How Much to Offer?

[boatpoker]

Originally Posted by reed1v

NADA is the place to start to get actual sales prices.

NADA prices are not actual sales prices, they do spot checks on the market then extrapolate from there based on an economic formula that has gotten further out of whack over the years and is wildly off base on certain categories. They do much better with their mainstay, cars as this is a much more stable market and easier to follow due to the huge wholesale auction market. It cannot show show sales prices of individual boats or actual previous sales listings, or the original asking price or specific location unlike soldboats.com which shows all of that so that any boat sold through Yacht World can be traced back decades to see what that particular boat sold for each time. No formula involved, just actual sales data.

[ausnp84]

Originally Posted by reed1v

The steel boat market(assuming your dealing with under 80 feet) has been avoided for quite some time.

Really? I'd love to see your reasoning behind this....

n

[sailpower]

Originally Posted by reed1v

NADA is the place to start to get actual sales prices. Some boats you can not dicker on like Pacific Seacraft. Others you can low ball down to 10% of asking like Columbia's. Remember, once a boat is over 30 you will find financing difficult to get and insurance real limited; so adjust your offer accordingly.

Wood boats are strange. A lot of wealthy folks are recently buying classic woodies at full asking prices. Plastic is de classe' nowadays. Concrete boats have virtually no buyers. The steel boat market(assuming your dealing with under 80 feet) has been avoided for quite some time. Good luck. Find out how long the boat has been on the market. If over five years, be prepared for them to accept your first offer.

NADA rarely if ever reflects market value. Their formulas are out of whack and have been for years.

With the help of a friend I did some digging into your "facts".

The following are from sales registered on soldboats.com since 1/1/2015.

96 sales of Pacific Seacraft sailboats, every one discounted from asking price.

45 sales of Columbia sailboats, not one discounted to 10% of asking price or close to it.

251 sales of wood sailboats, all but three were discounted. The three show sale at full ask but the caveat is that some brokers report the asking price as the sale price.

139 sales of steel sailboats under 80'.

15 sales of Ferro-Cement sailboats.

Where did you get your information?

[sailorboy1]

And people wonder why boats are priced wrong

[reed1v]

Originally Posted by boatpoker

NADA prices are not actual sales prices, they do spot checks on the market then extrapolate from there based on an economic formula that has gotten further out of whack over the years and is wildly off base on certain categories. They do much better with their mainstay, cars as this is a much more stable market and easier to follow due to the huge wholesale auction market. It cannot show show sales prices of individual boats or actual previous sales listings, or the original asking price or specific location unlike soldboats.com which shows all of that so that any boat sold through Yacht World can be traced back decades to see what that particular boat sold for each time. No formula involved, just actual sales data.

REALLY! Nada shows the average and range of boat prices by model, etc. But anyhow, yes, YachtWorld is also another source of pegging a boat's market value. Still, a lot of banking centers that make boat loans use NADA.

[reed1v]

Originally Posted by ausnp84

Really? I'd love to see your reasoning behind this....

n

Simply put, outside of commercial steel boats, the ability to get loans on a steel pleasure boat is nil. At least up here in the New England States.

[hellosailor]

The local supermarket sells a fancy brand-name steakhouse's steak sauce for $2.99 a bottle. Couple of exits down the road, a high end market sells the exact same product for $12.99 in front of their (alleged) prime meat butcher shop.


Different market, different price. Exact same goods.

[boatpoker]

Originally Posted by reed1v

REALLY! Nada shows the average and range of boat prices by model, etc. But anyhow, yes, YachtWorld is also another source of pegging a boat's market value. Still, a lot of banking centers that make boat loans use NADA.

Yacht World shows only asking prices which often bear little resemblance to actual sale prices (see explanation of soldboats) so is useless for that purpose. Yes, some financial institutions use NADA for loan values in that they will finance 40 - 70% of the NADA value on newer boats, again based on extrapolated, averaged numbers again that have nothing to do with actual sales prices in the market but has some value to the banking industry as they are going to leave themselves a wide safety margin if the loan goes belly up..

[sailpower]

Originally Posted by reed1v

Simply put, outside of commercial steel boats, the ability to get loans on a steel pleasure boat is nil. At least up here in the New England States.

I don't know any banks or marine financing services that set their lending policy based on what part of the country you live.

Who have you spoken to about this?

In any event the OP hasn't mentioned buying a steel boat so??

[sailpower]

Originally Posted by amiller

Hi,
We are shopping for boat in the Caribbean.

I see a range of prices for brokered listed boats, and frequently ads stating "price reduced, owner wants it sold!"

Is there a standard/expected offer deduction, say 10%? For instance, is a boat listed at $220,000 actually expected to sell for that, or for $200k, or...

I do plan to involve a broker to do the hard details on price, but what has been your experience buying or selling?

How does this math change when a boat is listed privately, listed by owner, or for sail from a charter company? What does the impending hurricane season do to price?

Thanks for your wisdom!
-Andy

Looking at a purchase through the prism of asking price isn't very useful.

Asking prices vary based on owner and are not consistent so discount percentages will not be consistent.

eg Two very similar boats are for sale. Owner 1 adds up every penny of what he spent under his ownership, adds 20% and asks 200k.

Owner 2 asks 120k.

Market analysis reveals that models in their condition and with their equipment tend to trade 100k to 120k.

Eventually both owners sell at market price of 110k.

Owner 1 ended up discounting his boat by 45% while owner 2 discounted his by a little over 8.5%.

Did the buyer of the first boat get a better deal? Of course not which is why these % off comparisons don't help, at least in the used market..

In determining market value the right broker can be very valuable as he/she has access to lots of selling data. If you have been reading some of the wildly inaccurate responses in this thread you probably already realize the benefit of that.

When you have determined market value than decide what kind of a buyer you want to be.

If paying the lowest sales price ever paid is your goal than make offers based on that.

If you are more concerned about value i.e. a fair price for a well maintained boat, than make your offer based on that.

Good luck.

[ausnp84]

Originally Posted by reed1v

Simply put, outside of commercial steel boats, the ability to get loans on a steel pleasure boat is nil. At least up here in the New England States.

That's news to me then... Europe and Australasia both seem quite happy lending - as long as a survey is done first. They seem more concerned with the age of the vessel rather than the hull construction.

n

[Lizzy Belle]

Originally Posted by ausnp84

Europe and Australasia both seem quite happy lending - as long as a survey is done first.

I'm in a European country - one with a lot of boats - and it's NOT easy getting a loan for a boat ('ship mortgage') here. Most people use the mortgage on their home or even a personal loan.

I haven't a clue about other European countries; it'll be easier in some then in others. Just cos we share a continent does't mean that's what's true for one country is also true for another ...

Originally Posted by amiller

Is there a standard/expected offer deduction, say 10%?

Short answer: no.

Some boats are priced to sell. Some are way overpriced. And a few are underpriced.
To figure out what a boat is worth, you have to go see her and check her out for yourself.

Simply applying math (asking price minus x%) implies all boats are prices very close to what they're worth - if only

[duefocena]

I had to chime in on this one and my reply is to the OP.
The guy who is "on his nth boat" has missed a lot of good boats IMHO. Why? Because he is usually the "low baller" ( Person offering half of asking price ) and I have represented sellers in the past who have stated, " I wouldn't sell to him if it was at asking price". Offending someone with a ridiculous offer can turn around and bite you if it is a boat you want. Lowballer's are typically on their nth boat because they try to flip boats for a profit usually starting with boats most wouldn't want to own. Your broker can tell you what is ridiculous.
There are two appraisal companies in the US. NADA and BUC. You use NADA if you are buying a boat because they typically hit them low. ( That is why lending institutions use them ) You use BUC if you are selling a boat because they tend to hit them high. ( In the US the taxation is based on the BUC appraisal). Neither are correct. Neither is the sold boats.com listings ( Only brokers have access to this ). Case in point is an Amel Maramu I recently dealt with. BUC says it is worth $150k, NADA says $119 and sold boat averages more than both. We got the boat for $60,000 this week and I feel we overpaid.
If I feel the asking is within reason , I would offer12% to 15% less. When accepted I would haul and survey then ask for a "survey allowance for 50% of the cost of repair.
Really clean boats that haven't been in the rental business seldom sell for less than they're worth. What are they worth? Make your broker show you why you should buy the boat and why the price is fair. By your questions it is obvious you are not some low balling sheister trying to chisel someone out of a boat. You sound like someone who wants a fair price on a good boat that you will want to depend on in the future.

[ranchero76]

Yea, this exact thing every realtor and car dealer will tell you
If you are buyer, they will scare you that you'll "miss that boat (car, house) which you'll never find again" If you're the seller, they'll scare you that "you'll miss that buyer you not going find again"
In fact, there're millions of boats, cars, houses etc. on this planet. And if someone buys something before you, that only means that YOUR boat, car, house not found yet
These middle persons - car dealers, brokers, realtors - no more than bunch of a-holes who ONLY and EXCLUSIVELY care about their commission. Nothing else. Never. They wouldn't tell you that, of course, even though one realtor once was honest enough with me and told that straight. I learned that earlier hard way (buying house thru the realtor, who "suppose" to protect my rights bla-bla-bla).
So, the point is - educate yourself. NEVER rely on opinion of middle person. GET INVOLVED!!!! That what the brain is for! With Internet, you can do research WAY better than any broker because, as already said, you do care about yourself, while broker cares only about commission.
There's something money can't buy. It's priceless. That's brain.
Very sad that people less and less use it.

[amiller]

Thanks for everyone's advice/opinions/wisdom!

My take home learning from this discussion is that sellers can be expected to be a bit "optimistic" in their pricing (and who would fault them, right?),

brokers might be expected to be most interested in closing a deal, perhaps more than they are interested in helping me get a good price,

and buyers should offer less than asking, but need to realize that the seller of a good boat at a good price shouldn't be expected to budge much on the listing price.

I wish that the soldboat data was open to the public so that buyers and sellers could make better informed decisions about price! Why does this data have to be hidden from the people who could most benefit from it?