, hoses and belts, and detail the entire engine room.
6. Battling market conditions and competition -
- "Sellers Market" and "Buyers Market" conditions have been the terms heard in yachting for years.
- Timing is everything. Market conditions are affected by any number of external and unpredictable conditions. All of us are affected by weather conditions, interest rates, the local economy and public optimism or pessimism. In a "hot" sellers market, chances are your yacht will sell for its asking price. In a "cold" buyers market, where inventories grow and qualified buyers are scarce, you'll be lucky to find a buyer even at a low price. So, if you’re trying to sell your yacht in a "cold - flat" market where you're competing with new inventory in dealers or builders hands, be prepared to settle for less than top dollar.
7. Ineffective marketing.
- The times when your yacht broker could simply put your listing in some local tabloid advertising, or hold a "hot dog and soda" open house at their marina, are gone. The top yacht brokers and yacht sales firms launch large expensive and impressive multi-level marketing campaigns that include a company website rich with professional photos and graphics, tours of the boat, placement of ads in national yachting publications, as well as writing up a complete specification sheet and producing a color brochure. The successful yacht brokers are computer-savvy and come equipped with all the latest digital technology. Your yacht appears on their website in full color and is carried on their laptop in full color to show prospective clients or communicate to out of town clients or other brokers instantly.
- If your yacht broker isn’t displaying and listing your yacht through the company website and a worldwide web listing/marketing service, you are not getting the exposure necessary to find a qualified buyer.
- The system of compensation for your yacht broker is a strange system because the broker gets paid the same whether they know nothing or have many years of experience and the technology to give you the widest possible worldwide exposure for the sale of your yacht.
8. Your yacht's builder is out of business.
- When the builder of your custom or production yacht is no longer in business producing other quality yachts like yours, the market may react unfavorably towards the resale value of your vessel. The builder was spending marketing dollars in advertising, attending boat shows and maintaining a dealer network or representative network for these yachts, but now there is nothing to support your boats resale value. This circumstance can be easily overcome if the Naval Architect or Designer, or even the defunct builder were of good repute. But as a seller, be prepared to accept less than your asking price unless you own a piece of history or some well-publicized masterpiece.
- Custom yachts are, after all, works of art, but don’t expect deceased artist’s prices. A defunct builder needn't deter a sale provided proper marketing and promotions are undertaken using the positives of names and information about your yacht to its best advantage.
Adapted from an article written by: Jim Eden