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Old 25-10-2016, 08:56   #91
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Re: Average Discount to Price

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Originally Posted by valhalla360 View Post
Your statements so far are inconsistent with someone who bargains but hey, if you say one thing and do another, you won't be the first.

If you are selling an F150, pricing it right makes a lot of sense because you can literally find hundreds or thousands within 20miles of any major city. There are well established pricing estimates including adjustments for equipment and condition. It's easy to find the going rate and if you deviate significantly, you either lose money on a quick sale or no one will even call because you priced it too high. Plus for most people it costs little or nothing to sit on it for 6-12 months waiting for a buyer. Also buying a few hundred miles away can be done without incurring a major expense opening up a larger selection and further applying the law of averages.

With cruising boats, it's unusual for a model to have even 100 built per year. Many models are in the single digits. Outfitting varies wildly and owners often don't understand the $20k electronic system that is 10yrs old adds almost nothing to the final sale price. There may be damage that the owner isn't even aware of. Storage for a cruising boat is typically measured in thousands per year. If the boat isn't local, a buyer not ready to go full time (as most are) must discount to cover the cost of getting it home which often means thousands in transport costs.

The idea that you can expect the typical seller to set the "correct" price is ludicrous. As a buyer, prices will be all over the map and the only way to find out what the market will bear is to test the market with a low offer.

Reality, is the typical owner doesn't have the information to set a "correct" price and brokers often steer owners for their own purposes (an underpriced boat may cost him 10-20% of his commission but it will sell quickly with negligible effort). With so much variation, the asking prices are just that asking. They have almost no bearing on what the "correct" price is.
Please. Did I say once, "Never offer 50% of asking price.

NO! I would never suggest that. I have done it myself, even less.

I said, "Don't waste your time running around offering 50% of the fair market value for good boats that are in demand."

Two completely different things.

Are there good boats in demand that are correctly priced?

Absolutely!

They are selling.

Are their boats on the market over-priced?

Absolutely! They are not selling for any where near asking price.

(The marine market sales cycle is longer than the auto market due to a number of factors, but other than that, not so different.)

If you see a boat your are interested in, and you research it, determine market value, and offer 50% fishing, that's fine. You only risk looking stupid.

99.5% of the time you'll be told you have to come way up. If you don't, you'll be told to walk very quickly.

If you have no intent of ever offering near market value, shop for something cheaper, you simply can't afford what you are looking at, and are wasting every one's time looking for that "deal of a lifetime".

Inspecting boats for entertainment is not cool, it's a waste of the seller's and your time.

If you have been actively shopping for a boat for 6 months, with no specific model in mind, and you haven't bought something yet, you are obviously doing something wrong and wasting a lot of valuable time in the process.

If you eventually do find that deal of a lifetime, and calculate the time, effort, and lost opportunity cost, it likely cost you more than just paying a reasonable amount for a properly priced boat earlier. It's like driving across town to get $0.50 cheaper toilet paper; did you really score a great deal?
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Old 25-10-2016, 09:17   #92
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Re: Average Discount to Price

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Originally Posted by ramblinrod View Post
Old 25 ft non-runners are a dime a dozen. They really have no value. (Trailererables are a different story.)
The proof is that you were willing to give it away.
50% of nothing is nothing. That they offered you something as a courtesy
is something. You did well to get rid of it and get something for it.
Yes I agree. But what made them offer me something was the fact that 1. the boat was in the water so no add'l cost to transport and launch, 2. they needed a boat they could use right away and not spend weeks or months or years bringing her up to a sail away condition and 3. compared to anything they've seen, incl. "free give away boats" this one was in the best of shape.

The biggest mistake most people getting the boats at the lower end of the price scale make is to expect their boats to be blue water sailors or to be capable of eventually becoming "beauty queens" if only they make a little effort. Those situations usually end up not well both financially and otherwise. However if one gets into ownership of an older cheaper/free boat with the idea "it is what it is" and treat her not as something to be totally refitted but to be used as is where is and with the thought that it's better to be on the water sailing a so-so boat than to be slaving away to someday afford a better boat one is already way ahead of the game. People here can snicker all they want about "cheap or free derelicts" and to pontificate about seaworthiness or this or that shortcoming but for the vast majority of boat wannabies the reality is that the most boat they can afford is way down the $$ scale. And that forces them to make a choice of getting an older TLC boat or none at all or be forever stuck with the limited satisfaction of still expensive club membership or some such. IMO any boat which floats and has a working engine of some kind and sails which don't rip at the first puff of wind should be good enough for these less than wealthy wannabies/newbies provided they approach boat ownership realistically and understand their limits and taper their wants accordingly.
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Old 25-10-2016, 09:54   #93
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Re: Average Discount to Price

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Originally Posted by kmacdonald View Post
^ Yep. Island Packet closed their door because they couldn't sell new boats when the price of used ones was so low.
That is part of it, part is also when there is very little difference in new vs old, its tough to justify new. They didn't innovate, or go cheap. I believe they got caught is a spiral, the few boats you sell, the higher the price you have to get for each new boat as there are so many fixed costs in manufacturing, so the higher the price, the fewer you sell, requiring higher prices just to break even, pretty soon your overpriced, and not making any money.


Attitudes have changed I believe for people that buy new, people want what they have been getting in houses more and more, that is X amount of dollars per sq ft, they want big, flashy and inexpensive for the size, and they want whatever they can brag about.
They don't want a hand built quality anything, have no use for something that will last over 20 yrs, cause they know in all likelihood in 5 yrs they will have sold the boat and bought an airplane or beach house or something else.

Now a custom boat builder I think is different, more likely they are building for someone that knows a thing or two about boats and does want quality, and knows quality isn't cheap.

IP wasn't a custom builder


What the heck has that got to do with used boat prices? I think that used boat buyers are similar to new boat buyers, they want big, flashy and whatever is popular, they want bragging rights to their circle of friends.
So big, flashy and popular sell well, and your deals may be better in not popular, but better built boats. Catamarans I believe sell well, and monos with walk though transoms come next, and last I believe are monos without a Sugar Scoop
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Old 25-10-2016, 15:29   #94
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Re: Average Discount to Price

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If you have been actively shopping for a boat for 6 months, with no specific model in mind, and you haven't bought something yet, you are obviously doing something wrong and wasting a lot of valuable time in the process.
Rod, while I agree with many of your observations, the above is not always true. Consider the case of the knowledgeable and experienced buyer who seeks something better than the average production boat. Ann and I were i n that situation whilst seeking our current vessel. We wrote up a list of criteria, things that we specifically wanted, things that were "value added" to us, and things that were unacceptable... deal breakers. It had 21 items listed, and we would give that to every broker that we encountered. Their reactions varied a lot. Several said things like "I wish every customer had their ideas lined up this well, for it saves us both a lot of trouble", and one said "you are wasting my time, for there is no such boat, so get out of my office".

After three years of active searching, we found and bought our current boat. It satisfied 20 out of the 21 criteria, and had a reasonable substitute for the failed item (sit-down navigation station). I don't think we were doing anything "wrong" nor wasting time. If one wants something out of the ordinary, extraordinary efforts may be required, and rapid success is unlikely.

We also found that even after extensive communications with distant brokers, they grossly misrepresented some of the subject vessels, sometimes causing us considerable travel expense to view a totally unacceptable boat. We learned to not trust them at all, and that it usually was more productive to speak to the owners, for they were not as accomplished at misrepresentation. A great learning experience for us... how ironic that we do not expect to buy another boat and thus exercise this knowledge!

Jim
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Old 26-10-2016, 16:05   #95
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Re: Average Discount to Price

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Originally Posted by Jim Cate View Post
We wrote up a list of criteria, things that we specifically wanted, things that were "value added" to us, and things that were unacceptable... deal breakers. It had 21 items listed, and we would give that to every broker that we encountered.
What was your list? It might help some of these new buyers.
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Old 26-10-2016, 18:50   #96
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Re: Average Discount to Price

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Originally Posted by SVNeko View Post
What was your list? It might help some of these new buyers.
sorry, but we made up that list 16 years ago, and several computers have died with inadequate backing up since then. That is to say, the original is not available! And, it was pretty idiosyncratic, reflecting our own (well developed) prejudices. Not likely to be of much help to others, sadly, even if I could find a copy.

It included things like:

Size between ~42 and ~50 feet OAL

No split rigs

No saildrives

No volvo engines

No ferrocement hulls

Preferred hull material FRP, Auminium, possibly steel (ended up buying a strip plank timber composite boat, much to my surprise and eventual delight)

Fin keel, spade or partial skeg rudder preferred

Cutter rig preferred

Solar and or wind charging value added

SA ratio greater than (some value that I don't remember) dunno why that happy face shows up there. I wrote SA to D with a colon.

L ratio no more that medium, favoring lighter again L to D ratio

Long LWL compared to LOA

Light air sails value added

and so on...

Despite this degree of specificity, and the obvious truth that we were pretty experienced cruisers at the time, some brokers insisted on showing us boats that encompassed one or more of our "deal breaking" specs. This was often accompanied with statements like "what you really need is this ferrocement Tahiti ketch..." One wonders how many boats they sell with that sort of approach?

The boat we eventually bought was not listed anywhere... a word-of-mouth transaction entirely. I suspect that many unusual and particularly nice boats sell like that. Oh, as to the OP's question, we essentially paid the asking price, and it wasn't cheap, but it was fair IMO.

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Old 27-10-2016, 04:39   #97
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Re: Average Discount to Price

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Originally Posted by ramblinrod View Post

I said, "Don't waste your time running around offering 50% of the fair market value for good boats that are in demand."
The problem is "fair market value" is what a willing buyer will give a willing seller.

As explained in my previous response, this isn't an F150 where the market is well established accounting for all the variables and a buyer and seller can simply check the market and come up with a price that is accurate to within 10% of the "Fair market value" and negotiate from there.

The only way to find "fair market value" on low volume, highly modified items of wildly varying condition is by testing the limits of what the willing seller will take.

A good comparable is high end collectors items. For insurance purposes or to set up an auction, they will often have a "fair market value" assigned but when they go up for auction, it's common place for the final sale price to be drastically different (mostly much lower but on rare occasions higher). The reason is the same. "Fair market value" simply can't be determined with any accuracy on rare items because the sample size it too small. This includes not only the sample size of the items sold but the sample size of people interested in buying and selling said item.
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Old 27-10-2016, 11:06   #98
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Re: Average Discount to Price

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Originally Posted by valhalla360 View Post
The problem is "fair market value" is what a willing buyer will give a willing seller.

As explained in my previous response, this isn't an F150 where the market is well established accounting for all the variables and a buyer and seller can simply check the market and come up with a price that is accurate to within 10% of the "Fair market value" and negotiate from there.

The only way to find "fair market value" on low volume, highly modified items of wildly varying condition is by testing the limits of what the willing seller will take.

A good comparable is high end collectors items. For insurance purposes or to set up an auction, they will often have a "fair market value" assigned but when they go up for auction, it's common place for the final sale price to be drastically different (mostly much lower but on rare occasions higher). The reason is the same. "Fair market value" simply can't be determined with any accuracy on rare items because the sample size it too small. This includes not only the sample size of the items sold but the sample size of people interested in buying and selling said item.
We disagree on this.

I evaluate fair market value for customers all of the time.

I can predict the selling price and speed very accurately most of the time (say 19 times out of 20).

Your reference to predicting "one-of-a-kind" items is irrelevant. There are lots of identical or very similar boats for sales. They just come in various degrees of condition or equipment which value is easily be calculated for the vessel fair market value.

In general, people choose a particular vessel based on emotion, but usually pay close to fair market value, because:

A) The purchaser doesn't want to pay too much
B) The seller doesn't want to accept too little.

Why would a seller agree to 50% less than value, if he suspects someone will come along shortly and offer 100%?

In my experience, a seller only accepts 50% less than asking, after attempting to sell an overpriced vessel too long, and realizing nobody is likely foolish enough to offer 100% over fair market value.
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Old 27-10-2016, 11:54   #99
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Re: Average Discount to Price

I'm going to sort of agree with ramblingrod but I also agree with Jim Cate. Most production boats are not that hard to find a fair market value on, so very few really hot deals out there. It can take time to make a purchase when your as experienced as Jim because he knows what he wants. All you have to do is cross a few oceans and cruise for a few years and you will, by default, start to get pretty opinionated and many of your opinions are probably spot on.
I have met a lot of cruisers that did more due diligence when they bought their latest flat screen TV than when they bought a cruising sailboat. Don't ask me why but if they manage to put in a couple of years of active cruising (actually going somewhere) they will also start to get quite opinionated and it's not long and they are shopping for anot her boat.
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Old 27-10-2016, 11:58   #100
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Re: Average Discount to Price

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Originally Posted by Jim Cate View Post
Rod, while I agree with many of your observations, the above is not always true. Consider the case of the knowledgeable and experienced buyer who seeks something better than the average production boat. Ann and I were i n that situation whilst seeking our current vessel. We wrote up a list of criteria, things that we specifically wanted, things that were "value added" to us, and things that were unacceptable... deal breakers. It had 21 items listed, and we would give that to every broker that we encountered. Their reactions varied a lot. Several said things like "I wish every customer had their ideas lined up this well, for it saves us both a lot of trouble", and one said "you are wasting my time, for there is no such boat, so get out of my office".

After three years of active searching, we found and bought our current boat. It satisfied 20 out of the 21 criteria, and had a reasonable substitute for the failed item (sit-down navigation station). I don't think we were doing anything "wrong" nor wasting time. If one wants something out of the ordinary, extraordinary efforts may be required, and rapid success is unlikely.

We also found that even after extensive communications with distant brokers, they grossly misrepresented some of the subject vessels, sometimes causing us considerable travel expense to view a totally unacceptable boat. We learned to not trust them at all, and that it usually was more productive to speak to the owners, for they were not as accomplished at misrepresentation. A great learning experience for us... how ironic that we do not expect to buy another boat and thus exercise this knowledge!

Jim
Hi Jim,

There are certainly exceptions to every rule, but I think you missed the very important word in my statement "actively".

I consider "active" shopping, as someone who has decided they are definitely going to buy a boat, and are now "actively" on the hunt for the right one.

This consists of researching the available inventory on the internet daily and inspecting about 3 boats per week.

Setting criteria and then sitting back until something pops up, is "passive" not "active" shopping.

So yes, one can "passively" shop for years, but nobody can "actively" shop for a long period, it would cost too much (both time and money) and would drive one insane, with all the great boats they passed over, and could/should have been enjoying.

Passively shopping for years, dropping 50% of market value offers with no real commitment all over the place, on boats one may not even really want, is just a huge waste of time for everyone (including the perpetrator).

Constantly monitoring the used market, is a common pastime for all sailors, and is neither "passive" and most certainly not "active" shopping, its just "dreaming".
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Old 27-10-2016, 12:04   #101
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Re: Average Discount to Price

For the most part I think people pat too much for older boats. That's why everyone says you never get your money out of upgrades or repairs. 25 year old boats are near worthless if they need a new engine, sails, rigging, interior cushions, electronics, paint, etc. Now if the boat was free you might get SOME of your money back, but not much.
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Old 27-10-2016, 12:31   #102
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Re: Average Discount to Price

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For the most part I think people pat too much for older boats. That's why everyone says you never get your money out of upgrades or repairs. 25 year old boats are near worthless if they need a new engine, sails, rigging, interior cushions, electronics, paint, etc. Now if the boat was free you might get SOME of your money back, but not much.
You make a good point but it doesn't just cover 25 years and older. If you take a modern production boat and cruise it for 15 years you will be in just about the same spot. If you find a 25 year old boat in excellent condition that has had most of its systems upgraded and or replaced it can be a better buy than a 10 year old boat that has not been well looked after. Boats after the first 10 years are more about general condition than the year it was built.
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Old 27-10-2016, 12:54   #103
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Re: Average Discount to Price

^ I agree. Buy a boat someone else fixed up but be careful to make sure it was done well.
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Old 27-10-2016, 16:11   #104
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Re: Average Discount to Price

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Originally Posted by ramblinrod View Post
Hi Jim,

There are certainly exceptions to every rule, but I think you missed the very important word in my statement "actively".

I consider "active" shopping, as someone who has decided they are definitely going to buy a boat, and are now "actively" on the hunt for the right one.

This consists of researching the available inventory on the internet daily and inspecting about 3 boats per week.

Setting criteria and then sitting back until something pops up, is "passive" not "active" shopping.

So yes, one can "passively" shop for years, but nobody can "actively" shop for a long period, it would cost too much (both time and money) and would drive one insane, with all the great boats they passed over, and could/should have been enjoying.

Passively shopping for years, dropping 50% of market value offers with no real commitment all over the place, on boats one may not even really want, is just a huge waste of time for everyone (including the perpetrator).

Constantly monitoring the used market, is a common pastime for all sailors, and is neither "passive" and most certainly not "active" shopping, its just "dreaming".
Rod, perhaps you also missed that we were indeed looking actively, watching "Trade-a-boat" and various internet sites on a regular basis. Daily? No, but the market does not fluctuate that much. Remember, this was in Australia, not florida, and the marketplace can be searched much more rapidly when it is small.

Your idea of inspecting three boats a week does not work very well when one is not looking for a run of the mill production boat... there just are not so many around to inspect. We were willing to extend our view as far as New Zealand, and entertained some prospects there. None passed enough of the criteria to warrant a trans-Tasman trip to inspect.

At any rate, I think we were actively searching, that we had realistic criteria, and that indeed, it took three years to find our boat. We did not represent a typical buyer, but there are others like us, and your generalizations just do not universally apply.

Oh, BTW, w did not drop any offers at all prior to finding Insatiable, 50% or otherwise The long delays were not fiscally driven, but rather by lack of suitable boats

Jim
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Old 27-10-2016, 18:52   #105
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Re: Average Discount to Price

I don't think one should be buying a boat strictly on it's residual value sometime down the road. The only question IMO is - will this particular boat fulfill my particular needs for the next XXX years? The rest is just fluff. And as a corollary one should not be expecting to get ANY $$ out the resale sometime in the future. Meaning that whatever one puts into the boat over the years will not be recouped upon its resale. Once one can accept these conditions and limitations the rest is easy.
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