Luxury Yachts for Sale Motor Yachts For Sale - Sailing Yachts For Sale

Yacht Broker Ron Rickard

Yacht Broker/Consultant Ron Rickard
Fort Lauderdale, FL 33316
Tel: 954-629-3714
Ron@Luxury-YachtsforSale.com
 
Luxury Yachts For Sale F.A.Q.

QUESTION: When will you find the lowest prices on motor yachts for sale and sailing yachts for sale during the recession?

ANSWER: The most important question for the yacht buyer seeking to take advantage of lower prices caused by a bad economy is always the same: When are the prices for yachts for sale going to be at their lowest levels? Jumping into the market for a sailing or power yacht for sale too soon is likely to mean leaving cash on the table! Moving too late, however, is likely to have the same result.

None of us know when the general economy or the yachts for sale market will hit bottom. However, history and human nature, can provide us with some definite clues on timing a return to the market. History teaches us that recessions generally last from twelve to twenty-four months. Where then, in that progression will we find the best deal? My experience tells me that when it comes to yachts for sale, the bottom of the market comes sooner rather then later in the recessionary cycle. The reason for this is two fold: First, the psychological blow, and the accompanying fear, of bad times hits the hardest once we enter that long dark tunnel! Once we have admitted that trouble has arrived and done our best to position ourselves to weather it, the psychological pain and fear begins to wane somewhat, even if the actual economic conditions remain horrible.

Secondly, the market for sailing yachts for sale and power yachts for sale is made up of two very different kinds of sellers. The first group are those who can afford to wait and therefore will NOT drastically reduce their price, but instead will simply wait for better times. The other kind of seller, those whose cash position means they must sell, move as quickly as possible to do whatever is possible to get major assets such as yachts sold. This second group, the "must sell" owners, tend to move their boating assets in the early months of the economic downturn, simply because they have to do so. The way they get it done is with drastic price cuts. It is out of these "must sell" yachts that the major bargains arise. Once drastic cuts in selling prices have occurred and these boats move to new homes, the market tends to stabilize because the remaining yachts for sale are owned by sellers who do not have to sell. They may want to sell, but they do not have to do so.

My experience over the last three economic downturns is that the greatest bargains peak somewhere in the area of three to six months after the onset of the recession. As these "must sell" owners compete with each other for the few customers in the market, prices fall rapidly and drastically.

The next set of owners whose boats end up in the "bargain line" are those that do not need to sell, but who would very much like to. These second tier owners present opportunities for bargains, because they realize that prices have fallen, but not to the degree as did the earlier group of "must sell" owners. Therefore prices tend to stabilize at a low but not drastically reduced level during this second period of a recessionary market.

The final group of sellers in line, or the third tier, are those who would like to sell their yachts, but who do not have to do so and who will not accept a large sacrifice to do so. As the tier one and tier two sellers begin to move their boats, this third tier of sellers and boats begin to dominate and prices slowly begin to rise from bargain basement levels.

My advice on "timing" the sailing yachts for sale and power yachts for sale market is to wait for three to six months after the onset of bad times and then begin sorting through the bargain opportunities that will by then exist. Discounts of 30%, 40% and even 50% will be out there during this period. Remember, however, that it is not a bargain if it is not what you really want! You do not want a cheap yacht. You want a yacht of quality that fits your needs, at a bargain price. Make certain that your broker knows the difference.


 
QUESTION: When looking at ads for luxury yachts for sale, I often see references to “Central Agent”, “Central Listing” or “Open Listing”. What do these terms mean and how do such yachts for sale differ from “for sale by owner” yachts?

ANSWER: Boats are either sold by yacht brokers under a “listing agreement” or “by owner.” The latter category of sales is probably familiar to you in terms of housing sales. The “by owner” yacht for sale will probably not have to pay a commission in the event it is sold. The drawback in a “for sale by owner” situation is that no yacht broker will design and carry out a campaign to market the boat and it will not appear on the multiple listing services; i.e., the potential buyer market will be quite small. Yacht brokers will tell you, and probably correctly, that more potential buyers for any given boat will mean a higher sales price (supply and demand) which should more then compensate the owner for the yacht broker's sales commission.

A “central agent” is a yacht broker with whom the owner has signed an agreement for the sale of his boat. The listing yacht broker will be responsible for preparing and executing a marketing program for the boat and will handle showings of the boat and will coordinate any purchase offers and ultimate sales. The listing yacht broker is compensated for his work, even if some other yacht broker sells the boat, by a pre-agreed fee (usually about one-third of the total 10% sales commission). The balance of the commission, about two-thirds, is paid to the yacht broker who actually sells the boat- which may or may not be the listing yacht broker!

An “open listing” is one where the owner agrees to pay a yacht broker the sales commission (still usually 10%) only in the event that the yacht broker actually sells the boat himself. Any given boat may have numerous “open listing” agreements with various yacht brokers. Some owners like this type of listing because they believe it offers a greater incentive to a large number of yacht brokers who will, presumably, therefore work harder to sell the boat. The negative aspect of an open listing is that there is no yacht broker with a built in commission and therefore no one to prepare and implement a marketing program, coordinate showings of the boat or to do any of the other things a “listing yacht broker” normally does.


 
QUESTION: If I buy a luxury yacht through a yacht broker, whether it is a central or an open listing, who pays for the sales commission?

ANSWER: The seller is responsible for sales commissions and pays it out of the sales price he receives. Yacht broker's commissions do not effect the price paid by a buyer, except to the extent that the seller might take less for his boat if he did not have to pay a sales commission. Normally, however, from a buyer's point of view, he should not offer more for the boat then he believes it to be worth and therefore the presence or absence of a yacht broker in the deal should not effect what price he pays.


 
QUESTION: If I list my yacht with a luxury yacht broker, who pays for advertising expenses?

ANSWER: Normally the listing yacht broker will bear the cost of advertising such as thumbnail ads with description and photo in boating magazines and the like. Advertising expenses such as a partial or full page ad in a boating magazine or a slip at one of the big used boat shows are almost always borne by the owner. This is because the listing yacht broker may never sell the boat or get the commission but the owner will almost always sell the boat and end up with the sales proceeds. Some yacht brokerages will credit the owner back for bona fide marketing expenses when the boat is sold.


 
QUESTION: How do I know how much to offer for a yacht for sale?

ANSWER: Assuming that the buyer is represented by a yacht broker, the yacht broker should research sales prices of similar vessels and provide the buyer with the information he needs to make a decision as to value. The yacht broker can also provide the buyer with information about the sales prices of older vessels of the same type, so that the buyer can get a sense of what level of depreciation he is looking at after he buys the boat. The most important ingredient in determining value is the qualify of the boat being considered - a bad boat at a cheap price will almost always be a bad bargain for the buyer.


 
QUESTION: Are there real bargains in quality luxury yachts for sale and how do I find them?

ANSWER: Yes, there are true bargains out there among quality yachts for sale. Sometimes a very good boat will sell for way under market price because of the circumstances of its owner- death, illness, lack of patience on the sellers part, etc. These boats usually pop up and disappear very quickly and you normally have to rely on the judgment and advice of your yacht broker to find one. A not uncommon source of bargains, for instance, is a boat which is placed on the market at much too high a price. Such boats often sit for long periods until the owner is well and truly sick of them and they often end up as donation boats or the owner often accepts a below market offer to put an end to it all! Remember, when it is your turn to sell your boat, an above market price often kills interest in the boat and once yacht brokers turn away from a boat it is very hard to get them interested again!


 
QUESTION: Am I crazy for thinking about buying a large luxury yacht when I really have very little boating experience and know almost nothing about the yachts for sale?

ANSWER: One of the nicest things about a large luxury yacht is that the owner does not need to be intimately involved in navigation, maintenance or day to day management of the boat- he can rely on a professional crew and simply enjoy himself. Yachting is really all about lifestyle and is very little about marine proficiency!


 
QUESTION: If I buy a large boat and keep it for three or four years, how much should I expect to lose when I resell it?

ANSWER: You should expect to lose a bit of your original purchase price, but maybe not much and maybe not any at all. A top quality, used luxury yacht that is twelve years old is not worth much less then an identical sistership which is only nine years old. The key here is buying quality in the first place and then maintaining the yacht so that it remains in the same or improved condition. A second key is to buy a boat which is not only of the highest possible quality but is also of a widely sought after type and style. The third key to selling your yacht without taking too much of a loss is to make sure that you did not pay too much for it in the first place!


 
QUESTION: Where and how do I learn more about buying and owning a luxury yacht? Your Questions and Answers were informative, but I have a lot more questions!

ANSWER: This probably will not surprise you, but one good answer is that you can talk to me! I'd be glad to answer your questions. You can use the “Contact Me” tab on this site, Email Me or you can call me at (954) 525-7637. Either way, I'll do everything I can to help.

 

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Luxury Yachts For Sale
Yacht Broker Ron Rickard
Fort Lauderdale, FL 33316
Tel: 954-629-3714  ·  Ron@Luxury-YachtsforSale.com

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