Buy, Hold, or Sell?

By Gene A. Magnetti


Evaluating Your 2014 Boating Intentions

Now that the long winter is over and spring is in the air, it’s time to decide how to position yourself best to enjoy the boating season. Unlike Southern boaters who enjoy year-round time on the water, we need to plan more carefully for the time we do have available. So it is important to decide early to take action on what you want to do this season.






One thing to keep in mind is that no one really needs a boat. We own boats because we love them, we love the water, we love being outdoors in the sunshine, and we love the freedom and absence of shoreside restrictions that boating and sailing provide for us. While there are economic factors involved in boating decision making, the fact is that boating is something we do because we love it; not because we need it. Those of us who truly love the water are willing to sacrifice in other areas in order to enjoy such an engaging, satisfying part of life.


If you have outgrown your boat, or decided to get into boating for the first time, now is the time to search for a new or pre-owned boat. Sellers are actively seeking buyers and you will have a good deal of choice available to you on the brokerage market.

Now is also an excellent time to purchase a brand new boat as the severe winter has left many dealers with unsold inventory from last model year. These brand new boats can often be bought for tens of thousands less than a factory ordered new boat, and they come with a new boat warranty. However, these opportunities will disappear as smart buyers snatch them up.

A new boat purchase is easiest because dealers may be willing to accept your present boat as a trade toward the new boat. The trade is essentially a barter – you’re giving your boat instead of cash. The dealer will take on the risks of that conversion, making it easy for you to just step onto a brand new boat rather then having to deal with the uncertainties of selling the boat beforehand.


If you decide that you are happy with the boat you have, then just put aside your thinking about a new one. Put your energy into doing whatever maintenance or repairs are needed so you can enjoy it fully in the coming season. This may involve critical mechanical repairs or upgrades, or it may simply be re-doing the upholstery down below, or changing the plumbing fixtures. Whatever it is make a plan to get it done, and enjoy your time out on the water.

Sell - DIY or Division of Labor?

The economic concept of division of labor is extremely important to consider when selling your boat. Simply, it is the principle that humans have learned to specialize and do not create everything in life personally. Early in our history, self-sufficient people learned to trade with each other. As an example, the fur trapper soon learned that it was better for him to trade with the lumberman rather than spend his time cutting trees to build a house. And the lumberman saw that he was better off plying his trade rather than learning how to trap animals to get fur for clothing. In the same way, boaters are well served to understand that although it may be possible personally to sell their own boat, the time involved in learning how to do it and to develop the skills in actually carrying it out can better be spent on other things. When it comes to selling your boat, employing a yacht broker is the most effective division of labor.

The yacht broker will provide consultation and assist in an evaluation of prices to determine the offering price that will yield the highest possible return consistent with current market conditions. He will also prepare the listing for publication on the Internet and for advertising in print publications. He will market the boat to prospective buyers in his network and work with outside brokers to find a buyer in the quickest possible time. His self-interest is aligned with yours because his remuneration is not earned until he finds a buyer for your boat. Up until that point he is providing services for you without fee.

Your yacht broker will then handle all negotiations and paperwork to complete the transaction and transfer payment of the boat to you. An additional benefit is that handling negotiations through a third party often helps to keep a transaction on track when situations arise that raise tensions and that could spoil the deal when an owner deals directly with a buyer. Should a difficult situation between buyer and seller arise, a yacht broker is well positioned to defuse it.

The main objection certain people have to using a yacht broker is that they do not wish to pay for his/her services. This is actually a false objection since the payment is earned only when the boat is sold at the seller’s specified price. So, if a seller believes the boat is worth more than the offering price, less the commission for services, it can be rejected.

Sellers always make the final decision as to how much money they are willing to accept in exchange for their boat. Whether they employ a yacht broker and pay a commission or not, the net amount they receive for their boat is always the amount they decide is acceptable. Most sellers understand this, and value the s ervices available through a qualified yacht broker.

Gene A. Magnetti is a Managing Broker at Springline Yacht Sales in Mamaroneck, NY.


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