As the sales market staggers along on the road to recovery, the modest upturn can be attributed to US wealth and the willingness of its Ultra High Net Worth Individuals to start spending again. The country’s own recovery has been far more pronounced than in Europe and this has boosted American consumer confidence, right up to the ‘one-percenters’. However, despite renewed buyer confidence, the market is still blighted by an irreparable inventory of sub-standard yachts, and a marketplace that is being distorted by unrealistic pricing and misplaced faith on the part of sellers. The Superyacht Owner spoke exclusively with straight-talking US broker Bill Sanderson of the International Yacht Collection for a rare dose of honesty on the pricing of yachts.
The problem is that, in many cases, the seller either doesn’t want to sell at today’s prices or the broker is defending the asking price. I sold a boat not so long ago where the owner had come to me two years earlier, and when I gave him an approximate value, he never got back to me. In the meantime two other brokers had tried to sell it, failed to do so, and when he called me back I had to tell him that unfortunately it was worth less now than it was then but if he wanted to sell it we could put it on the market. We sold it three months later.
Some brokers manage to keep listings until the owner reduces the price to the price that I said was realistic in first place. But it’s the other broker that makes the deal, not me. That’s why brokers have mixed emotions about being realistic with owners. We’re walking on eggshells as brokers because, if we’re bluntly honest, we may not get the listing. It’s a very delicate situation.
If the owner wants to sell the boat, sooner or later he’s going to have to face the music because the market has changed and it’s not going to come back. A healthy dose of reality is better for them in the long term, but if I’m the guy giving them that dose, it remains to be seen whether I’m the one who will be making the deal for them.
Owners should find a broker who is knowledgeable and looking out for their interests. But that doesn’t mean they’re going to do it. Values are down and they’re staying down because people have different priorities. Owners have to face the reality that the market has changed and it won’t change back. The days of buying a boat to use a few days a year, chartering it successfully and selling it on two or three years later at a profit are gone. A yacht is now like a car – it depreciates about 25 or 30 per cent as soon as you drive it out of the showroom. I wish it was like the old days when we were busy, bustling and making lots of money. But we’re not; we’re busy and we’re bustling but the money is no longer there. Owners have to know that before they buy a yacht. ‘Your first offer is your best offer’ and I cannot tell you how many sellers do not heed this primary axiom!
This is an extract from the Charter & brokerage article in Issue 16 of The Superyacht Owner. For the full article, subscribers can view the issue online here. To become a subscriber, click here.
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