Tips For Selling Your Boat
How to Sell Your Boat
Most boaters put far more time and energy into buying a boat than they do selling it. While they price shop carefully before buying, they tend to simply slap a price on the windshield and damn the consequences when selling.
The result is that some boats are seriously undervalued when it comes to resale, while others are so overpriced that they remain on the market endlessly, eating up classified ad dollars and driving their owners crazy.
Approach selling your boat methodically, and you’ll not only get the very best price, but you’ll minimize the effort and grief involved as well. There are four crucial areas involved in selling your boat: setting a price, deciding on how to sell it, prepping it, and the final paperwork. Let’s take a look at each.
Of all the mistakes made by boat owners, the leading error is pricing the boat either too low or too high. Too low and you’re giving money away, too high and you can’t get rid of it. Here’s how to correctly price your boat.
Start by checking your local newspaper classifieds, which may have boats identical to yours for sale, but don’t forget that those are simply asking prices. Clip out appropriate ads and compile a scrapbook to show potential buyers what similar boats are listing for.
Talk to local dealers and see what similar models they have available. And the listing prices for those boats.
The best selection and where you’ll probably find many identical boats offered is on the Internet. There are a number of sites that list many thousands of boats for sale. Make sure you’re comparing apples to apples, because small variations in engines or equipment can make big differences in price.
Use a marine “Blue Book,” which you’ll find at your bank, insurance agent, or boat dealership. There are several books available (NADA and ABOS are the most well known), but each varies in pricing and methodology.
When using any Blue Book, be sure you understand how to use it … and be brutally honest about the condition of your boat. Check for variations for salt or freshwater use and see if the listing includes extra equipment that can raise the value.
Also, be sure you use the right year for your boat. A boat sold late in 1993, for example, is probably a 1994 model even though it shows 1993 on your registration papers. Check the VIN number stamped in the hull.
Take Blue Book values with a grain of salt and don’t base your selling price only on these guides. If possible, get a copy of the blue book page with your boat on it to show to prospective buyers.
Finally, if you have a loan on your boat, check to see the exact payoff amount, including any balloon payments or other charges. Use that to set the absolute minimum price you will accept for your boat.
Where and When To Sell
For every boat, you’ll have three basic choices: sell it yourself, trade it in, or sell it through a Yacht Broker. The choice will be influenced by the size and value of your boat. Small boats are rarely sold by brokers, since they produce too little income for the amount of time required to make the sale. Large boats often involve complex negotiations (documentation, etc.) that are simplified by Yacht Brokers.
Selling the boat yourself is likely to net you the most money, but you have to do all the work and it’s hard on your ego, too. If at all possible don’t allow your emotions to play a role in the sale of your boat.
Trading in your boat is easy when you’re buying a new boat, but most dealers won’t take trades on used boats. Trade-ins, incidentally, usually earn you the least money, so be sure to shop price since some dealers may offer considerably more trade-in money than others.
When deciding on a trade-in, remember that a trade-in may save you tax dollars, since you won’t be paying sales tax on the full price but only on the amount less your traded value. This may make it both easier and more cost-effective to trade in.
Try to sell your boat at the beginning of the boating season, when buyers are most interested. Off season sales never net as much money. The same is true for trade-ins, because the dealer can’t turn the boat over quickly after the boating season ends. If you do decide to sell your boat on your own, plan your advertising campaign.
Classified ads in a local newspaper are an obvious choice, but some magazines also draw buyers, especially for larger boats. Internet sites attract buyers across the country and worldwide. Don’t forget to post ads on Yacht Club bulletin boards and add a “For Sale” sign on the boat if your marina permits it.
Dealing With Brokers
Like a Real Estate Agent, a Yacht Broker advertises and shows your boat to potential clients, handles the legal paperwork, and takes a percentage of the selling price as a commission, which can range from 5 to the more typical 10 percent. Shop brokers to see who specializes in boats similar to yours, since they are likely to have more serious buyers.
Shop brokerage commissions, since some brokers may be willing to negotiate a discount. Understand your listing agreement with the broker. A reputable Yacht Broker, one that belongs to an association that requires following a code of ethics, can explain the various listing differences and point you in the direction that’s best for you.
Expect that the buyer of your boat will get a marine survey, which is an inspection paid for by the buyer to determine the condition of the boat. Surveys are often used to negotiate price downwards to compensate for any problems that are discovered. Sellers can either have the problem fixed or discount the selling price. If you agree to make repairs, spell out your obligations clearly and set a limit on the amount you will spend.
Prepping Your Boat
A clean and tidy boat always earns a higher selling price, so invest some time and elbow grease. Scrub the entire boat and deck with mild detergent and a soft brush. If the fiberglass finish doesn’t gleam, invest in having it buffed with rubbing compound and polished with wax.
On small boats, you can do this yourself using an automotive buffer. If your varnish is tired, at least one coat will restore the shine. If the teak is gray, bleach it so it looks good and perhaps oil it, too. Clean the bilge, because a musty and damp smelling boat suggests rot and decay.
Get rid of the crumbs in the galley, and be sure that the refrigerator/icebox sparkles. If you can remove the carpet, shampoo it and let it dry in the sun. Do the same for curtains and upholstery. Scrub the covers and Bimini top and, if the side curtains are hazy, take them off so they don’t distract.
Clean the head and shower thoroughly, and add a double dose of chemicals to the holding tank. No one wants a smelly head. Repair inoperative equipment that can turn off a buyer.
And don’t forget the engine. If it’s oily, have it carefully steam cleaned. Change the oil because dirty oil suggests poor maintenance, and touch up any corrosion spots on the engine or drives.
Charge the batteries and clean all connections so the engine starts immediately and the lights shine brightly.
Buyers like originality, so get rid of additions that don’t increase the value, such as racks and cabinets. Especially if they don’t look professionally installed.
Just as when selling a home, set the stage! Put a set of matching plates and glasses on the table, for example. Look at advertising brochures for ideas that can help make your boat appear more inviting.
At the same time that you’re primping your boat, remove the gear that you aren’t selling with it. And don’t forget to empty the galley drawers of all that junk! If you are leaving personal items on board that you want to keep, make sure the buyer is aware of them.
Put together an information kit to show prospects, including photos of the boat in the water (with people having a good time), copies of old brochures, and a neatly typed history of the boat with a list of the equipment included.
For trailer boaters, don’t forget to detail the trailer.
Paperwork and Legalities
Once you’ve got the money in your hands, it’s easy to think that you’re finished. Not true.
If you sell the boat yourself, be sure that you type up a bill of sale that includes price, buyer and seller names, addresses and driver’s license numbers, type and size of boat, registration numbers, and a list of the major equipment included. The bill of sale can serve as a receipt for payment.
If you take a down payment, provide a written receipt specifying all of the above as well. It’s a good idea to make the deposit non-refundable so that you don’t take the boat off the market for an uncommitted buyer.
Ask for a cashier’s or certified check for both the deposit and the balance. Set an agreed closing date and stick to it.
Signing the back of the pink slip or the title isn’t enough. You also need to send a form (usually included with the pink slip) to the boat registration agency specifying when, to whom, and for how much you sold your boat. Otherwise you may remain liable for accidents or liens caused by the new owner.
Cancel your insurance as soon as the transaction is completed and the boat leaves your control. You may get a refund on the unused portion of prepaid insurance.
While you don’t have a legal obligation to volunteer information about the boat, you also can’t withhold known information about a defect. If an accident occurs, your failure to disclose may come back to haunt you and selling a boat “as-is” is not always protection. If possible, include mention of any problems or defects in the written contract.
If a buyer wants a sea trial, be sure that you have a firm and non-refundable deposit in hand and that the buyer agrees to pay for any costs, such as launching the boat or refueling it. You don’t want to go into the boat-ride business.
If a buyer wants to make the sale contingent on getting good financing, set a deadline or face wasting time while other potential buyers get away.
Article courtesy of Chris Caswell