As days of COVID-19 quarantine turn into weeks, and markets across the world continue their downward trend, there are still plenty of people who are finding a silver lining in this uncertain time. We’re connecting with our families, enjoying time to recharge, or learning a new hobby.
At 26 North Yachts, our brokers have been receiving lots of questions from prospective yacht buyers wondering if the current economic situation will cause yacht prices to fall. While we haven’t seen many of these situations yet, it’s probable that as the global economy continues to pause, prices on luxury market items such as yachts will fall. As a buyer, being prepared for the right deal is crucial. We’ve collected our top tips to ensure that you’re ready when the opportunity presents itself.
1.Be creative with terms. In the 80’ and larger luxury yacht segment, most deals are cash offers. Offering cash increases the value of the offer, but it is also common in this size range. Your broker can help you understand the options you have when making an offer.
2. If you intend to finance your yacht, get pre-approved. Interest rates are currently very low, and some previously cash buyers are seeing the upside to financing their purchases. If you intend to finance, make sure you get your loan pre-approved. Being pre-approved makes an offer stronger, and it allows you to act more quickly when the right boat comes onto the market.
3. Don’t get overwhelmed by the findings in the pre-purchase survey. This happens frequently, particularly with first time buyers. Listen to your team. You have your broker, surveyors and captain to help you understand what’s important. They will be able to help you navigate the maintenance needs of your yacht, and will know which items are deal-breakers and which are easily corrected.
4. Be specific about what you’re looking for but remain open to options. Make sure your broker understands exactly what you’re looking for in your yacht. Be specific with must-have features and your budget. Be open, though, to yachts that may present themselves that are not exact matches. Remember, the average length of yacht ownership is only three years, so an excellent buying opportunity may outweigh any other details.
5. Act quickly. If your broker brings you a deal, you can be sure there are several other brokers sharing that same deal with their clients. Time is money. You will have days to make a decision, not weeks. If the boat is still available weeks later, the deal was not that good.
If you have a boat to get rid of or trade first, remember, in a depressed market you will not get top dollar for your boat. However, you should expect to make it up on the buy side. This is no different than in a boon being able to sell for top dollar but typically paying a little more on the buy side. For more tips on how to get the most out of your current vessel, see our top five tips for buyers blog. If you’re a buyer without a trade, now is your opportunity.
Having a broker at your side to guide you through the purchasing experience will be crucial. A broker will know when a good deal becomes available to the market, and will be able to quickly pass along the information to their clients. Then, a broker will guide you through the process of making an enticing offer on the yacht, and help you understand the remainder of the buying process through the closing. Contact us today if you’re considering yacht ownership, and we will begin searching for the perfect deal for you.