NOTE: There is a lot of “inside baseball” in this story. It’s really written for those of you buying or selling a boat in the future. Everyone is welcome to read it, but you’ve been warned!
Talking to many of you over the years, I realize selling your boat is daunting and nerve-racking at times. With this in mind, I thought I’d take you through the steps we followed to sell Relentless in the hope you’ll find something here that you can use when the time comes to sell your boat.
As I mentioned in my last post, Relentless is off to her new home in North Carolina, creating new memories for Buzz and Lou Anne, her new owners.
Selling a Boat is Funny Business
If you’re selling a recreational yacht, you’re essentially looking for someone with the desire and the means to fork over a million bucks or more to buy a high-maintenance toy.
Economically speaking, it requires demand for the kind of boat you’re selling (not all boats are equal, but based on my experience, Sabre is a brand that’s always in demand.) And since 2020, the boating market has been shaped by a shortage of supply – which further heightened demand entering the 2022 Spring boat selling season.
We ordered our new boat in 2021 for 2023 delivery with a plan to use Relentless for the 2022 season and then sell her before it came time to put her in storage. This was a little unusual. Most boat owners I know either traded their old boat in for their new one or sold the old boat before shopping for the new one.
My Slow Motion Sales Strategy
If you’re a regular here on My Buzzards Bay, you may have noticed my attempt to sell Relentless in an unconventional manner. In late June, I did a post announcing that I was ready to start talking about what would, in effect, have been a slow-motion sale (contract in August, close in October). That post drew almost 2,000 visitors in the first 48 hours.
I figured no one would be interested in 48 Sabre as their first boat: most would already have a boat they’d like to sell, and a slow-motion sale cycle would give them time to sell their boat while locking down the price they’d be paying months in the future.
And as recently as January of 2022, BYS owner Mike Myers told me:
“I would suggest that if you want to buy or sell your boat this is an unusual time and the best market I have seen in my 47 year tenure. Don’t wait as this is the new normal for the next 12 to at least 18 months.”
The Spring of 2022 Boat Market
Given the heightened demand and short supply of boats, I think it was a sound strategy and would have worked.
But as Spring arrived, it suddenly became clear that this would not be a normal summer for selling boats. We started the season with the invasion of Ukraine, which led to $6.50/gallon diesel. Then the inflation wave followed, and the stock market meltdown.
Any of these could chill the market for a $1 million “toy,” but combine them all, and you’ve got a deep frost.
The initial “For Sale” post went up on June 27, and several potential buyers immediately contacted me.
I showed the boat to half a dozen well-qualified potential buyers in early July. Everyone loved Relentless, and two promised to make offers (as a side note, my broker friends told me they would expect at least one offer from six quality prospects.)
I knew going into the season that selling directly to a local buyer was a bit of a long shot, but when we had so many serious potential buyers, it seemed to be working.
My Sale Escalation Strategy
The effort to locate a local direct buyer was always Plan A, but I had a plan to escalate my efforts to ensure a sale before I had to make the next big installment payment on the new boat.
- PLAN A – Use the blog to locate a local direct buyer as discussed above).
- PLAN B – Retain a broker to list her on YachtWorld with NO CO-BROKERAGE. This meant that I would not automatically authorize an extra 5% commission to another broker who brought us a buyer. If the original listing agent found the buyer, I’d pay the normal listing commission of 5%.
- PLAN C – If we weren’t closing the sale by late August, we’d pay to have Relentless professionally detailed and exhibit her at the Newort Used Boat Show (it runs concurrently with the Newport International Boat Show – September 15-18).
- PLAN D – If all else fails, hire a captain to bring her to Fort Lauderdale where she’d be selling into their prime market (late fall and early winter.)
Plan C and D would not be cheap. More importantly. If I got to Plan D, I would begin running the risk of owning two yachts at once – something you never want to do.
As promising as Plan A looked on the 4th of July, July suddenly became August and still no offers. I’m not sure what happened to all the Lookie Loos. I know two went with trawlers and one bought a much smaller boat. As I said, the great spring market had gone to crap due to the external event of early 2022.
Escalate To “Plan B”
In early August, I started working on PLAN B. I decided to give the local market a ten-day warning before I put it on YachtWorld. One more potential buyer came forward, but still no sale. It was time for a broker.
I considered listing her with Boston Yacht Sales – the leading Sabre Broker in the region and friends I’ve done four transactions with. I also spoke to HMY. They were the listing agent when I bought Relentless in 2020. They made a great pitch to bring her to Fort Lauderdale if I ended up at Plan D.
In the end, I went with Maritimo Yacht Sales. They lacked the strengths of BYS and HMY, but after working with Sheryl and Dave for over a year, I trusted them and their depth of knowledge in the yacht market. And, since they were selling me the new boat directly, they could do things a traditional broker might not.
Relentless hit YachtWorld a few hours before the boatyard burnt down.
The plan was to work the YachtWorld market for ten days, and if we weren’t engaged in the sale, we’d flip to Plan C and show her at the Newport Used Boat Show in September.
We never got there. Sheryl came through with flying colors, engaging three potential buyers in the first few days and the ultimate buyer within the first week.
I’ve bought and sold quite a few boats, but I have to say that I’ve never had an experience go as smoothly as this one. Sheryl is excellent at anticipating issues before they become problems.
The Yacht Sale Process Favors The Buyer
Selling a yacht is similar to selling a house or a car in that the real action begins with an agreed price and a deposit. And like a home sale, both parties are bound by a Purchase and Sale Agreement. But after that, the dynamic is quite different for the seller than the buyer.
Once the P&S is signed, the buyer is entirely in the driver’s seat. On the other hand, the seller never really has a “done deal” until everything is “accepted.”
While yacht sales can have all sorts of odd conditions, they almost always include a Hull Survey, a Mechanical Survey, and a Seatrial.
One of the reasons we didn’t waste time negotiating the price was the shortage of Surveyors available in New England after the Boat Show Season kicks off in mid-September.
We agreed to the price and terms on August 29, which gave Buzz (the buyer) a couple of weeks to find a surveyor before Newport started. If you maintain your boat, it’s unlikely the Hull Survey will come up with a deal-killing showstopper.
Similarly, for the Mechanical Survey with one huge exception – The Oil Analysis. The Mechanical Surveyor takes an oil sample and then ships it off to a lab where it’s tested for metal fragments, diesel, or water, any of which would kill the deal.
And the oil test is a pain because it’s typically the last thing to happen, and it’s always the one thing holding up the closing.
The other dynamic you won’t find in a home or car sale is the Sea-trial. Before you buy a home, you have a showing or visit an Open House. Before you talk price on a new car, you have a test drive. If you don’t like the looks of the house or the ride of the car, you walk away, and the sales cycle never begins.
Like a Real Estate showing or a test drive, the buyer’s impression of the Sea-trial is 100% subjective- they like it and want to buy, or they don’t. But unlike a home or a car, a yacht sea-trial happens long after the P&S is signed. In fact, it’s often combined with the Surveys, which occur very late in the game.
In our case, the P&S was signed on August 29 and Buzz put 10% into escrow. The Sea-trial didn’t happen until September 15, and the results of the Survey didn’t come in until September 21.
The gist of all this was that I was in limbo for 3 1/2 weeks, waiting to see if we passed the oil analysis, and if Buzz approved the Sea-trial.
Meanwhile, he could walk away at any point by simply declaring that he didn’t like the way the boat felt in the Sea-trial.
And if Buzz walked away, it was too late to go to Plan C and the Newport Boat Show, leaving me with the costly Plan D, which meant hiring a captain and buying 3,000 gallons of diesel to bring her to Fort Lauderdale to sell.
Gratefully to all involved, we never got to Plan D!
Arriving At A Fair Price
One of the challenges in selling Relentless was setting the selling price. My timing for buying her was perfect. I got her in 2020 for $1 million during the peak Covid lockdown. And I put well over $100,000 into her. But the post-pandemic boat market was nuts thanks to a global inventory shortage, so I made a few bucks.
On June 26, the day before my blog post announcing Relentless would be going up for sale, there were no other Sabre 48 Flybridges anywhere on the market. In addition, there were no 2017 Expresses on the market either.
A little research showed three Sabre 48 Flybridges had sold in the last two years. It turned out that the two 2019s were actually the same boat that had been bought and sold a year later for $1,546,000. There was 2016 that sold for $1,300,000 as well.
I reached out to Joyce at BYS to ensure I had all the comps, and she told me a 2017 Flybridge had just been listed in Connecticut for $1,450,000.
By the time we went to list on YachtWorld, the Connecticut boat had sold for $1,400,000. Hoping to end up there, we listed at $1,449,000.
Quite honestly, I never had a solid number in mind. There weren’t enough comps to calculate anything, and the market was changing weekly (dropping diesel prices and Bull Market Rallies).
Meanwhile, Buzz was doing his homework and talking regularly with Sheryl. As much as I wanted to believe that the Connecticut 48 was a direct comp, it really wasn’t.
- It had 450 hours – we had 510.
- It had the hydraulic swim platform and a nice RIB included.
- It had 700 HP Volvos, while Relentless had 600 HP Cummins. In 2017, Cummins was the standard engine manufacturer for Sabre. But in 2019, they switched to Volvos.
I had some big ticket options they didn’t have (KVH7 HD, Bow and Stern Thrusters, and tons of other AV upgrades), but they didn’t offset the Volvos and the Swim Platform.
I’d known for months that there was no obvious price, and I kept telling myself that I’d listen to any buyer’s rationale argument. And Buzz had a very solid case for his offer, so we settled on $1,320,000.
A High Quality Buyer
We’ve sold a lot of houses over the years and heard realtors throw around the term “high-quality buyer.”
My reaction was always, “Yeah, yeah, just show me the money!” That may be true for selling a home, but boats are different.
I speak to many brokers about the 2022 yacht market, and I keep hearing the same thing – buyers reluctantly accept the spike in prices, but more and more, they expect a perfect boat.
An all-cash buyer who expects a used boat to survey like a new boat is not a quality buyer.
That said, Buzz and Lou Anne turned out to be high-quality buyers!
Despite “playing the Volvo card” in price negotiations, Buzz really wanted Cummins engines. Apparently, Volvo has weak service near his home in North Carolina, and he had a good relationship with the local Cummins dealer.
On the other hand, he was leery about pods. The first time he was on in the spotless engine room (yes, I had the engine room detailed before I listed the boat), he looked at the starboard pod and said…
“Dave, how much do you think a new pod costs?
I said. “I’m not really sure, but I think it’s mostly transmission and the new transmission cost me $16,000, so maybe $25,000.”
Buzz said. “I think I’ll buy a spare and put it in the back of my barn.”
Now that’s a quality buyer!
A Sabre 48 Flybridge is a classic made-in-Maine yacht. It was engineered to operate like new for decades, provided the owner maintained her properly.
Buzz appreciated that; in fact, that was exactly what he wanted to buy.
Yacht Surveys are quite different than home inspections; in fact, most surveyors believe their job is to compare the subject boat to a brand-new boat and report the deficiencies. No wonder so many 2022 buyers are expecting a new boat for used prices!
The Hull Survey – which is actually an in-depth survey of everything except the power plant and propulsion, takes a full day. Buzz’s surveyor spent the first two hours walking every inch of the boat with a little hammer, tapping the hull and superstructure.
One of the first issues to emerge was a broken propeller in the bow thruster.
Ned and Peter impressed everyone by running over to IMTRA in New Bedford, buying a new one, and installing it before we relaunched for the Sea-trial.
Then he spent the next six hours looking under the floorboards, opening and closing cabinets, and turning everything on and off to ensure everything worked.
Not only did the mechanical surveyors send oil samples from both engines, pods, and the generator to a lab for testing, but they also hooked the engines up to a computer and had me run numerous acceleration and cruising scenarios while they monitored everything.
All tolled, the team of surveyors spent the better part of a day going over Relentless with a fine-toothed-comb.
Rolling With The Survey
It takes 3-4 days to complete and deliver the survey. As a seller, you just have to roll with the results and the buyer’s reaction to any problems uncovered.
If the survey finds something that can easily be repaired or replaced, the seller can either do the work or adjust the price; on the other hand, legally speaking, anything that falls short of good-as-new is grounds for the buyer to take back the deposit and walk away.
This is really where the quality of the buyer weighs in.
There was one significant issue that came out of the survey and it pertained to one of the after-coolers.
It was green, and it shouldn’t have been. The mechanical surveyors thought it was defective. If so, it needed to be replaced. Worse, if it had indeed failed, it may have even damaged the engine.
After the survey team left, Ned pulled the after-cooler, inspected it, and cleaned it. It was his opinion that the green came from seawater leaking in from another source, and the after-cooler was fine.
Buzz was planning to drive the boat to North Carolina after the deal closed, so he wanted to make everything was problem free.
I knew that a new after-cooler installation was less than $10,000, which wouldn’t stand in the way of a close.
Buzz once again demonstrated that he was a high-quality buyer by proposing a very reasonable Survey Allowance that was less than the cost of a new after-cooler.
Bon Voyage Buzz
As I mentioned earlier, on September 29, I had a total knee replacement (and I’m doing great – thank you.) Buzz hired my friend Captain Chris Godino to help him bring Relentless to the Chesapeake.
My recovery was far enough along for me to meet Buzz and Chris on October 7 and wish them well on their trip south.
As I sat in my recliner recovering from my surgery, I got texts from Buzz and Chris along their voyage, asking questions, sending me photos, and effectively bringing me along vicariously.
LESSONS LEARNED: The Tale of The Sale
Looking back, our sale could not have gone better. Yet, despite that, it was a mentally exhausting exercise. My advice to any of you planning on selling your boat would be to consider the actual timeline and don’t think for a minute you’ve got a deal just because you have a signed P&S and 10% down.
Needless to say, it would be worth a couple of hundred (thousand) bucks to have your mechanic do a cursory survey before the buyer’s team shows up.
Finally, it may be difficult but push for the Sea-trial and oil analysis before the survey. This could be something you negotiate in the P&S. As I said, it’s unlikely that the Hull Survey will reveal a deal-killing issue, which is not true for the Sea-trial and oil analysis.
There’s an old adage that says, “The two happiest days in the life of a boat owner are the day his boat is launched and the day he sells it.”
I can emphatically say that was not true in our case. As we watched her clear Mattapoisett harbor en route for New York City, Mrs. Horne and I shed a little tear.
Relentless was a great boat and we’re so happy she found a new home with Buzz and Lou Anne.