Organizers of a new auction website say it will bring a much-needed component to selling high-end boats. BoathouseAuctions.com, which currently has five vessels for auction on the site, was designed to help brokers sell boats.
“You can buy just about anything on online auctions, but you can’t buy a boat,” says Jack Mahoney, co-founder of the website. “I’ve been a boater all my life and was surprised that nobody was doing this. There are one-off auctions every now and then, maybe for bankruptcies or U.S. marshal seizures, but nothing that is online.”
Mahoney, who started the website after a career in financial planning, saw an opportunity at the high end of the brokerage market.
“There are all sorts of online auction sites for luxury cars or $5 million homes and even construction equipment, but not boats,” he says. “On YachtWorld.com, the average time for selling a boat over 46 feet is a year or more, and for 80-foot-plus sailing vessels, it’s 867 days. The problem we identified with selling these boats, especially for motivated sellers, was time. We’re talking about a depreciating asset with high carrying costs.”
Mahoney and his partner, Peter Amos, decided to stay at the upper end of the brokerage market, focusing on name-brand yachts that might attract high-net-worth individuals. “We’re not taking boats with issues,” he says.
The partners also made the decision to use brokers, rather than trying to bypass them, in the sales process.
“We didn’t want to cut the broker out, but rather have them use our service to help clients sell their boats,” Mahoney says. “We want to build loyalty with the brokers, who will serve as seller’s and buyer’s agents. Having the sale online not only gives them another way to sell, but it could possibly drive up prices — the opposite of what often happens with most brokerage boats.”
The auction works like eBay, with a minimum reserve price, no fees to list the boats and full commissions for the brokers. The website collects a 5 percent fee based on the winning bid. Listing brokers can “preview” the boats on the website for as long as they want. Auctions last one week. Mahoney says the end-to-end process should take about six weeks.
“Unlike most brokerage deals, we do a survey on the front end, so buyers have transparency to make the purchase,” he says. “We’re providing this facility for those who are ready to sell their boat for whatever reason — death, divorce or maybe they just want the liquidity. The idea is for the sellers to get out of the boat quickly, without prolonged negotiations.”
The company has contacted brokers in the United States over the past 15 months. “The brokers get it,” Mahoney says. “We rolled out our service on Sept. 5 at the Seattle Boat Show, and there were also some of us at the Newport [Rhode Island] show.”
He says the website will go live in the next two weeks.
“It’s a great idea, and we’ll see where it goes,” says Peter Truslow, president of Bertram Yachts. “This could be a good option for dealers and manufacturers, for wholesale trade-ins, so you don’t have to sell the boat at a peak discount. I’m happy to see how our brokers like Richard Bertram Yachts can work with this news sales platform.”
BoathouseAuctions.com has a 1996 Herreshoff 93 sailing yacht, a 1980 Poole-Chaffee 100 and a 1930 Elco 50 on the site, with bidding to begin in November. As brokers and potential sellers see the auction site, Mahoney says, more boats will be listed.
The company has partnered with Concierge Auctions for access to more buyers. Chad Roffers, chairman of Concierge Auctions, says online auctions have “risen sharply” since 2012. “Owners of high-quality assets are looking for time-certain solutions, valuing liquidity as an asset versus the reality of a long and uncertain sale process,” Roffers says in a statement.
BoathouseAuctions.com will also hold private, invitation-only auctions for superyachts. “This approach holds a lot of appeal with top brokerages, as it allows selling brokers the ability to reach very specific potential buyers with an offer they otherwise would not be aware of,” Mahoney says.