How to Calculate an Offer Price

[rebel heart]

My dad always offers half of the asking price. I used to think it was insulting and a bad idea, but he would just shrug. He helped me negotiate my first boat (32' Ericson) and I cringed when he offered $7K since it was listed at $15K. The guy countered at $11K, we ended up at $9K.

Prices (boat or otherwise) to me are about how much I want to spend, it has nothing to do with the asking price. If I think a boat is worth more than the offer price I'll bargain a bit just to save money, but if I think the seller is asking for way more than it's personally worth to me, I'll offer around there and stick to my guns.

[CPseudonym]

Originally Posted by FLLCatsailor

If it was a FSBO deal the owner can do whatever he wants, unless their was a contract in writing... If he returns the deposit I would just walk away... The cost of bringing a seller to court would not be worth the cost...

One of the advantages of working with a broker... If a broker pulled **** like this he would lose his license...

That being said, if the seller had the boat under contract and the boat goes to survey the seller can refuse to make any survey adjustments or address the items from the survey... Effectively killing the deal... Then accept the backup offer...

No written contract and yes it was a FSBO. The oral offer in first place was 70% of asking loaded with contingencies. News of the back up offer forced first guy to put up or shut up. He walked.

Everything in your post is spot on, you're either a broker or very savvy buyer.

I am not anti negotiation at all, in fact I encourage it. Only trying to demonstrate how pointless it is to make blanket statements of value in relation to asking prices. We both had patience in my previous posted examples, just when we did find good deals neither of us hesitated to close on them.

BTW, both of us paid less than half comp recent sold value. Asking price is a horrible way to judge value.

[FLLCatsailor]

Originally Posted by CPseudonym

No written contract and yes it was a FSBO. The oral offer in first place was 70% of asking loaded with contingencies. News of the back up offer forced first guy to put up or shut up. He walked.

Everything in your post is spot on, you're either a broker or very savvy buyer.

I am not anti negotiation at all, in fact I encourage it. Only trying to demonstrate how pointless it is to make blanket statements of value in relation to asking prices. We both had patience in my previous posted examples, just when we did find good deals neither of us hesitated to close on them.

BTW, both of us paid less than half comp recent sold value. Asking price is a horrible way to judge value.

I'm a broker... In terms of asking price being a horrible way to judge value... It is really a case by case situation... I've had buyers get boats for way under ask, and I've had clients pay full asking price, and had backup offers...

When advising clients on an offer amount one of the things I look at is how long the boat has been on the market... That is normally a really good indicator of how well a boat is priced...

[CPseudonym]

I couldn't agree more. A holistic approach to valuing commodities is best. Doesn't matter what the commodity is, in this case boats. We have both seen boats that would be money pits for half their asking price so caveat emptor when using asking price to assign value.

The overwhelming majority of buyers would find their best value for their money enlisting the services of a quality buyers broker. Especially new boaters. I plan on using one when I upsize in a couple years as frankly, I have no desire to invest the time involved going the FSBO route again unless one falls in my lap. The false argument that anyone adds 10% into the price to cover broker services is a fallacy.

[terminalcitygrl]

I am seeing a lot of boats with very significant price reductions - like $50 or $75k on a $150-200k boat. I am also seeing a lot of price reductions in general which indicates to me that many boats on Yachtworld have been sitting with wish prices for some time. A big question for me when I look at any boat is what I think I could sell it for if some unforeseen misfortune forced a too-soon sale. That is the price at which I will consider buying. I think 50-60% off list price in most cases right now shouldn't be considered unusual.

[letsgetsailing3]

Originally Posted by CPseudonym

The false argument that anyone adds 10% into the price to cover broker services is a fallacy.

That in itself is a false argument. I've seen it done.

You're entitled to your own opinion, but not your own facts. By all means, enlist a buyer's broker if you want. They are often helpful. But to insist that nobody tries to game the system, especially brokers, just isn't true. Kind of like in poker, the deal makers are playing the people, not the commodity involved.

It's no different than any other market, and particularly similar to the real estate market. There are good brokers, bad brokers, and everywhere in between.

The same for buyers and sellers.

[FLLCatsailor]

Originally Posted by letsgetsailing3

That in itself is a false argument. I've seen it done.

You're entitled to your own opinion, but not your own facts. By all means, enlist a buyer's broker if you want. They are often helpful. But to insist that nobody tries to game the system, especially brokers, just isn't true. Kind of like in poker, the deal makers are playing the people, not the commodity involved.

It's no different than any other market, and particularly similar to the real estate market. There are good brokers, bad brokers, and everywhere in between.

The same for buyers and sellers.

When I help a client price their boat I try to give them a good idea of what a realistic selling price for the boat should be. Unfortunately, a lot of sellers take this number and add 10-20%. These are the same clients that call and yell at their broker when their yachts haven't sold.

[CPseudonym]

Originally Posted by letsgetsailing3

I've seen it done.

I have too and their boats still haven't sold.

Originally Posted by letsgetsailing3

You're entitled to your own opinion, but not your own facts.

Was unaware sold boat data was not fact. All boats are unique but comping them is hardly difficult. Realistic priced commodities sell quickly, marketing 101.

[Snore]

When buying houses, cars or boats the only one on your side is you. If your "buyers broker" is paid by the seller guess what----- he does not work for you!

If he is paid by the buyer, guess where his obligation is?

I am sure there are exceptions to this general perception. But that would appear to be the exception!

[letsgetsailing3]

Originally Posted by CPseudonym

I have too and their boats still haven't sold.



Was unaware sold boat data was not fact. All boats are unique but comping them is hardly difficult. Realistic priced commodities sell quickly, marketing 101.

Nobody here is disputing sold boat data. Your statement was that people don't inflate their prices to cover their broker fees, one that you can't possibly back up.

Also, because boats are unique as to the way they're equipped and condition, comping them is sometimes difficult. But yes, like FLLCatsailor pointed out, the market will speak through actual sales. The true indicator of how well a boat is priced is how long it stays on the market, but you only know that after a boat sells.

[CPseudonym]

Originally Posted by letsgetsailing3

Your statement was that people don't inflate their prices to cover their broker fees, one that you can't possibly back up.

No. My point is who gives a **** if they do? If a buyer is too stupid to get sold boat data before making an offer they deserve to get screwed.

My only point from the beginning of my involvement in this thread is who gives a crap about asking price? You can ask anything you want and it doesn't make a tiny bit of difference in relation to value.

A seller can add 700% to the price of their boat if they feel like and it won't matter. Value is value and I don't care if its listed with a broker or your Aunt Millie is selling it in her front yard for you. Attempting to cover broker fees or anything else by inflating asking price does not and never will affect sold boat data which is the only data a lender, insurance company or buyer should care about.

This thread started with folks discussing formulas for making purchase offers based upon asking prices. A fools errand at best. If anyone tries assigning the percentage formulas related to "asking" prices some have suggested they will miss some boats low(no problem for the buyer) and many more will miss ridiculously high.

[Andy73]

Originally Posted by SVI

How to eliminate the broker? Easy. If you know the name of the boat, you can search on the online registration database, and then call or facebook the owner. Best case you will get the same boat for 10% less (and the Seller will sell the boat). Worst case - both of you will split and get 5% each. That's a lot of upgrades

While you are certainly entitled to try this, I would just like to point out you would be entering into an agreement with a seller who just reneged on their agreement with someone else (their broker)...

Would make me question their integrity more than a little...

[Andy73]

Originally Posted by Snore

If he is paid by the buyer, guess where his obligation is?

[captseamus]

Better read the fine print on the broker's contract before you try to buy that boat without him involved.. Good chance the broker will come after his commission you owe him.. its all in the fine print even after the contract date lapses his commission continues usually for at least six months afterwards if the broker is smart. It covers for folks that try to cheat them out of their commissions after they see the vessel and just wait until the broker's contract expires.. the commissions continues for another six to twelve months... Read the fine print!

[captseamus]

That nice little boat that is advertised in the booking magazines is probably under contract. No matter who buys that boat the broker will obtain his commission under law. Its pretty hard to out think an old scheme of cheating a broker out of his commission and besides its illegal.. The price of the commission would be a small amount compared to the price of an attorney to keep you from being sued for fraud...