Buying and Selling a Boat in this Economy (Monday - April 12, 2010)
This economy has been bleak for boat sales... as with many other things. Banks are not lending on the purchase of a boat, so having cash or something to trade against it is the best way to acquire your "toy" or "dream". In our case, our boat is our home. If it was ‘Meri’s Toy’, I’d definitely have someone else doing all the work on it!
When we bought ‘Hotspur’ in January, she had a major problem that we were aware of before we looked ather. The fuel tank had let loose and we’ve been told that the diesel had reached almost as high as the soles (floors). All the hoses would have to be replaced and the bilges scrubbed thoroughly. And Pee-Youuuu! The smell itself was intensely strong... so strong that it had permiated the cushions below! However, we knew this when we came to look at 'Hotspur' and see if she was worthy to be a part of the Faulkner Family. The cost to replace the fuel tank might be $3,000USD.
What we did not know (but soon found out) was that her 80HP Ford Lehman engine was seized beyond a simple repair. This was a major set back because the cost of getting a new Yanmar engine imported from the states to Mexico and installed was roughly $20,000 USD.
Jim and I decided we would make a very low offer on the boat... almost embarrassingly low. However, we’ve readied a boat for cruising before. We readied 'Windfall'... our 35' Cal Cruising that was in stellar condition and we STILL poured oodles of money into her to get her things we felt she needed for us. 'Hotspur' was going to be a massive buzz kill on our cruising, so in order for it to be worth it to us it needed to be more than just a "good deal". In addition, if we purchased ‘Hotspur’ it meant that both boats would have to be in a slip... very costly for a family of four with no employment! This meant we would have to sell ‘Windfall’ fast.
So here is our simple recipe for buying a boat in this economy:
Look at the going prices (the SOLD price... not the listing price) for your boat two or three years ago... take 35% off the average. THAT is realistic... even if your seller isn’t there in his/her mind yet.
Look at how much work you’re going to have to put into her. An old, rickety boat is going to be much more work than a well maintained boat. But the well maintained boat is still going to be work! It depends on how much time you have to put into your "project". To keep it even more in perspective, ‘Hotspur’ has been an everyday project for three months now and it is not an old, rickety boat... but it HAD been neglected for a couple years. That makes a difference!.
Look at what comes with the boat. Does it have a generator? A dinghy and outboard? A windvane? Single sideband radio? Radar? Solar panels? Epirb? Life raft? Sails in good condition? Does it come with all the dishes, bedding, sailing books, etc... And the list goes on... and on!
In the case of ‘Hotspur’, the sellers wanted to be rid of the boat. The asking price was on the high end for a 1976 Tartan TOCK, but we looked at it anyway. We did the math and presented it to the broker in writing so that the numbers made sense and weren’t just pulled from our aft. In the end, we bought Hotspur AS IS and for a quarter what she had been purchased for several years back.
Selling a boat in this crappy economy
It’s gonna hurt... that’s all I’ve got to say about it. Do you want to sell your boat or not? Do you want some cash in your pockets or do you want to continue to spend it on that slip rental? Start doing the mental adjustments now... it’s not going to get better any time soon.
We paid $40,000USD for 'Windfall' in 2007. And we feel we got a good price, as we paid less for Cal Cruising's being sold at that time and she was in fabulous condition AND she was cruiser ready! Keep in mind, 'Windfall' is a 35' boat and 'Hotspur' is a 41' boat. After purchasing 'Windfall', we still poured thousands of dollars into her. We added a new radar, new tuner, new anchor chain, manual bilge pump... blah, blah, blah.
We sold 'Windfall' for $35,000USD. Did we lose money? Of course we did! It’s a boat and we sold it during a crestfallen depression... we’re going to lose money! But, we sold it! We’re not sitting on two boats! We’re not paying insurance on two boats! We’re not paying slip rent for two boats! We don’t have to maintain two boats! (Jiggetty-jiggetty-jigetty-jig!)
If you don’t need to sell your boat, then fantastic! Don’t. But if you need to sell your boat, make the price look yummy. Clean your boat up... get those extra sails out from down below, polish that brightwork, clean the rust off the stainless and for God’s sake... air out the head! Spray something fresh and clean smelling while you’re at it! Get rid of the clutter and allow your potential buyers to see and feel the space. Selling a boat is work, too.
