Yacht Auctions

I think most auctions in the past have been foreclosed boats. This May auction is unique, billed as the world's first superyacht auction. The company running it is experienced in large auctions. There do seem to be some precautions which might somewhat protect the buyers versus a random auction one might see or one on a foreclosed yacht. There are going to be 20 yachts. Inspection and even survey is allowed prior.

Now based on auto auctions, art and collectible auctions and others, I'd say this. It's like any auction you go into, it may or may not be possible to get good deals. On a specific item if only those buying for possible resell are bidding, then prices will stay moderate, but when people start bidding for their dream boat, prices can rise (based on the way car auctions happen) up to or above market. Auction sellers are depending on the auction house being able to get more for an item than they could selling it themselves, based on advertising and reach. They must get more to justify the commissions. That means that the seller is depending on the buyers bidding the price up enough to cover those commissions. So in essence they are depending on you paying more than you might in a private sale. But, things don't always go like that so you might buy something for less. It's just knowing the system is designed for the prices to be higher than they otherwise would be.

You just have to be prepared to examine the boats, survey any that you might want to bid on, bid an amount you're comfortable with, but go into the bidding expecting to be overbid and not win while hoping to win. A typical experienced buyer in these type auctions (notice type but not boat since that's new in this magnitude and type) probably only ends up with the winning bid 1 out of every 10 or more times they bid.

When it comes to cars, Mecum promotes big and there are a lot of bidders. I'm sure they're trying the same on this auction but they don't have the same built in list of boat buyers to tie into so it's pure speculation as to how many bidders they will get or how aggressive they will be. Just the one thing a buyer still must keep in mind and that is that every seller is convinced the prices are going to rise to above market.

As to direct experience, I've been to collector car auctions and not bought, just been astonished at the prices. I have been to similar art auctions and bought one item, paying more than I intended but my wife and I loving it enough to do so. I have been to one auction of foreclosed boats and felt at that one that it was almost like gambling at Storage Wars. That day only one of three boats got a bid and it was by a man who buys, rebuilds, and sells so actually it was the junkier boat there. If I was going to be home for this one, I'd have to go out of curiosity. The car and the art auction I went to were run by Mecum and had quality items but lots of bidders and prices on some items were shocking. But at those auctions there are truly rare collectible cars that buyers feel they must have, they've long looked for. This boat auction doesn't have that aspect.

Here are the yachts being auctioned:

http://mecumyachtauction.com/view-all-lots/

May be shown live or later on NBCSN.

One note. I spoke of Auction commissions and in art they're often quite high. But on this auction I found that they are only normal brokerage commissions. So that's much less of an issue in pricing.

And, yes, this is a reserve auction. One thing to note too is that up to the reserve, Mecum may actually place bids for the seller. They cannot do that above the reserve. But it's a technique to try to run the price up to the reserve. So up to the reserve you may in fact be just bidding against the seller's representative.

As someone who has a lot of experience in live auction environments (my wife and I have been involved in the antiques/collectibles world for many years), I can tell you that I find it appalling that a seller or seller's rep would be allowed to engage in the bidding process. The whole idea of an auction is to demonstrate through the final bid what the market perceives the value of the item at auction to be worth! If without shilling (which is exactly what that is, allowing a seller to bid, whether it's just to the reserve or not), an item brings $1,000, or $10,000, or FIFTY dollars, then THAT is what the market (at least the market in attendance anyway) is telling the seller his item is worth.

I'm not a big believer is reserve auctions to begin with, since I feel if it's not an absolute auction it's really no more than a retail store giving it's audience the opportunity to bid over retail if they so choose. Let's face it, reserves are very rarely set so low they represent a truly wholesale value.

Allowing sellers to bid in any way just artificially drives up the perceived value of the item on the block. It doesn't set a "comp" for future sales and value analysis.

If there is to be a reserve, the fair way to do it is to announce the reserve at the outset and make the reserve the opening bid. Then the buyers know right away if they want to engage or if they are wasting their time. But having the reserve remain secret until it has been met simply wastes the time and energy of everyone involved in the process, IMHO.

If I were to decide to sell many of our personal collection of antique and/or collectable items, I would do some homework, find the best venue for the items in question, ensure the auction house does a good job of promoting their events, and then allow the items to be sold to the highest bidder with no reserve. In fact, when we have done that in the past, at large auction houses that aggressively advertise upcoming events, the results have, with only a few exceptions (there are always going to be an item or two that falls through the cracks) been that our items found their proper level, with the assistance of a good auctioneer who knew how to "work the crowd" and wasn't too anxious to bring the hammer down prematurely just to move on to the next item.

I don't think boats (or cars or trucks or planes or helicopters or WWII surplus tanks) are any different than a listed artist's painting or a rare piece of signed Rookwood. Promoted properly so the interested parties for the items on the block get to the auction, the prices will indeed come. At least to somewhere in the neighborhood of where they should be anyway.

I can tell you from experience that if, for example, I am interested in bidding on a piece of Roseville Pottery, a good auction house will have attracted many other buyers who are just as interested in that piece and NO ONE is going to let ME get it at a "steal". It gets bid close to retail every single time if there is legitimate competition in the audience, with NO "help" from the seller or his agent.

In fact, just the opposite sometimes occurs!

Buyers get "auction fever" and far over-bid for an item just so they won't "lose" it, even if they know (if they think clearly for a second) that they're paying a lot more than they should. Sometimes egos even get involved, and buyers get the attitude of "NO WAY is THAT SOB gonna win! NO WAY!" And the TRUE winner is of course the seller of the item, of course! (I always wish I was the seller when I see that kind of thing happening at an auction. LOL!)

Sorry for being so long-winded on this, but it hit a nerve for me because I have seen a lot of shady antics at even the finest auction houses, but allowing a seller to bid on his own items really "takes the cake" for me!!!

I've emailed them 3 times without a response. Couple things that bother me. One is that there is a 10% premium on top of the bid price? An attempt to hide extra commissions.

Also at least one of the boats has had their yachtworld price almost double a month or two ago. I guess a buyer will look up the inflated street price and think they are getting a deal.

I forecast the majority will not sell and the ones that do will sell for full market value.

I tend to agree with Carver38 and was shocked to see the agreement with them bidding. Plus I don't like reserves either. I'd rather see a starting bid. The problem is you can bid and bid and think you're winning but you don't hit the reserve. So seems to me the time spent in all bidding under the reserve is just wasted. Over the years many auction houses have had a "plant" in the audience bidding but in many states now that practice has been made illegal.

I've found some great purchases at auctions. Typically that's come when everyone else there was excited about a group of different type items from the one I wanted. I've also seen auction fever and everything going at retail. And a charity auction may be fun but a lot easier to just give them the money. But bidders start thinking that since the money is going to a charity, they don't care what they spend.

Don't count on that. I've been getting a bunch of emails from them over the past week or so. Seems they've bought some mailing lists. My guess is either Active Captain or Marina Life, in which case it's a fairly massive list.

Let me also stress something that was mentioned: "Reserves". I would expect them to be substantial.

Mecum had one auction not long ago with a reported turnout of 215,000 people. Now that's over 10 days so I don't think unique attendees. They were auctioning 3,000 cars. So they know how to market and get people there. So you may well be right on attendance. I'm just wondering how many attendees will be potential buyers.

I tend to pass on things where the odds are 215,000 to 1 against me, not to mention I'm an armature competing with professionals. They'd be as amused seeing a competitor end up with an overpaid for albatross as in winning a bid.

I haven't gotten anything, so hopefully that rules out Active Captain.

Nor have I.

Does not look like a great success to me. The Huckins belongs to a cousin of mine, and is unusual in only having 2 staterooms in 74 ft.
Best,
Maldwin

Looks to me like a highly publicized and attended used boat sale with the auction being nothing but a silly game of negotiation. $3.4 million sold, so I don't know if that makes it a success for Mecum or not. That's $340,000 commission assuming neither of the boats sold was a buyer brought there by a broker. 9% success rate, but then who knows what they anticipated. I think by the time you add the television rights in, it was profitable. Just not wildly successful as they might have hoped. Obviously for most people who went it was nothing, but for two it might have been worth it. Some nice boats but no great deals waiting in them.

Looking at the one that the reserve was given on, the 1995 Hatteras 130, it wasn't unreasonable. Still just not the great deal people were hoping for. Both Bradford and Westport have 1995 Hatteras 130's and they're listed at $4.69 and $4.39. So bid of $1.7 not reasonable. On the other hand the reserve of $3.5 isn't likely to work in an auction like this.

The Mecum folks did an excellent job producing a first class event. The service and attention to bidders and participants; before during and after the auction was outstanding.
This seemed to have been an expensive enterprise for the host.

O'boater mentions TV rights... I didn't see any cameras or the sort.

The $4.39 Hatt 130 that Bradford and Northrop and Johnson have listed is TRANQUILITY. The $4.69 Hatt 130 that Westport has listed is CHARISMA... the yacht at auction today.

The fact that these boats are Market Priced at $4.4/$4.7 does not dictate that their Market Value is $4.4/$4.7... (Tranquility has been asking mid 4's since March 2010).

$3.5 is a dubious retail value, simply because the boat is still for sale. Meaning; no one has stepped-up to offer this price, that her owner would accept. So, the Buy-Side of the market says she is worth a bit less.

For clarity: I had bid $1.6, I was shilled to $1.7 and contemplated going a bit higher. As soon as I became aware of the reserve, the contest, (for me) became irrelevant. No one else in the bidding crowd thought it reasonable to go above $1.7 - so the qualified responsible Buyers, bidding on this boat felt that $1.7 or less was a reasonable price. I will submit however, that the auctioneer and the selling owner, may not have found $1.7 reasonable at the moment.

What happened to the little Bimini run about they had listed?
There was an article by Bill Sanderson of C&N about boats being worth about 50% of there asking price, so I guess those bidding 1.7m for the Hatteras were spot on.
In my opinion a yacht auction will only work when it is a no reserve, and no bidding up by the auction house/ owner rep., now that I would like to see!