How to Calculate an Offer Price

[barnakiel]

Originally Posted by zboss

(...) Right or wrong, using a regression analysis to pick out boats based on valuation is probably a good starting point.(...)

Only if you understand the tool. Remember the limitations on the minimum required number of data points required for good line fit, shape of the data cloud, etc., etc., etc..

You also have to regress against a factor. The general formula being y=a+bx+e, Y being boat price, what will you use as the X? How will you interpret the intercept?

Most of the time boat pricing data is not regress'able. Cruising boat prices (when talking about a specific make/model) are not statistically meaningful.

b.

[Thames 4 Blood]

Having recently bought a boat I started with a maximum figure in mind on any particular vessel of what I thought I could sell her for if I had to.
Then, if possible, pay less!
The only way to reach that figure is to study the market, view boats and talk to people...

[barnakiel]

When we bought ours, I made a list of things that I did not like and said 'cause of this I think the just price is 0.9 of your asking price'. The guy gave me that kind of look and said if I do not like the price I must find myself another boat.

Every country is different. Some haggle some do not. Some price their boats roughly within reason, others take the askings out of blue air.

It does not help if you know the 'right price' when the seller will not haggle.

b.

[zboss]

Originally Posted by barnakiel

Only if you understand the tool. Remember the limitations on the minimum required number of data points required for good line fit, shape of the data cloud, etc., etc., etc..

You also have to regress against a factor. The general formula being y=a+bx+e, Y being boat price, what will you use as the X? How will you interpret the intercept?

Most of the time boat pricing data is not regress'able. Cruising boat prices (when talking about a specific make/model) are not statistically meaningful.

b.

Hey - I'm zboss! Reality has not meaning to bosses! Give me something I can use man! Don't force me to use a football analogy!

The reality is that I am assuming Y is an accurate assessment of the boat condition by the current owner/broker, the age and other factors having already been calculated and incorporated into that assessment. Again, this is only a starting point. I am interested in good bones not gizmos - what a boat does not have vs. what it does have. For example, no teak decks. No pullman berths, no oil canning, etc.

By the point we get to bringing in a pro to do a survey the idea of using math to make preliminary selections goes out the window because you are already committed and have arrived at negotiation point.

[TaoJones]

Originally Posted by zboss

Originally Posted by zboss

I am trying to determine the appropriate way to calculate an offer price on a boat. I am currently looking at a boat type of which there are quite a few on the market up and down the east coast, all of them late 70's mid 80's.

<snip>

Do I take the lowest priced boat as a starting point, then credit the amount based on the condition of each of the boats systems?

<snip>

Also, do you think it is a good policy (or not) to refuse credit towards any electronic (working or not) system over 1 or 2 years?

I'd advise taking 100% of all asking prices and running them through a macerator. The number of reasons someone places a given asking price on a boat approaches infinity . . . some may be valid, some may be absurd.

For example, I've known of more than one seller who claimed he "wouldn't take less than $xxx" because it turned out his wife never wanted to spend money on a boat in the first place and he dreaded telling her they have to accept less than he paid in an over-excited moment of weakness.

Originally Posted by Don L

You offer the price that the boat is worth to YOU, while remaining willing to walk away for the "deal"!

Seems you already understand the "market value" of the boat far as model goes. But it still comes down to what it is worth to YOU!

This is probably the best answer.

Originally Posted by zeehag

i bought this boat fro the electronix and hull..... po blew engine, and i lowered the offered price by 15000 dollars, us....he had some damage to interior and i removed another xxxx dollars---the leaky decks were xxxx dollars removed. sin ce i bought this boat i learned i did realllly good....they dont make em like this one any more, sad to say.

This is always an effective method.

Originally Posted by zboss

Hey - I'm zboss! Reality has not meaning to bosses! Give me something I can use man! Don't force me to use a football analogy!

The reality is that I am assuming Y is an accurate assessment of the boat condition by the current owner/broker, the age and other factors having already been calculated and incorporated into that assessment. Again, this is only a starting point.

<snip>

By the point we get to bringing in a pro to do a survey the idea of using math to make preliminary selections goes out the window because you are already committed and have arrived at negotiation point.

Forget being a boss of anything but your own emotions when it comes to negotiating the selling price of any vessel. And the "reality" you're assuming is an accurate reflection of the vessel's condition is a piss-poor basis upon which to base an offer to buy.

Never let yourself believe that you'll lose the boat of your dreams because the seller may act offended by your offer. That's his problem, not yours, even if it's true. Always be willing to walk away.

Every boat has problems, or will develop them later if they're not already apparent. Your own experience in that regard proves the point. And don't let yourself believe that because you've already gone past the preliminary negotiations and you're springing for a survey that you're "already committed."

That attitude could cost you Big Time because you've forgotten the "always be willing to walk away" guiding principle.

Football Analogy:

The other team (Seller and Broker) has the ball late in the 4th quarter, down by 21 points and deep in their own territory (stuck with a boat they can't sell in a soft market). Your defense is stingy (you, the Buyer, are holding the hammer; i.e. you have the superior negotiating position in a soft boat market) and while you'll concede short passes over the middle (leave a few dollars on the table for the six dingy life vests), you won't give up a long bomb (allow the Seller what he knows would be a miraculous Hail Mary scoring play).

The Seller's QB (the Broker) is good, but realizes there are no 21 point plays. He's got a long-term contract (many other boats in inventory) and knows he'll be OK whether his team wins this game or not. He just doesn't want to get hurt.

You and your defensive coordinator (your Broker) should call defensive sets that minimize any damage and consume time that their offense needs desperately. Keep everything in front of you, concede little, work the clock and force the other team to fumble or throw an interception or turn the ball over on downs; i.e. be completely prepared with every negative aspect of the vessel to counter all of the supposed positives they throw at you.

Wear them down and run out the clock while keeping them backed up as close to their own goal line as you can . . . at the very least, don't let them cross midfield. That is, in a soft boat market make buying for 50%, or less, of someone's fantasy price your standard of excellence.

The result will be victory for your side.

TaoJones

[Bash]

Originally Posted by zboss

On yachtworld, the prices range from mid-30's up to over 100's for the same model boat.

Always consider the possibility that the lowest-priced boat is the worst deal possible, and that one of the highest-priced boats might represent the best deal on the market.

[zboss]

Taojones... awesome!!! Sounds like fun.

Bash... I had considered that and actually that appears to be true [at least from the advert]. Unfortunately, at this point that is off the table financially.

Thanks for everyone remaining engaged on this thread... its been extremely valuable so far.

[sww914]

Take the number of inches of rain per year where the boat is, subtract that percentage from the asking price.
Determine how much of a jerk the seller is on a scale of 1-10 and subtract that percentage.
Determine how good or bad the broker is on a scale of 1-10. Add that percentage if he's bad or subtract if he's good.
Determine how nice or how evil your wife is, on a scale of 1-10, add for nice and subtract for mean.
Multiply the number of pets in your house by .75 and add that percentage and that should do it.

[Kenomac]

An Ipad today does a better job of chartplotting than the best systems available 6 years ago. I'd allow maybe $1000 credit for a good working radar that's less than 6 years old, and no financial consideration for any of the other electronics onboard including the VHF unless it's within 3 years old, and even then maybe only $50. The newer stuff is cheap and does so much more including AIS. Even an epirb that's over five years old will cost more to have it serviced with a new battery than the cost of a new one, which will do more.

SSB radio on the other hand, I'd credit at least $1500 for a good working model if you plan to use it; otherwise, nothing.

Some will disagree with me on my opinion and credits, but I just went through all this a few months ago with a 2001 Oyster that came with absolutely everything of the highest quality from ten years ago, including 2 SAT phones, onboard pc, two Furuno chartplotters, weather station, radar, SSB.... all junk by today's standards (except the SSB and Radar) and half of it either doesn't work or is no longer supported by the manufacturer.

The VHF was usable but needed updating, the pc immediately went into the trash along with the weather station fax.... don't know why I still have the SAT phones, maybe sell them on ebay. You get the idea.

[David_Old_Jersey]

Originally Posted by sww914

Take the number of inches of rain per year where the boat is, subtract that percentage from the asking price.
Determine how much of a jerk the seller is on a scale of 1-10 and subtract that percentage.
Determine how good or bad the broker is on a scale of 1-10. Add that percentage if he's bad or subtract if he's good.
Determine how nice or how evil your wife is, on a scale of 1-10, add for nice and subtract for mean.
Multiply the number of pets in your house by .75 and add that percentage and that should do it.

IMO that pretty much nails it .

As mentioned already, one of the useful "tricks" is to ask self: "how much do I think I could sell her for next week?".........if the answer is "no idea" then it's not time to write the cheque........

[ranger58sb]

Originally Posted by zboss

Electronics - if they are not longer serviceable because of deprecation by the manufacturer - are worth a lot less than a piece of electronics in fully functional form.

Absolutely, another key point, and one I should have included in my short list, too.

-Chris

[David_Old_Jersey]

Originally Posted by ranger42c

Absolutely, another key point, and one I should have included in my short list, too.

-Chris

If Old Electronics still function (even without manufacturer support / upgrades) they are not worthless.....latest whizzbang features have their place, but they haven't fundamentally changed the functions in the last decade (or 2!)........being fitted already has a cost benefit to factor in as well.......... and also whether the market for the boat concerned demands the latest items (5 year old boat more likely than 20 year old.......where "reflected in price " more likely the answer, along with "WTF do you expect?, it's a 20 year boat" )......

My take is that a boat has many prices / values:-

to You
to the Vendor
to the Market in general
to other buyers in the market at that time

and probably a few others as well! (Lender?, Broker?).

I also wouldn't restrict market comparison to only sister ships - open up the comparison to other boats that do the same job, even if you don't like them for personal reasons!

[ranger58sb]

Originally Posted by David_Old_Jersey

If Old Electronics still function (even without manufacturer support / upgrades) they are not worthless.....latest whizzbang features have their place, but they haven't fundamentally changed the functions in the last decade (or 2!)........being fitted already has a cost benefit to factor in as well..........

Agree.

OTOH, our current boat came fitted with a black-and-white (actually grayscale of sorts) chart plotter made by a manufacturer who was no longer in business... without operator's manuals... and I searched all over the 'net to find out how to work the thing. Never could find manuals. It worked fine, technically, but I couldn't figure most of it out by trial and error. (I suspect the original owner may have transfered that plotter from HIS previous boat.)

I eventually found a dealer in Chicago who used to handle that line, and he remembered (he thought) a specific key sequence that turned out to be very useful... so I got a couple years out of it while planning the replacement.

So not worthless, in that case, but also not worth serious money.

OTOH, perhaps the difference is about penalties (subtractions) from offers if the capability is NOT present. IOW, does the boat have a functioning X, even if old and gray? If so, offer is Y. If not, offer is Y-minus-something. Is X the latest and greatest? If so, maybe the asking price is more reasonable than if not, and offer Y might need to be closer to the asking price. And so forth.

-Chris

[Kenomac]

Chris,

It would have been much easier and better just to purchase a $50 chartplotter app. for an ipad that would include all the charts for North America or Europe. Then you would also have all the functions of the ipad including gps, knotmeter, internet, etc.

[ranger58sb]

Originally Posted by Kenomac

Chris,

It would have been much easier and better just to purchase a $50 chartplotter app. for an ipad that would include all the charts for North America or Europe. Then you would also have all the functions of the ipad including gps, knotmeter, internet, etc.

Heh... iPads didn't exist then, let alone apps and charts for 'em.

And FWIW, I think tablets are very much in the "backup for additional redundancy" category. Which is not to say bad, just not yet all that easy to read in full sunlight, not yet sufficiently waterproof, not networkable with all the components of our existing electronics suite, etc.

OP's mileage may vary, of course.

-Chris