What's a fair offer?

[Eastern Shore Bill]

When*we close in on the purchase of a boat that looks like a good prospect, may I have some advice on what to offer versus asking price?
For the discussion, can we assume no terrible surprises during the survey, just a good sound boat with a reasonable seller and reasonable buyer? (I'm probably dreaming on that one).
We wouldn't want to insult a seller with a an offer so low it would poison the negotiation, but we can't afford to leave money on the table, either.
On a trawler in the $200K range, what percentage can we expect a seller would be willing to deduct from the asking price?
As always, thanks for the great advice.
Bill

 

[Phil Fill]

I would not even be concerned what the asking price is.

 

[Marin]

Three factors I can think of are 1) how does the asking price stack up against the asking prices of the make and model of boat in general, 2) your offer might want to reflect the cost of making any necessary repairs, equipment upgrades, and obvious maintenance tasks that have been neglected, and 3) how is the current boat-buying market and the seller's need to sell affecting his/her willingness to reduce the price?

To determine (1) you need to peruse boat sales publications and internet sites. To determine (2), unless you have a lot of knowledge about the type of boat you are interested in and have experience with the different systems and structure of a boat and can accurately judge their condition, you need a surveyor. Usually two surveyors, one for the hull, structures, and systems and one for the engine(s).

(3) is a hard thing to determine since you probably won't know what sort of pressures are on the seller to sell. So it's a judgment call based on what you observe or the seller says. But you can always offer a few thousand less and see what happens. If the seller balks at this and you really want the boat, assuming (1) and (2) are accounted for, you can always come back with a higher offer.

 

[skipperdude]

Low ball it.
You might find a distressed seller. Who cares if you insult the seller. Just move on. You will never see the seller again. It's not like your getting married. The saying goes the first offer is usually the best offer. Lots of boats out there.

SD

 

[Fotoman]

I would agree with Skipperdude. you should't worry about how the seller will feel. Your goal is to get the best possible deal. If the seller doesn't think your offer is fair all he has to do is refuse it. End of story. The survey is the key element here. Once you have a deposit on the boat (the price you agree at that point doesn't really matter) you hire a surveyor and you renegociate the price based on his report (assuming he found some important issues).

When I bought my boat last month I got the seller to reduce his price by 35% after the survey.

 

[timjet]

I'm in the market for a boat as well and one item that I will consider before making an offer on a boat is the cost to survey it. This may sound like putting the horse before the cart, but considering it can cost upwards of $1000 to survey a boat, it should be a consideration in that make darn sure that you've looked over the boat very well before making an offer. You don't want the surveyor to uncover some obvious issues that you could have found by looking more closely and then trying to renegotiate a price after the survey. The seller knows you've already got money in the boat after the survey and he may be less willing to fix things or renegotiate.

A guide to used boat prices can be found on the NADA website, the BUC website which gives 3 free quotes, and at Boat US.

Good luck, let us know how you do.

 

[Tom.B]

skipperdude wrote:

You will never see the seller again. It's not like your getting married.

SD

Not the case at all for us. We still see the people we bought our boat from all the time. He works on many of the boats in the marina and is still friends with everyone there. It isn't always comfortable, but we still get along well. Nevertheless we didn't, and couldn't, low ball him at all. Had we, I think it may have poisoned the relationship some and we would not have been able to continue to milk them for info we need as new boaters.

 

[Marin]

timjet wrote:

but considering it can cost upwards of $1000 to survey a boat

I suppose you could spend that much, but I think you'll find surveyors are more in the $500 to $600 range for a thorough survey (less for an insurance survey).* At least that's been the case for all the surveys we've had done.* And these were very highly regarded surveyors, not run-of-the-mill guys.

*

 

[Baker]

I guarandamntee you that anyone trying to sell a $200k boat in this economy is a "distressed seller".....

One thing that brokers can "see"
now just like realtors is how long the boat has been on the market and how many price reductions.

You need to make an offer that let's the seller know you are serious and that you have the resources on hand to acquire the boat....but still it needs to be low enough to find his limits.

200k I would offer 150k assuming it is a fair price for a fair boat.....obvously a somewhat arbitrary opinion.

-- Edited by Baker on Thursday 7th of January 2010 10:42:15 PM

 

[FF]

I guarandamntee you that anyone trying to sell a $200k boat in this economy is a "distressed seller".....

Here in FL in Pinellas county there are 5500 condos for sale last year , 700 sold.

Its a buyers market so a LOW BALL is the rule of the day.

 

[Capn Chuck]

FF wrote:




I guarandamntee you that anyone trying to sell a $200k boat in this economy is a "distressed seller".....

Here in FL in Pinellas county there are 5500 condos for sale last year , 700 sold.

Its a buyers market so a LOW BALL is the rule of the day.

FF, I am not sure why every question that is ask on the board, your answer refers to trucks, condos, and commies......... As a former broker for several years in the Chesapeake I would suggest that even in a down market such as this, your initial offer should be a reasonable one based on a good bit of research. Find out how long the boat has been on the market, if there have been any previous offers, what condition the boat is in and how old is the equipment. There are resources to tell you what like boats have SOLD for in your area and other areas and this will be more helpful than even advise from the internet. Once you have all of that info you can make a decision as to what to offer. Your offer should come in a bit low but not so low as to upset the seller. He then becomes very hard to deal with if not impossible. Be prepared for a counter offer and be prepared to counter the counter. Good luck. Chuck

*

 

[Daddyo]

The morality of some of these answers is a bit depressing. How about you do what's right not see how much you can screw out of the guy. What goes around... Some day we all will be sellers, do you want this blood in the water mentality when your selling.

 

[Capn Chuck]

Well said. Chuck

 

[sunchaser]

Good points by all - it is a buyer's market but it usually is. Most sellers let pride get in their way and some are just testing the waters. My guess is serious sellers are less than 1/2 of boats offered. So determine if the sale is serious or just cause----*But, after a few offers and lots of dock walking it will come into focus. Four years ago my knowledge in this area increased 10 fold over 6 months so don't be in a hurry. And I could spot the serious sellers easily - one giveaway is have they emptied the boat of all junk and personal effects? I looked at one boat where the seller was provisioning for an Alaskan summer cruise. He was asking 10% above high market comps- and FIRM.

 

[skipperdude]

Daddyo wrote:

Some day we all will be sellers, do you want this blood in the water mentality when your selling.

******* You take your chances on most things in life. A boat is like*any thing else*for sale.* It is an agreement between a buyer and a seller. What one is willing to pay and what one is willing to accept.
**** No one has to accept an offer be it high or low.* You may be doing someone a favor. What if it sets on the marke for another year incuring all the expences and distressing the seller even more.**Or it goes into forclosure ruining credit ratings or worse. *Do you make a profit on everything you sell?
***** It only means the cost of using the boat over how ever many years you owned it went up.*A boat isn't gold*or any other appreciable asset. It is gauranteed to depreciate.**Would you rather pay to much for something?**Perhaps you just have more dollars than sense.* I buy my underware at Wal-mart because it is the best deal.
****** Just because you paid a lot for something doesn't mean thats what it's worth to everyone.* Sorry I look out for #1 first.

SD


*


-- Edited by skipperdude on Friday 8th of January 2010 10:24:21 AM

 

[Phil Fill]

You can divided a survey up into parts which you can stop at any time.1) a quick general walk through survey to see if there is any noticeable/major concerns which should take about ½ hour.* 2) if still interested then a more detail survey. *At this point the surveyor and you should have a general idea if you are interested and come up with an offering price.* Make offer subject to financing, finding a moorage, insurance, out of the water survey, a test cruise, or what ever so you still have a way to back out.* 3) if the offer is accepted then an out of the water survey.* If concerns are found then you can still reduce your offering price or back out of the deal.

Do not fall in love with the boat and for sure do not let the broker/owner know you love the boat.** If you want a great deal you have to make offers on several boats and walk.* *Its like hitting a ball if you do not swing you are for sure not going to hit the ball, but if you swing who knows what will happen?

We had surveys on boats that the surveyor did not even have to come out as he knew the boat, some surveys took less than 15 minutes to walk through. Many were free as the surveyor was in the area.* *When we bought the Eagle the surveyor and I where not to keen on the boat as it was a big old ugly Taiwan trawler, but has we took a general walk through start to see the potential my wife saw, and it had no major concerns that had to be fixed right away, but we did lower the offering price. *So if you have an experience surveyor they can quickly tell you if the boat is worth pursuing with out costing that much.* Even after you buy the boat you will want to have the boat survey for finance and insurance purposes to show the boat has no major problems and a value.* Every time we pull the Eagle I have hull surveyed and*an insurance survey done.* Cost*a couple hundred.* **
*

*


-- Edited by Phil Fill on Friday 8th of January 2010 10:17:58 AM

 

[ChuckB]

I agree with Skipperdude. It's why they call it "negotiation". If I was a seller, I would never be offended by a "low ball" offer. I would just say no or I would make a counteroffer. Getting angry at any offer just might chase away a potential buyer. As they say: It's just business, nothing personal.

 

[Eastern Shore Bill]

Once the survey is done, would it be standard practice to reduce the offer by the amount of essential fixes? At least the ones that the seller hadn't already acknowledged and factored into his initial asking price?

This discussion has been VERY helpful.

Thanks, Bill

 

[Capn Chuck]

Bill, You can't expect a seller to make a used boat like new and the survey will most definitely find some things wrong or it is not a good survey. The items for consideration for an adjustment are usually anything that makes the boat unseaworthy, unsafe or unisurable. You can't expect a seller to fix or adjust for every light bulb, gage that does not worth or whatever. A good surveyor will lead you through the items you should negotiate on and those that area considered normal wear and tare for a boat of the age you are considering. If it a structural or safety issue, or a repair that would require a large investment then, by all means either look for an adjustment or walk away.

 

[skipperdude]

There you go.
Somebody has to pay for it. It sure wouldn't be me. Normal wear and tear are just the things that make the price go down. Awell maintained boat is worth more. Would you sell a car without detailing it first. If you are serious about selling *a boat you have to make it as nice as possible.* All the junk off,*clean. all the little things fixed. Those little things take forever to get around to once you own the boat.* This is a used boat we are talking about here.* Not a condo on the water front.

*Ask for the moon and take what you can get.

SD

-- Edited by skipperdude on Friday 8th of January 2010 12:38:07 PM

 

[sunchaser]

Capn Chuck* -* Yes you can expect the*owner to make the boat look like new, if you are looking at newer well maintained yachts. I've looked at many where the boat was better than new, especially with all sorts of "new" systems added.**I looked at a 2-3 year old GB 49*that was better than new visually.

If the seller is representing the boat is in "bristol" shape, all is fair when you find problems during survey. One vessel I made an offer on was contingent upon the owner replacing all motor mounts and rebuilding the transmissions that were showing high metal.*His asking price reflected a vessel that was without these defects. He refused and the boat took another 18 months to sell and at a lower price than I had offered.

Dude is right, be tough. this is not a game for sissies.

 

[Marin]

Eastern Shore Bill wrote:

Once the survey is done, would it be standard practice to reduce the offer by the amount of essential fixes?

That's the typical custom.* You also have to determine what things you can correct yourself and what you might need a professional for.* If we had reduced the offer on the boat we bought by the cost of every single thing that needed dealing with, particularly the exterior cosmetic issues, the seller would never have accepted the offer.

But the boat was priced pretty fairly for the market at that time.* Not that we had the experience to know this, but in addition to our broker's advice we also had the advice of a good friend we took with us to California to look at and sea trial the boat with us and be present during the surveys.* Our friend has been an engineer in the marine industry for over 40 years and has had a vast experience with the type of boat we were looking at, and he didn't care if we bought it or not.* He advised us about things that didn't look so great but were well within our capabilities even then to deal with ourselves.* And he also advised on about issues that we would need a professional to deal with.* As did the hull and engine surveyors we hired.* The seller was willing to reduce the price because the autopilot was inoperative and would require x-amount of dollars to repair, but we didn't ask him to reduce the price because most of the exterior teak trim needed refinishing.

The bottom line is that you generally get what you pay for.* Sure, one can luck out and find a great boat that a widow is trying to sell just to get rid of it after her husband's death.* But for the most part, boats generally sell for what they should sell for.* The exceptions in today's market might be the really high-end boats, boats that start out a six or seven hundred grand and when they don't sell the price gets slashed by ten grand or so, and maybe in a few months another ten grand comes off.* But I guess this really isn't all that different from the seller of an $80,000 boat reducing the price by three or four thousand in the hopes of encouraging a sale.

If you don't care all that much about a particular boat, sure, you can try to knock the offer down a lot.* It might be accepted, it might not.* But if you are negotiating over a boat that you really do like and want, you will find that while there is always some wiggle room, you'll have to be willing to pay what it's honestly worth if you seriously want the boat.



*

 

[skipperdude]

I hate to beat a dead horse.**It's the economy. If you have money you are at the helm and in control.

Take advantage of it.*

*It wouldn't be for sale if the owner didn't want out. The skipper is either looking to up grade* or is distressed. if it is an upgrade the*owner will gain what he looses on the next boat.*If distressed he will take what he can get.

*All the numbers drop* at both ends.*

I'm Done.
SD

 

[Capn Chuck]

sunchaser wrote:

Capn Chuck* -* Yes you can expect the*owner to make the boat look like new, if you are looking at newer well maintained yachts. I've looked at many where the boat was better than new, especially with all sorts of "new" systems added.**I looked at a 2-3 year old GB 49*that was better than new visually.

If the seller is representing the boat is in "bristol" shape, all is fair when you find problems during survey. One vessel I made an offer on was contingent upon the owner replacing all motor mounts and rebuilding the transmissions that were showing high metal.*His asking price reflected a vessel that was without these defects. He refused and the boat took another 18 months to sell and at a lower price than I had offered.

Dude is right, be tough. this is not a game for sissies.

I have probably only been involved in the sale of several hundred boats over many years so I might not know much on the subject. There is a major difference with submitting a purchase on a boat someone has kept in perfect condition and one that has not. If any buyer came to any broker that I have ever worked for or to myself as a broker and demanded that every item on a used boat be repaired or adjusted for, I know of no broker or seller that would not have told him to go fly a kite, or words to that affect, and believe me when I tell you I have sold boats in worse economic climates than this. Chuck

*

 

[sunchaser]

Chuck - where did I say replace every switch etc. I said look like new. But as a seller or broker, if you say Bristol you better be able to back it up.* I don't know why, but I'm always a teeny bit suspicious of boat brokers, car salesmen, insurance agents and financial planners.**With a wife who fits into two of these categories, I tread softly.

 

[Tom.B]

I got lucky, both with my real estate agent and yacht broker. They were both stand-up guys that kept my feet grounded. We made FAIR offers on our house and our boat for a FAIR bit of capital. Sure there are exceptions, but generally, you get what you pay for. At the same time, we got what we wanted, when we wanted it, for what we budgeted for it. It's not that hard. Low-balls are for bottom-feeders and gamblers, not real buyers. IMHO... YMMV

 

[Steve]

The seller shouldn't be insulted he will probably just make a counter offer then negociate from there. His counter will probably be more than he expects to get just as your offer will probably be for less than you expect to pay. Then work towards a price you can both live with or move on.
Steve W.

 

[Baker]

Lowballs are for finding the limits of the seller. I have sold my boats and have been lowballed severely. It was a $50k boat. The dude offered 25k. I countered at 48k. He came back at 30k. I cam back at 48k. He came back at 32k. I came back at 48k. He very soon realized where I wanted to be. I still did not think this guy was serious but I stayed in the game. He came back at 40k. I came back at 47k letting him know he was getting warmer and that I was back in the game. Him 42k....me 45k. Agreed and contract at 44k. Surveyed and readjusted for 43.5k and it sold at that price. A very fair price for both of us and no hard feelings. I still see the boat around and he has done great things with it which I think is cool.

Keep your emotions out of it.

My current boat found me and followed me around on the internet. The dude had a new boat coming in and it was late Oct. in New York. Boats don't sell in the winter in NY and he was looking at storing and owning 2 boats thru the winter. He also wanted to do an "in and out" with the dealer to save on sales tax....which was significant. I liked the boat but it was way outta my budget. The dude kept riding me and lowering the price until I cried "uncle". It was $25k less than where he started!!!! But he was't stupid. He knew that he was looking at MORE than that in expenses and lost savings(ref sales tax) so it still made sense to him.He also paid the majority of shipping from NY to TX and filled the tanks with fuel and let a dinghy go with it!!!I saw it as the opportunity to own a boat like this and be able to unload it easily should I wish to. Well since the economy dumped,not so easy to unload a boat even at a good price. It is till a lot of money to most people.


-- Edited by Baker on Friday 8th of January 2010 06:50:44 PM

 

[FF]

Low-balls are for bottom-feeders and gamblers, not real buyers. IMHO... YMMV


The secert to a good low ball is to get HELP.

The best help is acquired by handing the broker a check for 10% (his commission) of your offer.

He will work his butt off to get the offer accepted.

Your insurance is in the face of the check,

Subject to Survey.

FF

 

[Forkliftt]

Speaking of insurance, we have to provide a current survey with haulout for our insurance renewal. We are currently in Mississippi- with only three surveyors available. I talked with all 3, hoping to find someone with a good bit of TT experience. Not the case- AND the going rate is $15 per foot, plus the haulout charge. *I worked a deal with one that is going to charge me $12 per foot. With me providing our prior survey and me being his "helper". That part I like.When we purchased our boat the price had just been dropped signifigantly. After seeing the ship we offered a price that was an additional 12% off. He accepted- but sent back not to beat him up on the survey. She surveyed well and we stayed with the agreed price.
I think if you are putting a bid on a vessel YOU HAVE TO HAVE (never a good idea) then you *would want to be careful on a lowball offer. Some owners would let pride direct their response and the price might go up!