How to Prepare Your Yacht To Be Listed For Sale
Selling your boat can be a bit of an emotional rollercoaster for sellers; you’ve made great memories on your boat, you’ve paid substantial bills for your boat and likely learning what your boat will garner on the open market might make you a bit pissed off, but hey, it was fun while it lasted.
While the broker you’re paying a lot of money to market and facilitate the sale should never be alseep on the job, it’s really critical that you do what you must to put them in a position to succeed.
If you’re boat is not part of the Yacht Zero Re-Sale program, we would have loved your business but hope that this roadmap makes the process a bit better regardless of who you have mobilized as your representative.
What To Prepare For Your Meeting With Your Broker
You should be prepared for your broker to show up with some sort of analysis and a listing plan as to how they will market your boat. What you need to discuss with your broker is the following
REVIEW AT FIRST MEETING WITH YOUR LISTING BROKER
Ownership Recap - What did you love about the boat and what made you buy it in the first place. Giving your broker an insight as to what compelled you, will likely make for a compelling story for your broker.
Review The Market Analysis - Don’t price your boat based on what other boats are listed at because they are undeinably too high otherwise they would be sold. It is best to find out what the last buyer paid for a boat the same make, model and year of yours, and price it there. You are essentially in a race against other sellers to be the next boat sold and you truthfully.
Review The Wholesale Offer - Whenever someone trades their boat in for a new one, what happens like a car deal, is the purchase price is inflated and they tell you they’re giving you a better number for your boat. In reality, brokerages go to wholesale companies which buy your boat at 20 - 40% below market value. You want to know what your worst case scenario is and be prepared to be gravely offended by the offer.
Calculate Your Holding Costs - Often times we see sellers pass on good offers and they forget to think about what their upkeep will be during another 3 months, 6 months and year of ownership. Once you put these numbers on paper, factoring in your dockage, insurance, crew costs and breakage, this should in theory give you a bit more motivation to get a deal done once you decide you’re ridding yourself of your yacht.
Broker Marketing Proposal - Honestly, after doing this for so many years, there’s only one tried and true way to sell a boat and that’s by listing on the Yacht Broker MLS. This feeds key sites like yachtworld.com, boats.com and pushes the listing to other brokers websites. There’s a huge issue behind the scene of yacht brokerage that there are more and more listing platforms begging for market share but they simply don’t drive results. A broker should have a plan but that’s paramount number one and it’s up to you to ensure it’s priced properly. They should be organizing a professional photo shoot and video presentation and ensure they are present at all showings. I cannot tell you how often we go to boats and no broker is there or brokers don’t answer the phone calls to show the boat. It is important to know that social media is neccessary but not overtly successful; additional listing platforms include Boattrader.com, Yachtr.com, yachtway.com and Yatco.com. As someone who pays the bills for all of these services, I can tell you emhpatically that only Yachtworld.com yields consistent results, and the damn private equity management company that constantly acquires it has the brokerage industry by the balls which in part is what justifies the absurd 10% commission you pay when selling.
DOCUMENTS YOU WILL EXPECT TO SIGN
Listing Agreement - This is the formal agreement that dictates the marketing partnership and what is required from both parties. This term typically is one year but some brokerages are receptive to doing this for a 6 month term, because truth be told, there’s nothing worse then being locked into an agreement when you realize your broker isn’t doing their job. Unfortunately, that will be lost value for you that you cannot gain back.
Showing Instructions - Who the broker needs to contact when they’re showing the boat; this can be you, a captain, a marina attendant and so on.
Material Damage Report - This is disclosing any major defects that have occured to the boat before you bought it or during your ownership. This isn’t asking you to state what’s wrong with the pasarelle but more to stop a buyer from moving through with a purchase unknowingly if the vessel was damaged in a hurricane, a fire, a major grounding or a lightning strike. As one can understand, you want to know this before you invest the time and money into surveying a boat.
Exclusion List - This is to document what will not be sold with your vessel. Artwork, furniture, or inflatable toys are just a few to name. We advise that anything that will not sell with the boat needs to be documented and needs to be removed prior to the survey onboard. Everything that’s there at survey, should stay with the boat.
Guaranty of Princial - This is to ensure that the person signing these documents is the person authorized to sell the boat. I can tell you stories of couples divorcing where the wife wouldn’t sign the sales agreement neccessary to transfer paperwork just so the husband would get hit with the 10% penalty; I can tell you of the time when I was first in the industry and the guy I was meeting with had no ownership of the boat and the actual signor wasn’t ok with the deal and I walked away with $4k in compensation because I didn’t want my due diligence error to negatively impact my company reputation or the buyer.
Payoff Statement - Knowing how much you owe is good to know upfront for all parties and can determine how much you will maybe need to come out of pocket to finalize the sale. Keep in mind if you are underwater on your loan, that gap only grows with time so as long as your cash flow allows, it’s best to take it on the chin, today.
DOCUMENT YOU WILL NEED TO PROVIDE
Identification - Who are you, how do you tie into the boat, and how can a broker ensure paperworks are accurate.
Corporate Documents - This is inclusive of the articles of incorporation, the operating agreement showing who is authorized to sign for the boat and other documents related to the owning entity.
Registration Documents - These documents provide accurate detail for the vessel, the accompanying dinghy or jetskis, and possibly the trailer.
Duty Paid Certificate - This has become a major sticking point in deals to provide evidence that the boat was imported properly and the buyer will not be on the hook for an extra 10-15%.
Builder’s Certificate - Certification of record from the builder.
EPA Engine Compliance Certificates - Showcasing that the engines adhere to emissions standards which are critical for the vessel domestically and abroad.
Warranty Informtion - If there’s a warranty and it’s transferrable, ensure this is passed along as it not only makes your vessel more appealing, but it’s normally a contingency of sale and it’s better to learn of it’s expiration now than at the time of sale.
Build Sheet - This will allow the broker and the buyer to have a firm understanding of the vessel that is being purchased, less the upgrades and modifications completed throughout ownership.
Docking Plan - This is typically for larger boats but can give an indication to shipyards that will be surveying the boat on how to best position the travel lift or syncholift to best position the boat during inspection.
Schematics and Techincal Drawings - If a surveyor, buyer or captain need additional details on systems while onboard, they can cross reference these so unneccessary survey items don’t need to be credited or addressed.
Tonnage Certificate - This is also a big boat item and is required to ensure registration for the new owner.
Owner’s Manual - Working through vessel issues is most easily done when consulting this manual which is put onboard for every new boat. If it goes missing, it can be expensive and time consuming to replace.
Payoff Statement - How much money do you owe on the boat as stated directly from your banking institution. While these are relevant only for about a period of 30 days, it will save you time and effort in the future before you’re required to provide a new one ahead of cloisng.
Service Records - showcasing what you’ve done on the boat and when, gives a buyer tremendous peace of mind. I cannot tell you how often sellers don’t have these records which makes a sale tougher but leads to buyers demanding larger credits then if a concise, detailed document is presented to them.
Preparing For Sale
Order Abstract of Title - An abstract of title shows the lineage of ownership, ability of the boat to pass title cleanly, and lastly shows you if any of the vendors on your boat have filed a lien, which will need to be resolved prior to sale. Too often, the first time a seller learns of these liens is when they’re at the closing table, which eliminates their leverage to dismiss or address this and it’s paid at closing.
Take Oil Samples - Oil samples will be taken during your survey and if they are conclusive and clean, you’re on a good path. If they are contaminated, there’s any number of paths a buyer will be comfortable taking or not taking, which will inhibit your sale. If work needs to be done, get it done now to keep more money in your pocket down the line.
Provide Fuel Burn & Consumption Figures - This will be a common question throughout the purchasing process and your broker won’t know this as they haven’t spent time onbaord. Manufacturer reccommendations only go so far and this is a great way to show buyers what they’re getting into.
Provide The Height - Another thing brokers don’t know and manufacturers don’t state for liability reasons. This will be asked and can be a make or break for clients planning to do the great loop or accessing bridges behind their homes.
Provide Wifi & Sat Tv Credentials - At some point this will be transferred so having it accessible now will help your broker, your buyer and the inspectors that get on the boat in the future.
Discuss Boat Show Partnership - Boat shows are like an open house for home sales that bring curious buyers onto your boat in a centralized location. They are extremely costly, may have many uniformed buyers pulling on handles, using your toilets and damaging the vessel if not done properly. It’s a great lead source for the brokers exhibiting the boat but it’s also a great way of getting the right person on your boat at the right time, that otherwise wouldn’t have planned to see the boat. Some brokerages cover all costs, some cover none; it’s my philosophy that this should be a seller absorbed cost for the upfront expenses and credited bak at the time of sale as it can be mutually beneficial to both sellers and the listing agents.
What You Need To Oblige Throughout The Sales Cycle
Continue Maintenance Program - I can’t tell you how sad I believe it to be when someone lists the boat and stops taking care of it. A broker shows up to show a dirty boat, a boat without working air conditioning which means they’re wasting their time and you’re losing more money. Routine washes, strainer checks, bottom cleanings, waxing and care still needs to be executed until the day of closing.
Remove Personal Belongings & Clutter - The less stuff onboard, signals this buyer wants to sell, which is a key psychological strategy for sellers. If items need to be moved and relocated, things get lost, broken and limits the buyers vision of the utility space on the boat.
Provide a Captain for Sea Trial and Photoshoot - For it to be exhibited and inspected, only you or your crew can move the boat.
Inform The Broker of Planned Trips - Imagine if a broker appears at your boat to show it to a buyer and then it’s in the Bahamas? Communicating schedules to your broker saves them from emarassement and reduces friction for purchasers.
Provide Repair Quotes For Known Issues - If you’re not planning on conducting repairs, that’s fine but putting concrete quotes infront of buyers will reduce them requesting larger credits at the time of sale.