How to Make a Successful Purchase Offer

[JulieMac]

I am seeking opinions on purchase offer strategies. Essentially, is it better to make a low ball initial offer, and negotiate up. Or.... better to lead with a high offer, while using the survey to push the price lower?

In our case, the boat's been languishing on the market for over 3 years. The owner lives out of state, and hasn't sailed in at least 3 years. He may owe the bank as much as the listing price.

The boat is a luxury brand, with other similar boats having a much higher price. The condition of this boat is fair, and it needs work. The prior owner has owned the boat about 4-5 years, and has done virtually no work to it.

Our goal is to pay 80% of his asking price. We think he wants very close to his listing, which he sees as a giveaway price.

Would you:
(a) offer 90-95% of his listing price, then use the survey to get to 85%
(b) offer 75%, then meet in the middle. Use the survey less aggressively to get to our 80-85% figure.

In the case of (b), we risk turning him off all together. In the case of (a), we have no idea that he will accept our list of needed repairs.

Thoughts?

[Tayana42]

Negotiate the best price you can subject to sea trial and survey, then with the survey results you can adjust from that price based on the costs to remedy all the issues found.


S/V B'Shert

[Steve W]

I really like (a) since you suspect his current asking price may be near the bottom. You are taking the price down by a reasonable 10% with an initial offer, so that should not be insulting. Stand firm on that offer, then use the survey to negotiate the remaining 5-10% (or he does the repairs). Sounds like a solid plan, especially since it has been neglected and on the market so long.

[a64pilot]

You have a Buyer's Broker?
If so then they should be able to advise

I'd say both of your strategies are good, but you never know. In my case I went in with a lowball offer and he took it, with the caveat of I took the boat subject to sea trial and survey of course, but he wasn't negotiating.
I think he had been down that road of people trying to beat him down on the price and got tired of it.

I can imagine him telling the Broker, "just sell the Damn thing"

But if there is a big debt on the boat, that makes it hard for them to just sell it because they are tired of messing about with it.

[PortClydeMe]

Originally Posted by Tayana42

Negotiate the best price you can subject to sea trial and survey, then with the survey results you can adjust from that price based on the costs to remedy all the issues found.


S/V B'Shert

That's one approach.

Or... hit the owner with a very low-ball number. Perhaps 50% of his/her asking price. When doing so, mention that although the boat is nice and you are interested, there are MANY other boats that you are currently looking at. Show COMPLETE indifference as to whether or not they will accept your offer. Make them "sweat"! Owner perspiration is good for your wallet.

I'd phrase is something like this:

"Look, we like your boat, yet we've also been looking at quite a few others that have caught our interest. In fact, those boats are in a little better shape than yours. We'll give you XYZ$$$ (the 50% number) cash on the barrel head. Of course, we'll only give you that amount if it passes a survey inspection. We can have the boat off your hands in A WEEK."

Personally, I don't like the "bargain down" approach. Start very low, then bargain up, if necessary. Or, walk away. Walking away is also a great tactic to make them sweat. Then give them a call 1-2 months later, and offer the same 50% number. You might be surprised.

[JPA Cate]

Once, after agreeing on a price, had the buyer ask, "oh, you wouldn't be interested in taking a lower price would you?"

Julie, what Tayana 44 wrote above, but start at 50%. Sitting for 4 years, there's a whole lot going to need changing. You can always move the up, never down, unless sea trials and survey show something really bad.

I hope you're dealing direct with the owner, not via a broker?

Ann

[koawm]

In general I am a fan of lowballing from the getgo. Market prices are subjective based on condition. If he's paying dock fees and not maintaining the boat at all he might be desperate and accept your initial offer just to get it off his hands. Like I've heard so many sailors say "a boat is not an investment". You'll never get more money out of it than you spent on it if you're actually sailing it.

[PortClydeMe]

Originally Posted by Steve W

I really like (a) since you suspect his current asking price may be near the bottom. You are taking the price down by a reasonable 10% with an initial offer, so that should not be insulting. Stand firm on that offer, then use the survey to negotiate the remaining 5-10% (or he does the repairs). Sounds like a solid plan, especially since it has been neglected and on the market so long.

Insult away!, I say. The owner has been listing the boat for 3 years. Offer 50%. Shock them into reality. So many boats to pick from, and make sure they understand that. Boat ownership is generally a money-losing game. Have fun insulting them!

[Suijin]

You say it's priced lower than similar boats, which would indicate that its condition is already factored into the asking price. Is that your evaluation? If you're working with a buyer's broker they should be able to help you by looking up what comparable boats actually sold for in the year prior vs. what the current asking prices are for boats now on the market. They can also get you the history of the asking price of the boat, which I assume has been periodically reduced over three years. That would be useful information to have in determining your strategy.

The boat would obviously seem to not be going anywhere...unless the price was very recently reduced significantly. It all comes down to how the boat stacks up against market value, and how desirable it is against it's sisters currently on the market.

If the asking is ballpark fair, you really want the boat, and think its going to move soon, offer 90%. That's a can't refuse offer for the most part.

If the asking is dubious, you can take or leave the boat, then offer @ 65-75% and see what happens. You can always revise your offer up, but as soon as you come back to the table the seller has the advantage and is going to try hard to push you back up close to his asking. That's just the psychology of negotiation in general, and likely a real issue in someone who's been unable to arrive at terms for 3 years or more.

[Suijin]

Just saw your other thread, which I had not read. So the price has come down a few times, and once again just recently. Owner wants to sell and price is getting soft.

And the boat has been sitting in the water for a few years, unmaintained. The survey is certainly going to turn stuff up, particularly if the zincs have not been maintained. Might not be pretty. You're definitely going to want to haul her and dry her out.

Sounds like you really want it. That you're "emotionally motivated". So don't try and get it for the cheapest price, try and get it for the fairest price. Only go for cheapest if you're happy to keep looking.

[Moody46CC]

You have had a lot of strategies tossed your way, so you will have to decide which one. A buyer broker might be helpful here.

If, when the smoke clears and you agree to a purchase price, if repairs are necessary as part of the deal, it is best in my view for the seller to lower the price to cover the repairs and for you to arrange them and pay for them. The seller really does not have the interest you do in getting the repairs done right. Moreover, once you get the boat and should one of the repairs be done incorrectly or go wrong, you have far more leverage to get it corrected since you paid for the repair. If you are buying a boat on the Lakes, arranging for the sea trial and survey will take patience if harbors are iced over. Nonetheless, insist as these are for your protection.

[Ericson38]

For a couple of years, we were closely watching a Bristol 47.7 CC with fiberglass decks on the east coast that we finally went to look at, prepared to play hard ball and get something going, as we had seen several 45.5s and 47.7 already, so we thought we knew the boat line pretty well. When we got there, learned it had been out of the water on the hard for a couple of years, and every 6 mos, the price would come down 20-30K. Got onboard, mildew was starting, and after getting some of the swelled up floor panels up, noted water was up to the floors, probably everywhere. The tanks were floating down there, and the wiring was, well. Didn't want to know more, selling broker could not meet us there, only phone calls. Bristol fuel and water tanks, not inexpensive to pull and replace.

Could not believe what we were seeing, but the owner had a trucking company and was gone a lot. Broker said he has lost interest. Since then, the price has dropped another 50K. No one at that yard ensured that the water coming down the mast track (and other places) wasn't expelled with bilge pump. I heard that when that boat was commissioned in 1987, it was the pride of the Bristol fleet around RI.

[Kenomac]

You need to hire a buyer's broker then make the offer you think is fair. I can PM an excellent broker that I've used twice if you like.

[SVTatia]

Originally Posted by Suijin

Just saw your other thread, which I had not read. So the price has come down a few times, and once again just recently. Owner wants to sell and price is getting soft.

And the boat has been sitting in the water for a few years, unmaintained. The survey is certainly going to turn stuff up, particularly if the zincs have not been maintained. Might not be pretty. You're definitely going to want to haul her and dry her out.

Sounds like you really want it. That you're "emotionally motivated". So don't try and get it for the cheapest price, try and get it for the fairest price. Only go for cheapest if you're happy to keep looking.

This is the best advice I've seen so far. You have to show the seller that his price is unrealistic if that is the case. Insulting the seller will not take you anywhere and I believe that a deal is only good when it satisfies both parties. But if you are "emotionally motivated" be careful and negotiate using your head not the heart.

[leftbrainstuff]

When we bought in late 2013 we found most good boats sold for about 15% below the advertised price.

If it's been on the market 3 years then it's probably overpriced.

Make an offer you feel comfortable with.

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