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Old 03-01-2017, 11:55   #1
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Boat Buying - the art of the Bid

I'm interested in knowing more about the technique of putting in an offer on a boat specifically related to the bid you offer versus the buyers asking price. The presumption here is that you as the buyer have done your due diligence in trying to figure out the boat's "true value" which in older boats with limited runs is often not easy. Having worked a bit with a yacht broker looking at "comps" for a number of different model boats, I don't recall seeing one that sold for the listing price. On average, the selling price seemed to be 10 - 20 percent lower than the listed price. In the small sample of boat owners I've spoken too there seems to be two camps on making offers. The first is to make a "reasonable" offer say 15-20 % lower then negotiate from there. The second camp says to make a "low ball" offer maybe 30 - 40% lower then negotiate. Curious to know which camp you're in (from both the buyer and seller perspective). Also, is there another "camp" or approach to submitting a bid? Thoughts or comments welcome.

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Old 03-01-2017, 12:34   #2
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Re: Boat Buying - the art of the Bid

I would say that all depends on how bad you want a particular boat. The most recent boat purchase we made was quite a lengthy negotiating process, in my opinion.
We made our first offer at 60% of the asking price. The boat was in good condition, but needed a good cleaning, canvas, carpet, etc. That offer was made in the spring, and we didn't get any response from the seller until August. The long and the short of it was that our offer was based on what we could afford. We ended up buying the boat for 72% of the asking price, and also became friends with the previous owner in the process. After several weekends of elbow grease, and about $6,000 dollars in parts, the survey value ended up 42% higher than our total investment. It wasn't the only boat we made an offer on, and offending a seller with a lowball didn't figure into our logic. It, quite simply, was going to have to be a steal for us to be a buyer, and we were very flexible in our wants and needs.

On the flip side, we sold our old boat after 5 years of fun without any major problems.....for $1,500 more than we paid.....which was $500 more than our asking price....to the first people that looked at it. Luckily the timing was right, and we had several appointments stacked up right in a row of potential buyers. The buyer thought my price was fair, and liked the fact that I told him all the bad before I told him the good......BUT, he is superstitious about paying an odd number for a boat for some reason, so he added $500 to even things out. Craziest thing I've ever heard, but I went ahead and accepted the offer.
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Old 03-01-2017, 13:44   #3
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Re: Boat Buying - the art of the Bid

Not sure if there's a standard way to come up with an initial offer, there are so many variables. Realistic asking price, condition, original owners attachment to boat and or attachment to reality. I've made offers based on my reality and budget, sometimes it worked other times the owners were "insulted" by my offer. Go figure. What's the boat worth to you is what it comes down to in the end.

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Old 03-01-2017, 14:33   #4
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Re: Boat Buying - the art of the Bid

To some extent, it will depend on how knowledgeable a buyer you are. We have had a lot of experience with boats, and paid almost exactly the asking price for this one, which was a reasonable price. It was being sold with an aluminum dinghy that we did not want, and that was the difference between the asking price and what we paid.

You hear really experienced buyers making the low ball offers that sometimes work out well, it really depends on the boat, and on the buyer and seller.

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Old 03-01-2017, 14:46   #5
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Re: Boat Buying - the art of the Bid

I think the key is to gather as much information as possible about the boat, what comparable boats have sold for in the prior year, what comparable boats are currently for sale, and where, how long the current boat has been on the market, whether the price has been dropped or not, and what the disposition of the seller is.

Obviously, the goal is to formulate the lowest possible rational bid, with justification for how you arrived at that number. By lowest possible I don't mean unreasonable, I mean rational.

Understand that after the survey you have another opportunity to adjust your offer, based on the survey. If anything about the boat's condition deviates from the listed condition, it's fair game for a price adjustment based on the cost of repair/replacement. Don't let the seller repair/replace, as you can be guaranteed it won't be quality work and materials.

I think saying that most boats on YW sell for a 20% discount to asking is probably a fairly accurate average. Some sell for more than asking, some with a much steeper discount. It's all about the particular situation, boat, owner, etc.
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Old 03-01-2017, 15:47   #6
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Re: Boat Buying - the art of the Bid

In addition to the good advice above, being able to say ".... and I'll pay cash or with a Banker's Cheque" can help convince a seller to accept a lower offer.

That alone knocked almost 7 thou US bucks off our purchase price as the owner clearly needed/wanted the sale to happen. We've met people (bar talk) who conditioned their purchase offer on their first being able to sell their current boat, or being able to obtain a bank loan; and there are sellers with mortgages outstanding on their floating dream. Cash is King, as the saying goes.
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Old 03-01-2017, 15:56   #7
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Re: Boat Buying - the art of the Bid

What are people's thoughts on survey values?
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Old 03-01-2017, 16:12   #8
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Re: Boat Buying - the art of the Bid

I have a different philosophy about bidding after doing a detailed survey.....

I make a reasonable offer based on what the yacht is worth to me

It is fixed and I do not negotiate.
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Old 03-01-2017, 16:36   #9
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Re: Boat Buying - the art of the Bid

My current boat had an asking price that was about right if it were in perfect condition at the time of the sale, but it wasn't, so we negotiated and came up with a price that worked for both parties. The final sale price ended up about 15% lower than asking, which was fair in this case.
When i sold my old boat I threw it on the market a little higher than average since it was an extremely well maintained example without all the issues that many of it's models in that year had accrued, when I got no bites I dropped it to the price I wanted to get as cash in my pocket. I got a lot of interest and a number of calls but of course there were many people hoping for a bargain, I stated in the add that I was listing it at pretty much what I wanted for it and didn't feel the need to mess around dickering.
Three buyers looked at it in the same week, one made a fair offer for right around what I asked and the other two tried to dicker, even though the other boats in it's price range were basically derelict pieces ready for a dumpster. If your going to dicker on price, be realistic, look at comparable boats and feel out the market, ask a broker who deals in those brand and vintage vessels what he's seen for selling price and make a judgement on that.
Sometimes you get a real deal if the seller is stressed, but most times you get exactly what you paid for, good or bad.
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Old 03-01-2017, 16:52   #10
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Re: Boat Buying - the art of the Bid

Quote:
Originally Posted by Suijin View Post
I think saying that most boats on YW sell for a 20% discount to asking is probably a fairly accurate average. Some sell for more than asking, some with a much steeper discount. It's all about the particular situation, boat, owner, etc.
This!

There's no hard and fast rule. It primarily depends on the current market, the boat in question and the asking price. Then the owner's expectations and personality come into play.
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Old 03-01-2017, 17:15   #11
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Re: Boat Buying - the art of the Bid

Quote:
Originally Posted by Suijin View Post
.......
Understand that after the survey you have another opportunity to adjust your offer, based on the survey. If anything about the boat's condition deviates from the listed condition, it's fair game for a price adjustment based on the cost of repair/replacement. Don't let the seller repair/replace, as you can be guaranteed it won't be quality work and materials.
.......
The survey adjustment may not always exist. I have bought and sold boats with survey adjustments. In both cases the buyer made the repairs.
My current boat was bought with a take it or leave it clause in the seller's offer acceptance. I gritted my teeth but knew the boat was worth my offer, to me. There was a bit of back and forth on the price as well, but not too much.
As it turned out there was nothing I would have re-negotiated over.
At the end both seller and buyer got what they needed out of the deal. That is what a successful negotiation is about.
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Old 03-01-2017, 17:36   #12
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Re: Boat Buying - the art of the Bid

Often, I think the competitive nature of negotiating, distracts from what should be a personal decision by the Buyer.
What is the boat worth to you?
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Old 03-01-2017, 17:38   #13
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Re: Boat Buying - the art of the Bid

I think we will see an extended buyers market for the next 20 years or so.

Currently we are in a buyers market (in Australia at least)... and given that the post WWII baby boomers and now beginning to drop off the perch, I think that there will be a glut of yachts coming onto the market due to baby boomers getting out of the market because of ill health, fitness issues etc.

The baby boomer generation come from large families, but themselves had small families... the effect of this will be less and less buyers having available more and more used yachts to choose from.
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Old 03-01-2017, 19:15   #14
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Re: Boat Buying - the art of the Bid

Back in 2012 / 2013 we looked at 125 boats mostly in the US.

We noticed that approx 15% below askimg price was the final sale price for several boats in good condition.

We low balled several average boats but all that did was offend the sellers.

At the end of the day once you reach a fair price then an agreement is possible. Then the real negotiation begins. Survey, sea trial, rigging inspection and mechanical survey.
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Old 03-01-2017, 19:58   #15
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Re: Boat Buying - the art of the Bid

It all depends upon the situation, boat, buyer, seller & timing. The situations I like are the ones where the seller has a truly nice & unique boat, understands what he has, and is more concerned with finding a good care giver for her rather than maximizing the selling price. Low ball & disrespect this type seller at your own peril. I have been blessed to purchase from this type seller twice & observe it happen a couple more times. More than once I witnessed a seller reduce the price so that a certain buyer could & would purchase his boat. From what I could tell, Karma was kind to all involved.
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