Someone made an offer for Don Quixote recently. The offer was nearly 25% below our asking price. What does this tell you?
First, it is clear that our beautiful Don Quixote is like 30% of the American housing market; Our boat is under water. Not literally, thank you Neptune, but economically. We can sell the boat for less than the outstanding balance on her ridiculously high mortgage. I don’t mean to imply that the boat market was anything like the bubble of the housing market. The problem relates more to the fact that giving the banks one trillion dollars to fix the financial markets did nothing for the American housing market… and more to the point it did nothing for the mortgage markets. The banks are just sitting on all that cash. They are certainly not going to lend any of it to someone who wants to buy a boat in Mexico.
The second message is that we must not really want to sell the boat, because all we did on hearing the offer was snort. We didn’t even bother to counter. If we were serious about selling Don Quixote, we would have come back with something halfway between the ask and the offer. Yet, DrC and I didn’t even talk about it. I read him the email over coffee Saturday morning, he shrugged, I emailed back to the broker a “no thanks.” I believe the broker was completely put out when further queries produced not even a hint of a whiff of a sniff of a counter on our part.
We’re not stupid enough to believe any longer that Don Quixote is worth our asking price. A lesson learned long ago when we were in the market to purchase a practice is that anything – business, boat, home, or bag of chips – is worth precisely what people are willing to pay for it. You can believe your business is worth a half million, but if the only offer you have on the table is for 200K, then your practice is worth 200K. No amount of wishful thinking, protests, or detailed accounting analytics can change this basic, fundamental economic principle. So while Don Quixote is worth a good chunk more than that low ball offer, she is nevertheless not worth our ask. This is actually a truism of almost any ask, because you always build into your asking price a bit of room for negotation. Nevertheless, we can only come to the depressing conclusion that the bottom is out of the boat market, and our beautiful condomaran is going to be a huge net loss when we finally go to sell her.
A third conclusion that inevitably falls out of this experience is that our hand is not being forced regarding our sailing return to New Zealand. If we really didn’t want to do this, here’s the perfect out. We sell the boat, clear the mortgage with a bit of extra cash, and then we are free to do whatever we want. We could return to New Zealand, move to Australia, buy backpacks and shelp around Europe, or follow in the tire treads of my hero Nancy and her family.
So now we have to admit to our family and our friends that our reluctant acquiesence to economic inevitability requiring a trek across the Pacific is not reluctant at all. We are not doing this because we have no choice, we are going to Puddle Jump because we want to go.
Puddle Jumping is absolutely welcome-to-the-next-level in the cruising game. Granted, the Coconut Milk Run, as it is known, is one of the easiest and most boring ocean crossings on the entire globe. On the other hand, it’s still over three weeks at sea striking out for a speck of an island in the middle of nowhere. And no one will question the high challenge factor of the Tonga to New Zealand leg across the east end of the Tasmin Sea. That bit of ocean has eaten a truly depressing number of boats. We can’t go about this half-assed.
So now I start reinvigatoring my cruising persona, this blog, my web site, and the boat. This kicks off the first of the “Preparing for the Crossing” posts. There is no backing out now. We just told the world, “Don’t buy my boat.” Forward is the only direction left to us.
First, it is clear that our beautiful Don Quixote is like 30% of the American housing market; Our boat is under water. Not literally, thank you Neptune, but economically. We can sell the boat for less than the outstanding balance on her ridiculously high mortgage. I don’t mean to imply that the boat market was anything like the bubble of the housing market. The problem relates more to the fact that giving the banks one trillion dollars to fix the financial markets did nothing for the American housing market… and more to the point it did nothing for the mortgage markets. The banks are just sitting on all that cash. They are certainly not going to lend any of it to someone who wants to buy a boat in Mexico.
The second message is that we must not really want to sell the boat, because all we did on hearing the offer was snort. We didn’t even bother to counter. If we were serious about selling Don Quixote, we would have come back with something halfway between the ask and the offer. Yet, DrC and I didn’t even talk about it. I read him the email over coffee Saturday morning, he shrugged, I emailed back to the broker a “no thanks.” I believe the broker was completely put out when further queries produced not even a hint of a whiff of a sniff of a counter on our part.
We’re not stupid enough to believe any longer that Don Quixote is worth our asking price. A lesson learned long ago when we were in the market to purchase a practice is that anything – business, boat, home, or bag of chips – is worth precisely what people are willing to pay for it. You can believe your business is worth a half million, but if the only offer you have on the table is for 200K, then your practice is worth 200K. No amount of wishful thinking, protests, or detailed accounting analytics can change this basic, fundamental economic principle. So while Don Quixote is worth a good chunk more than that low ball offer, she is nevertheless not worth our ask. This is actually a truism of almost any ask, because you always build into your asking price a bit of room for negotation. Nevertheless, we can only come to the depressing conclusion that the bottom is out of the boat market, and our beautiful condomaran is going to be a huge net loss when we finally go to sell her.
A third conclusion that inevitably falls out of this experience is that our hand is not being forced regarding our sailing return to New Zealand. If we really didn’t want to do this, here’s the perfect out. We sell the boat, clear the mortgage with a bit of extra cash, and then we are free to do whatever we want. We could return to New Zealand, move to Australia, buy backpacks and shelp around Europe, or follow in the tire treads of my hero Nancy and her family.
So now we have to admit to our family and our friends that our reluctant acquiesence to economic inevitability requiring a trek across the Pacific is not reluctant at all. We are not doing this because we have no choice, we are going to Puddle Jump because we want to go.
Puddle Jumping is absolutely welcome-to-the-next-level in the cruising game. Granted, the Coconut Milk Run, as it is known, is one of the easiest and most boring ocean crossings on the entire globe. On the other hand, it’s still over three weeks at sea striking out for a speck of an island in the middle of nowhere. And no one will question the high challenge factor of the Tonga to New Zealand leg across the east end of the Tasmin Sea. That bit of ocean has eaten a truly depressing number of boats. We can’t go about this half-assed.
So now I start reinvigatoring my cruising persona, this blog, my web site, and the boat. This kicks off the first of the “Preparing for the Crossing” posts. There is no backing out now. We just told the world, “Don’t buy my boat.” Forward is the only direction left to us.