Yes I know, the market is tough right now and everyone is having a hard time selling. Well, that’s not 100% accurate. There are many boats being sold right now of all sorts of sizes, ages and prices. In fact, boat sales this year have continued to exceed last year’s downturn. Now they might not all be selling for a premium :), but they are selling.
So why is my boat still on the market?
Assuming that you’ve listed your boat with a licensed broker and he’s placed ads in all the expected MLS sites here is the first of the top 5 reasons why your boat is not selling.
This is the single most important aspect of a sale not just because it invites offers, but because it invites interest, period. Think about the buying process. If you were buying a small trailer or bass boat you would likely drive over to your local dealer and see what they have. If the prices are too high then at least now you know about the type of boat that you like and you go home to check internet sites like Ebay and Craiglist where these sort of boats abound. You punch in the size, model, years and range you feel would be a fair price. Results pop up and you go about selecting the ones you like eventually narrowing it down to a purchase.
Buying a larger vessel is a bit more involved and geography plays a big part. Unless you live in South Florida, Seattle or Southern California where there are thousands of large boats to visit, your boat buying journey probably included planes, trains and automobiles. There’s no better way to learn about a lot of boat in a short period of time then attending a boat show, but those also require travel and have fixed dates. So what do people do the rest of the time to shop for boats? They go to the internet listing sites where hopefully they find you, right?
This is where price takes center stage. The internet shopping experience for yachts is a self guided and often misguided approach. Amongst other things, MLS sites provide search forms that invite (force) buyers to choose size, year and price ranges. At this point two things will happen:
- The buyer has already done some shopping and figured out a price range that they feel is fair for the type of boat that they want. If you’re price range is too high or too low for what is reasonable to expect for your vessel (ie. what the rest of the market is being offered at), then your boat will likely get cut off from the results page and that buyer won’t even know you exist!
- You come up on the results page, but on the unreasonable high or low end. The likelihood is for that buyer to discard either extreme as either an irrational seller (high end) or there must be something wrong with the boat (low end).
You can now understand what “pricing yourself out of the market” refers to. Clearly the lower the price the better your chances are of eventually selling, but it’s also quite possible to scare a prospective buyer away. The fact is that when we do find a boat that’s being sold dramatically below market value there’s usually a catch involved – short sale, bank repossession, damaged, etc… On the other hand, there are many acceptable reasons for liquidating a boat. Maybe you already found the next boat and made such a sweet deal that it’s ok to blow the current one out- happens all the time. Likewise, a high price could be a reflection of a truly highly maintained boat, but it can also be an owner that “doesn’t have to sell” (and no one will want to buy).
So what should I do?
You need to do your homework. A good salesman should know your specific market or should take the time to study it and report his findings back to you. He should do a thorough sales analysis including studying prices of the comparable boats in the current market and recently sold history. Custom builds or boats in small niche segments will be more difficult to asses on price s make an educated guess on the higher side. If the price is too high the market will let you know by not ringing your phone. Lower it and try again.
When in doubt: It’s always easier to lower the price than raise it, but be reasonable.
I’ve had clients that will sit on a price that’s clearly 20, 25, 30 and 40% over the market and they question me as to why the boat isn’t showing, much less getting offers. I explain the market price with details and suggest a lower price, but they resist “I’d rather keep it high so I have room to negotiate with”. Sure, that sounds logical: guy makes an ‘aggressive’ offer of $1.4M on a $2M listing, the seller counters at $1.5M and the deal is made. The buyer feels like they got a $500,o00 steal and the sale was possible because the seller kept the price with lots of room to negotiate, right? Sure, but that scenario is highly unlikely. Reality is that the prospective buyer never even called you. He saw your irregular price and moved onto more adequately priced boats. Your price kept him from even seeing your boat so you never even had the chance to offer him your sweet deal.
Is my boat adequately priced?
If you don’t know or you’re unsure of the answer email us (firstname.lastname@example.org) or call (954.650.7353) and we’ll try to help you. We offer a Sales Analysis that could save you hundreds of thousands of dollars and wasted time.