March 2021

December Boat Sales

U.S. yacht brokers sold 1,528 boats in December, completing a strong fourth quarter of 2013 and an eighth straight month of improving sales compared to the same month in 2012. According to YachtWorld member brokerages reporting in SoldBoats.com, the volume of sales was up 3 percent for the month of December, 8 percent for the quarter, and 6 percent for the year. The total number of sales for 2013 was 31,451 boats, up from 29,730 in 2012. The total value of the boats sold in the month was $447,000, an unusually high figure that was $99,000 above December, 2012 and the third highest monthly total in 2013. Superyacht sales accounted for about three-quarters of the gain, with $265 million paid for boats over 80 feet. But the market segments between 26 and 45 feet, which are much less volatile price-wise, accounted for most of the rest of the gain, a positive sign of increasing average prices through the high-volume end of the market. The aggregate price paid for boats sold in 2013 was $3.94 billion, almost $700 million more than the previous year. The volume of sales of the smallest boats sold actually slowed in December compared to the previous December, especially among powerboats, with brokers selling 1 percent fewer boats under 25 feet long and 2 percent fewer boats between 26 and 35 feet. More than offsetting those incremental declines, however, were sales of boats above 35 feet. Boats 36 to 45 feet were up 8 percent, with 370 boats sold. Sales of boats 46 to 55 feet rose 12 percent, with 118 boats sold. And among boats 56 to 79 feet, sales climbed 25 percent, with 60 boats changing hands. For the year, sales of boats of all lengths below 55 feet increased a similar amount on a percentage basis, between 5 and 7 percent. The strongest category was boats between 36 and 45 feet, with 6,606 boats sold, up from 6,170 a year earlier. The total price paid for all boats under 55 feet improved compared to 2012 at a greater rate than the number of sales in each length segment, proof that average prices paid rose during the year. For example, in the 36- to 45-foot category, total value increased 9 percent, from $789 million to $860 million, and the average price paid rose from $128,000 to $130,000.

Industry Tests Planned on Ethanol Alternatives

The recreational boating industry is conducting new Department of Energy-funded research on alternative biofuels.

On Thursday, the National Marine Manufacturers Association, the American Boat and Yacht Council and Evinrude will join together to find alternatives to fuel containing more than 10 percent ethanol.

The tests are funded by the Department of Energy, which released a 2011 report on engines using E15 that revealed performance issues such as stalling, corrosion leading to oil or fuel leaks, increased emissions and damaged valves, rubber fuel lines and gaskets. The results reinforced the recreational boating industry’s concern that E15 is not a suitable fuel for boat engines.

Although the Environmental Protection Agency has approved the use of E15 for model year 2001 and newer cars and trucks, the boating industry has found that fuel containing more than 10 percent ethanol causes severe damage to boat engines. Although marine engines are not approved by the EPA to use E15, misfueling at the pump is a danger for boaters who are not aware that E15 is not compliant with boat engines.

The tests, in conjunction with the ABYC and Evinrude, are part of ongoing research conducted by the recreational boating industry to explore the alternative biofuel isobutanol in response to the introduction of E15.

In 2011 and 2012, the groups did initial testing on isobutanol, revealing that it could be a promising alternative to E15. This year, the team is following up on preliminary laboratory investigations that indicated that a combination of three fuels, including 8 percent isobutanol, 5 percent ethanol and gasoline can achieve larger quantities of biofuel while inhibiting the negative effects of ethanol, which include corrosion, low energy content and high Reid vapor pressure.

The testing will take place from 9 a.m. to 4 p.m. at Washington Marina in Washington, D.C.

Market Update 2014

The First Quarter showed a decline in overall business in the United States.  The economy shrank for the first time in three years.   The weather is blamed for this and the Second Quarter is showing signs of improvement.  It had an effect throughout the entire country.  Boat sales were no different.  Fewer boats were sold in 2014’s First Quarter than 2013’s. 

With this said, we are getting good activity on properly priced vessels.  Later model vessels still command the best prices and activity.   

Large older sport fishing boats are seeing the largest setback of any other boats.  Sportfish owners are selling their boats in order to buy larger center consoles so they can be in the action and save time, fuel, money , and storage costs.  Because of this, the sport fishing boat market is flooded, and they are selling at bargain prices compared to years back. 

Large well priced center consoles seem to be in high demand.  Buyers are missing out on this segment of the boat market trying to find a bargain, and the boats often get sold out from underneath them.

Our advice if you are in the market for a sportfish, let a broker submit low ball offers until you find a match, and if you are in the market for a high end outboard, step up to the plate, inventory is shrinking and prices are rising.

The Internet Has Forever Changed the Brokerage Business

Boat buying has changed.  Period.  While the boats have changed, the economy has changed, the sizes of the boats have changed, the internet has made the largest impact.

We now show boats less often.  Buyers can do a lot of their shopping online without traveling.  While there is no substitution for actually looking at a boat, photos and specifications can help narrow the search. 

Smaller Brokerage Firms now have their boats placed in ads that have the same impact as a larger firm with a bigger advertising budget.  This helps firms that have good listings.

While many buyers feel they can get a better deal by going directly to the listing agent, in reality, having an agent representing you -the buyer- can be a real asset in many ways.  A professional agent can do a better job of qualifying a boat and save you a lot of travel looking at boats that are not suitable.   The internet allows a buyer to easily find boats and talk directly to the central agent, but there is nothing like having someone on your side to help it cost the buyer no more as commissions are split between agents.

The internet is not a bad thing nor is it the ultimate end for your purchase.   Buying a used boat is a time consuming process with lots of potential snags.  A good agent can make it easier and give lots of protections.

The biggest change is the speed that information travels, no longer is there a 30-60 day lag in getting an advertisement placed.  No longer does it take a week to get photographs.  With digital photography, email, and electronic signatures, we can now list, advertise, and even prepare and execute purchase agreements without paper and in a matter of minutes instead of days.

The world has changed and we have changed with it.  Soon the fax machine will go the way of the typewriter and carbon paper.  Yet the need for our services continue because it takes knowledge and expertise to properly market and bring a sale to closing. 

Why Use a Broker to Help You Buy a Boat

Yacht Brokers work like real estate agents. They are agents whom people consult to find and purchase a boat, and whom people hire to list, represent, and sell boats for them. Traditionally, the seller pays the commissions that a yacht broker earns – not the buyer, yet brokers have a duty to both buyer and seller in every transaction.

• The Initial Inquiry –A professional broker will listen closely to your wants and needs and will help you determine if the boat you are calling on is the right boat for you at the best value. They can objectively tell you about the condition of the vessel before you decide whether or not to spend your time to look at the boat. They will help you determine if there are similar boats on (and off) the market, the history of the yacht, how long it has been on the market, and the motivation of the seller. Anyone can look up asking prices on boats, but it takes a professional broker to have an intimate knowledge of current market conditions, a familiarity of similar boats, and information on recent sale prices and time on the market through www.soldboats.com, an industry resource not available to the public.
• Making an Offer on a Pre-Owned Boat – A professional broker can help their buyer decide on a realistic offer that increases the chances of buying a pre-owned boat for a fair and reasonable price, and with the necessary elements to protect your interests. Your broker prepares an Offer to Purchase for your signature. It should spell out the terms of the sale including obligations that you and the seller have agreed to, and when these obligations will be fulfilled. You also make a good-faith deposit on the boat, usually placed in escrow, and subject to sea trial and survey.
• Paperwork – Professional brokers and dealers are familiar with all the paperwork requirements for their country, state or province, from the initial Offer to Purchase and Bill of Sale to licensing and registration; or documentation and titling, to paying tax and other fees, as well as certificates of ownership, security agreements, and other documents needed to complete a sale. For example, 23 forms are needed at a closing of a brokerage boat in Florida (27 for foreign flagged vessels). Professionals will understand maritime and admiralty liens for the type of vessels they represent, as well as agency contracts, listing agreements, closing statements, deposit requirements and escrowed accounts to safeguard funds.
• Sea Trial and Survey – The buyer of a pre-owned vessel will usually request a sea trial and the services of a marine surveyor. Buyers pay for the surveys and for hauling the boat out of the water for inspection. Your yacht broker will usually attend the sea trial and marine survey with you, and help you determine how to properly address the nearly inevitable yacht survey issues and put the problems in context. They can help estimate time and cost of correcting, and where to obtain accurate quotes for items that are unfamiliar. Your lender and insurance carrier will usually require a copy of the survey.
• The Art of Negotiating The Deal – The broker can use his position as a middleman to keep the negotiations between buyer and seller moving to a successful conclusion.
• Safeguard Funds – A professional broker will use an escrow account for clients’ funds, and ensure that at closing, any existing loan or other encumbrances is paid off. This safeguard is of critical importance to the buyer and seller, and can be a potentially serious hazard in a private transaction not involving a broker.
• After the Sale – Your broker and dealer can help you find moorage and yacht maintenance and repair specialists or facilities. They can refer you to classes on sailing, boat handling and seamanship. Their experience in local waters can help you chart a course for great day, weekend or longer trips. They can connect you with boat clubs, races and rendezvous sponsored by builders and dealerships. Plus, you’ve got a new boating friend for life.
  

September 2014 Sales Report

With 2,414 brokerage boats selling in September, the U.S. market was off by 7 percent in total boats sold compared to the same month in 2013.  Although not as many boats sold, average selling prices improved.  One of the reasons for increased average prices was that sales were higher in the pricier 46- to 55-foot range in which the average boat of this size sold for $279,000, some 11 percent more than a year earlier.  Sale prices were also higher in the 36- to 45-foot range where sales increased 5 percent and the total price paid was up 9 percent, driving average prices up from $121,000 to $126,000. 

Most of the drop in sales came in the two smallest segments, under 26 feet and 26 to 35 feet, which are higher volume and lower price. While not as many boats were sold, average price increases were also noticed in the small-boat segments. While the highest-volume size range, 26 to 35 feet, saw lower sales by 7 percent, with 962 boats sold, sale values actually increased by 1 percent, and the average sale price was up 9 percent from $50,000 to nearly $55,000. Among boats below 26 feet, sales were down 15 percent, with 635 boats sold, but average pricing increased 5 percent to $14,000.

How Brokerage Works

Almost all brokers list boats with the understanding of a 10% commission. As brokers, we have a way of seeing if the boat is listed as an open listing or a central. If a boat has a central listing, even if the seller sells it to his brother, he owes commission. The buyer never pays commission. 

If the listing broker sells the boat themselves, then they get the entire 10% commission. If another broker brings the buyer, then the brokers split the commission 50/50 if the boat is under $100,000, or outside the state of Florida. If the boat is listed with a Florida broker and is over $100,000, the commission split is 60/40, with the 40% going to the listing broker. This is the reason that brokers get licensed in Florida even if they practice in other states. If the selling broker (the broker with a buyer) brings his buyer to Florida, the split is 50/50, although technically the state says that any person not in Florida cannot earn any commission in Florida without a license. Technically this only applies to boats over 32′ because the State of Florida classes the license as a “Yacht” broker’s license, and classify a yacht as over 32′.

Where are the good used outboard boat deals?

The biggest complaint of our customers is that there aren’t enough used outboard boats on the market for a good deal and that prices on used inventory are too high.  What we are going through is a basic supply and demand period in the boat market.  This situation is predictable and understandable.  Since the financial meltdown began in 2007, the marine industry had to quickly reduce its manufacturing capacity to 50% of what it was in 2006- a record year for boat sales.  This means that since 2007-2008 there have been half the number of boats built, which in a normal business cycle would now be entering the market as used boats for sale.  The used boats that everyone wants were not built, so they do not exist, which also happened in the 1990 financial crisis.  This is where the supply and demand concept applies.  In addition to that, people are keeping their boats longer, and if they really like their boat, many are repowering, upgrading electronics, and otherwise investing in maintenance items such as new canvas and upholstery – making the boat almost as good as new, but again reducing the used boat inventory.

The bottom line is that if you are shopping for a used boat and find the one you love, buy it.  Put the idea of getting a great deal aside, because in this point of the economic cycle, you will become frustrated.  If the boat you have now suits your boating needs well, and you like the boat, put the money into new power and other upgrades because a new boat will be substantially more expensive. Since late model boats are harder to find, and new boats are so expensive, we are seeing that buyers are willing to pay a premium for an older boat with newer power, so although you won’t recoup all your money on a repower, you will lose much less than if you try to sell a new boat in two or three years.