That’s right. We said it. This is how you can steal a boat… legally.
The newsletter from Christian & Company came in and this caught our eye, so we’re sharing. If you’re interested, why not head over and sign up for their newsletter as well?
This article will give you some tips on how to steal a boat…legally. Legalized theft, or buying boats for pennies (okay maybe dimes) on the dollar, is happening, so how is it done?
Let’s begin with a nod to our hard working friends in the boat sales industry. Few of the “deals” come without serious concessions on the part of the buyer, possibly including: title issues, time delays, significant deficiencies and questionable to poor customer service.
Wikipedia defines fair market value as follows:
Fair market value (FMV) is an estimate of the market value of a property, based on what a knowledgeable, willing, and unpressured buyer would probably pay to a knowledgeable, willing, and unpressured seller in the market
To steal a boat, a normal factor in the sales process has to be different. The seller has to be motivated and the buyer has to find the seller. The most common factor that allows one to steal a boat is financial distress on the part of the seller. There are a myriad of reasons for financial distress, particularly in the past few years! There are many other factors that result in low sales prices as well and there are a few companies specializing in selling boats in “distressed situations”.
Some boats are deals because few people know they are for sale. There are owners who refuse to pay brokers’ fees and thus they do not get adequate exposure. Some sellers create their own web sites or use lesser known listing sites. Google/Yahoo/Bing searching and internet “farming” will lead the diligent buyer to some of these sites.
Tip: Use a skilled broker to acquire the fair market value for a boat you are trying to sell.
Some boats are on the more popular listing sites, such as Yachtworld, but have incorrect information, reducing the size of the potential buying market. Wrong or lesser known manufacturer, wrong year, length, and even the wrong price are sometimes listed. Think about the wide range of names use for many boats, including the builder, importer, designer, model or common nick name. While these listing errors are “rookie” mistakes, there are a few rookies out there and a veteran shopper may be able to capitalize on these situations.
Deals are often possible before boats make it to a listing site or are listed by a broker and some deals are made after the boat has been listed for an inordinate amount of time and the seller has tired of the process and the burdens of ownership. “Low ball” offers on boats that have been for sale for a long period of time are occasionally accepted.
Life changes often result in boats available at a discount. An abandoned dream of sailing around the world, a divorce, the dissolution of a partnership and death are all great tragedies for some and opportunities for others. Boats for sale as a result of these types of events will often be sold to individuals who become aware of the circumstance soon after it occurs and are able to act quickly. A wide network helps locate these boats, so if you are looking for a deal, don’t keep it a secret. The more people that know you are looking the more likely a deal will be revealed to you.
Donated boats for sale are possible deals. Though laws changed a few years ago reducing the number of these opportunities, some remain. Boats of lower value or ones that the donor actually is giving the boat away (versus those who give as a better financial option to selling) can be had at a bargain. Some of these deals require a two year lease with an option to buy, and are appropriate for buyers who desire a particular boat and plan to keep it for several years. This is no longer a viable option for “flippers”, or those who want to buy and sell quickly for profit.
There are deals to be had on damaged boats, often for sale by insurance companies after a constructive total loss. There are numerous individual boats sold by countless insurance companies and marine surveyors (including Christian & Company), to find them one needs to network extensively and be patient. Then there are a few large companies specializing in this type of sale, they include Copart, Certified Sales and Cooper Capital. All are easily found online.
Tip: A stolen and recovered boat often has very little damage but still can be purchased at a significant discount due to the circumstances. Damaged boats present challenges best undertaken by people experienced in the repair industry or people who are “handy” and like to fiddle with projects.
Many boats are being sold on Craig’s List and other online markets such as Ebay. Some boats are sold by marinas and various marine companies as lien sales. There are various governmental auctions and Marshall’s sales, most are publicized on the internet. Don’t forget your due diligence (not so subtle plug for a good marine surveyor) and these sites can lead to a bargain.
And finally the most voluminous source of deals in today’s market: repossessed boats. There are many banks that sell only a few boats and utilize a wide variety of outlets to sell them. These boats can be found in all the nooks and crannies of boat selling websites and brokerages. Then there are a few companies that specialize in selling “repos”. Among these businesses are several with a Southern California presence, including: Long Beach Yacht Sales, Grande Yachts, National Liquidators and Brokaw Yacht Sales.
To utilize these companies effectively one should understand some of the underlying factors. Many of the boats are sold quickly, so be ready to act. Know what you want, a specific type of boat or a smoking hot deal. Have your budget or funding source established and if you see a boat that interests you, don’t take long to make your offer. Realize that some of these businesses are deluged with interest (phone calls, emails and walk-ins) and thus customer service is not what it might be at a more traditional brokerage. If you are seriously in the market, let the contact person at the business know in no uncertain terms. Some businesses give better service than others, but boats for sale by these companies may be available only through the listing broker (i.e. no commission available for your broker).
The discount doesn’t come without a catch. You don’t get the benefit of disclosure of problems, events of significance (submersions, collisions, etc…) or maintenance history. Many repo boats were not well maintained prior to being repossessed.
Bob Brokaw of Brokaw Yacht Sales is active in selling repo boats and he advises that a buyer utilize a broker familiar with the process. He also suggests that any potential buyer, who is remote from the boat, hire a qualified representative, local to the boat, to perform a “walk through” inspection prior to incurring any significant expense in the buying process. The sheer volume of repo boats handled by some companies precludes them from getting to know the boats well. Thus if you have an agree price on a boat that is a plane flight away, paying for a quick inspection (to let you know if there is an easily detected significant deficiency) can save you the airfare (and valuable time) or let you modify your offer before incurring the expense of travel and/or a detailed marine survey.
So how do you steal a boat?
-Broaden your network
-Prepare and act quickly
-Use due diligence
How do you avoid the pitfalls of this type of deal?
Hire a full service agent/broker and pay a fair price.