The Internet and the Yacht Sales: Why Boaters Prefer Brokers
The Washington Post published on March 17, 2017 an article titled “The Real Estate Industry has Something the Internet can’t offer: The Human Element”.
The relevance of the reporting for the boat sales business was immediately apparent.
The reporter, Todd C. Frankel, writes that “while the Internet has pummeled the middleman in many industries – decimating travel agents, stomping stock-trading fees, cracking open the heavily regulated taxi industry – the average commission paid to real estate agents has gone up slightly since 2005…”. In the eyes of homebuyers and sellers, brokers are still very much worth the price of commission.
According to Frankel’s research, Internet groups have, as predicted, moved in and attempted to take over the industry. Realtors feared and braced for a hard transition into automation and self-selling. However, people continue to rely on agents, real people, when buying and selling a home.
Many economists are stumped as to why real estate hasn’t been swallowed up by the Internet like so many other businesses. In 2006 Zillow launched with the intent of revolutionizing the way people buy homes. Redfin and a few other companies soon followed. These companies have not taken over and have not driven down commissions in total. Instead some have been forced to refocus on other aspects of home buying, including adopting more traditional home sale methods.
Steve Murray, president of consulting firm Real Trends and a source for The Washington Post article, says changes and advances are possible and possibly inevitable. However, it’ll be the agents themselves making the changes and advancing the industry.
The enduring value of real estate agents parallels another market; the used yacht sales business. Like realtors, boat brokers have withstood rising tides of automation and internet takeovers.
The yacht sales business follows real estate closely. They both suffered the same dip in the 2008 recession and since then they’ve ridden the same steady rise. A September 2016 market report by Global Industry Analysts, Inc. predicts that global sales of luxury boats will continue upward in the coming years. In the U.S., market experts are seeing annual “small and steady gains”. Specifically in the Pacific Northwest sales are more consistently climbing. As the economy strengthens, more people are embracing boating. The yacht sales business seems like the perfect place for automation companies to set up camp. So why aren’t people ditching brokers for apps?
Like in real estate, internet companies promising international online exposure at smaller commissions have tried to move into the boat business. But boaters, like homeowners have built relationships with their brokers. And new boaters hoping for personal and experienced local guidance have been resistant to online models.
Why the resistance? Many buyers and sellers are happy to use the Internet for collecting information, reviews, market stats, and boat pictures and specs. And in fact we find that almost all buyers do some of their research on the internet before making a move toward a purchase. But personal expertise is still highly regarded and yacht brokers remain, unlike so many other dwindling professions, a valuable part of the total purchase process.
Those in the boat business have a few theories:
Boats are a Big Deal
Like with real estate, buying or selling a yacht is a big decision. Expensive or not, a boat is often a very personal thing, and people don’t make personal decisions lightly. Support is needed and a broker can offer helpful expertise, a clear view of the big picture, a voice of reason, someone to bounce ideas, and someone to celebrate with. So far, the Internet hasn’t been able to recreate the support that so many buyers and sellers want.
Adrift in a Sea of Jargon
The purchase of a boat means negotiations, surveys, repairs, and so much paperwork. Many sellers are overwhelmed by the time and effort that goes into selling their boat, even after finding a buyer. Changing laws and regulations can blindside even the most experienced boaters. The devil is in the details and when it comes to boats there are a lot of details owners can’t afford to miss. People need to know they’re getting the best deal possible. A reliable broker who’s made boating his or her business guarantees that.
Age of Information
Today, people are used to having vast amounts of information at their fingertips. Buyers demand to know everything about what they’re buying before they buy. This is especially true for larger purchases like a house or a yacht. It’s not unreasonable for a serious buyer (or even a mildly interested looker) to demand a full history, photos, video, full specs, and a personal tour of a boat for sale. For a seller, the time and effort that goes into gathering and sharing all that information can feel crushing. This makes selling a boat a full-time job, and not many sellers want to or can afford the time to do all of this work.
Internet Makes a Better Broker
Rather than replacing yacht brokers, the Internet provides tools and information that has made brokers better at helping buyers and sellers. Brokers now have access to market reports and boat histories. Connecting and keeping buyers and sellers informed is easier and faster. Brokers can respond to more inquiries and display boats to remote buyers with 360 virtual tours. The incredible amount of information and new technologies may overwhelm a boater selling the boat on their own or a buyer going through an ocean of listings. But professional boat brokers know how to streamline information and use the newest available features to make boat sales easier.
It’s Supposed to be Fun
Owning and operating a boat is inherently complex, multilayered, and challenging – which is largely why it is interesting. A good broker will help to navigate the complexity of owning and enjoying a boat with knowledge from their own experiences.
Consumers consume online and life-changing purchases like your next home or yacht are no exception. For a seller, the Internet can increase exposure and cast a wider net of potential buyers. For buyers, the Internet provides access to more information and accessibility to boats formerly out of reach. However, like the real estate business, people still want a handshake and a professional, reliable expert. Local knowledge and experience are resources that can’t be duplicated. Technology will continue to evolve but when it comes to something as complex and personal as a boat, a good broker continues to be in high demand.