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| Boats & Yachts |
Rising with the Tide
Michael Verdon
01/01/2004
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Schattenburg says pricing is a slippery slope for many brokers who want listings, yet are afraid to tell the owners that their yacht is worth less than they paid for it. "But then the broker can’t produce the sale, and a year later it’s worth even less," he says.
He recommends clients do a prepurchase evaluation of the yacht to get a sense of its fair market value, and even invest money in sprucing it up. "We took one 60-foot yacht, the worst boat in the fleet, and invested about $25,000 in new carpet, furniture and a high-gloss wax job, and turned it into the best in class," he says. "We recouped the money many times over, and the owner saved months of operating expenses."
Most brokers caution that yachts will not sell overnight. "It takes several months to get a good marketing program going," says Joe Killian, a broker at Camper & Nicholsons, who says to start looking for responses after six months.
What are the signs that your broker is being proactive rather than just accumulating listings and hoping one will sell? "He should have it on at least one multiple listing service, and tell you when it’s being advertised and shown to potential buyers," says Schattenburg. He also says the boat should be shown at open houses to other brokers.
Finding the right broker is crucial to the sales process. Carney estimates that about 10 percent of the brokers in the field are intimately knowledgeable about boats; Sabates puts that number up to 25 percent. "The large commission on such a high-ticket item turns a lot of honest people into dishonest people," he says. "I think probably a quarter of the brokers will put your interests before theirs." While it is impossible to create an integrity index, making a shortlist of good brokers is feasible.
Schattenburg urges us to make certain our broker belongs to a professional organization, such as the Florida Yacht Brokers Association or Mediterranean Yacht Brokers Association, both of which maintain codes of business ethics. Killian says that brokers are best found through word of mouth, from other yachtsmen or maritime attorneys. Schattenburg advises that clients should interview several brokers, ask about yachting experience and past sales, and seek references from former clients. "Check for lawsuits," adds Schattenburg. "I’ve never been a party to litigation, but that’s not the case with some firms."
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