Average Discount to Price

[Dockhead]

Originally Posted by DsquareD

In my experience, most things of this nature have some leeway. You are correct that some boats may sell at 100%. You are also correct that you have to know what typical pricing is for a particular boat.

We seem to disagree in negotiating style, not necessarily what is fair.

It's difficult to know what the actual selling price is of comparable boats (at least for me it is). Another thing that is difficult to know is the seller's situation. Maybe they just want a quick sale and will counter offer with anyone showing interest.

I'm simply transferring my previous negotiating style from other purchases. Sometimes a 50% opening offer may land you in a 75% closing price and if the seller was hoping to get between 75% to 100% and the buyer could afford the final price, then both should be happy. Certainly a 70% offer could have ended up with the same result.

Sometimes a 50% opening offer will land you in a 50% closing price, too.

It really depends on all the circumstances.

My own experience is different -- I paid exactly 100% of the asking price of my present boat, and the buyer of my previous boat also paid 100% of the asking price.

But there is no "intrinsic value" in boats, and not really any such thing as "fair market value" either. If you find someone who really needs to sell, and you don't happen to have any competition, you might agree on an apparently ridiculous price. Or you might not find such a deal, as I did not. It really depends on the market and the particular circumstances.

[ramblinrod]

Originally Posted by DsquareD

In my experience, most things of this nature have some leeway. You are correct that some boats may sell at 100%. You are also correct that you have to know what typical pricing is for a particular boat.

We seem to disagree in negotiating style, not necessarily what is fair.

It's difficult to know what the actual selling price is of comparable boats (at least for me it is). Another thing that is difficult to know is the seller's situation. Maybe they just want a quick sale and will counter offer with anyone showing interest.

I'm simply transferring my previous negotiating style from other purchases. Sometimes a 50% opening offer may land you in a 75% closing price and if the seller was hoping to get between 75% to 100% and the buyer could afford the final price, then both should be happy. Certainly a 70% offer could have ended up with the same result.

Again if an owner prices a boat 100% more than it's worth, they are likely expecting 50% of asking price, hoping they find somebody stupid enough to pay more. If the purchaser offers 50% less, and the owner accepts, how much of a deal did the purchaser get? ZERO.

If an owner prices a boat properly, they are expecting (and will get) close to what they are asking (unless they are stupid, in which case that is a terrible boat to buy, because the owner was stupid and most likely did lots of stupid things to it, in which case, the actual selling price was correct after all).

By all means, offer way less on over-priced boats, but don't waste everyone's time offering way less on properly priced boats at or near fair market, it won't get anyone anywhere.

[DsquareD]

Originally Posted by ramblinrod

Again if an owner prices a boat 100% more than it's worth, they are likely expecting 50% of asking price, hoping they find somebody stupid enough to pay more. If the purchaser offers 50% less, and the owner accepts, how much of a deal did the purchaser get? ZERO.

If an owner prices a boat properly, they are expecting (and will get) close to what they are asking (unless they are stupid, in which case that is a terrible boat to buy, because the owner was stupid and most likely did lots of stupid things to it, in which case, the actual selling price was correct after all).

By all means, offer way less on over-priced boats, but don't waste everyone's time offering way less on properly priced boats at or near fair market, it won't get anyone anywhere.

I see what you are saying. In the ideal world everything you say is spot on and I agree with you.

Perhaps it is different in different localities as well and brokers know this. So the broker deliberately includes the expected negotiating amount into the listing price. Then, as in my case, the seller already bought another boat and doesn't want to pay winter storage at a time that produces very few buyers. So that "broker added negotiating room", minus winter storage, minus launching in the spring, minus sitting on it for another season all adds up to a big but fair discount.

So maybe our biggest difference in opinion is simply regional. I certainly don't mean to be contrary and one day when I see my ideal boat on the market for a very fair price I may make an offer much closer to the list price (pending survey, of course).

[robert sailor]

As others have said, do your home work, know what the boat you are after should sell for and try to find a real good example and if it's priced right buy it. If it's 30% above the market offer 30% less, it's not rocket science but you need to have good information before you buy a boat. If you find a real clean example of the boat of your dreams and it's priced right and your offer is 50 or 30 percent less all you'll do is piss off the seller and he won't deal with you.

[ramblinrod]

Originally Posted by robert sailor

As others have said, do your home work, know what the boat you are after should sell for and try to find a real good example and if it's priced right buy it. If it's 30% above the market offer 30% less, it's not rocket science but you need to have good information before you buy a boat. If you find a real clean example of the boat of your dreams and it's priced right and your offer is 50 or 30 percent less all you'll do is piss off the seller and he won't deal with you.

Precisely. When I'm selling a boat if someone tries a low ball, I just say, "No, the boat is worth what I'm asking. If you don't want it, someone else will."

If they don't immediately come up close to asking, I send them packing.

I had one idiot (first time purchaser) ask, "Do you know what is currently going on in the sailboat market?"

I advised, "I know exactly where the market is, and what this vessel will sell for to someone who knows what they are looking at. If you disagree, no point in wasting any more of my time here."

2 weeks later, the boat sold to another for exactly what I expected.

No one will ever be offended if someone offers market value or close to it. The first boat we ever purchased, was way over-priced.

When the owners asked if we were interested, we advised we liked the boat, but it was more than we were willing to pay. They advised the price was negotiable. We collected a number of listings for similar boats, and presented with our offer. We paid fair market value, 50% of asking. Had they been asking market value, we would have paid 100%; we liked the boat.

[DsquareD]

Originally Posted by ramblinrod

Precisely. When I'm selling a boat if someone tries a low ball, I just say, "No, the boat is worth what I'm asking. If you don't want it, someone else will."

If they don't immediately come up close to asking, I send them packing.

I had one idiot (first time purchaser) ask, "Do you know what is currently going on in the sailboat market?"

I advised, "I know exactly where the market is, and what this vessel will sell for to someone who knows what they are looking at. If you disagree, no point in wasting any more of my time here."

2 weeks later, the boat sold to another for exactly what I expected.

No one will ever be offended if someone offers market value or close to it. The first boat we ever purchased, was way over-priced.

When the owners asked if we were interested, we advised we liked the boat, but it was more than we were willing to pay. They advised the price was negotiable. We collected a number of listings for similar boats, and presented with our offer. We paid fair market value, 50% of asking. Had they been asking market value, we would have paid 100%; we liked the boat.

So, essentially, we're doing the same thing. You just prefer to list your items at or near the actual selling price and there is a lot to be said for that. If everyone did that, then we wouldn't have to start off so far apart.

I hate using the word "stupid" though. I would not call someone stupid for making a low offer. When I'm ready to sell my boat I will price it fairly, but will still be open to all offers. An offer shows interest and I certainly understand someone fishing for my bottom dollar. I will not send them packing until I have played out the possibility.

Hopefully our discussion illustrates to the OP the wide variance of thought on this subject.

[tms]

I've been watching 2000 and later Lagoon and Leopard Cats from 38' to 44' for sometime now. I think there is a decent enough demand for these so I can't imagine offering $180,000 for a 2006 Lagoon 440 that is listed for $360,000. I think maybe starting with about 70% of listed value might be a good starting point. You might pay more or less depending on survey.

I would offer $10,000 for a 1980's boat listed for $20,000, no problem.

Yet, every couple of weeks at least one of the $200,000-$250,000 Cats has a $20,000 discount.

I read a post once by a yacht broker who lamented the internet blind offer, but personally, I would prefer to get a ballpark estimate before committing to travel and survey.

[ramblinrod]

Originally Posted by tms

I've been watching 2000 and later Lagoon and Leopard Cats from 38' to 44' for sometime now. I think there is a decent enough demand for these so I can't imagine offering $180,000 for a 2006 Lagoon 440 that is listed for $360,000. I think maybe starting with about 70% of listed value might be a good starting point. You might pay more or less depending on survey.

I would offer $10,000 for a 1980's boat listed for $20,000, no problem.

Yet, every couple of weeks at least one of the $200,000-$250,000 Cats has a $20,000 discount.

I read a post once by a yacht broker who lamented the internet blind offer, but personally, I would prefer to get a ballpark estimate before committing to travel and survey.

The lament over the internet blind offer, is because the prospect cannot
possibly know the value of the vessel having never even seen it. Every time I
List a boat, I get 3 or 4 internet offers well under vessel value. How serious are these offers? Obviously not serious at all, just swindlers looking for sumthin for
nuthin.

[tomfl]

Originally Posted by tms

SNIP

I read a post once by a yacht broker who lamented the internet blind offer, but personally, I would prefer to get a ballpark estimate before committing to travel and survey.

There have been lots of posts at CF about folks who looked at pix of a boat on the internet only to find when they viewed the boat in person the pix did not show the true condition of the boat.

Even for an inexperienced person simply looking at a boat will tell you a lot about it. Even more so if the owner (or someone else) is actively living/cruising on it. Not saying you don't need a survey; just that I (and probably most other folks) could eliminate the need for a survey for a lot of boats by simply looking at them.

As has been posted earlier if something seems to good to be true it probably is. Bottom line is while some folks may get lucky most of the time a good boat will be fairly priced and boats that need a lot of work are the ones that sometime are over priced and wind up selling for half the asking price.

[landlockedsquid]

Originally Posted by ramblinrod

If you can't afford to boat, don't.

Stop wasting everyone's time (including your own) looking for that one "Deal of A Lifetime".

Boats that are priced properly and in demand, sell pretty much for asking, perhaps even more.

Boats that are crap (usually owner inflicted), sell for crap prices.

One has to deal with so many attempted swindlers, to find a fair and honest purchaser who is prepared to pay an appropriate amount for the vessel they want.

Just remember, if you are purchasing a boat, that some day, you will need to sell.

How many will you wish to deal with, going through every nook and cranny, inspecting every sail, only to have them offer half what its worth because they either have no idea of the value, don't have enough money to pay for what they are wasting your time looking at, or are just plain trying to swindle you out of your money?

I have but 2 words for someone offering 50% for a properly priced boat.

If you can't afford anywhere near what the boat is priced at, be honourable, tell the boat owner up front before wasting their time. When people do this, I tell them flat out, "No, the boat is priced fairly, perhaps you should be looking at something smaller or in lesser condition."

99.9% of the time, you get what you pay for.

If you do get a "deal" of 50% off the asking price, there is a simple reason, it was priced at 100% over fair market value to begin with.

Then of course, it is really no deal at all.

And one can spot these a mile away, they are priced 100% more than identical boats of equal value.

Oh ya? Well how does the buyer know you aren't the swindler?
I know a guy like you and the other eff off guy from earlier in the thread.
Lemme tell you a story about me and him.
I was gonna buy a house from this guy. Piece of crap house, but the 1/2 acre it was on was good. We agreed on a price for the house and he was going to carry the note for a short period of time, till I sold my house and got a construction loan to build a house on the lot. The interest we agreed on was 9%. My wife didn't like that and decided to try and get the interest down to 6%. Well he's one of those guys like you. He sets his price and theres no negotiating. He told me to eff off. In fact he told me to eff off and he wasn't going to sell me the house. Fine. Didn't bother me one bit. He did almost get his a** beat a few months later when he decided he wanted to start talking sh*t about my wife. My friend, his brother, saved his a** by telling him to shut up.
But 8 years later I own a different house and he still hasn't sold that piece of crap.
So go ahead and be like that to others. It really is no skin off a buyers back. Your the one that won't be selling the boat to them, or maybe you won't sell it to anyone.

[ramblinrod]

Originally Posted by landlockedsquid

Oh ya? Well how does the buyer know you aren't the swindler?
I know a guy like you and the other eff off guy from earlier in the thread.
Lemme tell you a story about me and him.
I was gonna buy a house from this guy. Piece of crap house, but the 1/2 acre it was on was good. We agreed on a price for the house and he was going to carry the note for a short period of time, till I sold my house and got a construction loan to build a house on the lot. The interest we agreed on was 9%. My wife didn't like that and decided to try and get the interest down to 6%. Well he's one of those guys like you. He sets his price and theres no negotiating. He told me to eff off. In fact he told me to eff off and he wasn't going to sell me the house. Fine. Didn't bother me one bit. He did almost get his a** beat a few months later when he decided he wanted to start talking sh*t about my wife. My friend, his brother, saved his a** by telling him to shut up.
But 8 years later I own a different house and he still hasn't sold that piece of crap.
So go ahead and be like that to others. It really is no skin off a buyers back. Your the one that won't be selling the boat to them, or maybe you won't sell it to anyone.

I rest my case.

[tms]

Isn't there a way to get a listing of recent comparable sales? For example, I like the Leopard 40 and Lagoon 400, I would think there would be several of these sold the last couple years. Is there a database that can be accessed for sailboat buyers?

[tomfl]

Originally Posted by tms

Isn't there a way to get a listing of recent comparable sales? For example, I like the Leopard 40 and Lagoon 400, I would think there would be several of these sold the last couple years. Is there a database that can be accessed for sailboat buyers?

Brokers pay to subscribe to a database with prices paid. Problem is the brokers submit data about the prices paid and there have been reports the data submitted does not always match what was really paid.

The thing is there is no such thing as a generic Leopard 40. Sails may be like new or blown out. Engine may have been run with not enough oil or seldom used and in pristine shape. You really have to look at a boat with a fine tooth comb and then pay a surveyor as well to get an idea what the real condition is. Four years ago I was looking to buy and looked at three PDQ cats. Asking price had an almost 50k range. The one with the lowest price had bare plywood in the salon where the owner was redoing it. Also saw one with a nice interior but fridge was shot and sail inventory was small.

A good surveyor has access to lots of paid prices. Problem is the boat they are surveying may be the same model but have significant differences from the boats sold for a particular price. Insurance companies base the value of a boat on what the surveyor says and that is probably the best value you will get. But the boat often sells for a different amount than the survey value.

[landlockedsquid]

Originally Posted by ramblinrod

I rest my case.

The only case you've rested is that you are the one who hasn't got a CLUE.
And don't worry, Rob, I will make sure that Sheen Marine never has to bother with me.

[tuffr2]

I am looking at a boat that is on consignment for 33k. I have no problem with an offer of 25k. Now saying that there are a ton of boats like this one so I have other options.

Once I sold small runabout boat just to get it out of my driveway. The buyer was at the right place at the right time. He probably got a 35% - 50% discount.