Asking Price vs Selling Price - Caribbean Cats?

[Mermaid]

Originally Posted by Mark424

Not sure how the purchase cycle works on the east coast, or Caribbean, but last time I bought a boat in California, it went like this.

1. Make an Offer
2. Negotiate Price
3. Settle on Price
4. Make refundable Deposit
5. Sea Trial (no sea trial before deposit, they don't want joy riders)
6. Survey
7. Go back to seller with items found during the survey and negotiate adjustments. If you didn't like the sea trial or couldn't agree on survey compensation, you could walk away with your deposit repaid in full.
8. Make Binding commitment.

So my question is, do you do your hard bargaining upfront, or bargain a bit and plan to play hardball after the survey. My feeling is if you bargain hard upfront, you are basically in an "as-is" scenario as they are less likely to make adjustments for items found in the survey. You are basically treating the survey as a decision whether to walk. If you don't bargain hard upfront, you could be in a position where the survey doesn't find that much and have a hard time justifying a significant adjustment.

Would appreciate your thoughts and what has worked for you.

Mark

This is interesting as it is how I feel as well. We ask lots of questions from the brokers (most of them cannot answer them and if they can you have to make sure they are certain and not lying. We ask if there is anything that should be working but needs repairs or not working at all (you can ask that they put this in writing to send to the owner to disclose). If the broker is willing to ask the owner then we will put the offer on the table (as well as answering any other questions we have.) Do you want to put an offer on a boat if you don't have all your questions answered? Do you want to spend money on a survey that may or may not address those questions to later find out that the surveyor didn't find something the owner was aware off and now you have to pay to fix it?

The survey's recommendations may be a little "soft" for insurance purposes. A boat we saw recently had badly rusted keel backing plates and the screws and bolts were different sizes. It seemed to us like a safety issue but a survey done a few months earlier only listed it under recommended maintenance.

The broker that showed us a boat last week did not know anything about sailing, and could not answer any questions about the boat. When we asked "is anything in need of repair or not working?" his answer was "you get the survey done and negotiate it later" --- not in my world when my money for that survey is on the line...

We put an offer on a boat for 20% under asking price (according to our broker no other comparable boats had sold that low - he didn't even wanted to present the offer) the owner accepted our offer, our broker got greedy and we backed off the deal because the whole thing started to smell really wrong. You can read the rest of the (long) story at: Bramamare’s Blog if interested.

California is a tough place to buy a boat. The brokers are trying to keep the prices up to get better commissions and the boat prices don't go down even after a year or longer. The broker we fired told us the boats in California "do not depreciate". You may also want to make sure you will be able to get a slip for the boat before purchasing it as we know of a couple that had to keep their 46' anchored for a year before getting a slip.

[Mark424]

Originally Posted by Mermaid

This is interesting as it is how I feel as well. We ask lots of questions from the brokers (most of them cannot answer them and if they can you have to make sure they are certain and not lying. We ask if there is anything that should be working but needs repairs or not working at all (you can ask that they put this in writing to send to the owner to disclose). If the broker is willing to ask the owner then we will put the offer on the table (as well as answering any other questions we have.) Do you want to put an offer on a boat if you don't have all your questions answered? Do you want to spend money on a survey that may or may not address those questions to later find out that the surveyor didn't find something the owner was aware off and now you have to pay to fix it?

The survey's recommendations may be a little "soft" for insurance purposes. A boat we saw recently had badly rusted keel backing plates and the screws and bolts were different sizes. It seemed to us like a safety issue but a survey done a few months earlier only listed it under recommended maintenance.

The broker that showed us a boat last week did not know anything about sailing, and could not answer any questions about the boat. When we asked "is anything in need of repair or not working?" his answer was "you get the survey done and negotiate it later" --- not in my world when my money for that survey is on the line...

We put an offer on a boat for 20% under asking price (according to our broker no other comparable boats had sold that low - he didn't even wanted to present the offer) the owner accepted our offer, our broker got greedy and we backed off the deal because the whole thing started to smell really wrong. You can read the rest of the (long) story at: Bramamare’s Blog if interested.

California is a tough place to buy a boat. The brokers are trying to keep the prices up to get better commissions and the boat prices don't go down even after a year or longer. The broker we fired told us the boats in California "do not depreciate". You may also want to make sure you will be able to get a slip for the boat before purchasing it as we know of a couple that had to keep their 46' anchored for a year before getting a slip.

I like your blog. I also have an aging golden that would have loved to go on our charter out to Catalina and SB island this summer.

Years ago I bought a boat in SD though a broker who acted like my best friend and had all kinds of ideas how he could help me get reasonably priced repairs and upgrades. The minute the paperwork was signed, he was just annoyed at any discussion or request for follow through. He just wanted to get to the close so he could ignore me completely.

Did you get the 43' in spite of the broker's shenanigans? In this market, I've heard tales of people getting accepted offers for half price - I'm sure that's the exception, but I figure if they accept your first offer you offered too much.

I met a young couple while walking the docks a couple years back that had just bought a Defever trawler as a liveaboard and he said he looked high and low for the right boat himself, then when he knew he had found the right boat, called the local brokers and said they could represent him in the deal if they found him a liveaboard slip. They required them to do their job first before they got the deal. They did have a nice spot on the main channel across from the park. 2 different brokers I've talked to at the local boat show have winked and rubbed there fingers together when I asked about getting a slip, they have their ways they said. Nice huh?

We have to recognize that, just like real estate agents, the broker is not in the buyers side. Their motivation is to close the deal and maximize their cut. Similarly the surveyor is more likely to need the referral from that broker more often than he'll need one from you. I think we basically need educate ourselves to do our own informal survey, as much as possible, before the offer.

I read a post on a forum once by a fellow moving his boat here to Marina del Rey who couldn't get a straight answer on slip availability, so he just sailed up, called them all from the breakwater, said I'm here, do you want my money or not. And lo and behold he got a slip. He would have been in a tough spot if he didn't find a slip, but just one more anecdote that you have to push and push and push till you get what you want.

What kind of boats are you looking at?

[asb]

Originally Posted by Mark424

We have to recognize that, just like real estate agents, the broker is not in the buyers side. Their motivation is to close the deal and maximize their cut. Similarly the surveyor is more likely to need the referral from that broker more often than he'll need one from you. I think we basically need educate ourselves to do our own informal survey, as much as possible, before the offer.

Some brokers are the main barriers for the buyers and sellers. I have seen few deals gone bust just because of the broker. It is absolutely correct what you have mentioned.

Before you make an offer I would suggest the following:

1. Inform yourself about the new prices of that cat with the options. Make an offer after that.

2. Always demand a meeting with the owner from the broker. Bargaining face to face with the owner is essential. If the broker refuses to introduce you with the owner, there must be something fishy. Move on to the next boat/broker.

3. If she is the boat you desired, with a bit of research, you can always find the owner.

Good luck to everybody, including me for the search.

[muskoka]

Mark,

I bargain hard up-front. The sea trial, survey etc all cost money so I want a price established before I spend a dime on any due diligence.

If a significant defect shows up during the DD I'll adjust my offer accordingly. If it's something that is normal wear & tear, or something that can be fixed for under $500., then I'm inclined to simply proceed per the agreed price.

Cheers, Cameron

[rigamarole]

For the first time this year, more brokerage boats were sold in a one-month period than in the same one-month period a year earlier. As reported to SoldBoats.com by the member brokers of YachtWorld.com, unit sales increased to 3,182 boats in the United States during June-10.5 percent more than the 2,879 boats sold in June '08.

The split between powerboat and sailboat sales we discussed last month has continued. If only power were considered, unit sales made dramatic gains in June, from 2,245 to 2,630. By contrast, sailboat sales declined from 625 boats sold to 552.

If we review the data reporting sales by length of boat, one reason for this variation comes to light. June '09 shows a sharp increase in sales of boats under 36 feet, including higher total valuations.

Leading this trend is the region for which we provide a snapshot this month, the Mid-Atlantic, an area that currently accounts for 18 percent of the boats sold nationwide. We looked at boat sales from Delaware to Georgia and found a 15-percent increase in unit sales, comparing June '09 with June '08. And year to date, the region is down only 5 percent in unit sales. Power, in particular, is up strongly in the Mid-Atlantic, with 454 boats sold in June '09 versus 356 sold a year earlier. And year to date, brokers in the region have sold 1,937 powerboats against 1,847, a year ago.

As with the national trend, the Mid-Atlantic's recovery is powered largely by sales of powerboats under 26 feet. As you might expect, the total valuation of boat sales isn't as high, proportionately: year to date, valuations of all boats sold are off by a third and sailboat sales only are down by a third in units and roughly 40 percent in value.

This article originally appeared in the August 2009 issue.

[Tropic Cat]

Interesting info, but where are the catamaran figures? Are used Cat prices trending down with the rest of the market, or are they bucking the trend?

Are newer used cats dropping in price faster? Are older cats holding their value? Where can we find this type of info?

[rigamarole]

Yachtworld probably could filter that down, but doesn't. I'm going to get active again next spring so I'll see at that time. "Want" vs "Need" purchases are going to be substantually lower for the forseeable future, IMO.

[careka]

buying a boat in US, do you have to use a broker/agent ?
and thanks for all nice info from you all.

[jkd]

Originally Posted by careka

buying a boat in US, do you have to use a broker/agent ?
and thanks for all nice info from you all.

Nope. Not required but they may help in areas that you may not be comfortable dealing in ie contracts etc.

John

[Full Sail]

Originally Posted by careka

buying a boat in US, do you have to use a broker/agent ?
and thanks for all nice info from you all.

Not that you have to, but I highly reccommend using one. It costs you nothing, an experienced broker should have a feel for what you want/need (not always the same) and can guide you through many of the pitfalls a new buyer may encounter. I talked to several before settling with the one I liked, and stuck with him, and told him that when I buy it will be through him. That develops a loyalty from the broker, knowing he will eventually be getting a commission. He gave me honest opinions on each boat and was not worried about pushing me for a sale.

[virginia boy]

I will be looking to buy my boat in late spring 2010. I've watched as the price of my brand of boat dropped in price again recently and am getting really excited, but terrified at the same time that the economy will recover, boat prices will soar faster than I can save (which was what happened to me during the housing boom in the DC area) and once again i miss the boat so to speak. Of course I don't wish anyone to suffer and I would like to see the economy recover; however,I find myself praying that it doesn't happen until I buy. Wow! That sounds pretty selfish now that I see my thoughts in writing.
The question I have is; how quickly do boat prices recover after a recession? And do the prices rise rapidly? Do you think that prices will rise or keep dropping before spring/summer?

[CortoMaltese]

Originally Posted by virginia boy

I will be looking to buy my boat in late spring 2010. I've watched as the price of my brand of boat dropped in price again recently and am getting really excited, but terrified at the same time that the economy will recover, boat prices will soar faster than I can save (which was what happened to me during the housing boom in the DC area) and once again i miss the boat so to speak. Of course I don't wish anyone to suffer and I would like to see the economy recover; however,I find myself praying that it doesn't happen until I buy. Wow! That sounds pretty selfish now that I see my thoughts in writing.
The question I have is; how quickly do boat prices recover after a recession? And do the prices rise rapidly? Do you think that prices will rise or keep dropping before spring/summer?

I' am more or less in the same situation, but i'm not worried. A boat is not an apartment neither gold.
I dodn't think that in the next years people will get so wealthy to encrease boat pricing. IMHO

[rigamarole]

Fullsail, who did you use?
There isn't a dedicated thread to fp bahia's. Any interest in starting one?
I'm interested in how your cruising is going. David.

[Full Sail]

Originally Posted by rigamarole

Fullsail, who did you use?
There isn't a dedicated thread to fp bahia's. Any interest in starting one?
I'm interested in how your cruising is going. David.

I think the reason there is no dedicated thread is because most Bahia's are still in charter. There are a few privately owned, but I haven't found many owners wanting to talk...or maybe they are all out sailing.

John Anderson was my broker. He just left catamaran company but has his own website now. Catamarans, for sale, power and sailing yachts, new & used, John Anderson, Yacht Broker. I'd reccommend him.

[Olorin]

OK here's my data point in the discussion.
April 2009, five years of sailing time, 40 foot Catamaran, Single owner, minimal charter use, I'd been over it with a fine tooth comb before I made my offers,
Asking Price: $248K (all in USD)
Previously agreed selling price that fell through: $223K
My first offer: $198K
Agreed pre-survey & pre-sea trial: $210K
Loved the sea trial in 38 knots of breeze.
Some small things found in the survey.
Agreed final: $203.5K
I was offering cash.