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Purchasing a new yacht...

Discussion in 'General Yachting Discussion' started by Jackson, Feb 24, 2005.

  1. Jackson

    Jackson New Member

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    Cost of Motor Yachts

    We are consdering buying a motor yacht - Horizon among them - is there any way to find out what the original cost of a boat is - e.g. if we are looking at a 1998 Horizon listed at 2.1M is this more or less than the original cost....difficult business dealing with boat brokers.

    Would appreciate any input.
  2. AMG

    AMG YF Moderator

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    Normally the replacement price is higher than the market value of a pre-owned yacht. As you have probably seen, the power options and a lot of interior fittings and electronics cost extra and on the other side you have to consider the age and wear of the yacht as compared to a new. It shouldn´t be impossible to get the original bill on such a recent boat, but the market value is still what you are prepared to pay for the boat.
    A good broker who likes to have repeat clients should guide both the seller and the buyer to the right price... ;)
  3. Jackson

    Jackson New Member

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    Buying a Previously Owned Yacht

    Thanks for your reply AMG. What we are trying to determine is this...what the original buy paid for the boat with everything included - e.g. did s/he pay 2M in 1999 for the fully loaded boat and now is trying to sell it for 2.5M five years later? We would like to have this kind of information to determine where we have negotiating room - are we really paying market rate or what the brokers would like to portray as market rate? What is the true value of the boat? We have found it very difficult to get information about all the types of boats - the Azimut broker hates the Horizon, the Horizon hates the Monte Fino, etc.....has been interesting.

    Re brokers: it has been nearly impossible for us to get a completely straight answer from the brokers we have talked to....is amazing to us what the boats actually sell for compared to how they are priced (most recently was a 109' yacht listed for 4.4M that sold for 3.7M - if we believed the selling broker we would have thought there was no room for negotiation). It is an industry that makes one feel as though one is standing on shifting sands.....

    Appreciate any input/illumination.
  4. AMG

    AMG YF Moderator

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    I can understand your frustration, but there is still an open question what you are prepared to pay. You give the offer to the broker and there the negotiation starts. If you look at the yacht market, it is something in between used cars and real estate. Small cruisers have almost fixed price lists as used, whereas a nice Feadship usually gains more than her original price. And the rest is in between and what one person want, the other don´t. So nobody can ever tell you what is the right price, only you, by comparing as you are doing and eventually find what you want and trying to get it as cheap as you can. That is the process and many loves it, eventhough it can be frustrating to not have a firm price list at hand.
    But again, this is what the broker should help you with, and by choosing the right broker and letting him do the legwork for you, it would be much easier. You don´t have to shop around yourself, this is what brokers are there for. I have worked as both a buyers broker and a sellers, and I prefer to be the buyers.. :)
  5. D'ARTOIS

    D'ARTOIS New Member

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    It is very difficult, or close to impossible, to tell any new price of a yacht of considerable size. List prices do exist only in theory but are never paid and that is a certainty.
    It depends also on the negotiation skills of the respective buyers/clients, but it is always quoting and being counterquoted - it depends on the cash-flow situation of the Yard also - there are literally a zillion factors that can and may play a decisive role. It is as much as in real business a matter of tactics also.

    There is another important thing that plays in my opinion a role: a brand new boat is a far cry from being perfect - as it is mostly or in all events a handmade job; so many imperfections have crouched in during the process of making the boat.
    It is not exeptional that a yard has 10 pages of corrections to do; that may run
    into small booklets when you are talking yachts with serious dimensions.

    In that respect it is sometimes even better to buy a second hand or "pre-owned" yacht. Free (mostly) from imperfections - and lots of money spend on maintainance and upgrading.

    It depends greatly on the procuring skills of the prospect buyers/clients - are they serious, can they make a spot decision - can they work without a bank credit (which asks time).
    If you really want to pay the ultimate minimum start to clear your bankfacilities in the first place and in such a way that you have immediate access to your funds.
    If the broker/owner is aware of this fact than he/she will certainly be open for serious negotiation.

    I know cases of brokers buying brand new yachts against yard-prices and reselling later with profits of several 100 K's as they paid the yard in hard cash.

    The best way to operate for any prospect buyer is to approacht a number of suppliers of similar boats asking for a quotation. In that particular way a general price for the going yacht can be established, take from that amount about 10% margin and you may (not guaranteed) approach a correct yardprice.
    The same situation counts for pre-owned yachts. Check a number of boats that are offered on the open market. Then a general line will become visible.
    Believe me, brokers are there to sell boats and as long as you are serious and you can pay for your deal, your boat is waiting for you.
  6. Jackson

    Jackson New Member

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    Buying a Boat

    Okay, so what you are both saying is that we need to research to try and understand the yacht industry and then think like a broker while negotiating. We have the resources for the boat so that is not an issue. Find this whole experience to be more opaque than real estate or used car sales....

    Do either of you have an opinion of the Horizon vs. the Monte Fino? Have compared both - each manufacturer criticizes the other for the same reasons (almost like the French and the English) They both think they have the better finishes - odd as the boats are made in the same yard - from what we can tell they are similar in quality of hull construction, equipment, stability, etc....Any opinions? Also, would you put the Azimut in the same class in terms of quality of construction, etc.... (know it is a different type of boat in terms of "mission", speed, range and design)?

    Who knew that being a boat purchaser was so involved....
  7. AMG

    AMG YF Moderator

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    We are now in a thread concerning Horizon Yachts and this is not the right place to compare to others I think. Can only say that many of the Horizons are designed by a fellow-Swede and from what I have seen are good quality and can be compared to Italian boats of the same size.

    Maybe we should post this topic of buying yachts in the General discussion area?;)
  8. YachtForums

    YachtForums Publisher/Admin

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    Thank you Lars!

    This thread is being moved to the "General Yachting Discussion" forum, as the direction of the thread does not concern Horizon. More importantly, Horizon is building one of the highest quality yachts in the industry and although every newly built yacht has a few bugs to work out (this is NORMAL), I sincerely beleive Horizon's product is as close as you get to turn-the-key and cruise.
  9. D'ARTOIS

    D'ARTOIS New Member

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    I agree with you Lars, BTW I fell in love with a Frers 50, however, although her price is affordable and acceptable, she is on the other end of the world.
    I will buy her, no doubt (I hope the guy selling her is not reading this): Jackson, it is not always a matter of money, more what you feel.

    I had for more than 20 years racehorses (another hole in the water where you poor money in) lots of money in that hobby before I bought my first yacht. It is all emotions but keep your head clear.

    Cheers!
  10. AMG

    AMG YF Moderator

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    An attempt to a short description on how to buy a yacht.

    As a boat buyer, especially when buying a yacht bigger than you have ever had before, you are likely to get in touch with a yacht broker and a surveyor. The yacht brokerage is there to sell or to help you buy or build a yacht and they do this on a commission from the seller, often shared by other brokers involved in the same deal. This means that you don´t have to be your own broker, it is better to find someone you trust.

    When you find a yacht, pre-owned, and would like to make an offer, you can do this at any level and normally you get a counter-offer. This way you will establish a price and you must then pay a downpayment of normally 10 percent.

    After that you call for a surveyor, (on your expense) they are normally certified and insured and you take the boat out of the water to inspect the hull. Fibreglass boats for osmosis and steel or alu for corrosion that can be measured. Also props, rudders and stabilizers if such is fitted.

    Then the surveyor will go through the entire yacht, inspecting tanks, engines and everything. Finally you will make a sea trial, sometimes you do this before when you are going to the shipyard. When all this is done, you are likely to have a list of faults that has a price to adjust. At this point, both the buyer and the seller have the right to refuse the deal if there are too many and costly problems with the yacht. But in most case you deduct some or all of the estimated costs from the offered purchase price and this will be the final price to pay before taking delivery.

    Nobody has to buy a yacht without knowing what he or she is buying and for the broker this is the normal way of acting, so you don´t even have to ask about it. Then there are many other aspects, like financing, insurance, registering and such that the broker will help you with and on even bigger yachts he can recruite the crew and manage chartering... :)
  11. Jackson

    Jackson New Member

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    Purchasing a New Yacht

    Mea Culpa - did not stop to think that it would be "unpolitic" to discuss other boats in a Horizon Forum. So, now we are out in the open, does anyone have an opinion about Horizons and Monte Finos - seem to be the most comparable in terms of size, price, styling, etc...

    I agree that boats (and racehorses) have much emotion attached but as a neophyte feel the need to have information and make a decision based on heart AND head...this is a big lifestyle (not to mention financial) commitment.
  12. Jackson

    Jackson New Member

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    PUrchasing a Yacht

    AMG - we have done the research re hiring a surveyor, arranging insurance, documentation, etc.... just stuck between three types of boats that we like for different reasons - wondering if we can get input from anyone about Horizon vs. Monte Fino - it is not to malign either manufacturer - obviously we would not be close to choosing one of them to put in an offer if we either grossly inferior - we are just trying to determine if we are comparing "apples to apples" - any input?
  13. AMG

    AMG YF Moderator

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    Like d´Artois pointed out, not two boats are the same, even coming from the same series of production boats. To compare brands is therefore not really fair or even correct since they could be built to very different specifications depending of the original buyer. Also the use can have been very different and the "good brand" boat can be in a worse condition than the less good brand.

    But of course there are different levels of quality and image that influence the price and this is where your own preferences are of importance, how much you will use the yacht, where and for what. Decisions, decisions.... ;)
  14. Crewagency

    Crewagency Guest

    Buyers and sellers

    Normally a seller adds all costs over the years on top of the purchasing price.
    Lets say:
    2002 purchase price 2000000 for a new yacht.
    2 years Mooring 100000
    2 Years Crew 80000
    2 Years Service / Maintainance 250000 to hold the Yacht in perfect condition
    2 Years insurance and other expenses
    like water toys, newest Navigation equipment, etc. 100000

    Sales Price 2004 : 2530000
    and of course the broker wants to earn his 5-10% ( 7.5 = around 200000 )

    Here we are : 2,72 Mio. ( only as an example calculation )

    So normally a professional buyer offers 70 % of the first asking price and
    the negotiation begins.

    My experience shows that sometimes it is better to buy a used boat where the startup problems are finished and the Yacht is in useable conditions for your holidays. But dont forget to use a surveyor before buying.
    It will be also usefull to charter the Yacht for 1 or 2 weeks before buying.
    This is the most efficient way to see if this yacht is your dream or will be your
    nightmare.
  15. AMG

    AMG YF Moderator

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    For once, I disagree a little with you Crewagency...

    This idea of adding previous running costs on the purchase price is new to me and I don´t think it is normally used.

    The other idea of chartering before purchase is perhaps a good advise, but only if you are keeping your intention of purchase secret. The crew can otherwise play a too big part in making you like or dislike the yacht depending on their future situation. As a broker I am also thinking of how things out of human control, like the weather, can affect the impression of a yacht or yachting in general if you are not experienced.

    What I am trying to say is that a bad boat can be a dream, versus a good becoming a nightmare with the wrong circumstances during the charter.

    But I agree with you that a boat that has been shaken down a couple of seasons is normally a better deal than a new, if you like it as it is fitted out so you don´t have to invest too much in changing interior and equipment.
  16. Jackson

    Jackson New Member

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    Purchasing a Yacht

    Thank you for your input. Have to say AMG that our experience with pricing (list price of a boat vs. actual purchase price) seems to be uncannily close to CrewAgency's formula. Also seems to me that price should be affected by how many of a particular type of boat are for sale and how long they have been on the market. For example, we are looking at a particular type of boat. There are currently four "used" ones on the market - most of these four have been for sale for just less than one year to a year and a half - don't think it says anything negative about boat construction just about supply and demand. Is a very interesting business and can understand how people get hooked - I would bet that most good brokers are also good poker players.

    We have narrowed our options a bit - may charter a boat to "try out" - obviously can't blame Acts of God that lead to a bad charter on the boat.....We both have some experience boating and are eager to learn more. We are stuck between a boat the size that we could handle ourselves with a captain (80' to 85') and a bigger boat (95' to 105") that would require at least two in crew - could be an issue as we plan to spend a lot of time on the boat - this is a lifestyle purchase and would be instead of a condominium or house.
  17. Crewagency

    Crewagency Guest

    Crew

    Jackson,

    my experience in the Crew business shows that it is not a good idea to employ only one Crew on a MY bigger than 80 feet also over 100 feet you have to employ minimum 3 - 4 to hold a Yacht in perfect conditions. Sure this depends also on the time you spend on board and how much you want to be pampered.
    Also Lars ( AMG ) is right that you should not show any interest to buy a Yacht to the Crew. ( If they know that you will buy their boat they might think of loosing their job and might tell you lies about the boat conditions to stay on board for the future )

    Sure that brokers are good poker players ! but also some owners or buyers know how to play this game :)

    Please also put an eye on the current destination of the Yacht you want to buy and the future sailing area you prefer. This is sometimes very intersting for additional electrical equipment you might have to install like converters for shore power etc and also for Telecommunication, Internet, Plotters etc. in your prefered area. There are many differences between Europe and USA.
  18. AMG

    AMG YF Moderator

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    There is a saying, (I just made it up) that it is better to buy a good boat at a bad price, than a bad boat at a good price... ;)

    Or like Artois is saying, the heart has to be involved as well. If you have four boats you consider equally good, of course you buy the cheapest. But if you like one better than the other, isn´t it justified to pay more?
  19. Jackson

    Jackson New Member

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    Purchasing a Yacht and Crew

    We don't need too much pampering (e.g. a full-time chef, stewardess, etc...). More focussed on help driving and maintaining mechanics/electronics of a boat - on a bigger boat definitely need two people + to keep everything running shipshape. We are hands-on people too so don't foresee too many problems. Also, can envision taking on additional help as we need it when we have guests on board (who may want to be pampered).

    I agree with your "saying" - we have definitely had an emotional reaction to different boats - just like houses each boat feels a certain way but again, is a matter of making a decision with both heart and head involved - we want to start cruising asap but will also wait if we have to for the right boat (which is sometimes agonizing as I am ready to go!).

    One of our dilemmas about a bigger boat is the increased crew - any boat we buy definitely has to have good crew quarters (yes, this seems to be an American "cultural" thing - would hesitate to buy some of the Italian boats for that reason - is Italian crew really that small?). We are easy going people but we also like a certain amount of privacy.

    Is it hard to find good captains/crew? Are there any warning signs, characteristics we should look for when interviewing/searching? My thought was to try and find a couple - any thoughts? Lazy/unmotivated is definitely a problem for us. I guess it is as difficult as finding good, expert workers anywhere - at least in the US seems there are a lot of people who don't like to work too hard.....too many video games and time in the car eh?
  20. D'ARTOIS

    D'ARTOIS New Member

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    In my opinion - as long as your boatdimension stays within the limit of say max 80' you may need nobody, it depends of course on your ability and if you are willing to act as captain/skipper.
    If you would like to enjoy boating without the requirements of being occupied with
    navigation and actual driving the boat , in that case becomes the availability of a skipper very handy. Even a 80' yacht becomes small when there are a lot of people on board and most of those yachts are not really equipped to cater for more than 6 pax and 1 crew.

    It depends all on you, your skills and of course, your requirements.

    I'll second the opinion of buying a - preowned yacht. That, I have already pointed before. Only when this particular boat was owned by an experienced principal and have been cared for meticulously and as such you might be assured that all deflects have been faded out.

    Make a list - with your wife. She is the most important person on board. Listen to her and give full attention to her opinion. This was the first lesson I had to learn when I became professional involved in yachts.

    Then, go for the boat you like. Not number 2, not number 3, because they are cheaper or whatever else.

    Appoint a surveyor, a good one - not a recommended one, but one you found yourself, let him scrutinise the boat with the emphasis on the electrical part, in most cases the Achilles heel of any boat.

    With this outcome you are prepared for the battle with the broker or whoever might be responsible for the sale.

    Bonne chasse
    Last edited: Feb 26, 2005

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