How to Make a Successful Purchase Offer

[s/v Beth]

I recently bought a boat and have also sold one.
I offered 40% below, they laughed, I thanked them kindly and walked away. 2 months later I said OK, 20% minus problems that come up at survey. They said OK. Survey showed 50K worth of problems! They sold at 40% below and were happy.
The one I sold- they offered 40% below, but needed to go up to Canada with it. I said I would haul it for full price, they negotiated without the outboard. I got everything for about 10-15% below asking. And I got paid for hauling it of course.
Lessons- a good survey is worth 10 times what you pay for it.
The nice people get the best deals.

[letsgetsailing3]

The problem with low-balling is that the seller knows that's what you're doing, and can't really take your offer seriously. It could work, but I'd only use that approach if it's a boat you're pretty indifferent about and don't mind going the low-percentage-of-success route. That approach has the danger of annoying the current owner to the point where they don't want to do business with you. You've started out the relationship with an annoyance.

Offer what you think is fair, or just under that. Then the seller knows you're serious, and may just accept outright. Keep the relationship good, and then you'll be better able to close the deal.

[Ex-Calif]

First rule of negotiating. Let him make the first number...

"Look I know your boat has been listed for 3 years. I really like the boat but there are a lot of unknowns. What's the lowest you'd take for her?"

a) He offers a decent lower number - counter lower by 10%
b) He refuses to budge or comes down notionally - "Look I get it but really that's a lot more than I can afford to do. Here is an offer 50% of your asking price. If you want to move the boat now or in the future please keep my offer as a back up."

Then walk away.

Your first offer has to be lower than you are willing to pay. Otherwise you have no negotiating room left and if you want the boat you will overpay on his next counter 99% of the time.

BTW - The 50% number in b considers a boat on the market for 3-4 years. The XX% is gonna depend on whether there are similar boats on the market that are moving and how much they are going for.

I am selling my boat and potential buyers have said they follow me on CF - Yikes. The bottom line is I am motivated and won't be insulted by lower offers. I may not accept them but I might. At the end of the day I want a happy buyer, a happy me and boat that is gonna get miles of happy use.

[brownoarsman]

I never understand why people would offer a price, and then intentionally use the survey to knock it down. You may have just bought yourself the cost of a survey, especially if the owner thinks his price is fair and can't be convinced otherwise. I preferred to make a reasonable low offer, and tell them that I was expecting problems, and so would use survey as a walk or buy, rather than negotiating tool. On two boats I looked at, issues were apparent on personal inspection that were very bad. The owners didn't know of them. I took photos of them, documented them, and sent them in. The owners still wouldn't budge on their price. If I had used a surveyor, j would've been out a grand on a hope that the seller was reasonable.


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[Ex-Calif]

Originally Posted by brownoarsman

I never understand why people would offer a price, and then intentionally use the survey to knock it down. You may have just bought yourself the cost of a survey, especially if the owner thinks his price is fair and can't be convinced otherwise. I preferred to make a reasonable low offer, and tell them that I was expecting problems, and so would use survey as a walk or buy, rather than negotiating tool. On two boats I looked at, issues were apparent on personal inspection that were very bad. The owners didn't know of them. I took photos of them, documented them, and sent them in. The owners still wouldn't budge on their price. If I had used a surveyor, j would've been out a grand on a hope that the seller was reasonable.


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It is always best to get to the owner directly and bypass the broker. Having said that, no seller wants their boat bad-mouthed. It stresses out the deal at the very least.

When the offer is made an agreed condition of the boat is made, prior to survey. If the survey reveals things then renegotiating is fair. If the issues can't be resolved either by fixing or price then the deal falls apart.

It's nothing personal. Buyers OTOH need to understand (many don't) that all boats have lists of to do's, even new ones. There is a price at which a buyer and a seller are both happy.

[brownoarsman]

Oh I get that; if the boat is not in the condition at which you agreed to buy it: renegotiate, owner fix, or walk. But the way the OP phrased this and the ways it's been presented in the past, if I understand her right; she has no intention of paying close to the asking price or even her own offer price, but would rather use the survey to knock it down post-offer. If she does this, then she's out of luck if the surveyor doesn't find anything, and out the survey cost if he does but the seller doesn't want to budge. It just seems like this method places unnecessary risk on the buyer,
vs. getting the low price offer accepted up front. Sellers, after all, can be very tied to a price.


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[SimonV]

Originally Posted by koawm

In general I am a fan of lowballing from the getgo. Market prices are subjective based on condition. If he's paying dock fees and not maintaining the boat at all he might be desperate and accept your initial offer just to get it off his hands. Like I've heard so many sailors say "a boat is not an investment". You'll never get more money out of it than you spent on it if you're actually sailing it.

so how's your low ball attitude going? Have you got your boat at your price.
If a boat has been on the market for some time at the cheapest end of its brand then there is something wrong with the boat. On the other side what I am seeing is more listings where the owner is listing for what they are willing to except plus 5-10% wiggle room. Good boats do not stay unsold for long, pricing a boat too high will just poison it as every month the price goes down and watchers watch. Just had a look at a nice boat priced at 50% below the norm. It sounded good from the add and photos, looked good from the outside, but inside was a tide line, swollen sole and lower bulk heads. Still way overpriced by 45%.

[Scout 30]

Getting advice on how to negotiate is a good idea. Asking for list price/sale price percentages or offer/sale price percentages is not. The numbers provided by anyone on this site will be anecdotal at best & arbitrary at worst. Unless you are a broker with access to a large enough database to provide reliable statistics you cannot get a reliable median list price/sale price percentage and no database would include offering prices, only list & sale prices. If you do hire a broker who can generate some kind of median list price/sale price percentage it would still be based on the general market or whatever market segment the broker inputs. You have to remember that the median value is really only a guideline that has statistical relevance but may not be relevant to your particular situation.

[Julie Mor]

So let's say going into the offer phase of the process you know the boat about as well as a buyer can without the aid of a surveyor or the knowledge gained from being able to turn things on to see if they work. You have asked questions of the owner and the owner has answered, maybe to your satisfaction, maybe not. You've done about as much investigating and inspecting a reasonably knowledgeable buyer can do prior to making the offer.

You then make a list of all the knowns and unknowns and price out each either by just figuring material costs for those things you can fix or by installed price for those things you can't DIY.

Next you get the recent sold prices of the same make and model and find the average selling price is xx% of asking price. But you really don't know how their condition compares to the condition of the boat you are looking at.

Certain things HAVE to be done, so do you deduct the cost of those from the asking price right off the bat or do you let the surveyor price them out later?

Certain things most likely will have to be done, like replacing the electronics. Do you deduct those items from the asking price or wait for the surveyor?

Then there's cosmetic things like paint. Maybe you see scratches on the hull that few buyers would live with, paint bubbles on metal spars tell you that needs to be looked at. Things most people would see. How do you handle that?

You can't know about the engine (or the generator, if there is one) because without the owner there, the broker won't start either. Same with electronics, pumps and motors. You may only know the age but you will know how they look because you saw them and took pictures you later examined.

You have no idea about the bottom or zincs or metal because it's in the water. I'm guessing that has to be left to the surveyor.

From this point, how would one proceed in coming up with that first offer number?

a) Deduct the cost of everything you want done from the asking price?

b) Deduct the cost of everything that has to be done to make the boat safe and sailable? The dollar value being created by having it professionally done.

c) Deduct the cost of everything that has to be done to make the boat safe and sailable? The dollar value being created by material costs on DIY projects and professionally done costs for the rest.

d) Deduct the xx% established by sold boats and take an extra ??% off for negotiating?

e) Tap the broker for a number he or she believes will draw the owner into accepting and let the survey, and whatever else comes up be used as a tool to reduce the final sale price?

f) Forget the boat and use the money you would have spent on this whole offer/survey thing and have fun with the money instead?

[letsgetsailing3]

The price you're willing to pay is about you, not about the boat. What's it worth to you?

The price the seller is willing to sell for is not about you, but about him.

Hopefully, there is some overlap there, and your job is to find it. At the low end is fine, but anywhere in the overlap is really OK.

Trying to come up with a formula for this is a pointless endeavor. Figure out what you think the boat is worth to YOU, in the current condition, and try to get the boat for that. Don't drive yourself nuts trying to emulate someone else's deal, because they're all a little unique. If it needs some work, you should base your analysis on what that work is actually going to cost you. Make sure you have the funds to cover it when all is said and done.

If you try and game the negotiation, and whiff on the boat when you could have actually found that overlap, you've failed. If you've ended up offering what you think the boat is worth, and you whiff on the boat, then there wasn't an overlap, and you weren't going to get that boat anyway. Again, figure out the range of price you feel comfortable with. If you work with a broker, don't tell him what that range is. He's on a need-to-know basis. If you work with a broker, you will be paying him, no matter what anybody says. Broker pay is coming out of the transaction, and you're a party to the transaction.

Maybe 20% of people are good negotiators. The rest are just normal people who want to think they got the best price they could have.

Don't overthink it.

[sardinebreath]

Originally Posted by Julie Mor

So let's say going into the offer phase of the process you know the boat about as well as a buyer can without the aid of a surveyor or the knowledge gained from being able to turn things on to see if they work. You have asked questions of the owner and the owner has answered, maybe to your satisfaction, maybe not. You've done about as much investigating and inspecting a reasonably knowledgeable buyer can do prior to making the offer.

You then make a list of all the knowns and unknowns and price out each either by just figuring material costs for those things you can fix or by installed price for those things you can't DIY.

Next you get the recent sold prices of the same make and model and find the average selling price is xx% of asking price. But you really don't know how their condition compares to the condition of the boat you are looking at.

Certain things HAVE to be done, so do you deduct the cost of those from the asking price right off the bat or do you let the surveyor price them out later?

Certain things most likely will have to be done, like replacing the electronics. Do you deduct those items from the asking price or wait for the surveyor?

Then there's cosmetic things like paint. Maybe you see scratches on the hull that few buyers would live with, paint bubbles on metal spars tell you that needs to be looked at. Things most people would see. How do you handle that?

You can't know about the engine (or the generator, if there is one) because without the owner there, the broker won't start either. Same with electronics, pumps and motors. You may only know the age but you will know how they look because you saw them and took pictures you later examined.

You have no idea about the bottom or zincs or metal because it's in the water. I'm guessing that has to be left to the surveyor.

From this point, how would one proceed in coming up with that first offer number?

a) Deduct the cost of everything you want done from the asking price?

b) Deduct the cost of everything that has to be done to make the boat safe and sailable? The dollar value being created by having it professionally done.

c) Deduct the cost of everything that has to be done to make the boat safe and sailable? The dollar value being created by material costs on DIY projects and professionally done costs for the rest.

d) Deduct the xx% established by sold boats and take an extra ??% off for negotiating?

e) Tap the broker for a number he or she believes will draw the owner into accepting and let the survey, and whatever else comes up be used as a tool to reduce the final sale price?

f) Forget the boat and use the money you would have spent on this whole offer/survey thing and have fun with the money instead?

It's always something of a crapshoot. Being on the market for 3 years, they might seriously consider almost any offer at this point. Or it may have been on the market for 3 years because they absolutely will NOT seriously consider anything significantly below asking. Some owners readily renegotiate after the survey; some don't.

I'd probably go with B but take off another 5% for stuff that will inevitably come up and to get closer to what you actually want to end up with, not just what is safe and sailable. The problem with counting on further reductions based on what the survey finds, is that the seller knows that you have already invested money at that point making it harder for you to walk away. I feel it's better to let them know that the offer is based on what you know needs doing and the assumption that there will be other fairly minor stuff the survey finds. Therefore your pre-survey offer won't be subject to negotiation, and you won't be expecting post survey allowances unless something fairly major should come up.

[Scout 30]

Even if you can get an average "recent" sale price of the same model you are trying to buy the pool will be too small to be statistically significant. However, it is valuable information. There will be a range of value but it's reasonable to assume that the average price will reflect boats in average condition. If you assume that the average price reflects market value for this model boat in average condition & you find a boat that is in below average condition but is listed below market value the list price may already accurately reflect the boats condition or the cost to correct the deferred maintenance. In this case adjusting for the cost to cure again would not be supported. If you believe that the cost to cure greatly exceeds the already discounted list price then you should then negotiate based on that belief.

[Scout 30]

It would be great if there was a Broker that could contribute some statistics that would help us all determine the health of the boat market in general. 3 years on the market appears to be a long time but we don't really know what a typical marketing time is or if that has been increasing or holding steady. We also don't know how much inventory is out there compared to the absorption rate which is the most important thing. Do we actually have on oversupply as a lot of posters seem to think or is it a stable market. Knowing these things can help both buyers & sellers which we all are at one time or another.

[Drift Woods]

How do you find the real prices that boat are being sold for? I'm looking to purchase a 34 / 36 Catalina for weekending in the Keys and trips to the Bahamas. Prices are all over the place. The only online pricing I can find on boats is the NADA guide.

[Sundae Driver]

Hello,

I worked as a sales rep for most of my way through college. I learned a lot during those years about successful tactics, and even more about people than I ever wanted to know. There are few schools of thought when dealing with buyers. In one camp, the buyers will low ball what they tell others they paid just so everyone will be impressed; another goes higher just to sound equally impressive. The wise ones keep their mouth shut; the honest will share that it is not anyone else's concern about what they paid.

Remember this, "No one ever listened themselves out of a sale." I agree with the others who posted something about people preferring to deal with someone they like over haggling with a raging jerk. I could ignore the jerks in a professional way mostly because I was after the money in their pocket but it always cost them more, even if they didn't know it.

Be sympathetic to the seller and let them tell their story. You don't have to make a dollar amount offer; you just have to let them know that you are keenly interested. Saying something about really liking ~ name the boat (personalize it) but then go around and gaze at it carefully but make no comments as you touch things that will need to be fixed or checked. The one who talks first usually loses in this situation.

Asking what the bottom line is often forces the seller to lie. Better to share what you are willing to do right now as in, I am willing to go to <dollar amount>. Then add "If everything checks out, but if you can't get there yet, I understand." Then be willing to walk away but make sure they know that you really want ~ name the boat. I'd say something like "The only thing stopping this sale is the price so if you can do better, please try to help me." You should also ask them what they think may turn up in the survey during that moment in time as far as haggling.

Bottom line, you have to live with yourself so there is little value in hurting someone's feelings with a low ball offer. Just ask them where they are in the price, how many others have walked away, why they think the price is fair, and then ask if there is any margin for coming to a reasonable agreement.

I hope this helps.

Kindest,

Sundae