The 70% Rule

[Paul L]

The sold-price info should be pretty good if the boat has a lot of similar boats to use as comps. If you see data that you suspect, Google is your friend. It is usually pretty easy to figure out the contact info for the buyers. Send them an e-mail and ask them about their buying experience and ask them to confirm the sold price. I've done this and found small discrepancies in the 3 or 4% range.

[belizesailor]

Originally Posted by letsgetsailing3

If a boat is priced right, it sells quickly. If not, it stays on the market for a while, maybe forever, or until someone offers a lot lower amount and it sells.

I'm not sure what the strategy is, but there is a lot of gamesmanship in the boat market.

I'd LOVE to see the actual prices boats sell for.

Yes, its really about pricing realistically relative to market value (true of boats or whatever you are selling). Boats that sell for much less than asking are simply priced unrealistically to begin with...which is fairly common I think.

Sold my last boat quickly at about $5K more than what I originally paid for it, because that was the current fair market value...there was nothing to negotiate, the price was set right to start with and the first potential buyer took it. If he had requested significant price reductions I would have rejected the offer because it was priced right and would sell to the next person.

As I understand it, BucNet valuations, which many brokers use, is based upon actual sales data. That and additional research are what I used to price my boat.

[Cheechako]

Broker? I've never had a broker do anything but all-but-refuse to present a 50% offer. You are going to end up using a broker likely, and that's fine, but as far as them being much help... I just think it's rare.
The bottom line is how much action is going on on the boat. How popular is it on the market? If it's fairly new to the market and a real find....Based on what you've looked at recently..... condition, equiptment and design are great... then it may sell fast at nearly full price. If the boat has been sitting unsold quite a while... then the sky's the limit offer wise... It's really a tough thing to pass on... but you need to look enough you are intimately familiar with the market... and be ready to jump on the best thing for you when it appears....
When I sold my 44 footer it was on the market 3 weeks. Had a less than full price offer which we verbally rejected responding with a lower price at near full price. Within a few days the boat sold at full price to another buyer. The first offerer was so mad he threatened legal action.!

[Just BS]

A boat (or anything) that is for sale is only worth what someone is not only willing to pay for it, but what the seller is willing to let it go for. Using a 70% formula is counter-productive. Doing your homework, setting a budget and shopping the market is a much better way to find your next boat.

The one thing I have noticed is that the beginning or end of sailing season affects the price of boats as owners and buyers seem to be more motivated to be in or out of boating.

[Dockhead]

Originally Posted by Paul L

There is no 70% rule. It is just dumb to make an offer based on some percentage of the asking price. Determine what the boat is worth to you, i.e what would you pay for it based on your ability to pay, the other similar boats on the market, the condition and terms of this boat etc. Now you have your number and the sellers offering number. Then you can come up with a starting offer. If a boat is listed to sell quickly, then it may go for 10% under the listing, if it is listed because the wife said sell it, it may never sell or may sell at 50% of the asking price. There's no pat answer. You can get a list of comps from any broker that will give you insights into what the listing and selling price was for similar boats.

+1

If there were a rule consistently followed by buyers when pricing their boats for sale, the perhaps there might be a rule which could be followed by buyers, but there isn't any rhyme or reason in it.

Some boats are priced right, some are underpriced, some are overpriced, and besides that, some boats are "liquid" -- lots of buyers, lots of sales, and others may not be.

So it really all depends. I have seen boats sold for more than the original asking price, after a bidding war developed. I've seen boats sold for 20% of the original asking price, after years on the market. It really all depends on the market in that particular niche, the boat, the buyer, the pricing level, etc., etc., etc., etc.

I guess one thing which might look like a general rule is that older boats of a certain type seem to be systematically overpriced because the owners -- often older people who gradually stopped sailing over a period of many years -- have no idea how much deferred maintenance has built up. They still remember the $20,000 they spent on new electronics and figure that into the price -- without really grasping that this was 10 years ago, and the electronics are already obsolete and not really worth anything already. For example.

The main thing is to gather enough information so that you have a feeling yourself what a given boat is worth, then just decide what you're willing to pay for it. Then see if you can strike a deal. If you don't strike a deal the first time, that's ok. Buying a boat is a really long, tedious process, if you do it with care. I spent a year, a lot of weekends, and a lot of money on train and plane tickets before I bought mine.

[DSDman]

It really comes down to what you can justify to the seller. With a good broker you can find the average selling price for that make and model. From there you add or subtract based on what you find at survey. That will establish your offer price. It really may have nothing to do with that particular sellers asking price. But when you make the offer you have solid numbers to back up your claim. Then it comes down to the seller. Do they agree with your logic or not. Written offers with specifics work best.

[jtsailjt]

When considering a price to offer and the owner might accept, you also have to consider WHICH asking price you are dealing with. A couple of boats that I'm aware of that were/are recently on the market had original asking prices of around 300K. One was originally listed a year and a half ago for 335K then was lowered to 269K, then after a few more months to 249K and actually sold for 198K. Another sistership started at 269K last spring, then 249K about 2 months ago, reduced to 229K, 209K and now is listed for 199K. So, for just two boats, those are a lot of asking prices. For the one that's fallen all the way to 199K, I doubt if the owner would accept even 10% off his current asking price because along the way, the boat was under contract once and the owner fixed everything that was amiss but the buyer still backed out. So, even at 100% of that boats current asking price, I think it's a very good deal. Assuming this owner is willing to go just a couple percent lower than his current asking price, both of these boats will have sold for 70% or less of their ORIGINAL asking prices.

Another factor has to do with the location of the boat and what stage of the sailing season exists when you make your offer. For a boat located in the Caribbean at this time of year, with the best sailing of the season right around the corner, an owner might be less likely to take a low offer than an owner in New England facing another years worth of decommissioning, storage, recommissioning just to get it ready to show again next year. Next June, that will reverse.

I can understand some of the anti-broker comments but in my recent boat search I ran into just one "fast talking used car salesman" that I couldn't stand, and the rest of the brokers I had contact with were very knowledgeable and professional individuals who just wanted to facilitate the deal but always with good ethics at the forefront. A lot of the best yacht brokers are guys who have tons of sailing/boating experience and just enjoy being around boats and they're like walking encyclopedias (boating oriented search engines for younger readers who have never heard of an encyclopedia). I've run into three or four of that type in just the last year so if you look around and talk to a few to size them up, it shouldn't be hard to find a good one. If you PM me, I might be able to point out a couple top notch individuals who could be very helpful, depending on where you live and where the boats you are interested in are located.

[hpeer]

FWIW. asking was 129. We paid 93.

[Capt Phil]

Forget about percentages... what is it worth to you? Discount electronics 100% if they are 5 years old. Rigging, both standing and running should be discounted at 20% a year. Blisters? Imagine the costs of hauling, repair and bottom paint. You get below 50% real quick. Teak deck? Count on replacing immediately. If the seller won't deal, walk. Sorry to be so tough but that is the market in which you are dealing... if not comfortable, just write a check and don't complain! Phil

[Cheechako]

Originally Posted by DSDman

It really comes down to what you can justify to the seller. With a good broker you can find the average selling price for that make and model. From there you add or subtract based on what you find at survey. That will establish your offer price. It really may have nothing to do with that particular sellers asking price. But when you make the offer you have solid numbers to back up your claim. Then it comes down to the seller. Do they agree with your logic or not. Written offers with specifics work best.

Offers and contract nearly always come before survey.....not that you cant amend price after survey. or maybe that's what you meant...

[ozsailer]

Hello all,
Having just listed our boat for sale I can offer some insight as to the price we are asking. Our boat is a 1982 38ft centre cockpit. It is in good condition with many extra's and ready to go offshore straight away. Boat has always been well maintained. I looked at comparative boats which I believe the price was well over the current market here in Australia. I chose not to use a broker as taking 10% off the final purchase price can really hamper the asking price and gives the seller a little more room to negotiate. Its not that we have to sell our boat but having seen to many boats not sell I believe we have priced out boat very competitively but leaving a bit of lee room for a offer. If someone were to offer me 70% of its value then they are more then welcome to find a similar boat for anywhere near the asking price. Yes a boat is only worth what someone is prepared to pay but its has to be a fair offer IMO particularly when you are not desperate to sell.

[Paul L]

Originally Posted by ozsailer

...... If someone were to offer me 70% of its value then they are more then welcome to find a similar boat for anywhere near the asking price. Yes a boat is only worth what someone is prepared to pay but its has to be a fair offer IMO particularly when you are not desperate to sell.

Hopefully when you get a 70% offer you'll treat it as a real offer and work with the buyer to get a better offer. Some seem to think it is an insult. But from the buyers point of view, they have no knowledge of how desperate you might be or probably even how long the boat has been on the market. Making a 70% offer as a start on a solid boat is reasonable.
I had a seller that insisted on blowing off offers on a boat that I made. In the end I bought the boat, but the seller had to carry it for an extra 3 months. He could have cut short the process and saved himself some money if they had taken the original offers more seriously.

[Snore]

My boat is currently on the market. I priced it below other T-33's. If a real buyer offered me 70% he would be at 50% of the other guys prices. And I would reject their offer and not sell to them as they would probably be a PITA to deal with.

A real and competent buyer surveys the market and compares specific examples of the same model to develop a real offer.

Respectfully- people who don't want to do their homework offer 70%.

[jtsailjt]

Originally Posted by Snore

My boat is currently on the market. I priced it below other T-33's. If a real buyer offered me 70% he would be at 50% of the other guys prices. And I would reject their offer and not sell to them as they would probably be a PITA to deal with.

A real and competent buyer surveys the market and compares specific examples of the same model to develop a real offer.

Respectfully- people who don't want to do their homework offer 70%.

I think that your approach is a very valid one, but it's not taken as often as it probably should be, thus the frequency of 50% to 70% offers. I've sold 2 sailboats over the years and got within 15% of my initial asking price both times, and both buyers were pretty knowledgeable about the sort of boat they were buying and never expressed any regrets after the sale. The second boat took almost 3 years to sell but I didn't mind because I was still enjoying it and keeping it in great shape. Eventually, a neighbor from the harbor I kept it in rowed over in his dinghy and said he wanted to buy it and did about 3 weeks later, no broker involved. I'm not sure what makes people list their boats for almost double what they are realistically worth because if they did a little research it's not too difficult to determine what a realistic figure is. I think one key to getting a good price is to keep the boat in "sailaway" condition, as if you were going out for a week long trip starting tomorrrow. A stale smelling boat with something as simple as lots of light bulbs that don't work and dirt on everything just doesn't inspire a buyer to think, "YES, I could have a great time sailing this boat" and instead makes him think, "how much time am I going to have to spend cleaning this up and chasing down systems that don't work correctly." It's good to make a positive first impression, one that your sailboat is "alive" and ready to take the new owner on a great adventure.

[bobofthenorth]

When I'm buying I don't waste my time with stupid sellers who have priced themselves ridiculously high. As a buyer you need to do your homework, figure out what the market is and offer accordingly. That offer might be 50% of asking, 70% or even 100% - the key is knowing what the item is really worth. Personally I won't bother trying to convince a seller that he is priced completely wrong because it simply isn't worth my time.