How to Make a Successful Purchase Offer

[SimonV]

Originally Posted by PortClydeMe

That's almost correct, yet in today's market you forgot number 6.

6 - Divide that price by 2, and that is your initial offer.

As an owner of a boat I want to sell, I will price it as close to the exceptable sale price plus a bit of wiggle room. If someone offered 50% of my asking price they would be shown the door without any further comment or conversation. As a serious buyer, you would have done your homework, offering 50% you're just an insulting time waster.

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[Ex-Calif]

I wouldn't dis a 50% offer. I'd keep the buyer's details and if my circumstances drastically changed I'd call him/her up.

Life throws curveballs.

[PortClydeMe]

Originally Posted by SimonV

As an owner of a boat I want to sell, I will price it as close to the exceptable sale price plus a bit of wiggle room. If someone offered 50% of my asking price they would be shown the door without any further comment or conversation. As a serious buyer, you would have done your homework, offering 50% you're just an insulting time waster.

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From a seller's perspective, yes, you want to receive as close to your exceptableacceptable price as possible. However, and as Ex-Calif cogently pointed out, should a curve ball be thrown your way you'll be searching through your sock drawer for that scrap of paper with my number on it. The captains of industry who built America were not always the nicest of men. In fact, they got very rich via the unhappiness of many. That's what allowed them to purchase very nice yachts, and not at the seller's asking price.

[sailorboy1]

Originally Posted by Ex-Calif

I wouldn't dis a 50% offer. I'd keep the buyer's details and if my circumstances drastically changed I'd call him/her up.

Life throws curveballs.

If I were a seller I would just toss it. If circumstances changed that much I'm sure I could relist my boat for 1/2 off and sell it to some other non-insulting person.

Seems most stories of getting a boat for 50% are from people who who looked for a boat for years, they are more interested in getting a "deal" than a boat.

[Scout 30]

Originally Posted by PortClydeMe

Bull? In business you have to play hard ball. I'm not concerned about the broker's happiness or the seller's ego. In reality, it will go something like this:

6 - Divide that price by 2, and that is your initial offer.
7 - Make that offer, then watch the facial expressions.
8 - Before anyone can speak, say "OK!, now let's talk some real numbers.", and offer them 25% lower than number 5. Deal done!

50%...25%...big round numbers based on nothing. Why not 27% or 31%. The fact is these are gross generalizations that might actually apply to a single deal but that is irrelevant. Every deal is different. You need to know what you are buying & what it's fair market value is. You should not pay more than something is worth but you should not expect to pay less than it is worth. Market value is the current value in the current market based upon a typical marketing time.

I think part of the problem with threads like this is that the buyer thinks that the list price establishes value. It does not. If the market value of a boat is $100,000 & it's listed at $300,000 PortClydeMe would have you offer $150,000 for the boat which is too much. If it's listed at $50,000 PortClydeMe would have you offer $25,000 which would be 75% less than it's actual value. If you are a used boat salesman & just trying to build inventory & throwing offers at a lot of boats that might be a good approach but for the typically motivated buyer & seller it does not make sense.

Everyone cannot pay less for something than it's worth because what everyone pays for something determines what it's worth.

[Suijin]

Originally Posted by SimonV

As an owner of a boat I want to sell, I will price it as close to the exceptable sale price plus a bit of wiggle room. If someone offered 50% of my asking price they would be shown the door without any further comment or conversation. As a serious buyer, you would have done your homework, offering 50% you're just an insulting time waster.

You're generalizing based on your own experience and/or expectations.

Every situation is different and that's why learning as much as possible about the boat, it's time on the market, comparable sales, and the owner is extremely important in determining what is the best offer you can make. And that offer might be dramatically lower than the asking price.

There are circumstances that can lead an owner to be extremely receptive to what on the face of it seem like unreasonable offers.

I know of a 50' semi-custom yacht, in gorgeous condition, that went for 60% of it's listed price. The owner's husband had passed away and she was so distraught by the process of selling their dream that after a few offers fell through she told the broker to accept the next offer that he received, whatever it was.

Yes, in a perfect world all boats are priced appropriately and rationally. But many are not. I've heard more than a couple of brokers say that it takes some owners about two years to come to grips with the true value of their boat and the result is many boats that are grossly overpriced.

I bought my boat after the buyer had turned down over a dozen offers of roughly the same level. He just finally realized that they represented the market value of the boat and I just happened to be the one in line when it dawned on him.

[Scout 30]

[QUOTE=Suijin;1769703]You're generalizing based on your own experience and/or expectations.

Every situation is different and that's why learning as much as possible about the boat, it's time on the market, comparable sales, and the owner is extremely important in determining what is the best offer you can make. And that offer might be dramatically lower than the asking price.

There are circumstances that can lead an owner to be extremely receptive to what on the face of it seem like unreasonable offers.

I know of a 50' semi-custom yacht, in gorgeous condition, that went for 60% of it's listed price. The owner's husband had passed away and she was so distraught by the process of selling their dream that after a few offers fell through she told the broker to accept the next offer that he received, whatever it was.



QUOTE]

Market value requires typically motivated sellers. There are always distress sales that normally tend to sell below market value but you can't treat every listing like it's a distress sale.

[Scout 30]

Originally Posted by Suijin

You're generalizing based on your own experience and/or expectations.

Yes, in a perfect world all boats are priced appropriately and rationally. But many are not. I've heard more than a couple of brokers say that it takes some owners about two years to come to grips with the true value of their boat and the result is many boats that are grossly overpriced.

I bought my boat after the buyer had turned down over a dozen offers of roughly the same level. He just finally realized that they represented the market value of the boat and I just happened to be the one in line when it dawned on him.

This is a good point. Without a realistic seller it's hard to make a deal. However, sometimes a seller appears unrealistic due to the cost of recent updates and/or upgrades. Estimating a boats fair market value must include condition which may be significantly above or below average. Updates and/or upgrades typically have some value although it's usually below, & sometimes way below, their actual cost.

I think it's human nature to look for the lowest priced boats but they typically represent below average condition. IMHO the best deals are the boats that have been significantly updated. The seller has already done the work you would have to do & is eating the depreciation on top of that.

[weavis]

Originally Posted by sailorboy1

1 - Get a broker
2 - Inspect the boat with the broker
3 - Get broker to run the sold boat data
4 - Determine a price YOU are willing to pay based on 2&3 dependent on survey
5 - adjust final price based on 4

All this low ball game crap is just insulting! If you think it is a good boat be willing to pay what it is worth, if you don't want the boat just don't waste everyone's time.

I would agree to the principle of your comments.
Herein lies the crux of negotiation.

Seller has a vessel he is offering for sale at 100K. A stock production line vessel.

Buyer comes along and looks at the vessel, and a survey determines that work needs to be done, at an estimate of 25K.

Buyer does his homework and determines that EXTRA cosmetic work may need to done in order to cover over the traces of the survey requirements.

So what is the Vessel worth? If a good market price example in working order is worth 100K, then this vessel is already devalued to 70K.

Then there is the time involved in doing the work, and perhaps whilst the vessel is in bits, it might be prudent to upgrade certain other things that will need replacing shortly, although not immediately.

If there are 5 identical boats all at 100K, then a buyer has the opportunity to examine each one as to "fit for the purpose" and choose the best one out of the 5, and negotiate on the price or indeed if all is well, pay the asking price.

If the vessel was a rare one off........ even if it required work, then price of 100K is what it is-take it or leave it. Only the one you are looking at is not.

I never have seen the point of buying a 100K vessel, dropping essential work/money into it to the value of 1/3 or 1/2 of its selling price, and it still is only worth 100K

So yes........ based on all the criteria, my offer would be 40 or 50% less than the asking............... for that is what it is worth given the 'retail' cost of a used boat of that marque.

The classic example is the older Catalac range of Catamarans. A fabulous boat and commanded huge money in used condition....... a 9 was getting close to 50K Sterling 13 months ago.

Suddenly overnight, people woke up to the fact that the 8 and 9 was hitting the 40 year old mark and lots needed doing. Engines, rudders, osmosis treatment, modernising, upgrading etc....... and the price tumbled. Advertised prices have come down to mid 20K and many can be bought on offer for under under 20K....... Does it make it a bad boat? absolutely not...... they are great...... I even offered 38K sterling for one early last year and was sneered at. He didnt sneer in December when it sold for mid 20K.

There are lots of factors involved in making an offer. Desirability, necessity, value, work involved and future sale.

So what is a boat worth? I guess its worth what a person is willing to pay. I will have good reasons for offering a low price when I know the issues involved. I already will have money "invested" in the vessel via the survey.
Last year I spent 4K in surveys, There are a lot of Demics out there.

Remember, a seller does not have to sell. He has a say in it too.

[Esc Pod]

Originally Posted by 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.

Spot on! Nearly the same just happened with me. I found that the willingness to walk away (in both selling and buying) is the key. Surveys can be pricey but once you have accepted that having one done may mean you won't go through with the purchase (as opposed to a mentality that with that much invested a purchase must be made) you will really see things start to work in your favor. Right now you are trying to make a map for a place you have never been. Choose your destination and follow the map as it presents itself and all will go as it is supposed to.

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[Scout 30]

Originally Posted by weavis

I would agree to the principle of your comments.
Herein lies the crux of negotiation.

Seller has a vessel he is offering for sale at 100K. A stock production line vessel.

Buyer comes along and looks at the vessel, and a survey determines that work needs to be done, at an estimate of 25K.

Buyer does his homework and determines that EXTRA cosmetic work may need to done in order to cover over the traces of the survey requirements.

So what is the Vessel worth? If a good market price example in working order is worth 100K, then this vessel is already devalued to 70K.



Then there is the time involved in doing the work, and perhaps whilst the vessel is in bits, it might be prudent to upgrade certain other things that will need replacing shortly, although not immediately.

If there are 5 identical boats all at 100K, then a buyer has the opportunity to examine each one as to "fit for the purpose" and choose the best one out of the 5, and negotiate on the price or indeed if all is well, pay the asking price.

If the vessel was a rare one off........ even if it required work, then price of 100K is what it is-take it or leave it. Only the one you are looking at is not.

I never have seen the point of buying a 100K vessel, dropping essential work/money into it to the value of 1/3 or 1/2 of its selling price, and it still is only worth 100K

So yes........ based on all the criteria, my offer would be 40 or 50% less than the asking............... for that is what it is worth given the 'retail' cost of a used boat of that marque.

The classic example is the older Catalac range of Catamarans. A fabulous boat and commanded huge money in used condition....... a 9 was getting close to 50K Sterling 13 months ago.

Suddenly overnight, people woke up to the fact that the 8 and 9 was hitting the 40 year old mark and lots needed doing. Engines, rudders, osmosis treatment, modernising, upgrading etc....... and the price tumbled. Advertised prices have come down to mid 20K and many can be bought on offer for under under 20K....... Does it make it a bad boat? absolutely not...... they are great...... I even offered 38K sterling for one early last year and was sneered at. He didnt sneer in December when it sold for mid 20K.

There are lots of factors involved in making an offer. Desirability, necessity, value, work involved and future sale.

So what is a boat worth? I guess its worth what a person is willing to pay. I will have good reasons for offering a low price when I know the issues involved. I already will have money "invested" in the vessel via the survey.
Last year I spent 4K in surveys, There are a lot of Demics out there.

Remember, a seller does not have to sell. He has a say in it too.

Market value must include condition. If you pay 100k for a boat, do 20k in repairs & it's then worth 100k either the repairs you made were unnecessary (not recognized by the market) or you paid too much. Probably some of both.

We looked at a boat at the St Pete Boat Show that was an older boat that had been significantly updated & upgraded. The owner had replaced all of the chain plates with custom made round plates designed by Steven Dashew at a huge cost even though the chain plates he replaced were still functional. He will see little return on that investment.

[Scout 30]

Unless you are a troll telling everyone to low ball the crap out of every listing out there is not in any boat owner's best interest. Most of the people on this forum have a significant investment in a boat and are therefore future sellers. If you don't own a boat & you are on this forum you are most likely interested in buying a boat meaning you are also a future seller.

[a64pilot]

I bought an older, hopefully well founded boat, that had never had any cruising gear. It was obviously a Marina Queen, I will have at least 1/3 of the price I paid for the boat in adding gear and replacing sails etc., probably more.
I expect all this work will increase the value of the boat by about half of what I'm spending on her, when it's all new and unused, any age of course will devalue it even further.
It's my opinion that you usually won't get your money back out of a boat. The one exception to that is if your buying a boat to "flip", it's dirty and nasty when you bought it, and you spent very little money, but a lot of work cleaning it up and making it presentable.

[PortClydeMe]

Originally Posted by Scout 30

If the market value of a boat is $100,000 & it's listed at $300,000 PortClydeMe would have you offer $150,000 for the boat which is too much. If it's listed at $50,000 PortClydeMe would have you offer $25,000 which would be 75% less than it's actual value.

Basic idiocy was removed from the general formula prior to posting. Buy and sell boats, or anything, however you wish. It's your money.

[darylat8750]

IMHO

Percentage of anything has nothing to do with anything. It's value to you is what counts.

Figure out what it's value is to you. This should include other boats that would provide you with the experience you are looking for in boat ownership. Figure out what it will cost to get it into the condition that will be acceptable to you. Think time and money. Your time has value even in a labor of love. You should be able to research this reasonably close before hiring a surveyor. I would not make an offer without hearing the engine (s) run and operating all the systems that can be operated at the dock. If the broker won't do that without the owner there fine. Get the owner there. If he wants to sell the boat he will come.

Make the offer based on what the boat is worth to you and what it will cost to get the boat in the condition you want it in and note the things you know about. Be sure the offer is low enough that you can go up if you choose to. The survey should only affect the price if it reveals issues you didn't know at the time the offer was made.

If your offer is rejected thank the owner for his time and tell him if he reconsiders before you purchase a different boat that he can give you a call.

Be sure to make contact with the owner before giving up. Note the thread about using up their Karma. Brokers have their own interest to protect.