'Asking Price' vs 'Offer Price' - brokerage boats

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Our boats have always been like family pets, sharing a big part of our lifes adventures and looking after us in all sorts of situations. My whole life experience has been massively extended by sailing, it is a big part of why we live where we do. The boats have introduced us to lifelong friends and provided greatly treasured memories. It is hard not to feel offended by a derisory offer, I do not really want that person to have charge of my boat. So when we sold our last one we were really pleased that she was purchased by a family who looked after her and valued her as much as we had done. We kept an eye on them and they passed with flying colours.
Similarly I would be reluctant to buy a second hand boat from someone who did not value it. The attitude of the last owner is a big part of the transaction and would be reflected in the keenness to offer.
It is daft, no need to tell me, but I sympathise with people for which it is just a commodity.

I empathise with that. Trouble is, in these difficult times, it is very difficult to get a potential buyer who will offer a fair price . I was lucky in that I sold my boat reluctantly 5 years ago, and got what turned out to be a decent price, and the buyers, a couple of girls from Edinburgh, have kept in contact to this day.

 

[dom]

Many boats, probably an increasing number, are for sale because the owners want out or cannot face the future expenditure to keep the boat in good condition. Unfortunately many such owners still imagine their boat as it was in its prime (and they had just paid a lot of money for it!) so are simply not aware that the world has changed.

And there's the rub, it's often so much better to pay up for a fully sorted boat than get a great "deal" on an old cart and then commence the long overdue maintenance/upgrade malarkey. Before you know it there's worn decks, leaky stanchions, stiff rudder bearings, a dodgy heater, dicky electrics, worn furling gear, tatty sails and that means bills, lots and lots of them! In my experience people have an innate tendency to overestimate their skills when it comes to repairs, inadequately factor in the tame wasted in trying to fix a boat in a faraway marina, underestimate the costs and generally underestimate the magnitude of the necessary revamp.

If I were buying a "new" boat I'd personally be inclined to call up either or both of the two brokers on here, tell them what I wanted and when it came up offer some decent dosh to secure the sale instead of playing silly buggers and letting someone else pinch it from under my nose!

Exactly the same applies in the corporate world; I might be able to knock 15% off the price of the company of my dreams, but if anyone susses what I'm up to they'll leap in and gazump me and why not? A few rounds of that and you'd find me propping up the local bar telling stories of "clueless" buyers who overpaid for what were after all, ...well my dreams. As we all only live once I just can't see the attraction in that!

 

[Birdseye]

No rule of thumb. You offer what you think the boat is worth to you.

de.

Asolutely right. Dont feel embarrassed about offering £100 if that what you want to pay - you never know, the seller might be desperate.

 

[Blue Sunray]

Friendly and helpful. Not.

+1

 

[TheCharteringClasses]

Asolutely right. Dont feel embarrassed about offering £100 if that what you want to pay - you never know, the seller might be desperate.

Similarly the buyer may be either keen or clueless in which case as the seller you're a bit of a plonker if you haven't stuck a bit on top just in case.
Logically therefore, the selling price is below the asking price, regardless of what jonic claims.

Which brings us back to how much?

 

[Tranona]

Similarly the buyer may be either keen or clueless in which case as the seller you're a bit of a plonker if you haven't stuck a bit on top just in case.
Logically therefore, the selling price is below the asking price, regardless of what jonic claims.

Which brings us back to how much?

You have good examples already on this thread of boats that sold at very close to their asking price.

The problem with these threads is rather like customer service - you mainly hear from those who have complaints. So in this case you mainly hear from those buyers who have encountered carp overpriced boats or believe they have screwed the seller down, or from sellers who receive insulting offers from the same type of buyers. What you rarely hear about is the thousands of successful transactions that take place every year where both buyers and sellers are satisfied - largely because these folks have no axe to grind or ego to inflate.

 

[maxi77]

You have good examples already on this thread of boats that sold at very close to their asking price.

The problem with these threads is rather like customer service - you mainly hear from those who have complaints. So in this case you mainly hear from those buyers who have encountered carp overpriced boats or believe they have screwed the seller down, or from sellers who receive insulting offers from the same type of buyers. What you rarely hear about is the thousands of successful transactions that take place every year where both buyers and sellers are satisfied - largely because these folks have no axe to grind or ego to inflate.

Seeking the right boat at the right price for yourself is sod all to do with grinding axes or inflating egos. When you find ityou are simply happy. Incompetant brokers, sellers with a different view of value are just some of the annoyances you meet along the way. In the end you find the right boat, right broker and right price.

 

[Tranona]

Seeking the right boat at the right price for yourself is sod all to do with grinding axes or inflating egos. When you find ityou are simply happy. Incompetant brokers, sellers with a different view of value are just some of the annoyances you meet along the way. In the end you find the right boat, right broker and right price.

Suggest you read my post#39. Was not suggesting that you don't meet problems along the way as you describe, actually rather the opposite. Just making the point in this post that you don't hear of all the successful transactions. Some good examples of "egos" being displayed on this thread if you look!

 

[duncan99210]

When we were searching for our current boat, we fixed on the boat we wanted by make and size. We then looked at those on the market with an asking price within our budget. Having found the one we preferred, we looked at how long it had been on the market (about nine months) and came to the conclusion that the owner might be open to an offer below the asking price. We made an offer some 15% less than the asking price which was immediately accepted.

This surprised us as we firmly expected to do some haggling round the offer, which is the way we've always done business with high ticket items: low bid, counter bid and finalise somewhere in the middle. In this instance, opening offer could perhaps have been lower and therefore open to a bit of bargaining but it wasn't and we still got the boat we wanted for less than we expected to pay for it.

Why relate the story? To my mind, buying any large ticket item is down to a bargain. Low offer, counter offer and so on. There's no need for emotion to enter into it. If a broker has been instructed not to budge from the asking price by the seller, fair enough, I'll walk away and look elsewhere. If, on the other hand, a broker doesn't at least pass on my offer where no such instruction is in place, then I feel he's not doing his best to find a buyer for the boat, as what might strike him as a "silly" offer may be just the beginning of a deal.

As to how much to offer against an asking price, that really is up to the individual making the offer. There is no magic formula out there that will help you decide how low to pitch the initial offer.

 

[doug748]

Just like our For Sale section some of these items are stupidly over the odds, others are a give away.

You have to know which is which. If not, somebody will be buying whilst you are still scratching your arris, or you will be upsetting a genuine seller with his bargain. Mucking about with chancers, flogging dodgy bits of kit, is much minimised with a bit of research.

I see our own Dylan Winter had a purse of about 4k and was iffing and butting looking for a deal at the bottom of the market. He spotted an excellent boat asking a reduced c 6k and settled quickly at very near the asking price. In like Flynn, that's the way to operate.

 

[KINGFISHER 9]

There's Jonic, who knows what he's talking about and does things properly (personal experience) .... then there's the rest ...... and then there's Boatshed!

 

[Goldie]

Thank you Jonic, an excellent post (and I speak as someone who may be marketing their boat v.soon). Re:

A1GSS It can also be very slow and the current yachtworld data sent to me a few weeks ago is giving an average of circa 350 days to sell a sail boat in Europe.

Does the same source identify the percentage of the asking price achieved, and whether that was the original asking price? That I suspect, would go a log way to answering the OP's original question.

 

[Sticky Fingers]

Probably would, but I doubt it's public info. As others have pointed out, there's such a wide spread of boats, ages, quality and sellers that a rule of thumb is impossible. That said, a database of sold prices by builder/model/year/condition would be useful (like Glass' or CAP guides for cars). OK boat sales volumes are so much lower that statistics would at best be a rough guide.

 

[lw395]

Thank you Jonic, an excellent post (and I speak as someone who may be marketing their boat v.soon). Re:

Does the same source identify the percentage of the asking price achieved, and whether that was the original asking price? That I suspect, would go a log way to answering the OP's original question.

Very often the price achieved will be lowered by the cost of post-survey work. The price achieved for a seller may get reduced twice, once at the offer stage then again to reflect the survey.
Or the best boats may change hands for the asking price (if they reach the open market...).

 

[Tranona]

Thank you Jonic, an excellent post (and I speak as someone who may be marketing their boat v.soon). Re:

Does the same source identify the percentage of the asking price achieved, and whether that was the original asking price? That I suspect, would go a log way to answering the OP's original question.

No. Only the reported transaction price which is voluntary from the participating brokers. As lw395 suggests the transaction price may be influenced by a number of factors, particularly negotiated reductions for post survey work, or as in my recent case as part exchange where the price might not necessarily reflect an open market sale price.

There was some data published in France purporting to show exactly what you are asking for. Guess what, there was no systematic link between advertised price and reported sale price. Boat sold for close to asking, a bit less, a lot less etc. Unless you have the details of each transaction, particularly those with big differences there is no way of knowing the reason which is likely to explain the discrepancy.

There is a big difference between the boat market and the car, or even house markets primarily because it is a very "thin" market - that is very few similar transactions in a short time scale. How many boats exactly like (or even close) yours change hands each year?

 

[mrming]

Exactly. If asked I always tell most boat buyers, once they have decided on a particular type, to go and find the very best example around and pay a bit more for it if needed. Unless they simply don't have the money, or enjoy fixing things more than sailing, and there are people who do like it this way round, and nothing wrong with that.

John Wilson
http://www.yachtsnet.co.uk/

This is very good advice. The "bargains" are usually fixer-uppers which is fine if you don't mind doing the fixing up, but if you just want to go sailing you should absolutely buy the best condition example you can afford. The bit extra you pay will be way less than what you need to spend on a tired "bargain" to bring it up to the same standard.

On the other hand, I personally don't mind a bit of fettling.

 

[jonic]

Guess what, there was no systematic link between advertised price and reported sale price. Boat sold for close to asking, a bit less, a lot less etc. Unless you have the details of each transaction, particularly those with big differences there is no way of knowing the reason which is likely to explain the discrepancy.

There is a big difference between the boat market and the car, or even house markets primarily because it is a very "thin" market - that is very few similar transactions in a short time scale. How many boats exactly like (or even close) yours change hands each year?

If you take nothing else from this thread- take this.

It's the closest and most accurate description to the reality you will get.

 

[Sticky Fingers]

:encouragement:

 

[TheCharteringClasses]

There is a big difference between the boat market and the car, or even house markets primarily because it is a very "thin" market - that is very few similar transactions in a short time scale. How many boats exactly like (or even close) yours change hands each year?

I have to state the obvious here that that would create a very aggressive market, where sellers deliberately pitch high on the grounds of exclusivity and the buyers deliberately pitch low on the chance of desperation. The final price will be somewhere below the offer price, the "thinness" (thinitudinality?) of the market I would expect to exaggerate that unless you get distressed buyers - which I feel is unlikely.

I'm afraid the logic is price high and offer low.

Jonic is well informed, but the rest of us aren't which changes the view of the market.

 

[Tranona]

I have to state the obvious here that that would create a very aggressive market, where sellers deliberately pitch high on the grounds of exclusivity and the buyers deliberately pitch low on the chance of desperation. The final price will be somewhere below the offer price, the "thinness" (thinitudinality?) of the market I would expect to exaggerate that unless you get distressed buyers - which I feel is unlikely.

I'm afraid the logic is price high and offer low.

Jonic is well informed, but the rest of us aren't which changes the view of the market.

There are clearly trends and fairly narrow asking price bands on popular boats where there are sufficient sales to establish a trend - probably in a range of +/- 5%, and achieved prices at any given time in a similar band, although probably overall lower. However when boats get older and condition varies more, or there are substantial differences in equipment, or even variation in location, the band of both asking prices and selling prices widens. Each sale is very individual and the price of that transaction has very little impact on the price of the next transaction, partly because the information is not public.

Basic economic theory shows that for a perfect market (where the price is the clearing price) requires homogenous products, many buyers and sellers, a place where buyers and sellers can meet, and perfect information. It does not take much imagination to see that the secondhand boat market is a long way off meeting these conditions. So it is not surprising that both sellers and buyers have difficulty in pitching the asking price and offer price. It comes down to the individuals' perception of value - for the seller what does he expect as deprival value for his boat and for the buyer what is his utility value. If the monetary value of both of those is close then there will be a deal - but as the next buyer/seller encounter will not be aware of that value they will have to go through the same process.

The main purpose of the asking price is to signal an indicative deprival value to potential buyers. Remember that this is not a business, but each transaction is unique to the two parties, and indeed much of the detail that underlies the determination of the final transaction price is also unique. So even if it becomes public knowledge it lacks the detail that is necessary for it to be any help in the next transaction.

Not sure how you arrive at your "logic" as it is not supported by any systematic evidence. There a several examples on this thread of boats that have achieved the asking price (or close), some that achieve a little bit less and some that achieve a lot less. It is impossible to tell whether sellers were distressed or buyers lucky - all that is available is an uncorroborated figure.