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Old 10-10-2013, 19:26   #76
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Re: Catamaran Sold Report Q2 2013

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Originally Posted by dennisail View Post
I wont refuse to give a counter offer on the grounds they might be a time waster.
Well said...and a very sound approach too.

It's seems odd for a seller to ignore a buyer making an offer, any offer. An offer at least confirms the buyer's interest. Whether or not the price gap can be closed enough for both parties is really the next phase. It takes so little effort on the seller's part to put a counter offer...and such an effort seems worthwhile to at least probe the buyer's position. If the seller suspects the buyer is not genuine or a time-waster, then drop the asking price by some token amount, say 1%; if the seller's genuine, let them make the next move, perhaps accusing you the seller of not being genuine!?! If the buyer instead confirms the suspicion, one way or another, or just disappears, nothing's lost.

In our view the channel of communication should always remain open on the seller's side. After all and especially with large assets, you really never know any other's parties position until the deal is closed.
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Old 10-10-2013, 19:35   #77
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Re: Catamaran Sold Report Q2 2013

Agree 100%. Egos can ruin sales. I know someone who refused to buy a good car that was obviously way under the the market value because she was unable to lowball them even further. She ended up getting a larger price reduction from another seller, which satisfied her ego, but she ended up paying MORE as the price was much higher to begin with. Its easy with cars though as many are being sold so you know what the market value is. Its hard to know the value of something like a custom cat.

Sellers can also end up much worse off due to ego and reality problems. The old story of an ever reduction of price for years and years. However the reductions always stay one step over a realistic price. The asset devalues over time. If they only took one of the first offers which in hindsight was higher than what the asset is for sale for currently with no sign of a buyer.
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Old 10-10-2013, 19:48   #78
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Re: Catamaran Sold Report Q2 2013

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If they only took one of the first offers which in hindsight was higher than what the asset is for sale for currently with no sign of a buyer.
Absolutely spot on there! We've all seen that happen, plenty of times. The seller's challenge is not to learn that lesson all over again...
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Old 10-10-2013, 20:02   #79
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Re: Catamaran Sold Report Q2 2013

Don

Having met you, you are a very nice fellow, but I would be prepared to bet that if I offered you a 30% discount for any of your wares, you would show me the door, or perhaps the stern in your case, politely of course.

My experience of 30 years in business is that lowball offers come from time wasters and I don't like my time wasted, and I cannot think of a single instance of where my judgement was wrong on such a matter. Maybe its "odd" but I don't think I am that different to most people.

I cant speak to monos or boats in the USA. I can only speak to multis in Australia. The thing I like about Australians is that in most cases they tell you direct. Either "Don't bother coming in with a BS offer as you will be wasting your precious time and mine" or "This price is non negotiable" or even "Tell him he's dreaming".
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Old 10-10-2013, 22:14   #80
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Re: Catamaran Sold Report Q2 2013

cwjohm,
I'm on the side of offering what the buyer is prepared to actually pay no matter what the asking price may be so please don't take offense at my disagreement with some of your points, it's not personal.
No-one loves time wasters, they're a trade hazard but you're placing all offers below 10-15% of asking price as "lowballers" and "time-wasters" and that's too broad of a brush for me to accept.
I've made an honest living by buying in a % range which you dismiss, as you mentioned earlier in houses, boats and I'll add cars, trucks and caravans.
I offer what I assess to be a realistic and fair price for the sale, many rejections, many successes.
Why is it so?, you've covered a lot of that accurately WRT seller's self informed expectations and for every agent that tells his client they're too high many more do the opposite just to keep the listing.
You mentioned epiphany earlier, people arrive at that point by many roads eg. Death, divorce, business downturn, infirmity etc. those are but a few examples which drive sellers to accept less than what they'd hoped, sometimes a lot less, have you never met such people?
You are referring particularly to Australian cats so my examples cannot directly compare but of the many I have on record here's two.
Three years ago a cat went on sale in NZ for $600K+, according to the broker it was priced that way for a quick sale ie already discounted.
I watched it then assessed it and the market engaged a lawyer and offered $400K with deposit, I expected rejection but made it clear it was a standing offer.
The offer was very rudely dismissed as uneducated and uninformed etc.
Nearly two years later, it sold, for $380K. My lawyer was never contacted, perhaps some brokers or sellers don't like the uneducated being right.
I'm sure you're aware that not only did the vendor lose $20K, they lost 2 years of expenses on the hard and whatever 2 yrs of $400K would have earned.
Another cat in Turkey [there were 2 actually, 1 I've already mentioned] was also touted for $600K+, same offer rejected, sold for $360K after 2 more years sitting on blocks.
It's for sale again but I'm not making an offer until a few points are cleared up.
I think I can understand your position as a broker though I admit that the distinction from a sales rep. gets very blurred with some companies.
If Don had been drawn to a critical moment by any trauma listed above and he'd already overpriced his 'wares' by 15% to allow for a drop by negotiation, re-ask him your question, he may have to say yes.
I haven't even covered those prospects who are looking while they prepare to buy being tyre kickers but I have to pick up the kids now and look at a car on the way home.
Cheers,
Mac
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Old 10-10-2013, 22:20   #81
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Re: Catamaran Sold Report Q2 2013

Good post and I agree. With the tyre kickers, how are you supposed to make an informed decision on what to buy without looking at a lot of boats? Is a buyer expected to buy the first boat he looks at otherwise be labeled as a tyre kicker?
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Old 10-10-2013, 22:20   #82
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Re: Catamaran Sold Report Q2 2013

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...if I offered you a 30% discount for any of your wares, you would show me the door...
Try me! Seriously, it will depend on the product, as would be the case in any retail scenario. For products with very low margins, yours would be a safe bet, but on others and especially for a nice fellow like yourself, we might just do business!!

Back to boats though, there is no 'margin' and it's all a matter of negotiation between the buyer and the seller. We don't question either your (or anyone else's) judgment or experience...and "odd" was probably a poor word choice on our side. In the current environment, however, and even here in Australia where we seem (happily for us!) relatively insulated from the economic malaise(s) elsewhere, cash is king. Buyers of major personal assets are therefore looking for a good deal...or, often, a bargain. So it is not unusual -- Some suggest it is common -- for buyers, including very genuine buyers, to open negotiations with lo-ball offers to probe the vendor's attitude. If the vendor is silent, the buyer will most likely take that as a 'not negotiable' signal; if that's where the vendor is really standing, no problem...and both parties happily walk away from each other. If, however, the vendor is open to discussion, then perhaps shutting the door in the buyer's face at that stage may not be in the vendor's interests?

No doubt our view also reflects our experience. As both buyers and sellers of major personal assets in recent years, we both made and received lo-ball offers...and in fact we can't think of any major asset purchase over the past few years where we did NOT start off the process with a lo-ball offer to probe the vendor's position. So based on that experience, we join dennisail's view that any offer should be answered, in one way or another. If the offer is patently ridiculous, then the answer might just be, as suggested earlier, a 1% discount...or even a 'please try again'...always looking for ways to give the buyer that 'great deal' feeling.
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Old 10-10-2013, 22:29   #83
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Re: Catamaran Sold Report Q2 2013

I think the 1% counter to 30% "rude" offer is also a bad idea and would not be in the sellers best interests if the seller would actually accept 15% off. Perhaps the buyer would take 15% after all, and by offering 1% you have given the signal of non negotiable and that will be the last you hear from the buyer. The 1% thing is an ego thing unless you are serious that you do not want to budge on price.
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Old 10-10-2013, 23:10   #84
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Re: Catamaran Sold Report Q2 2013

Don

I will remember that when you next come to Mooloolaba.

As to the other posts we will just have to agree to disagree. The examples given do not illustrate the point to me. If a boat is for sale at $600K and it is worth $400K then the seller is not a real seller and is wasting the buyers time. In that case making an offer is futile and waiting for the seller to drop his price is more appropriate. Making an offer 33% below his asking price will simply piss him off as it did in the case stated, and he will not come back to you as plainly he didn't. It may be appropriate to say "I am interested but not at that price. Let me know should you reconsider your asking price".

Clearly, we all agree that the market will eventually dictate the price of a boat. It is a matter of how you tackle the problem. What I am saying is that making an offer 30%+ below any asking price will simply aggravate the seller and rarely will anything be achieved. This is basic human nature.

What this comes down to is the nature of the human condition. Some, and I would stipulate the minority, both sellers and buyers, like to pursue a deal to their own financial advantage and will haggle endlessly to do so. The vast majority however, could not be bothered with all of that BS and simply want to get or pay a fair price, and get on with life, and tend to reject out of hand the people who want to endlessly negotiate.

By all means if you are one of the minority as plainly you guys are go to it. Maybe you will meet a kindred spirit and you can enjoy locking horns in the negotiation, but be prepared for the average joe who will just say "go away and aggravate somebody else".
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Old 10-10-2013, 23:20   #85
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Re: Catamaran Sold Report Q2 2013

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if you are one of the minority as plainly you guys are go to it
It does appear you are in the minority here.
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Old 10-10-2013, 23:27   #86
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Re: Catamaran Sold Report Q2 2013

Of course, as one would expect given the nature of the thread. Surely not a reflection of the real world though.
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Old 10-10-2013, 23:44   #87
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Re: Catamaran Sold Report Q2 2013

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Don

I will remember that when you next come to Mooloolaba.

As to the other posts we will just have to agree to disagree. The examples given do not illustrate the point to me. If a boat is for sale at $600K and it is worth $400K then the seller is not a real seller and is wasting the buyers time. In that case making an offer is futile and waiting for the seller to drop his price is more appropriate. Making an offer 33% below his asking price will simply piss him off as it did in the case stated, and he will not come back to you as plainly he didn't. It may be appropriate to say "I am interested but not at that price. Let me know should you reconsider your asking price".

I didn't expect they would convince you, perhaps the fact that the boats actually sold for less than offered may tell others a different story about who informed the owner in the first place?.
With the offers went a list of reasons and almost to a word began with your quoted sentence, a normal courteous business phrase. Perhaps you misunderstood what I meant by engaging a lawyer, expecting initial rejection, making it clear it was a standing offer should they reconsider etc.
Do you really know the owner was pissed off when the same language you advise was used?

Clearly, we all agree that the market will eventually dictate the price of a boat. It is a matter of how you tackle the problem. What I am saying is that making an offer 30%+ below any asking price will simply aggravate the seller and rarely will anything be achieved. This is basic human nature.

The true 'market' is actually informed by the boat selling price and dictated to by many factors external to any individual deal. Credit availability, cash flow, inflation, surplus of stock, slow charter trade purchases/disposal ratio all play a part in the 'market'. If the market place were fair, the actual sales prices would be readily available to prospects, not a trade only tool.

What this comes down to is the nature of the human condition. Some, and I would stipulate the minority, both sellers and buyers, like to pursue a deal to their own financial advantage and will haggle endlessly to do so. The vast majority however, could not be bothered with all of that BS and simply want to get or pay a fair price, and get on with life, and tend to reject out of hand the people who want to endlessly negotiate.

I agree with that completely. I NEVER haggle, I make an offer and ask the vendor to think it over, they either accept it, reject it or consider it. That's it for me until they contact me, or not. No hassles.

By all means if you are one of the minority as plainly you guys are go to it. Maybe you will meet a kindred spirit and you can enjoy locking horns in the negotiation, but be prepared for the average joe who will just say "go away and aggravate somebody else".
I may be one of a minority who doesn't buy what you're selling but if you care to characterize me as aggravating people on purpose, then you won't mind me characterizing you as just a salesman.

Mac
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Old 10-10-2013, 23:53   #88
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Re: Catamaran Sold Report Q2 2013

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I think the 1% counter to 30% "rude" offer is also a bad idea and would not be in the sellers best interests if the seller would actually accept 15% off. Perhaps the buyer would take 15% after all, and by offering 1% you have given the signal of non negotiable and that will be the last you hear from the buyer. The 1% thing is an ego thing unless you are serious that you do not want to budge on price.
Fair comments. If, however, we assume the seller is prepared to accept 15% off then the 30% offer isn't 'rude' anyway, in the seller's own context...and a 1% response would indeed seem foolish! That all seems to make the same points though, viz. (1) every situation will be unique to the parties involved -- Mac probably expressed it better -- and (2) any offer deserves some response, whatever may be appropriate for that individual situation.

Perhaps we're not all that far from agreement, other than insofar as cwjohm may draw a line at a 30% discount offer being automatically a waste of time. We certainly don't haggle endlessly...and we agree with cwjohm that the haggle endlessly approach would apply to a minority. That said, what we (and perhaps Mac as well...and maybe even the real world majority?) do is approach a negotiation in good faith...and then we quit that negotiation either when a deal is done or when it becomes clear that a deal will not be done. So as a seller, we will not close the door at X%...but we will walk away when it becomes clear that a buyer will not meet our requirements.
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Old 10-10-2013, 23:59   #89
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Re: Catamaran Sold Report Q2 2013

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.but we will walk away when it becomes clear that a buyer will not meet our requirements.
Which can only be found out via sensible negotiation. Labeling people as "time wasters" and "1% reductions" are not sensible negotiations, but demonstrations that the ego is more important than the transaction.

A friend just got the price of a $75K mono down to 45K in QLD. He offered 40 and did not accept 45 because he simply does not have 45K but does have 40. Was he a time waster? Well he got the price down by over 30% but in the end if he had an extra 5K both parties would have had a deal.
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Old 11-10-2013, 00:43   #90
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Re: Catamaran Sold Report Q2 2013

Mac

You seem to be misinformed. I am not a broker. I am businessmen yes but not in sales, and nothing to do with property, cars or boats. In this regard I am simply an average guy who has bought and sold property, cars and boats. I never have problems buying or selling. When I sell I set a fair price only subject to minimal negotiation and when I buy I ignore the significant number of sellers who are not real sellers, and only choose to deal with those who have a realistic price on the item.

My last boat I bought at a 15% discount at a price below what the guy rejected 6 months before. He was majorly pissed at selling at this price, which was reflected by his actions in the sale, but I wont go into the details. If I had offered 30% off I do not think I would have been game to make such an offer in his presence.

Dennis

The proof is in the pudding. You have your sales strategy. Offer 30%+ off. What difference does it matter what any of us think. I for one am fascinated to hear how you go with that. Just make sure your health insurance is paid up first.
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