Not selling, so increase the price!

[travellerw]

We have been in the market now for a few months, but I have been watching boats for almost a year..

One I've been watching recently tried this manoeuvre. Been on the market for 6 months or so at a given price. I just noticed that it has not been raised by a substantial margin (about 16%).

Not sure what the thinking is behind doing this! Seems like if it wasn't selling at the lower price, raising the price would drive more people away (especially in the soft market).

Maybe they have been getting offers, but %10-15 off their asking and they think this will raise the offers.

Would love to hear opinions one why someone would try this!

[Ex-Calif]

1. Wife wants him to sell and he doesn't
2. Believes the hype that the economy is coming back
3. Believes a higher asking will give him more wiggle room
4. Did something to impact the value
5. Personal financial situation improved, doesn't need to "dump" the boat
6. In no rush to sell

Bottom line is, "What is it worth to you?"

[roverhi]

Have they done any work on the boat. May have raised the price to reflect the cost of the boat and the fact that the boat may be way more attractive. Funny how people will shy away from a boat that basically just needs a bit of scrubbing and wax. Not saying they just cleaned it up but maybe they did other work that was limiting its marketabiliity.

It could also be just a marketing ploy. If the boat is the only similar one on the market may be hoping that scarcity may get nudge someone to make an offer if they think the value has actually gone up.

[travellerw]

Nope no work has been done... Pretty sure they REALLY want to sell it as it has been actively for sale for over 6 months.

I'm guessing its a combination of "wiggle room" and that they believe the economy is coming back. Maybe it is, but I don't think its affected the boat market yet. I just heard of a nice catamaran selling for 65K under asking. Yup seriously..

In any case, its an interesting tactic... Maybe it will work for them.. As the saying goes "Crazy like a fox".

[Cadence]

Originally Posted by travellerw

We have been in the market now for a few months, but I have been watching boats for almost a year..

One I've been watching recently tried this manoeuvre. Been on the market for 6 months or so at a given price. I just noticed that it has not been raised by a substantial margin (about 16%).

Not sure what the thinking is behind doing this! Seems like if it wasn't selling at the lower price, raising the price would drive more people away (especially in the soft market).

Maybe they have been getting offers, but %10-15 off their asking and they think this will raise the offers.

Would love to hear opinions one why someone would try this!

Could be a broker just screwed up or a typo?

[Steve1944]

I have often thought of raising the price because something didn't sell. It draws up people with real money. It also puts the value in relation to the other boats that are for sale. If you undercut the market too far they think there's something wrong with the product.

[travellerw]

The problem I see with this is...

With the market being slow, I'm guessing there are no more than 5 potential new buyers per month (for that size and class and price). Maybe less as it seems boats between 200K and 400K have a very limited market right now. So by raising the price, they have essentially scared away anyone who was on the fence about that boat. They are now relying only on the new buyers entering the market.

The boat has sat for over 6 months now (they have moved on). IMHO they should be dropping the price not raising it. Boats that sit turn sour pretty quickly...

[DotDun]

I've witnessed this in real estate many times. Someone looking in the $500k range won't look at a $400k property. Raise the price and you now have a new set of buyers. And, I've seen it actually work!

[Cheechako]

Originally Posted by Ex-Calif

1. Wife wants him to sell and he doesn't
2. Believes the hype that the economy is coming back
3. Believes a higher asking will give him more wiggle room
4. Did something to impact the value
5. Personal financial situation improved, doesn't need to "dump" the boat
6. In no rush to sell

Bottom line is, "What is it worth to you?"

Yep... I've also heard in some states people have their boat for sale perpetually... as the state wont tax it if it's only there to be sold....

[Steve1944]

Originally Posted by travellerw

The problem I see with this is...

With the market being slow, I'm guessing there are no more than 5 potential new buyers per month (for that size and class and price). Maybe less as it seems boats between 200K and 400K have a very limited market right now. So by raising the price, they have essentially scared away anyone who was on the fence about that boat. They are now relying only on the new buyers entering the market.

The boat has sat for over 6 months now (they have moved on). IMHO they should be dropping the price not raising it. Boats that sit turn sour pretty quickly...

People with 400K to spend on a boat are NOT on the fence.

People with 400K to spend on a boat, while they are few and far between, they look at what they're buying as what they will be selling , later. So, a higher purchase price is better to have what will fetch a higher resale price.


We all know big boats don't turn over very fast.

[lancelot9898]

The only place where raising the price might cause more bidding is in the stock market. Maybe it might be applicable to other markets?

[travellerw]

I just wanted to see what other people thought of it.. Maybe it is the right move sometimes, not sure in this particular case.

I very much disagree about people with 400K not on the fence.. Money is just one circumstance. There are many reasons people sit on the fence not just money. Life has a way of derailing the best laid plans. e.g. A change in business requires the person to stay on longer to help the transition so they can actually get out there. This may delay their purchase by 3 - 5 months and that boat was on their shortlist. The price increase may lead that person to pursue another boat on their list.

[jwing]

The next time I buy a sailboat, I will have an idea of what size and features I want. I will have done enough research to know about what I can expect to pay for a boat that meets my criteria. I won't waste my time with boats that, on paper, meet my criteria, yet the asking price is low compared to the expected asking price. I would figure that the owner was a smart person who understands that his/her boat has shortcomings that require a low price. I'm not a potential buyer for that boat.

On the other hand, if a well-kept boat that I was selling was getting little interest and I discovered that my asking price was lower than similar boats, I would raise the price in order to increase the number of potential buyers to include people like myself.

[onestepcsy37]

Sorry, jwing, but I dont agree with your reasoning. These are individuals in all sorts of situations with differing financial and personal goals who are selling for all kinds of reasons. My boat may be far better than yours but I need it gone for some pressing reason so I will sell it for less. Or (true story) I know nothing about boats/sailing but my father died and left me his big sailboat, albeit in poor condition, but I saw one like it for sale at top dollar and thats how much I want. When it comes to buying or selling I believe that Heisingers Uncertaincy Principle reigns.

I raised the price of my boat by 10% when I stopped trying to sell it myself and listed it with a broker, to cover his fee.

[rwidman]

Originally Posted by travellerw

We have been in the market now for a few months, but I have been watching boats for almost a year..

One I've been watching recently tried this manoeuvre. Been on the market for 6 months or so at a given price. I just noticed that it has not been raised by a substantial margin (about 16%).

Not sure what the thinking is behind doing this! Seems like if it wasn't selling at the lower price, raising the price would drive more people away (especially in the soft market).

Maybe they have been getting offers, but %10-15 off their asking and they think this will raise the offers.

Would love to hear opinions one why someone would try this!

I had a friend many years ago who owned a bunch of vending machines. He had some items that weren't selling well so he raised the price. They sold better at the higher price and of course he made a bigger profit. His theory was that people thought the item was a higher quality because it was priced higher.