Bad Market - Good Negotiation Strategies ?

[Dockhead]

Originally Posted by svgiacomo

Does anyone have insight on market conditions in Europe (Germany/Holland specifically) v. the U.S.? Are most boats advertised prices significantly higher than actual selling price? How do bargaining customs differ there from here?

Thanks for the interesting thread, lots of good info here!

High-end sailboats in the UK are in great demand and scarce supply and command high prices. Asking prices are often firm. In many cases, 10 year old high-end sailboats sell for more than their original new price. Part of it is that the Euro has been (maybe not at this particular second) quite high in relation to the pound, so there have been a lot of foreign buyers.

It's my impression that prices in Germany and Holland are in general quite robust, and generally higher than in the UK. Whereas UK prices are probably higher than in the US for production boats (what they call "AWB" here -- average white boats); maybe not for high-end non-production boats.

[Doodles]

Originally Posted by rognvald

The "mind games" you proposed in your last tutorial. People who have bought and sold for a living never waste time . . . neither theirs nor a sellers. Get to the quick, or get off the stick. It makes for fair and honest dealings.

I agree, but I've found discussing brokers is right up there with anchors, guns and the mono/multi debate!

I have a great broker.

[Lagoon4us]

Originally Posted by Dockhead

High-end sailboats in the UK are in great demand and scarce supply and command high prices. Asking prices are often firm. In many cases, 10 year old high-end sailboats sell for more than their original new price. Part of it is that the Euro has been (maybe not at this particular second) quite high in relation to the pound, so there have been a lot of foreign buyers.

It's my impression that prices in Germany and Holland are in general quite robust, and generally higher than in the UK. Whereas UK prices are probably higher than in the US for production boats (what they call "AWB" here -- average white boats); maybe not for high-end non-production boats.

I've only investigated around the Med, the beauty of Euro countries for those who come from non-euro countries(in our case Australia) is the amount of boats that have not paid VAT so straight up there is a 20 odd percent discount.

I've also found the prices can be negotiated a further 10 to 15% approx.

Med boats tend not to have the solar extras that the more southern latitudes have.

Cheers...

[David_Old_Jersey]

Originally Posted by rognvald

The "mind games" you proposed in your last tutorial. People who have bought and sold for a living never waste time . . . neither theirs nor a sellers. Get to the quick, or get off the stick. It makes for fair and honest dealings.

Thanks for the response - I was / am genuinely interested.

In some respects I do agree with you, but (there always is a but!) when it comes to buying boats I don't think that is an appropriate comparison - for principally 5 reasons:-

1) The person buying a boat is usually an amateur buyer (when it comes to buying and selling boats). By amateur I mean that it is a rare / unusual transaction for them.

2) The professional buyer (i.e. someone who does that for a living) is often using someone else's money!

3) A professional buyer can usually afford to get a deal wrong as can simply take a swings and roundabouts approach over future (and past) deals......win some, lose some - the score only counts at the end of the game.

4) A proffessional buyer is (usually?!) very aufait with his specific market / the items being traded so can more easily make a quick decision on both whether to buy (or not) and at how much.

5) In practice a professional buyer will often be dealing with at least some parties they have an element of trust in (built up through previous deals), as well knowing who not to touch with a barge pole! / can spot trouble coming down the pipe from a mile away! And depending on who they are working for often some big sticks in the cupboard to keep people honest.


I appreciate that, as always, there are exceptions to the above.

In addition I would say that for both an Amateur and a Proffesional buyer a s/h boat is a real pig to both assess and then value!....for an Amateur especially it does simply take time and effort to do that - a Vendor / Broker can make the Buyers (and own) lives easier on that, but not every one of those realises that - or can be arsed. Happier to moan about "Timewasters" whilst sitting on an unsold boat (AKA folks who didn't mail a cheque immediately upon seeing the Advert on Google.....or who lost the will to live during the transaction ).


In regard to my suggested MO, whilst there are a few "Mind Games" (mostly involved around making the other parties sweat a bit), but those are incidental - fundamentally the approach is wrapped around a buyer not making any decisions or commitments until in a position to have obtained sufficient knowledge of the boat and not to give up control of the transaction (or his money).

I would also add that it is the intention to allow both parties to walk away with the minimum of cost (in cash and time) at any time, until the contract is signed (and even then, a boat purchase agreement is barely worth the paper it is written on - the transaction does rely heavily on both parties being willing).

FWIW, I would have absolutely no problem with any buyer taking the approach I suggested, either as a Vendor (which I am not presently) nor as a Broker (which I am also not!)....indeed, I would consider it a good sign as they were someone who had their sh#t together .

And of course I am not saying my approach is the only approach - folks free to do WTF they want (they usually do!)

[justwaiting]

Originally Posted by rognvald

Just a thought . . . it would be interesting to know how many hard bargainers" with little concern for wasting a broker's/seller's time have ever owned a retail business or worked as a commissioned salesman. My guess is zero to none since ,if they did, they would never treat another professional they way they, on occasion, have been treated themselves. The worst buyers in the worst markets are always those who think that everyone other than themselves is a crook, a cheat, or not worthy of respect. Once again, a hard bargainer can still be a gentleman and win.

On the other hand it would be interesting to know how many (of the unethical) brokers have stoped to consider or care about the time and money that misrepresenting boats has coast prospective buyers. Futhermore what consideration they have given to the flow on effect that their actions have had on the reputable brokers. I bet you any money that some one like Jordans could give you there own list of the 10 most "wanted" .... well he probably wouldnt even discribe them as brokers.

Buying a boat is not the same as buying most other things each is unique in some way. While the same could be said about houses far more regulation aplies to houses, real estate agents .... at least in Australia.

Inherentatly in the sale of a boat there is an inbalance of information of information between the seller and buyer. While the market favors the buyer, information favors the seller. Again who has not gone out to buy a boat only to be a victim of sellers misrepresentation, spending far more money and time than the seller does. OK so that may happen a number of times, but if they have a boat thats market value is as stated, the boat will sell.

As buyers we are to be encouraged to be open and honest (which in its-self is a good thing) yet look at most of the adverts 'boat for sale' in this forum, lol. What highlight this is those sellers who are honest and open (thinking Mike O Riely (sp) ) I suspect that one of the problems that he faces is the scepitism of buyers developed from dealing with shonks.

DOJ has a point of view that some of us may be uncomfortable with, but one that reflects the practices of both buyers, sellers and too many "brokers". If you can find some one that will repay your ethics go with it and you will have a great experience, if not follow DOJ,s advice

[stevensuf]

When i purchased my boat last september, i looked at the price of the cheapest one on on the market, same make/year, then offered 20 percent less than that price. I know the previous owner lost a good $30,000 on the boat in his one year of ownership ( found bill of sale, eu vat invoice paid, new sails etc receipts)!

I was a happy buyer, whether i will be a happy seller or not years down the line who knows!

[TomandAnitas34]

While decorum is relevant, the fundamental issue is the condition of the marketplace. You cannot make a seller, sell or a buyer, buy. Each sale or purchase is based on the perceptions of the involved parties, the choices of individuals. Speaking in general terms, the "tide" is lowering all the boats in the bay. We are in a market driven by fear. I present this as a fact. In evidence, I submit that gun sales are at their highest point ever, with a record 100,000 instant checks received by the ATF in a single day, last December. This, friends, is naked undefined fear. Fear of the future. Additionally, I submit house sales, where someone has the security and confidence he/she will be able to support the associated expenses for 20 to 30 years, are low, while people who rent are growing as a group. The question is whether or not these conditions will persist. I suspect it will actually get worse but I am somewhat pessimistic by nature. Throw in inflation, which is double what the "official" figures are, and you have an economic soup that is difficult for anyone to understand.
So back to boat price negotiations. I think they are mostly wishful thinking. For a seller, minimizing expenses and maximizing exposure for the long run is the best strategy. Perhaps the only strategy and it's not a great one. Within a time frame and within an economic environment, you will get what you will get. It's the hard facts. You can extend the time frame but if you don't raise the price, in two years you will loose 15% of the purchasing power of what you do get. For the buyer, the moment you ink the contract, you have just traded places with the seller. It is wildly unrealistic to expect a return of any kind on this investment. Your need for cataract surgery will not compel a buyer to rush to the table with an extra $15,000 . So there you have it. To me, it's a wonder that boat prices are as high as they are.
Like so many people here, I too have the cruising dream. I am rethinking it as well. My fantasy that I maybe able to " live lightly " on the water is getting a complete work over. Most people value security, at least somewhat. As a buyer, I must perceive that some the value of the boat will, in some way, exist when it comes time to sell. In this market that is not a sure thing. I must believe that I can find inexpensive places to go to in my boat, that won't charge me $100 per night to be there. Places like this are becoming fewer and fewer as time goes by. Maintenance costs are inflating as well. It puts buyers in the position where they can buy more than they can afford. Just because you can buy it doesn't guarantee that you can keep it up. I want a bigger boat so bad I can taste it but given the current economic conditions and my life expectancy, I have to wonder if I'm not a little out-of-touch.
I admire the resourcefulness, intelligence, energy and creativity of the people here who can make the dream work. Whether or not they acknowledge it, the folks on these forums are an exceptional group of people. I hope I find an economic model which will allow me to join the cruising fleet without leaving me destitute somewhere south of Norman's Cay. That model will not include a $100.000 boat that will bring $20,000 in a dead market when I exit salt water.
So perhaps reality is the best model for negotiating the sale price of your next boat.

[kthoennes]

Another excellent post from Tomandanitas34. Right on target. My wife and I have good six figure secure jobs, rock solid in any normal economy, yet there's not a day that goes by when I don't do a mental check about having a good parachute if we both lose our jobs tomorrow. Multiply that across a national or global economy, and it has to have a profound effect. We could easily afford more boat, but we're not doing it. I'm not naturally pessimistic either, but when governments can't stop astronomical spending, something has to crash eventually. We bought our last boat from a gentleman in a terminal condition sadly. Yes we got a "fire sale" deal, but he had no illusions and just wanted the boat and all the headaches and expenses off his mind. He could have just as easily told us to jump in the water. We offered what we offered because that's what we wanted to spend on a boat, and his circumstances had nothing to do with it. I just don't get the posters who think we had some ethical obligation to pay more for some reason. Next time you gas up your car, if the qwik stop is owned by a poor widow and she paid a higher wholesale price last week, you go ahead and pay $5 a gallon (US) for that gas just because you have some ethical obligation to overpay.

[Boulter]

Hi:

Thanks DOJ for the very detailed reply to my post a while back. I still have not taken that next step to actually make an offer, but I do have a mosture meter now!

I have been keeping a close eye on certain boats for about 8 months now. In a very unscientific way, in that time I have seen 1 of 18 or so Whitby 42s sell (after dropping the ask, no idea on sell) 2 of over 2 dozen CSY 44s with asks of $56 and $64K (the rest of the fleet are for the most part listed well above this), and while not having paid as much attention to other models like CS36T, Niagara 35, there is not much going on there either.

With the above level of sells in the above time frame, it is quite clear to me that there is plenty of scope for price movement downwards. Given my level of inexperience, my best plan is likely to get experience on OPBs this summer and wait for the ask prices to deflate the next year, or the year after. I like many here don't see the economic situation improving drastically any time soon.

Or if the boat finds me ...

Boulter

[zeta]

IMO the market is great right now for someone like me. I will retire in 6-12 months and want to make a lifestyle change. I want a small boat and get off the grid. I am a single, empty nester and care nothing about resell value as I believe I can do well @ under 20K for a boat I will be pleased with < 30ft. If I’ve had it after 5 yrs. of cruising and have to give the boat to charity, so be it. What have I lost? Not much in my estimation, less than 5 yrs. rent. I have no intention of selling and “getting my money back”, a fallacy I believe many expect. As with homes, many financed new boat buyers are upside down and can not escape. Boats, homes, cars, etc. become abandoned due to buyer over his head. If a seller doesn’t realize the market is down and falling further he will have a big reality check very soon. There is a hugh market correction world-wide as major assets are rapidly deprecating and stagnant wages abound, toys are the first things to go and to many boats are just that, so I will pay what I think something is worth to me and will not second guess nor fret over getting ripped off or ripping someone off. I will not fall in love with a boat until she becomes mine, then I will make her my home and treat her as such, never once thinking I need to get my money back. As with most that are cruising I will be on a fixed budget, but my health care costs are reasonable (retired military) and I am sure I can live the way I want on my budget (~$2.4K/month) as I will be cruising, not tied up dockside. So I go into this buyer’s market with no intention of ever reselling and that takes a huge burden off my shoulders and allows me to find a boat for me and not what someone else will like in a few years. I love this market!

[Ex-Calif]

Free market economies. Buyers buy and sellers sell. No one has a gun to their head.

The ethics discussion is confounding.

My dad was literally begged to buy an airplane off a friends widow. He already had 3 airplanes and definitely did not need another. He helped her place the ad and offered to assist in the sale. The airplane was "worth" about $25k.

In 4 months she hadn't sold. The airplane was deteriorating and costing insurance and ramp fees. She begged him again to offer anything.

He bought it for $12k. To characterize better, she said "offer anything." He said, "I really don't need an airplane but I could give you $12k."

He didn't need it and when I found out what had happened he talked me into buying it from him for $12k. I flew it for 3 years and sold it for $23k.

Was my dad immoral? Was I immoral?

She was happy to unload the airplane, my dad carried it for a few months before he convinced me that I needed it. The guy I eventually sold it to was very happy when he flew away.

My dad could be viewed as immoral or he could be viewed as helping an old lady out of a spot.

Same with boats. I have no qualm buying from distressed sales.

[denverd0n]

Originally Posted by Ex-Calif

She was happy to unload the airplane, my dad carried it for a few months before he convinced me that I needed it. The guy I eventually sold it to was very happy when he flew away.

No one was forced to do anything they didn't want to, and everyone ended up happy. Everyone, from their own perspective, came out ahead on the deal. How could there be anything wrong with that?

What's more, this demonstrates why it is simply wrong to think that someone has to lose in order for someone else to win. In this case, everyone was a winner--everyone came out ahead, everyone got what they wanted, everyone ended up happy. It's a beautiful thing.

[rognvald]

Originally Posted by Ex-Calif

Free market economies. Buyers buy and sellers sell. No one has a gun to their head.

The ethics discussion is confounding.

My dad was literally begged to buy an airplane off a friends widow. He already had 3 airplanes and definitely did not need another. He helped her place the ad and offered to assist in the sale. The airplane was "worth" about $25k.

In 4 months she hadn't sold. The airplane was deteriorating and costing insurance and ramp fees. She begged him again to offer anything.

He bought it for $12k. To characterize better, she said "offer anything." He said, "I really don't need an airplane but I could give you $12k."

He didn't need it and when I found out what had happened he talked me into buying it from him for $12k. I flew it for 3 years and sold it for $23k.

Was my dad immoral? Was I immoral?

She was happy to unload the airplane, my dad carried it for a few months before he convinced me that I needed it. The guy I eventually sold it to was very happy when he flew away.

My dad could be viewed as immoral or he could be viewed as helping an old lady out of a spot.

Same with boats. I have no qualm buying from distressed sales.

There is nothing amoral about a "lowball" offer. And, your father's offer certainly was not immoral. Many of these offers, such as your father's, are handled honestly, fairly and translate into deals. There is, however, in other cases an honest and straightforward approach to the deal where both the buyer and the seller are aware that a low offer is going to be made up front which gives the seller an opportunity to kill any pending negotiations or wasted time and effort if he is not willing to consider the offer. And, contrary to a previous respondent's comment that professional buyers are using another person's money, it disregards the millions of small business owners across the country/world that buy and sell on a daily basis for profit. Their successful negotiations depend upon their honesty as a seller or a buyer whether its a one time sale or a long term relationship. Donald Trump, the American billionaire, has a reputation as a hard bargainer. He also has a reputation as a fair and honest businessman that produces a quality product . . .ergo, his success and appeal of his brand. On the other hand, you have the duplicitous Bernie Madoff who through deception and sleight of hand accumulated millions of dollars as he destroyed the lives of all those around him. His product and brand were junk. His fate was sealed by his business tactics. The point is that how you negotiate is a direct reflection of who you are as a person. Contrary to the "Blue Collar/Working Man's" stereotype of the dishonest, shady salesman/businessman who hoodwinks his unsuspecting customers for financial gain, the key to successful dealing for most in both a business and personal sense is to be honest and straightforward and the rewards will be forthcoming. What do you really have to lose?

[Sand crab]

Sometimes a guys just a dick and you got to teach him a lesson.
A million years ago when the real estate market was good I was selling my own house FSBO I had 2 interested parties one was a lawyer and his wife and the other were a husband and wife realtor. The lawyer was jerking me around and trying to get the house for nothing but the realtors really wanted the house and gave me an unheard of substantial non-refundable deposit with a closing in 6 months. They had to sell their house first so I insisted on the deposit money paid to me first. It was a good deal and mutually beneficial. Meanwhile the lawyer keeps trying to screw me to the point that I would have to write a check to sell it to him. We go back and forth verbally about changes to a potential contract but nothing was ever in writing and no deposit was ever tendered. He thinks he's jerking me around but it's me having fun at his expense. One month later I'm moving out and he shows up to make another stupid offer and asks me what's going on. I tell him I got contract on the place. He starts yelling that he was negotiating in good faith and I tell him that actually I was negotiating in good faith you were trying to get the house for nothing. He leaves threatening lawsuit, blah, blah, blah. Never heard from him again and the house closed right on time.
The moral of this story is to offer what ever you think it's worth and walk away sooner rather than later. If your offer is too low many will not take you seriously. You do run the risk of offending people. I'm reminded of the recent similar thread about how much to offer on a near new Outremer 49. Posters were saying knock 30% to 50% off of asking and I was saying "not on that boat". Well that strategy must not have worked because that same boat was at Strictly Sail Miami recently still for sale.

[Nemo55]

I for one will always deal on a solid foundation of honesty and openness,,some may call me a fool for doing so, but i have been buying and selling Classic cars now for a long time. I have always given the buyer all the information i had about the said Automobile, and in most cases i have also given the buyer three days in which to change his or her mind. and No i am not a car dealer,,i am just someone who's hobby involves older collector cars.
The buyer has the right to make an offer that seems fair to him or her,,and the Seller(me) is free to refuse the offer,,,sometimes while throwing them bodily out of my driveway(yes i have had to do this)as some buyers seem to think they have a right to hold you captive to their meanderings and insults.
As to ripping off old ladies or the infirm,,i do believe this happens,and i don't think very much of people who do this, for example,,my daughter was recently ripped off by a real cheesy seller, my first reaction was to go and take a baseball bat to his legs,,but after some thought i decided that My Daughter had to learn a valuable lesson,,even if it ended up costing me to correct the deficiencies with the said car. and no i will not do this to someone else,as my Karma or my ability to sleep soundly is important to me.
Caviat Emptor is a watch word to keep close to heart,,but i find it sad that some people think of profit at any cost,and go the extra mile to get it.
They certainly will not get my business, and if and when it does occur they can count themselves lucky they can still walk afterwards.
Lastly..."I say Deal with people as you wish to be dealt with and the world will turn" Happy transacting shipmates..