As a yacht owner, you've worked hard to reach the level you’re at today. Originally, you probably started yachting to release stress and have a great time on the water. Now, let’s be honest, selling a yacht can be a pain. After all, you’re carrying many costs, such as: berthing, maintenance, service, insurance, and crew costs to name a few.
Do You Remember Why You Started Yachting?
Making matters more costly, a brokerage firm is asking a substantial amount of money to help you sell your yacht. And naturally, when a broker or brokerage wants a commission to sell your yacht, you may feel that it’s not appropriate. After all, in the past, you've probably been pressured into signing an exclusive agreement. In return, you may have received poor marketing material and little results after too much time on the market.
What makes selling a yacht so challenging? Simply, you are selling:
A luxury product less than 1% of the population can afford
A product that’s last on the list of things people need in life
An item with a long buying cycle
In an ultra-competitive and price-driven market
To a market of buyers who are more demanding
The Most Important Factor That Will Influence The Sale of Your Yacht
If you want to get the best price for your yacht, then you must sell your yacht in the shortest time possible. Time is the most important factor for the sale of your yacht, as it will substantially reduce the value of your yacht in 3 specific ways:
Running Costs (the longer your yacht stays on the market, the greater your berthing costs, crew costs, maintenance costs, insurance costs, etc. will continually add up).
Depreciation Cost (the longer your yacht stays on the market the greater the depreciation costs will increase).
Market Perception Cost (the longer your yacht is on the market the less desirable it will appear to the marketplace).
Therefore, time is the most important factor to consider when it comes to setting the best price for your yacht.
The following example will show you why.
How Time Affects the Value of Your Yacht
Imagine this: It's March 2018 and a broker lists a 2014 Sunseeker 73. The owner decides to list the Sunseeker at $2.15M — about $200,000 above the fair market price. As a result, the yacht doesn't get much interest. After 4 months, the owner gets his first offer for $1.83M, but he refuses it. Time passes and total losses continue adding up, month after month. By March 2019, after a year on the market, the owner has accumulated the following costs:
1 year of running costs: $216,000 ($18,000/month x 12 months)
1 year of depreciation costs: $192,000 ($16,000/month x 12 months)
1 year of market perception costs: $120,000 ($10,000/month x 12 months)
Bottom line: after one year on the market, the Sunseeker is now worth ~$1.7M while the owner lost $216,000 in running costs and $192,000 in depreciation costs. Moreover, after a year on the market, the market perception of the yacht is now at its lowest — and will most likely attract deal makers and bottom feeders with lower offers.
You Must Sell Your Yacht as Fast as Possible to Get The Best Price
As you have just seen, if you want to get the best price for your yacht then you must sell it in the shortest time possible to avoid these accumulated losses. For that reason, you must ensure that your yacht is sold in the shortest amount of time possible.