Job done with Marine Auctions. (Part I)
by John Curnow on 2 Oct 2012
One of the age-old truths in this life is that something is only worth what somebody else is willing to pay for it. Now if you’re the type that can’t handle the truth, it is probably better for you to close this window right now and go read something else.
No matter whether it is a Catamaran, Cruiser, Sportsfisherman or Sportboat, Marine Auctions has them all. Marine Auctions
However, if being told the truth works for you and getting a real handle on what your vessel or pen is likely to return to you, then you’re probably the kind that is prepared to put your boat to market with Marine Auctions. Good on you for being honest with yourself, too. As a bonus, you might be pleasantly surprised to know that Marine Auctions achieves something in the order of 70% clearance rates. All of which means that if you are in the place where you want to move on, either to your next vessel or completely away from boats, as the prospect of paying next months marina fees and associated costs is just driving you nuts, then you really do need to look at the auction.
Now with their online auctions coming on stream, both in real time and time bombed (ala eBay), this is not only going to be a good thing, it will also probably help you out enormously as you’ll be before a bigger market. So there you have it. It will be job all done with Marine Auctions.
As with a lot of people in and around the marine business, Marine Auction’s CEO, Adrian Seiffert, is in, on or immediately adjacent to boats, just about every day of the year. Also like many of us, he does not get to use them that much for his own purposes, as he’s simply too busy. Case in point was when a client asked him to bring down a near new Capricorn 40 from Mooloolaba to Brisbane. He did it, but took along a driver with him, so that he could be on the laptop, going about the business of auctioning boats. Finding drivers also seems to be something Adrian gets asked to do a lot, as it turns out.
There are several strings in Adrian’s Marine Auctions bow these days, which is why there are around eight staffers. A former ocean racer, Adrian has been a registered valuer of plant and equipment for a long time and combining the two passions is what created Marine Auctions some eight years ago. Today, there is a specialist marine valuation division, buyer’s advocacy and a marine services side that handles assets like pens, both of which are also growing well you’ll be happy to know.
The ocean racer in him is smart enough to voice the adage ‘never say never’ when talking about going offshore again and you recognise a distinct glimmer in relation to doing another Hobart when you’re talking with Adrian, as well. That prudence and determination is also evident in not stopping with the development and enhancement of the Marine Auctions business, which is why they have just gone online with them.
‘It’s true that Australia is more in love with auctions per se than several other countries, but anything that is online is now global and you only have to look at rare coins, banknotes, fine art and cars to see that commodities do very well thank you, both in terms of at auctions and especially online. Indeed every record price for an item has been set at auction. In the United States just a couple of years ago, the Auction Industry as a whole was worth US$200B and the agriculture equipment side of that is phenomenal’, said Adrian.
Of course, not everyone is delighted with Marine Auctions. ‘Yes, the brokers do get upset with us, but we are moving boats that have been listed with them for a long time. We had an owner bring up a large Sportsfisherman from Sydney, which is a big, big market. It was a great boat with a good tuna tower fitted and naturally, it sold. Another client had a boat that was literally listed everywhere and we asked him to be realistic about his price, as I did not think we could get the price he wanted. He took $20,000 off his reserve and we ended up getting $20,000 more than what he had originally required. That does not happen all the time, but I sure wish it did’, Adrian commented.
So just where is the market in today’s terms then? Yet another seemingly appropriate adage is that there is not a boat afloat, which is not for sale. In current times however, it seems what some said about a characteristic of the late and great Steve Jobs is more than apt. There is now more of a reality distortion field around what an owner thinks a vessel is worth and what its really going to achieve are two different things. Adrian says, ‘Very much so. What it is worth and what someone will pay are different. Sometimes this is because people paid too much in the first place. I had a client who bought a vessel thinking he’d done well because he got 10% off the listed price. The problem was that the original asking price was something like 40% above the odds to start with. We're a certified practicing valuer and definitely keep our proverbial finger on pulse throughout the world and gather all the data we can through contacts, subscriptions to data services and the like.’
Continuing on, Adrian adds, ‘We auction 30 to 40 boats a month in Australia. We can tell you that a 2004 to 2008 model will be around 50% - 60% of new price and that over 10 years old it drops off a lot. However, it astounds me what people look at on our site and I often wonder. What we can confirm is that the traditional sports cruiser, such as a Mustang 3200, has been hit hard and it is due to over supply. Doing well are smaller Sportsfishermen like Boston Whalers, as too for good cruising catamarans, such as Fontaine Pajot and Perry. Big old racing yachts are a bit of problem and there are not many charters occurring for them up in the Whitsundays.’
‘We do reject boats, especially when the vendor has an unrealistic price expectation. Some may tell them what they want to hear, but we’ll tell them the real deal. What they don't want to hear, if you will. We don't have a lot of craft for sale at one time, just what is up for the next auction. So you may find it is usually just one of any particular brand or model. Buying a boat is easy, but paying ongoing costs is not so. With marina fees, another old adage has quite possibly increased and that is that you will require 20% of the purchase price annually to keep it going and this is mainly due to marina fees becoming dearer. There are a lot that do not move at all and we do often ask why someone is selling and a lot of the time they just say they do not use it. There are definitely advantages to the clubs or syndicates. If I was in the market, I think I'd look at that. A big issue for some buyers is obtaining finance. A senior person at one bank told me plainly - We will not lend on planes or boats!’
Yet it is not all negative. Prices for new craft are down, as the factories do all they can to get competitive and a high Australian dollar helps domestic customers. Adrian comments, ‘$500k – 600k gets you a lot of boat. 18 months ago that was what you would have paid $1 to 1.1M for. I think only 20% of those who buy used craft from overseas do better than what they could have achieved here. I see it all too often when a craft comes in and the motors are gone because it has sat over there for years. Might have been 'cheap' at the time, but what is that really. We perform a lot of valuations for Customs on behalf of the Tax Office and it is not just GST you have to think of, but also duty when it is a country that does not have a free trade agreement with Australia, for instance.’
The auction system certainly sets up a true market valuation and the only one where you can get in excess of your asking price, as the haggling is between the prospective buyers and not the one buyer and a vendor. ‘Our boats are sold As Is/Where Is. Some vendors and purchasers get surveys done. We encourage people to bring whomever to inspect in the three to four weeks leading up to an auction. Then again, some just show up on the day. Interestingly, people tend to put more due diligence into smaller craft than big ones. Go figure. I recall one instance where people arrived for a sea trial with a picnic basket and bottle of wine. We did a short circuit just outside the marina and that was that’, said Adrian.
So we have certainly just seen some home truths about selling and indeed buying a boat from Adrian Seiffert of Marine Auctions. In Part II we’ll learn about new ways to get the job done with Marine Marine Auctions website
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