On Buying and Selling Boats
July 13, 2000
By Bernadette Bernon
Ithaka dropped anchor yesterday afternoon in the sleepy, colonial berg of Stonington, an unplanned but not unhappy detour on our two-week exploration of Long Island Sound. Engine problems have a way of modifying one’s plans, and Stonington has a breakwater and large anchoring field, the right combination for anchoring a big boat under sail.
The following morning, to his relief, Douglas managed the engine repairs, and we hailed Dodson’s Marina on the VHF, got a launch pick up and went ashore to re-provision, and poke around.
Stonington is not new to us. We’d made several pilgrimages here last spring when we were boat hunting and had found a beautiful aluminum boat we wanted to buy. We’d heard about the boat, which we’ll call Harvest Moon, from our friend Sally at Cruising World, who told us about the first-class modifications the owners had made only a year before – Northern Lights generator, five new North sails, all new rigging, new stove, new wiring, new dinghy, new upholstery, new watermaker, all new safety equipment, new electronics, new, new, new. The owners had bought and refitted the boat, gone to the Caribbean on their dream cruise and, after less than a year, a surprise pregnancy had changed their plans and Harvest Moon was for sale. We jumped in the car and went to Stonington to see the boat.
At first, Harvest Moon seemed too much for us, but we warmed to the boat quickly as we learned more about her. She was a fantastic deal, considering how much value was in her, even though she was a bit over our budget. She was big -- 44 feet, 34,000 pounds, and with a seven-foot draft – and we were a little daunted, but the owners had modified her to make her a good couple’s sailing boat, and we liked what they’d done. She was older – built in 1970 -- but she had an impeccable pedigree, having been custom built in Holland, designed by Britton Chance to be fast, and maintained since then to high standards. Over three visits to Stonington, with the accompanying 90-minute car trips each way and angst-filled conversation about nothing else other than Harvest Moon, we decided to make an offer.
The owners had been working with a prominent broker of high-end yachts up until that point, who’d had the exclusive listing on the boat for six months. They were unhappy. Twice they’d dropped the price significantly during this time, and they were frustrated with their broker, who they thought hadn’t put any effort into marketing the boat, so they did not renew their contract with him. Douglas and I subtracted the broker fee, and an additional 10 percent from the asking price, made the offer, negotiated up a bit, and made a handshake deal. In the week that followed, as we all tried to come up with a contract, as they coped with their disappointment about taking such a financial bath, and as we dealt with coming up with more money than we had planned for, combined with an uncomfortable misunderstanding with the owners about what was and wasn’t included in the equipment list, the deal began to unravel, and we all decided amicably to call the whole thing off. They said they were going to keep Harvest Moon, charter her for the summer out of Stonington, then put her up for sale in the fall, when they thought they could get a sale price closer to what they had originally wanted for the boat.
We were disappointed but, luckily, Ithaka was out there, at that very minute sailing up the East Coast from Florida, her South African owners deciding to put her up for sale in Annapolis, where we would find her two months later.
We learned a great deal from our experiences with Harvest Moon about the differences between buying a boat with and without a broker, and we learned a great deal about working with a variety of brokers over the course of the eight months we spent “in the market.” Here’s our advice:
1)If you’re going to try to sell your boat yourself, it’s critical to do a complete inventory of every single thing that’s included with the boat. If it’s not included, take it off the boat. Also, find a good contract, modify it to suit your boat and your needs, include specifications about deposit requirements, and exactly how the escrow account will work, and then when you strike a deal, use the contract you’ve prepared, with additions if necessary. Period. This is no time for confusion; it’s a time for clarity and professionalism.
2)If you decide to sell your boat through a broker, be sure to list it with a broker who works in your price range. Placing the boat for sale with a broker whose success is in the mega-yacht circuit, for example, might handicap your boat’s chances of being properly (read: aggressively) marketed to the mid-range cruising community. By the same token, if you’re trying to sell a serious long-distance cruising boat, don’t list it with a small local broker; be sure to list it with an experienced broker accustomed to selling other boats of equal caliber, and who is committed to doing national marketing in the monthly magazines. This marketing commitment is expensive, and it’s important. Customers in the market for such a boat scour these ads, and are willing to travel to see the right boats.
3) If you’re looking for a serious cruising boat, don’t rely on only one broker to find it for you. We wasted three months doing this with a broker who only wanted to sell us boats he listed himself so that he wouldn’t have to co-broke any deal. You must take charge of this process yourself; scour all the classifieds of the magazines (the minute they hit the newsstands), as well as all the internet sites, so that you find out what’s for sale in the country, and what the sales prices really are, so you don’t miss an opportunity when it comes up. This familiarization process is intense, takes about a month, and entails quite a bit of phone time. (When you call a broker who has a listing you’re interested in, it’s only fair to tell him/her that you’re working with others as well.)
4) Keep scrupulous notes on who told you about which boats, and when, as different brokers will give you leads and send you BUC listings (the marine multiple-listing service) about the same boats.
5) Selling boats is different than selling real estate, even though many of the terms and names are the same. For example: In the real-estate business, “agents” and “brokers” are professionally trained, tested and certified, and unless you sign a specific agreement with them to the contrary, they are obliged to represent the best interests of the seller. On the other hand, boat “brokers” need no special training, testing or certification programs to get into the business. In some cases they represent sellers, in others the buyers. We found that it’s important to go to a well-known, well-established firm that markets nationally in order to get first shot at the best boats. Brokers working in small, independent local offices may tend to rely too heavily on the BUC listing to find the bigger cruising boats, and this listing is picked over by the time the information ever trickles out.
6) If you can, try to work with brokers who have owned a bluewater cruising boat, or who’ve gone cruising themselves. You’ll be looking to them for advice, and it’s helpful if they really understand your needs for a strong and ruggedly-built ocean boat with real liveaboard amenities and storage.
7) Move as quickly as you can. It’s a very active market right now and, like the real-estate market, good boats are moving fast.
8) If you are determined to sell your boat yourself, Douglas has a few tips for you on how to write the ad (see accompanying article)
Heading into Dodson’s this morning, we asked our launch driver if he knew whatever happened to a boat named Harvest Moon that had been in the Dodson’s boatyard last spring. We were stunned by his answer.
“She just sold,” he said. “The owner had her in charter last season and the boat got trashed. He finally unloaded it for $98,000.”
This figure was a fraction of what the owners had invested in the boat, and far below the number Douglas and I had offered to buy it. We stepped off the launch, speechless, and wandered around town, feeling blue for the owners we’d liked so much, talking about Harvest Moon, and how this story should have turned out very differently. Later, we returned to Ithaka, very glad to be home.
Memories Of Selling EVORA
By Douglas Bernon
In 1975, when I was not too many years out of college, I bought an old 30 footer in Key West and with more audacity than sense set off on a year of single-handing. Evora was a rugged and forgiving cutter-rigged, double-ender who tolerated sudden stops in the mud, indelicate glances off bridge pilings and, on one occasion, even the brutal extraction of her bow-pulpit after I’d improperly tangled a tow-line from a friendly Cuban fishing boat. I’d been aground again, and during the tow had yanked the pulpit and a score of stainless bolts clear through the deck, launching a stainless steel sputnik whose crash landing completely ruined the teak hatch cover I’d spent the previous two weeks fashioning from found scraps.
Evora was built in Baltimore, Ireland, in 1936, for the vagaries of the North Sea. Over the years ambitious souls had made her into a no-frills cruiser. Nothing fancy. No holding tanks. A bucket for a head. No electrical system. No refrigeration. No batteries. No shower, naturally. Just functional gear: a sturdy double-diamond rig, an early version of a self-steering vane, a trusty lead line, heavily pitted but functional kerosene running and reading lights. Decent sails. She had a hand-crank, one-lung diesel that taught me I knew even less about engines than I did about sailing. Early on, I choked it to death when, like a whale feeding endlessly on krill, I filtered the Gulf Stream clean through it.
With neither motor nor money, but a merciful measure of good fortune, I taught myself something about sailing and learned how to maneuver her around harbors under canvas or with a pair of sixteen-foot sweeps that in every anchorage rightfully alarmed anyone parked nearby. Intensely curious neighbors watched with boathooks and fenders close at hand.
Fourteen months later, figuring in part that no boat could be asked to protect the likes of me much longer, I decided to sell Evora and get on with other aspects of my life. I sailed her across to Key Largo, found a boatyard where I could barter my labor for the cost of hauling, and spent several weeks swallowing the dust of other people's fiberglass during the day to pay for the sand paper that would allow me to swallow my own wood-dust at night. I scraped, sanded, painted, polished and varnished. I had the dodger re-sewn, winched the little Volvo Penta out with my boom and had it rebuilt.
Finally I sailed to Miami and placed a newspaper classified ad that drew no attention at all. I examined other ads to see what tickled my fancy. Not surprisingly, I found, the key to selling many things (not just boats) appeared to rest on sexual fantasy, so I hitch-hiked back downtown to the Miami Herald and inserted three words in the middle of my ad: “WOMB-LIKE INTERIOR .”
That Saturday there was a parade of prospective buyers I had to all but beat back with a stick. Anyone in Miami thinking of buying a 30 footer came to see what a WOMB-LIKE INTERIOR might be. Several people asked to go out for a test sail, but once underway it became obvious they were more interested in an afternoon dalliance in Key Biscayne than they were in buying a boat. I decided my marketing strategy had improved but remained inadequate. Immediately I began charging $100 for the ride, which weeded out the dilettante tire kickers.
On Sunday, a fellow sauntered up and made all kinds of technical comments about the apparent durability of the boat and the heavier-than-usual rigging. He took a nylon stocking from his pocket and ran it over the shrouds looking for frays in the wire. He inspected every cranny with a flashlight, ice-picked any spot that raised an eyebrow, and asked a slew of questions:
"How thick's the rigging? How much water storage? How far apart are the ribs? How about taking a sail around the Bay?"
"Sure," I said. “But that’ll cost a hundred bucks."
Once under sail he asked, “How much removable ballast has she got?"
Now there are lots of sensible questions to ask about a boat, but precious few regarding removable ballast, a useful commodity you wouldn’t want to jettison unless you were intending to replace it with something equally useful but of potentially greater value. I pulled up the floorboards and showed him where the pig iron was secured and how it might be removed or repositioned. He was pleased.
"How long will it take you to get off the boat?"
I told him I preferred to wait till I got to shore.
"Fine,” he says. “I've got the cash in the car. Mind if I pay in tens? They’re in my trunk."
"No,” I said. “Tens are nice. But I think I’d like to get them at the bank. You give them to teller and she’ll give me a check, OK?”
"No prob, man.”
Back at his car, he unlocked the trunk, pulled out two Piggly-Wiggly grocery bags full of $10,000 in ten-dollar bills. Not neatly folded or bound, just loose and mushed down.
The exchange at the bank was uneventful. This was 1976, and our teller was not fazed by a couple of scraggly looking guys, one of whom had two shopping bags full of small bills. We drove back to the boat and he helped me load everything I owned in the whole world into eight small cartons. As we shook hands to say good-bye, his final question removed any doubts.
"Wanna go to South America?"
I decided to pass on it.