What is a reasonable offer?

[seaK]

Just curious. New world for us. We are going to look at a boat we are very interested in. Have done our homework and know it is priced high. We know owners are moving and wish to sell boat. Not interested in taking advantage of anyone's situation or even being perceived as such. For example if a boat is priced at $95K is it offensive to offer $80?

 

[ksanders]

A reasonable offer is one where you do not pay too much for the boat if its accepted, and is not so low as to not open up negotiations with the seller.

 

[GFC]

SeaK, if you've done your homework you should know what the boat is worth and how much too high it's priced.

Knowing the owners are moving is something you may or may not be able to use to your advantage, possibly depending on whether the boat is listed with a selling broker or not. If it's with a broker they have to pay him and may not be willing to negotiate too far down from their $95k

What I would suggest is that you make your money offer and make your offer contingent on a successful survey (hull and also equipment) and that the price be lowered by the estimated cost of fixing any major issues with the boat. And that survey would also include a sea trial.

The wrong boat, at the best price in the world, is still the wrong boat. Getting it cheaper doesn't necessarily make it right for your needs.

 

[Grae]

Today we were gifted a number of old "Passagemaker" magazines. We were interested to note that in 2007 sellers were asking close to the same money for 2001/2 models (of trawlers we are interested in) as is being asked for the same vintage in 2015.
Does this mean that these models are a good investment or the vendors are pitching their asking price well above what they will eventually (if seriously on the market) obtain? It seems to me a much lower offer, in these cases, would be in order?
Inflation over that period would be quite low.

 

[THD]

Grae-as has been said here many, many times, the words "investment" and "boat" should never be used in the same sentence. I am somewhat surprised at the situation you found. I would have expected a lower price now than in 2007. As to whether the current prices are valid, I would do some heavy research checking out comparables. You never know how an offer may be perceived until you make it. Offer what the boat is worth to you.

 

[bligh]

Today we were gifted a number of old "Passagemaker" magazines. We were interested to note that in 2007 sellers were asking close to the same money for 2001/2 models (of trawlers we are interested in) as is being asked for the same vintage in 2015.
Does this mean that these models are a good investment or the vendors are pitching their asking price well above what they will eventually (if seriously on the market) obtain? It seems to me a much lower offer, in these cases, would be in order?
Inflation over that period would be quite low.

In 2007 people were getting rid of boats like bad cases of lice. I wouldnt us 2007 prices for comparables...
I would use selling prices of boats in the last year or two of the same model boat as comparables. And even then , unless you saw the boat itself, there are huge differences in price from one boat to another since equipment and maintenance can add up to a huge amount of money. For example , one boat you look at may have a $20000 tender on it and another one you look at may have a $1000 tender on it. And that is just one piece of equipment.

 

[FF]

The best way to low ball a boat is to give 10% of your offer price to the Broker in a check.

Now the broker will work for himself , against the seller who is paying his fee to get the owner to accept the deal.

The broker does not give a damn about the sellers price, only about closing the sale quickly.

10% of $200,000 vs 10% of $150,000 for a sale NOW! rather than in a year is no problem for the broker.

He gives up only $5,000 while the seller gives up $50,000

 

[ljk]

IF the boat is priced correctly, most sellers would consider anything within 10% a reasonable offer, in my experience. I have bought/sold several boats through brokers.

 

[kolive]

We were on the same situation when we made an offer on our Grand Banks. Loved the boat and did not want to do a lowball offer because of the owners situation. Several people told us to separate the personal feelings of loving the boat from the financial part of the deal and basically treat it as a financial transaction only. Make sure your your offer fits your budget requirements first. A survey is always part of our process, this was our third boat purchase. Contingencies upon survey are common practices. Removing the feelings of "loving the boat" from the deal allows you to focus on the financial piece best suited for you. If you are going through a broker, ask them to show you reports of what previous boats of this brand and vintage sold for in the past 24 months. I was very surprised how much difference there was between asking and selling prices. Negotiations are part of the process, do what is best for your situation.

 

[Biggusstickus]

My first offer on a boat was 77% of asking price (only because it was a nice round number) I ended up getting the boat for about 81% of asking price. I don't think an offer of 15k below asking price on a 95k boat is unfair at all, I would go less first. Must be subject to survey/sea trial of course!

 

[sunchaser]

Fair offer requires a lot of thought.

"Name brand" vessels that are well maintained both mechanically and cosmetically will sell quickly and for a better price. Some "name brands" have a deserved bad reputation and take longer to sell unless priced lower. One of a kind but good yard built vessels may do ok, but if from a backyard take a while to sell. Poorly maintained vessels whether branded or not are all too often the case as lack of funds force the sale.

So, given this hodgepodge of types of vessels of unknown owner care, buying a boat for the inexperienced is tricky. It is tough enough for the experienced. A walk through the marinas tells the tale. Boats sit unused, rotting away as the owner has lost interest, health problems cropped up or boat care funds ran dry.

A fair offer really comes down to quite a few variables, with buyer knowledge and experience a key component. Knowing as much about the boat being considered as the seller knows is the goal and conundrum.

If you are considering brand X and you ask an owner of a similar vessel for advice, if all you get is how great the boat is ask somebody else. The best of boats have negatives and many of them. Add in poor maintenance and we're back to buyer knowledge and experience.

So a fair offer price is more dependent upon the buyer's boating background, knowing the markets, having the upfront funds and listing all the known go forward fix up costs to make the vessel new owner happy.

Of course if the vessel is a fixer upper and the potential buyer lacks the time or skills to do the work, don't buy anything that floats.

 

[Delta_JimS]

I guess I missed something along the way.
Comparing "asking" price of similar models is no problem, but where are you coming up with the "selling" price? Is this from the Buyers Broker sales database? Where do you get those final prices?

I would have to agree that asking price and sale are not necessarily that close. In our case, we got the boat for less than 60% of asking price.

Yes, probably a rather rare exception. I suspect the condition, sellers motivation and the ongoing Recession all contributed to the sale price.
Also seemed to frustrate the crap out of Boland. All brought much joy to my heart.

 

[kolive]

Delta JimS, yes I was referring to a Brokers accessible data base for actual selling price. I suggested he ask the broker he might be going through to view that to help him decide.

 

[sunchaser]

Delta JimS, yes I was referring to a Brokers accessible data base for actual selling price. I suggested he ask the broker he might be going through to view that to help him decide.

I know of brokers that have fed an inflated selling price into the data base. There is no governing body as exists in the housing market.

 

[kolive]

Sunchaser,

There does not appear to be an end to the number of unscrupulous people out there lacking and form of integrity. Sad, but unfortunately we have to be on the watch for them.

 

[Wxx3]

The best way to low ball a boat is to give 10% of your offer price to the Broker in a check.

Now the broker will work for himself , against the seller who is paying his fee to get the owner to accept the deal.

The broker does not give a damn about the sellers price, only about closing the sale quickly.

10% of $200,000 vs 10% of $150,000 for a sale NOW! rather than in a year is no problem for the broker.

He gives up only $5,000 while the seller gives up $50,000

Yep. Also a good broker will try to help you as much as the seller. They'll give you advice, bc as ff states above, it's in their interest to get a deal done.

 

[Delta_JimS]

Sunchaser,

Yes, I ran into that in Santa Cruz. I took one look at his "comps" and tossed it back at him. I was insulted that he would play me for such a fool and told him what he could do with it.

And, the boat was a piece of crap.
Pretty much a waste of a whole day except SC was quite nice that day...

 

[Delta_JimS]

I hate to seem too biased and cynical, but in my experience, honest boat sales (persons?) are Very few and Very far between.

 

[yachtbrokerguy]

And then brokers say "Buyers are liars and sellers are too." There are good and bad buyers, sellers, and brokers like everything else in the world.

What is a reasonable offer is the question from the OP. Just ask the broker if their have been previous offers and what he feels the owner will consider. I have had many offers so low it turned the seller off and they did not want to negotiate, other sellers are glad to get an offer, even an unreasonable one.

If you are dealing directly with the owner just talk it over with them.

 

[BandB]

I hate to seem too biased and cynical, but in my experience, honest boat sales (persons?) are Very few and Very far between.

You know...I blame two people for that. The owners of the brokerages or dealers and the purchasers. We all need to do a better job of encouraging and rewarding honesty.

I compare this a bit to college coaches. We say we want them to build a rule abiding program where students get an education, but then they can do everything in that regard perfectly, then get fired for not making the tournament.

Owners of dealerships say they want honesty and ethical salesmen, but they do nothing to encourage it. Just like the basketball player who doesn't go to class but scores 20 points a game, the salesman who makes sales can get by with anything. As an owner you're responsible for it all.

Now, as the customer, what do we do? Would you ever go to the owner or manager and say, I want to deal with a different salesman and I must be assured the first one gets no part of the commission. Otherwise I'm going somewhere else. Or do you walk because you don't like the way things are done? With cars it's easy as there are many others in town selling the same. I once purchased a very expensive bedroom suite, like nothing I'd ever purchased, from a store in Atlanta because the one in North Carolina made promises they wouldn't keep and lied to me.

All I can say is get recommendations from people you trust and don't go in blindly. Find a respected broker. On a new boat it may only be available one place although I know someone would went to VA to buy a boat instead of from the Florida dealer. I did remove a specific brand from my consideration because there is no way I could trust the builder. We bought cars in Tampa instead of Fort Lauderdale because of the behavior and actions at the Fort Lauderdale dealerships. Interestingly enough within a year they had both lost the franchises for those brands. From what I heard the manufacturer did step up to the plate on how they wanted to be represented. However, these were low volume cars. I don't expect to see Chevrolet police their dealers.

If I was a boat sales person or a broker, I'd be terribly offended by the behavior of many of my peers. Now, there are some extremely honest and ethical brokers. I know more than one who left a larger brokerage over the lack of ethics there.

And next time you aren't comfortable with a sales person, then find another one.

 

[ljk]

I just bought a 34 Mainship Pilot in Punta Gorda FL last week. I recommend BOTH the buying (my) broker and the selling broker highly. The buying broker was Barb Hansen of SW Florida Yachts. The selling broker was Greg Postel of PierOne Yacht sales.

If anyone wants details, they can PM me.

 

[No Mast]

if boating is new to you perhaps getting your own broker to represent only your interests would keep you out of trouble.

What is a fair offer depends on the market as well as the condition of the boat.

 

[sunchaser]

I have had many offers so low it turned the seller off and they did not want to negotiate. QUOTE]

Had this happen to us 3 years ago when negotiating on a Nordhavn. I was the potential buyer. Based upon a lot of research and input we made a firm non negotiable offer at 80%. The seller was so offended he refused to talk any further with us. Which was nuts on his part as we knew better than him what the market was doing. He refused to even listen to his very smart and experienced broker to accept the offer.

Eight months later back he comes to "accept" our offer which was not timely for us as we had already found more rational places to put the cash. He ended up selling for 70% of original listing price.

If there is a moral to the story - when selling, list at the right price and listen to your broker.

 

[cafesport]

If it's a 9, offer 90 percent, if it's a 7, offer 70 percent. If it's an eleven, and they do exist btw, just hit the offer. Also it's best done with a buyers broker and money in escrow ready to move when that boat finds you which it will.


Via iPhone.

 

[sunchaser]

If it's a 9, offer 90 percent, if it's a 7, offer 70 percent. If it's an eleven, and they do exist btw, just hit the offer. Also it's best done with a buyers broker and money in escrow ready to move when that boat finds you which it will.


Via iPhone.

Doesn't work if the vessel if badly overpriced to begin with.

 

[Delta_JimS]

seaK,

I have to totally agree with No Mast. If you are new to boats and their systems and buying from a broker, you should have your own buyer's broker.
Ask a Lot of questions and re-ask over and over like an idiot to compare the answers - they will often vary - sometimes a Lot.

If you are buying privately, like off Craig's list, you are largely on your own, but try to get a seasoned yachtsman to help you. Most boaters are quite willing to help, and generally really resent sellers trying to take advantage of Newbies.

You can also ask question of your broker, just not disclose the boat you are looking at. They have no control over your private dealings, but will try and also act annoyed and hurt.


BandB, I think we are primarily talking about older used Trawlers here, not new boats. I cannot see where much if any choice of salesman or broker applies.

In my case and opinion, the salesman and brokerage in general were Jerks. I tried to get a different sales guy when not seeming to get support, but I had a Buyer's broker and they were dealing broker to broker.
As stated elsewhere, the more brokers involved, the more difficult the deal - seems to be an exponential function.

If the old trawler that one really wants is being sold by a hard-ass broker, what possible choice do you have except to deal with them, or wait until the seller gets tried of them and goes to another broker.

In my case, seemed both brokers did everything (short of calling us each axe murders) to keep buyer and seller apart and unable to talk with each other.

It also seemed to me, in our case, that the seller (and/or broker) were trying to stall the deal as long as possible as the seller had to continually pour boat bucks into the boat after survey and might well have wanted us to go away so the could put the boat back on the market with all the (bonus) repairs.
(just the posters opinion)

 

[cafesport]

Doesn't work if the vessel if badly overpriced to begin with.

No nothing does. But those boats tend to languish and then phone stops ringing. Then another broker gets a shot with the listing and hopefully at a more reasonable price.


Via iPhone.

 

[TDunn]

I have based my offers on...

When I buy a boat I spend quite a lot of time shopping. When I find a boat I want, I research that model to get a feel for asking prices in the area where I am looking. I also look at historical data to get a feel for trends in asking prices. I also look at how long the boat has been for sale. Then I do my own extremely exhaustive survey. Based on the result of that survey I decide if I am going to make an offer and then decide on an offer price, which is generally 75% or less of the asking price. When I have made an offer, I make sure it is conditional on survey and I also make sure the broker lets the buyer know it is not conditional on financing.

 

[No Mast]

When I buy a boat I spend quite a lot of time shopping. When I find a boat I want, I research that model to get a feel for asking prices in the area where I am looking. I also look at historical data to get a feel for trends in asking prices. I also look at how long the boat has been for sale. Then I do my own extremely exhaustive survey. Based on the result of that survey I decide if I am going to make an offer and then decide on an offer price, which is generally 75% or less of the asking price. When I have made an offer, I make sure it is conditional on survey and I also make sure the broker lets the buyer know it is not conditional on financing.

yes, and I entirely agree. the OP stated boating was a new world to them. They would not know how to accomplish this in a meaningful way. Which is why I suggested perhaps they find a broker to represent them and help them along.

 

[CPseudonym]

So much good advice here but have to admit, I hate the premise of this thread. Apologies to the OP.

There is no percentage formula for determining how much below asking price will not offend a seller. My dad passed away a few years ago and mom needed to sell their house of 25 years as it was too much to care for. The house was on land in a desirable location and in fair shape.

First agent came in and blew smoke up her rear end and promised to get it sold for a number well over $100K over reasonable. 6 months, 1 offer for fair market value, no sale. Agent 2 came along and managed to talk her down to list it for $80k over market, couple offers for fair market value led to no sale. She was determined to get "her" price so the house sat.

Fast foreword a couple of years and 2 disastrous fails of renters. Spent $70K repairing damage done, re-list with agent 3 for fair market value and it sells in 2 weeks for full price cash, 15 day escrow. She's complained bitterly that the price was too low due to the quick sale and tried to counter for $30K over list price.

Moral of the story, make a fair and reasonable offer for you that you are comfortable with and put the ball in their court. If it "offends" them so what? Walk away and find a better deal.

FTR, I payed full asking price for my boat and recently received an unsolicited offer for significantly more than we payed.