A Historic, Competitive Yacht Market

Purchase demand for yachts is at its highest level in Worth Avenue Yachts 10-year history, as pandemic-fatigued Owners take to the water to cruise with the people that matter to them most. On-trend with real estate, the few yachts that are on the market are receiving multiple offers. A recent example of this competitive yachting frenzy is the sale of the custom catamaran, built for the America’s Cup, GIZMO.

MARKETING DURING THE PANDEMIC

GIZMO is a unique boat. She was designed for adventure and entertainment as one of 6 limited edition yachts for the 34th America’s Cup in San Francisco. The listing broker, Diego Gomez of Worth Avenue Yachts was passionate about the marketing of GIZMO from the beginning, “The amazing thing is we actually had 5 offers over a 2-week period on this boat after it being on the market for 11 months! In the end, we had two clients who saw the vision for this incredibly unique boat, designed as the ultimate entertaining platform, and they both had to have the boat. There were only 6 of these boats built, and there’s really nothing else like them on the market.” An incredible journey with a grand finale closing.

Unprecedented demand

The demand for yachts since the beginning of the pandemic has been unexpected. As families are looking for adventure in a safe environment, sales of large and small vessels have skyrocketed. “I think GIZMO is an interesting representation of the market this past 18 months. We went to market in the middle of the COVID pandemic. During the first year of COVID, it seemed the market was craving one of two types of boats, either small, low-cost day boats or larger powerboats that could accommodate a modern family and allow them to be socially distant. GIZMO was neither: it was bigger, more expensive, and more difficult to find slips for than the day boats, but sparse on accommodation.” This posed an interesting dilemma for promoting this unique yacht and others like it. Worth Avenue Yachts takes a one-on-one approach to marketing each vessel based on the needs of each individual yacht. “As the pandemic wore on, and things began to open, vaccines arrived, and people started traveling and getting together more, the desire to be together, entertain, and socialize became the preference, and that is where GIZMO shines. It’s like a light got switched, the number of leads, number of inquiries, and ultimately a flood of offers came, and we ended up with a fantastic result for both buyer and seller”, stated Gomez.

HANDLING MULTIPLE OFFERS

Ultimately, GIZMO ended up in a bidding war. “Handling multiple offers at once is a delicate balance, especially with such a unique boat that has been on the market for a while. We had a combination of 4 offers that escalated throughout the negotiation, and one that came in after we were already in contract. They were a combination of 3 in-house (two of which were my clients, one was Harold Kleiderman’s) and 2 co-op buyers, and it was crucial for me to maintain the highest ethical standards and ensure that everyone’s interests were managed professionally.” Harold Kleiderman joined Worth Avenue Yachts in 2021 and is stationed in the San Diego office. Gomez continues, “I’m proud to say that although neither of my personal buyer clients ended up with the boat, they are both very happy to be continuing their boat search with me. The hardest moment however was when the final two buyers both expressed that they ‘HAD to have the boat’. I’ve never had two buyers who were perfect for a boat at the exact same time, and truthfully only one boat like it to sell them. The key to the multiple offer sale was the fact that despite the significant activity on the boat, I never stopped showing it. I’ve always believed momentum generates momentum. We ended up with the best possible offer for the seller and couldn’t be more pleased with how it worked out.”

FLEXIBILITY AND PROFESSIONALISM

In the end, the custom catamaran sold over asking price in a unique closing. All offers were to be submitted on a given date, at a specified time and the seller chose the final offer. “While over-asking bids are generally rare in yacht sales, it seems to be happening more in the current market with such limited inventory. I’ve had the chance to buy real estate in very competitive markets, and that’s probably the closest comparison to what we’re seeing today. With pocket listing inventory selling before hitting the MLS, boats going into contract within a day or two of going on the market, multiple offers, over-asking sales, and buyers waiving contingencies, it is most definitely still a seller’s market, and buyer’s need a good strategy and intimate relationship with their broker to really compete. In this deal, we received multiple offers on the same day, and the seller countered all offers with request for their best and final offer. When crafting a best and final offer, a buyer needs to consider three factors, price, time, and risk to make their offer most competitive. There are multiple tools you can use, for example, escalation clauses, weaving contingencies together, increasing deposits or making them non-refundable, and even potentially waiving contingencies,” states Gomez.

TEAM WORK

After 11 months on the market the unique, custom listing was sold as an in-house deal. Diego Gomez represented the seller and Harold Kleiderman represented the buyer. Gomez states, “After having had the boat on the market for quite a long time, throughout the COVID pandemic, and dozens of showings, it was very special to finally find the two people who had the vision and passion for this boat. It’s a unique boat, and not designed for the mass market, so there was a lot of pushbacks throughout the listing about its layout, accommodation, etc. To finally find the right buyer was very rewarding, and so fun to feel that passion.”

QUICK, EFFECTIVE SALES

While not all listings end up in a bidding war, it is no secret that the demand for yachts, similar to the real estate market, is higher than we have ever seen it. Worth Avenue Yachts team can create a custom proposal for you or go over the options of placing your vessel in an upcoming boat show for a quick sale. Let Worth Avenue Yachts develop a strategic plan for you. Contact us today at Inquiries@WorthAvenueYachts.com.

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