Change in the Hatteras Market?

[eclipsarkanna]

Since I have gained so much from this forum in terms of technical advice first and then specific model advice after that (advantages and disadvantages of certain models that fit my "buy" category), I am creating this new thread to give back to the Hatt Forum community.

Yesterday I ended my 15 months of research and started my "purchase" cycle. I started with an offer on a 53ED to the Listing Broker that has had it listed for a good 12 months. I found out this morning that it just went under contract earlier this week (asking had dropped to $259k). I immediately then contacted my second choice 53ED - one out of Texas listed for $255k and got an email this morning that one just went under contract in the last day or two and they haven't had time to put the "pending sale" notice on YW.

So one of many things is happening and any serious buyers (and good news for Vendors as well) should keep this in mind - the Spring market has hit with March 1st, Vendors are now getting realistic in their pricing OR the 53ED market has found its bottom (somewhere between $215k and $250k for a boat in decent shape).

Bill

 

[Boss Lady]

That is good info.

I will say that there is no market on boats out of production per se. The brokers want you to believe there is a market out there and that boats have some ficticious "market" value. If a broker says your boat is worth "X", then tell him to write you a check for it. LOL That will never happen, but if it does you will know that the price is attractive! Boats are hard assets and are not liquid, even worse they are toys. A better comparison would be airplanes. Which can have more extreme price spreads than boats for a given model in the same year group. One may only bring $50K depending upon condition and equipment, while the creme puff with up to date electronics may bring $300K. There are individual specimens and individual buyers and each has to determine what a vessel is worth to them. If the owner puts a value that is not attractive to someone else then he gets to keep it until someone thinks the same way or the price changes.

I have always said to buy the best condition you can find for the price you can afford to pay. It pays to shop hard, because right around the corner a creme puff may be lurking and it will be priced somewhere near the ficticous "market" price.

 

[Genesis]

I think most of the people who have had their boats on the market a year or more with unrealistic prices have finally figured it out - if they want to sell, they have to be willing to take a bona-fide offer.

Its all about where the seller actually is with their boat and how serious they are about wanting it gone. Some people don't really want to sell; they'll let you have the boat at a quite-high price, but in terms of actually WANTING to get rid of it, they don't. Others are more motivated - they're just done using it.

The trick is to find a boat that hasn't been neglected in the interim, especially mechanically. Cosmetics are, relatively-speaking, cheap. Serious mechanical problems come in $10k denominations and get far worse from there, especially in the larger boats.

 

[Boss Lady]

It just amazes me that quality boats like Hatteras and Bertram take a back seat to lthe likes of Sea Ray when it comes to the used boat category. But then again, it makes sense if you look at the morons who buy them. Normally there are ready buyers for quality goods when they come up for sale.

But believe me, the classics are not taking as severe a beating on prices as the new Hats are. The prices on new boats have gotten so high that the "true" custom boats look like a bargain. When you can get a new custom boat for the price of a used Hat, they have to take a beating to move them. Hatteras dominated the market by being a semi-custom production company and offering high value for the amount paid compared to a custom boat builder. This is no longer true. I still think that Hatteras should survey us out here and pick our brains. I think that if they keep listening to the Sea Ray boys they will go down a path that will get them in trouble. I keep looking at the new boats, but I am afraid that I will have to have my next boat built, just like I have had to do with my current project. If they don't make what I want, then I will have to do it myself. I like the 77 Converible, but $6 million is a lot of cabbage and I don't see the value for the amount of money they want for it.

At one time you had to get a "position" in the production schedule to get a new boat. Now there are too many suppliers with too much production chasing a finite number of buyers. There was Hatteras and there was Bertram, and the customs. Now we have Viking, Ocean, Cabo, Sea Ray, etc. and new market is saturated, there are enough speculation boats being built that the market is over saturated. This part of the cycle. It will change.

 

[ADaily3224]

It all depends. Most older boats that a potential buyer will look at have been neglected and are unattractive to the average prospect. If you have a beauty it will sell and quick. It's no different than any used retail item, be it a car, truck, house, or a boat. Price not withstanding the majority of buyers don't want to get involved with multiple repairs and updates, they want to push the button and go. So if they can't find a good used quality boat to meet their expectations they buy a new one. It doesn't mean they are dumb, they just don't want to fool around, or don't have the time. If you can't, or won't do the work yourself you are in for a very unexciting ride. We all know that. Why do people buy new cars, aren't there enough used one's around to fill the bill? Same reason, they don't want problems and are willing to pay the price to be happy.

How many Hatteras owners are here on this forum? Compare it to how many boat owners there are. Most people just aren't interested in owning an old classic needing continual care.
Just my opinion,
Tony D

 

[SKYCHENEY]

I agree that condition has more and more to do with value as the boat gets older. You can probably say what an average 2005 boat is worth, but not a 1975. As many have stated before, the really well maintained and updated boats have usually have buyers waiting for them. How many times have you seen a really nice boat at your marina sell and you had no idea that it was even for sale. My dad did that with his 49 Gulfstar. He casually mentioned to someone on the dock that he was thinking about listing it. About a week later he got a call from a guy who wanted to buy it and it was sold.

I know that not all people who say "Let me know if you ever want to sell her" are really serious, but how many times have you heard that. My point is, that if you really want to buy a boat in near-perfect condition, you have to be in the right place at the right time because they don't stay on the market for long.

 

[Freebird]

Okay, I suppose I have not replied to every thread posted today, but I've tried to address the ones that interest me.

Looks to me like a simple case of supply and demand. Popular boats in excellent condition still bring more than ones with neither attribute. That seems to remain constant in every economic up and down.

In any market with any product, the product is worth only as much as anyone is willing to pay at the point it needs to be sold.

That should just about do it.

 

[MikeP]

In any market with any product, the product is worth only as much as anyone is willing to pay at the point it needs to be sold.

THat's exactly right. I am also often amazed when someone says, This [item] is worth X dollars. Yeah? To Whom?

Some years ago, in going through some stuff I came across a box of comic books from my youth. In there were a bunch of original Walt Disney's "Uncle Scrooge" comics. A friend that was with me at the time picked up one of them and said, "This is easily worth a thousand bucks." I said, "Ok, give me $800 and it's yours! He declined and I still have that box of comics somewhere.

However, it can work the other way. When we sold our last boat I determined what I thought was a good price and told our broker the price. He tried to discourage me, saying that it was too high. We agreed on a compromise - to list it at that and, if there were no bites in 2 weeks, to lower it to his recommended listing. It sold at my price in less than one day to a couple who was at the marina looking at an entirely different type of boat. I had the cash in my hand 2 days later.

So you never know...

 

[eclipsarkanna]

MikeP:

Good points. The Bird told me yesterday when he checked on a 53ED for me in TN that the owner's list price of $350k was inflexible because he had to "net" $300k (among other things, health reasons). This listing is new to the market and I am sure his intractible position will change. As RR said, just make the offer I am comfortable with and many sellers will change their mind pretty quickly when that cashiers check is in their hand. Although I feel sorry for Vendors that must sell for health reasons, that is not going to soften up any buyer to write a bigger check if the sale price is not in the recent range of sale prices for a similar boat.

Bill

 

[jim rosenthal]

I'm going to take issue with the point made above which stated that if the broker thinks that your boat is worth X, let him write you a check for it. I'm not a yacht broker, but this misunderstands what a yacht broker does. They are not yacht buyers, at least not in the usual circumstances. They try to get sellers and buyers together and make a transaction occur. If the broker provides an opinion about what a boat is worth, it is based on his/her survey of the market and what he thinks the boat will bring. If a boat is stuck on the market at an inflexible price, nine time of ten it is because of the owner, not the broker. Keep in mind that the broker doesn't make a cent unless an until the boat sells.

Finally, most of the times I've seen a broker suggest an asking price for a boat, it was in response to an owner's query as to what it was worth, preparatory to putting it on the market. Brokers don't walk the docks proffering unsolicited opinions about what someone's boat is worth. They are too busy trying to make a living. The broker is in a "can't win" situation; if the boat sells instantly, the owner will feel it was priced too low. If it doesn't sell, the owner feels the broker is not doing his job. I have never seen an owner who voluntarily says, "well, I just decided to see what the traffic would bear, now let's ask a realistic price and sell the boat." The broker, of course, has been spending money to advertise the boat and has nothing to show for it.

Yes, its' spring, and now boats are selling. And the low-hanging fruit- the nice boats at good prices- will go first. This should not be a surprise to those of us who are watching the market.

 

[jim rosenthal]

Oh, and Mike, do you still have the comic books? PM me. I'm serious.

 

[Freebird]

I agree that condition has more and more to do with value as the boat gets older. You can probably say what an average 2005 boat is worth, but not a 1975. As many have stated before, the really well maintained and updated boats have usually have buyers waiting for them. How many times have you seen a really nice boat at your marina sell and you had no idea that it was even for sale. My dad did that with his 49 Gulfstar. He casually mentioned to someone on the dock that he was thinking about listing it. About a week later he got a call from a guy who wanted to buy it and it was sold.

I know that not all people who say "Let me know if you ever want to sell her" are really serious, but how many times have you heard that. My point is, that if you really want to buy a boat in near-perfect condition, you have to be in the right place at the right time because they don't stay on the market for long.

I have never paid what a seller offered me as his bottom line before I bought my 41DC. If it had been a diamond in the rough like my 58TC was/is, I would have walked. I have the ability to see things the way I know I can make them, but the 41DC had more appeal and uniqueness than I could have ever imagined. That, coupled with the fact I became to be friends with the PO, is why I bought it and have never regretted it for a minute even though I was not in the market for an old Hatteras when I ran across it.

There is never an ultimate deal on anything unless you do happen across something that is do damn unique that it represents the chance of a lifetime to own something with that attribute. In other words, you buy the thing or watch someone else get it and spend the next year or so kicking yourself in the rear for letting it get away because you had to have the last word or offer!

If you happen to hold something of this nature, be it a Hatteras or an old car, waterfront home... whatever, you will have a definte edge in the selling department when the time comes to cut it loose. That is assuming you haven't found yourself sitting naked over a burning barrel!

 

[eclipsarkanna]

At the risk of ruffling the feathers of the Bird, I am a buyer and will offer a buyer's point of view - Randy is a seller and he is offering a Seller's perspective. One thing is for sure. Never kick yourself in the rear for missing what might seem like a great buy because there is definitely a better buy right around the next corner (Age taught me that one over and over and over). And in a downward spiral big boat market, Sellers have to realize they don't hold the black jack hand - the buyers do. I certainly agree that if a Seller is sitting on a one of a kind super Classic and can demand whatever price, however high, more power to that Seller. Somehow, even though a newbie and not yet an owner, I just don't see the Hatt market being a "classic" or unique marketplace.

 

[ThirdHatt]

Bill, you are so right! Many boat owners that made "great deals" a year or so ago when the market was just beginning it's slide all of a sudden have something that if they were to try to sell now for what they paid then, it would be overpriced in today's market. What was CHEAP last year is average price now. Some owners will objectively analyze the market and the desirability/marketability of their boat in it's current condition and price it accordingly. Those boats will sell. Others will think that because they got a deal last year, someone should be more than happy to give them their money back, even if the boat is not in as good a condition as when they bought it!! Sometimes low or no offers will wake them up, or sometimes only time sitting on the market will show them the err of their ways. It all depends on how realistic they are when they price the boat for the CURRENT market. Nobody cares what an owner paid for a boat when he bought it, they want to buy it at a good price in TODAY'S market.

Be glad that you are a buyer and not a seller right now!

 

[eclipsarkanna]

Third:

I am very glad I am a buyer right now but I appear to be irritating a lot of seller brokers - some are downright obnoxious and tell me what a nerve I have suggesting an offer 30% off asking, others send me emails that as a newbie prospective Hatt owner I have a lot to learn and until I educate myself I should hire an educated broker to represent me and others simply do not even respond to a valid and serious approach (price being the only issue). I even went to the time and trouble of actually hiring a broker out of Florida who came highly recommended here in Bermuda and when I asked him to submit my contract offer, he said that he didn't have time to educate me on boat buying, that he saw the boat on my behalf and he felt the asking price was reasonable. I "nicely" responded saying that I understood his position and that if there were "club" rules among Florida brokers I can accept that but I still wanted my price submitted. He then fired me in a very pleasant sort of way,saying he was busy for the next several months! I really don't think that it was unreasonable to ask that an offer be put in at 40% off asking when the yacht I was offering on had dropped in price by over $200,000 in 14 months, it was still languishing on YW, a family member found out through his Florida connections the boat hasn't been out of the water in over 4 years and I was going "unconditional" (not even a survey) on my 40% off asking figure.

Bottom line. I have absolutely zero use for brokers period and am going it alone now no matter how many brokers end up with my face on their dartboards.

Bill

 

[eclipsarkanna]

One further follow up to my last post (and yes I do have a burr in my saddle when it comes to brokers). If brokers don't soon get their act together people like me will start resorting to conducting "owner searches" by registered boat name and by-passing the brokers that simply fail to do their job by submitting any written contract offer. The price is an issue solely for the Vendor - not the broker. I have not yet resorted to the public register search approach but I am not far off resorting to that. Happily I have a friend who is knowledgeable who I met through this forum who thinks like I do when it comes to price offers and I will figure out a way to pay him for his services in dealing with the brokers.

Bill

 

[Freebird]

At the risk of ruffling the feathers of the Bird, I am a buyer and will offer a buyer's point of view - Randy is a seller and he is offering a Seller's perspective.

Bottom line. I have absolutely zero use for brokers period and am going it alone now no matter how many brokers end up with my face on their dartboards.

Bill

You lawyers are all the same, you just can't look a gift horse in the mouth without thinking of sueing the guy who invented the talking horse!

In case you haven't noticed, I've bought more boats than I've sold. My balance sheet is loaded to the owned side by about 9 at last count so kwitcherbichen about my perspective and having to go it alone as a newbie on the Hatt buying quest! I done told ya' I'd hep you out (of this dang forum! ).

BTW NOBODY ever ruffled my feathers before YOU came along!

 

[ThirdHatt]

Bill, To hell with any broker who will not submit your offer! It is YOUR offer, not the broker's! Never be afraid to make a low offer. You have to start somewhere! It's a great way to see how serious the seller is too.

About looking up the owner and contacting him directly, that does work well at times but if the boat is under contract the broker will still get his percentage and the owner will likely want the broker to deal with you. He will not want to deal with selling his boat AND paying a broker for selling it.

 

[Freebird]

One further follow up to my last post (and yes I do have a burr in my saddle when it comes to brokers). If brokers don't soon get their act together people like me will start resorting to conducting "owner searches" by registered boat name and by-passing the brokers that simply fail to do their job by submitting any written contract offer. The price is an issue solely for the Vendor - not the broker. I have not yet resorted to the public register search approach but I am not far off resorting to that. Happily I have a friend who is knowledgeable who I met through this forum who thinks like I do when it comes to price offers and I will figure out a way to pay him for his services in dealing with the brokers.

Bill

Boat brokers are just like any commision based wage earner. Their job is to sell boats to make money. Some take a personal interest and realize satisfield customers on both sides of the buying and selling fence will make themselves trustworthy which make themselves wealthy, some can't see the forest for the trees and go back to selling misrepresented used cars.

I'm sure you have found both types in your profession as an attorney as well. You, my friend, are in a profession most people love to hate, but you appear to have an attitude and ethic which would change the way many view your career of choice.

Bottom line is, don't judge all brokers by a few poor examples, and we won't judge attornies in the same way aka judging books by their covers. There are good and bad examples in every profession. We all just have to shop around to find someone who recognizes our needs and knows how to fill them.

Now then, wasn't that purty?

 

[Genesis]

Looking up owners is easy if you can get the boat's name or doc number. The former is easy - the latter is a bit trickier (someone has to go visit it, but its easy to find on the boat - by law it has to be!) once you get inside.

If the boat is under contract with a listing broker they'll still get their percentage, BUT submitting the offer personally to the owner insures that the owner can't be "snowed" by the listing broker with the offer being hidden from him.

Some owners will get upset with such an approach, but if I'm a buyer, I don't care. There are a lot of boats and the buyer is always the guy with the blackjack hand. Don't get impatient as a buyer - take your time - and if you see something you like submit an offer for what you think its worth - whether the seller likes it or not is not material.

The worst thing the seller can do is say "no".