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Old 06-16-2016, 04:12 PM   #1
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What to do with the current boat when it is time to buy a new, used boat

I'm starting this thread based on discussions that have evolved from the Reminder To Do It Now thread. We are considering selling our current Nordic Tug 32/34 to move up to something in the 40-50 foot range (probably closer to 40-45). We know our budget, we know our wants/needs, we've already narrowed down what we want, and have seen a few boats locally that seem to be worth looking at.

When we bought the NT, we already had a sailboat. However, becuase the sailboat wasn't worth a significant amount of money, we didn't have to sell it before purchasing the NT (we did have to pay double slip fees for a while, but that was the only issue). This worked to our advantage, becuase we were able to jump on our NT at a great price. However, in order to move up this time, we will need the equity out of our current boat.

For those who have been through this, how did you deal with it? I know we could probably trade it on a new build, but we would rather get something relatively new but that has also already taken the first major depreciation hit. Is it the simple fact that we will need to sell our boat first, then see what is on the market at that time, or are there otherways to go about this? We ask, in part, becuse we have a boat in mind that is priced very agressively and would love to make a move on it. I think the answer is sell first, but figured I would reach out for the collective wisdom of the group. We hate the idea of being without a boat between the time we sell and whenever we find what we want (our list of prefered boats is relativley short so finding what we want at any particular time would not be an easy task).
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Old 06-16-2016, 04:27 PM   #2
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We had a "between boat" time too. Glad we waited. Trying to keep up two boats with slip fees and all that is involved? No thinks.

You have a tough choice. You could try and work with the seller on a "hold time". Not likely they would agree in the current market. You would also have to price your boat very aggressively to sell in nothing flat. Also an unlikely scenario. You MAY be able to find people willing to trade, but I think that to be kinda rare. Still, you are going bigger and there are some looking to go smaller, so you never know. But for the exact boat you are already looking at? Probably not.

Is there still a lien on your current boat? Are you going to need a loan to get your new one? If so, I think it is best you just wait until yours sells and hope you can find a new boat after you sell. Sucks, but if you can't afford two payments or whatever the scenario that doesn't allow you to own two boats, that's the grim reality. In my book, it is too risky to lose both boats just out of impatience. That would suck worse.

TBH, if you HAVE to sell before you can buy, you need to get started yesterday. Get a broker and get it listed or do whatever marketing you need to do to get it done.
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Old 06-16-2016, 04:56 PM   #3
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Put an offer in with the contingency of first selling yours. There may be someone waiting for yours to hit the market. Bottom line is, you never know how motivated the other owner is. Certainly wouldn't close on the new one until you sell your current one.

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Old 06-16-2016, 05:10 PM   #4
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We did the two boat thing for a year plus before we sold our old boat. We own two slips so expenses other than insurance weren't too bad. After a while we got too far from home to come back to run the old one so we put it on the market for sale.


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Old 06-16-2016, 05:20 PM   #5
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Is there still a lien on your current boat? Are you going to need a loan to get your new one?
Yes, we have a lien, but we could pay it off today as it isn't much (only around 20% of the value and we have the cash available). We will also be taking a loan on the next boat (probably around 50% of purchase price or less). And that is the kicker. Putting aside the cost of maintaining two boats (slip fees, insurance and maintenance, which we can afford to pay but don't want to), we don't want to take out a larger loan on the next boat, just to then have to refinance a lower amount after selling our current boat. darn those pesky first world problems.
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Old 06-16-2016, 05:50 PM   #6
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We were in almost exactly the same situation. We however did have enough cash on hand to be able to purchase the new boat (financed about 60% of the total purchase cost on the new boat) before selling the existing one.

The downside, is that I now own two boats. Whether this was OK, or the-most-stupid-thing-ever-done will be determined by how fast the old boat sells.

You may find a broker that is willing to take your existing boat off your hands in order to sell you the next one. You also can talk to a broker in your area and see how fast NT34s are going right now. If you price it right, in the right market, in the right area.... it might be quick.

The safest move would be to put the boat on the market NOW. You it while you list it and hope for a quick sale. Maybe you will find a good boat to buy at the end of the season when sellers are more motivated.
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Old 06-16-2016, 06:16 PM   #7
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If it were my deal and I had an attractive NT 32-34, I'd speak to the selling Broker or owner to mention the trade. You never know when someone is willing or wanting to trade down. It may not be in the minds of either, so put it there. First decide on the price of your boat and the offer on the boat you want. What's to loose. Many people can't quite manage a larger boat....there's your market. If it doesn't work, the owner know you are serious about it...maybe another offer would be forthcoming. If it's a Broker, he may know someone looking for your boat. It's not like you've got some obscure, odd or weird boat built in who-knows-where. Be creative!
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Old 06-17-2016, 02:27 PM   #8
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The downside, is that I now own two boats. Whether this was OK, or the-most-stupid-thing-ever-done will be determined by how fast the old boat sells.

Yea...and that is the kicker now, isn't it? Managing risk. For me, I couldn't at all afford the upkeep of two should the current one not sell. Hell, I can barely afford one, but that isn't the case for everyone. TBH, I am a glass half-empty guy. All I could think about are the badthings that could happen. What if it takes YEARS to sell? What if Bess or I get sick? You know, crap like that.

Good luck though.
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Old 06-17-2016, 11:38 PM   #9
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If it were my deal and I had an attractive NT 32-34, I'd speak to the selling Broker or owner to mention the trade. You never know when someone is willing or wanting to trade down. It may not be in the minds of either, so put it there. First decide on the price of your boat and the offer on the boat you want. What's to loose. Many people can't quite manage a larger boat....there's your market. If it doesn't work, the owner know you are serious about it...maybe another offer would be forthcoming. If it's a Broker, he may know someone looking for your boat. It's not like you've got some obscure, odd or weird boat built in who-knows-where. Be creative!
I used a boat i owned as a partial payment towards my current boat. The po immediately used it as a trade in to buy a different (smaller)boat. The owners of the boat he bought hadnt had any offers, so they quickly agreed to the trade. They still have the boat i originally owned and use it about 3 times per year, even though they were never really in the market for another boat.
Bottom line is a nt32 is a good boat to use as a trade as they are pretty easy to sell and they are desireable to own as well. Any prospective seller you approach will know he can sell your tug anytime he wants to..
Good advice healhustler!
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Old 06-18-2016, 12:12 AM   #10
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We bought our new boat, then sold our old boat.

A boat priced right will sell quickly. It is only when owners overprice the boat for the market that they sit for sale until the owner drops his price down to a price that triggers an offer.
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Old 06-18-2016, 12:26 AM   #11
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An interesting dilemma to be sure and one we can relate to. When we bought our current boat we had not yet sold our last boat. That was not a happy circumstance and the lesson we learned is to sell first, then buy.

Now we face a new challenge. We would like to buy a bigger boat. Since we live aboard, how do you sell a boat you are living on? Our broker says we need to move off the boat, empty it out so it shows pristine, sell it and then buy a bigger boat. He said that very few buyers will look at a boat being lived on with the same vision as one that is showroom empty. Such problems we boaters have!

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Old 06-18-2016, 01:19 PM   #12
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Originally Posted by Carolena;
We hate the idea of being without a boat between the time we sell and whenever we find what we want (our list of prefered boats is relativley short so finding what we want at any particular time would not be an easy task).
That is emotion that could really bite you if not dismissed. In your OP you keep repeating "can't afford two boats."

Though there are critical details missing, I will fill in some blanks and assume the boat you are interested in is brokered, local and you have been aboard.

If so, I (me personally) would really dig into the broker and if he appears to be a good one, with a proven record of working hard for his clients, I would talk to him.

Put your situation to him and have him make it all happen. Two commissions are a big incentive. I would though, make it clear that if he gets my listing and the other boat sells first, I might withdraw the listing and step back for a bit.

If the boat is a FSBO, at some distance, maybe you have not had a real good look at it, or you can't shake the emotional part quoted above, all bets are off.
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Old 06-18-2016, 02:59 PM   #13
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Good advice Hawgwash.
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Old 06-20-2016, 11:58 PM   #14
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we don't want to take out a larger loan on the next boat, just to then have to refinance a lower amount after selling our current boat. darn those pesky first world problems.
Do boat loans typically include prepayment penalties?

If not, you could take the large loan out initially, then make a large prepayment against principal with the proceeds when your current boat sells, avoiding the refi costs.
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Old 06-21-2016, 01:16 PM   #15
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We bought our new boat, then sold our old boat.

A boat priced right will sell quickly. It is only when owners overprice the boat for the market that they sit for sale until the owner drops his price down to a price that triggers an offer.
Very true. When we list our current boat, we plan to price agressively. It helps that we purchased at a very good price compared to others on the market, even today, four years later.
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Old 06-21-2016, 01:27 PM   #16
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That is emotion that could really bite you if not dismissed. In your OP you keep repeating "can't afford two boats."

Though there are critical details missing, I will fill in some blanks and assume the boat you are interested in is brokered, local and you have been aboard.

If so, I (me personally) would really dig into the broker and if he appears to be a good one, with a proven record of working hard for his clients, I would talk to him.

Put your situation to him and have him make it all happen. Two commissions are a big incentive. I would though, make it clear that if he gets my listing and the other boat sells first, I might withdraw the listing and step back for a bit.
Good advice. As an initial point, it isn't so much that we can't afford two boats, but rather that we don't want to deal with the cost of two boats. We have been in touch with the broker for the boat we want to purchase. His brokerage is very well known and the discussion went well. That said, he was clear in his opinion that we should sell the current boat first. To that end, he would want us to pretty much empty the current boat and try not to use it much while it is on the market, and would want to have it moved closer to his office (which is quite a distance from where we currently keep it). He was also realistic about the fact that in many ways we are already half way through the season. I actually appreciated his attempt to point out all the pitfalls.

We've given this a lot of thought, and think we will sit tight for the rest of the season with our current boat. Come late winter we will make a decision as to whether we want to put it on the market next spring. I'm sure something else will be available when we are ready to make the purchase, or not in which case we will wait patiently for something to come along. This is going to be a very different experience from what we have dealt with when buying and selling our previous boats. We've never had so much equity tied up in a boat, and have never been in a situation where we didn't mind having two boats for a period of time (almost a year the last purchase). Boating has become such an important part of our life, it is difficult to see us as boatless, even for a few months during the summer season.

We want to thank everyone for all the great advice and shared experiences. It is nice to get different experiences, as well as confirmation of what we already believed to be true.

Lastly, for those who suggested seeing if the current owner of the boat we are looking at would be willing to trade, we asked and that isn't something they are willing to do. They have decided to get out of boating.
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Old 06-21-2016, 01:29 PM   #17
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Do boat loans typically include prepayment penalties?

If not, you could take the large loan out initially, then make a large prepayment against principal with the proceeds when your current boat sells, avoiding the refi costs.
Our loan does not have a prepayment penalty, and I wouldn't want a loan with such a restriction. The primary problem with what you proposed is that even though we would be able to pay down the principle, we would be stuck with a much larger payment than what we would want long term. We tend to pay extra every month, but enjoy having the flexibility of paying the regular payment if we want. We've taken that approach with other loans, including our home mortgage.
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