Haggling - asking price & offer prices

[JasonClark]

i suppose it depends on how deep your pocket is as regards alienating a seller with a very low offer. In my case i had a set figure to spend on a boat and i had no more, so thats exactley what i offered and i told him that too, so i could'nt care less whether he was insulted alienated or whatever "Take it or Leave it" springs to mind as i wasnt in position to up my offer, At the end of the day its business, your not there to make best friends.

 

[whipper_snapper]

Offer what YOU think is bottom fair.

First boat I bought - I paid approx. 75% of asking ...

Next boat I bought .... yes BOUGHT ... I offered 40% of asking price, he told me to 'go away' ... couple days later he called me back saying yes ... I then told him as I had another boat on offer I was now only going to consider 30% subject to survey ... his language was quite rich ! 7am next morning I got call saying have survey done ... we settled at 25% of his asking price.

Next I paid 50% of asking...

Next and present main boat I paid what he asked as I knew it was a good deal, he knew what boat was worth etc. He wasn't asking silly money as most sellers are.

I agree entirely. A seller who for one reason or another is desperate to sell will sometimes accept very low offers. As a seller I have received (and declined) offers of around 50%, I was not in the least offended or upset and I hesitated before declining because I was trying to sell at a distance through an inept broker. A boat that has been on the market for 6 months or more starts to look very tired and becomes increasingly difficult to sell while the owner becomes increasingly worried.

 

[Refueler]

I've said this on another thread ... one of the biggest problems with boat asking prices is mostly with todays AWB's ...

Person buys a xxxxxx35 at xxxK and then has to spend xxK to kit it out fully. Sail-aways are not kitted out that well !!
So they've now spent a lot more than initial purchase price. No doubt other costs creep in during that first year ...

Few years later they get the bug to move up / across or whatever ... so they find another boat. Now they want to sell the first. What do they do ? They scan the pages of mags, check online the asking prices ... compare write-ups .... c'mon - we've all done it. Here's where the crunch comes ... But OUR boat is better equipped than that ..we spent loads of bunce on it etc. So they ask price trying to stay in realms of spent - NOT what is reality for their boat.

You see it again and again ... you read posts of people moaning about daft offers ... etc. Trouble is it thenm escalates as others check the adverts - see daft prices and THEY add their 'pride and joy' to the list ... perpetuating this silly price game.

The guy who sold me the Sunrider didn't put to a broker, he put an ad in the mag ... straight, honest text ... sensible price. I viewed the boat, knew what the boat was and it's real value ... he'd hit it square on the nail. We did biz.

This is how the boat was presented and shown to wife and I ... simply, honestly and with everything clean, tidy and ready for me ....

Now if only the rest of the boating world could do that ! We wouldn't have threads like this ....

 

[maxi77]

I think the first question is what is the boat worth to you, once you have worked that out, never pay more than that figure. This figure needs also to take account of what you will need to spend on the boat, and the going price for similar boats that need less spent on them.

As to how low can you go, you need to know how long the boat has been on the market, has the price already been reduced and if yes when. YOu also need to have an idea how keen a seller it is.

Finally, do not be embarrased about what you offer, after all it is your money and if you think it is only worth 50% of the asking price, offer 40% so you can come up to your 50%.

 

[photodog]

Hmmm not so sure about the idea that a kitted out boat is not worth any more than a non-kitted out boat....

The idea that the "Extras" are worth nothing is clearly nonsense.....

They may be worth nothing to some buyers... but to others.. they may be worth quite a bit.....


I spent quite a bit of time looking for our last boat... and found several examples of boats that were on our list on the Solent.... but none of these boats were even remotely kitted out to the standard that we wanted for cruising the west country.... So, they tended to lack things like Radar, Electric Windlass, Heating, and kedges..

i was keen to find a boat with a certain minimal level of kit included in the price.... So it was the kit on board that in the end determined the value of the boat to me......

I dont think that you can just add the new value of the kit to the price of the boat... but clearly there is value in the level of kit the boat has on board.....

If you have two identical boats side by side, one with Radar, heating and EW, and one without.... and both boats are identically priced..... then the boat without the gear will simply not realise the same price as the loaded up boat... either as a result of having to discount more to make a sale... or by virtue of taking longer to sell or having a smaller pool of people to whom the boat will be suitable.

Some kit adds no value.. things like Stereo, Flat screen telly, Leather, microwave.... but other gear does have value... in particular Heating, Radar, Fridge.....

 

[Refueler]

Hmmm not so sure about the idea that a kitted out boat is not worth any more than a non-kitted out boat....

The idea that the "Extras" are worth nothing is clearly nonsense.....

They may be worth nothing to some buyers... but to others.. they may be worth quite a bit.....


I spent quite a bit of time looking for our last boat... and found several examples of boats that were on our list on the Solent.... but none of these boats were even remotely kitted out to the standard that we wanted for cruising the west country.... So, they tended to lack things like Radar, Electric Windlass, Heating, and kedges..

i was keen to find a boat with a certain minimal level of kit included in the price.... So it was the kit on board that in the end determined the value of the boat to me......

I dont think that you can just add the new value of the kit to the price of the boat... but clearly there is value in the level of kit the boat has on board.....

If you have two identical boats side by side, one with Radar, heating and EW, and one without.... and both boats are identically priced..... then the boat without the gear will simply not realise the same price as the loaded up boat... either as a result of having to discount more to make a sale... or by virtue of taking longer to sell or having a smaller pool of people to whom the boat will be suitable.

Some kit adds no value.. things like Stereo, Flat screen telly, Leather, microwave.... but other gear does have value... in particular Heating, Radar, Fridge.....

No-one would argue that kit doesn't add value to BUYER ... of course it does. But it doesn't add to pricing - not significantly as some seem to think they should do. That's the argument.

 

[maxi77]

No-one would argue that kit doesn't add value to BUYER ... of course it does. But it doesn't add to pricing - not significantly as some seem to think they should do. That's the argument.

The problem is more that the lack of certain items knock cash of the value to the buyer. You tend to start of with an idea of the kit you want on the boat, and the price you are going to pay. You never add to what you are prepared to pay because there are extras, but you deduct for kit you consider important to you that is not there or out of date.

 

[Refueler]

The problem is more that the lack of certain items knock cash of the value to the buyer. You tend to start of with an idea of the kit you want on the boat, and the price you are going to pay. You never add to what you are prepared to pay because there are extras, but you deduct for kit you consider important to you that is not there or out of date.

Please can we separate the two words .... value .... price ..... they are not same.

Seller thinks he can ask premium price because he has kit on board. His value ideas are higher than reality.

Buyer is looking for boat that he can sail-off with kitted out to reasonable degree. His idea of value is market.

Buyer finds boat with good inventory, in fact likely more gear than he initially expects, but he still will look at that boat at market value and offer lowest market price he can.

Buyer finds boat with less gear than he expects, likely he will walk away or offer daft low price accordingly as he then considers how much it's going to cost him to reach his required spec. Therefore he de-values the boat.

Know what I mean ?

 

[oldsaltoz]

Most of the above is good advice, some is questionable.

Can I assume you have a particular length and brand in mind along with a list of must have items included?

If not you have some way to go, work out just what you plan to do with the boat, what you need to do it and what you expect to pay.

First rule: Never be in hurry to buy, we are not talking a season here we could be talking a year or more. It took me over 2 years to find my last boat.

You have to spend a lot of your time compiling data on sort of sort of boat you plan to purchase. This takes time. You also have to get on board and have a good look around several of the sort of boats that interest you, making notes about anything you particularly like and add this to you list of nice to have.

When you have developed a feel for what a particular boat should sell for, you are almost ready to make a purchase.

You now have to wait for the right one to come onto the market, then find out as much as you can about it and why it has now come for sale.

When I told the agent what I was prepared to offer for my current gin palace he replied "The owner will kill me if I told him that.

I got it, subject to survey and sea trials, both came up very well and we sailed north 2 days later, I saved over 30%.

As others have pointed out, always subject to survey, and subject to sea trial, this will give the opportunity to check that everything on board is working properly, engine, all instruments, charging systems, plotter, radar, anchor winch, water pressure system, toilets, hot water, radios, winches, sails and the list goes on.

The only expense in the last few years has been an engine water pump rebuild for around AU$25.00 and a new UV strip on the furler that cost 2 cartons of beer to stitch.

So, know the market, take your time, get the facts and a good buy.

Avagoodweekend......

PS. I am still looking for my next bargain by the way.

 

[photodog]

finds boat with less gear than he expects, likely he will walk away or offer daft low price accordingly as he then considers how much it's going to cost him to reach his required spec. Therefore he de-values the boat

So kit DOES add value to a boat... this in the end effects the price...


Clearly to me it is entirely reasonable to take into consideration the value of the kit on a boat when determining the asking price......

So they ask price trying to stay in realms of spent - NOT what is reality for their boat.


Clearly what you spend on your boat initially may not have any impact on the real value of a boat in a particular market... but I think it is entirely reasonable, and realistic, to allow for this higher initial spend in the calculation of your asking price...

The problem is for many sellers is that they speced a boat new with a lot of options.... and then they mortgaged this overall price.... and of course some of this mortgage is on equipment which depreciates at a far faster rate than the hull.... so if they are selling the boat on there can be issues.

(Should we not be allowing high depreciation items to be added to the invoice total... and therefore the Mortgage?)


How otoh do you price a 25 year old Cirrus, which has a new Radar Plotter, heating, fridge, AIS and DCS VHF..... the sum total of which is worth more than the value of the hull and gear on its own???

 

[Refueler]

But the buyer de-values from HIS idea of market pricing ... Sellers price is only a number on the advert to any buyer who is really looking.

How many times do you hear the advice ... look at boats just OVER your max price as well ... why ?

Seller generally over-values his item ... hoping a punter will agree. Near all buyers undervalue an item to start - to get a haggle going and they can say to themselves at end ... Boy I did well - I saved xK of his asking price !!

Let's be real ... most people will price up what they see ... and offer accordingly. Me ? I'm one of those with cheek and thick skin that will push the limits of low offers !! If you don't try - you don't get !

 

[Coaster]

How otoh do you price a 25 year old Cirrus, which has a new Radar Plotter, heating, fridge, AIS and DCS VHF..... the sum total of which is worth more than the value of the hull and gear on its own???

There is still confusion about "price" and "value". Both words need to be qualified if they are to be used accurately.

"Asking price" is an amount quoted by a prospective seller. Some are negotiable, such as the asking prices for second hand boats. Others are not negotiable, for example the asking price of Yachting Monthly in W H Smith.

"Sale price" is the actual figure something sells for. It may be disclosed if the buyer or seller has a reason for doing so. I suspect that many claimed sale prices are quoted inaccurately, for example when boasting.

"Value" can be qualified in various ways, the most common being perhaps "open market value" (OMV). My definition is the amount that would be paid in the open market by a willing buyer to a willing seller.

The most common mistake made when assessing OMV may be the failure to realise that most OMVs are subject to a margin of error or tolerance. For example, an expert may say that a Georgian dining table going to auction should fetch between £6000 and £10000. That opinion puts the OMV at £8000 plus or minus 25%.

I suggest that when estimating the OMV of a reasonably standard boat of a fairly common type the margin is about plus or minus 10%. With more unusual boats the margin will be considerably more.

So asking price or sale price are specific amounts. But open market value is a matter of opinion. Those with vested interests will of course be more likely to pitch the figure high or low. The OMV will also vary with market conditions. This is very similar to the residential property market. In that market expert opinions on OMV can be obtained from suitably qualified and experienced Chartered Surveyors. However in boat markets there appear to be proportionately fewer independent valuation experts.

So far as the Cirrus mentioned above is concerned, the sum of the sale prices paid for the new equipment does not equate to the kit's current OMV. I don't know enough about such values but I suspect a seller would be lucky to see the kit fetch more than 30% - 40% of the amount paid for it when brand new. I suspect that the Cirrus OMV will only be increased by perhaps 25% of the equipment's original prices.

In most second hand boat sales the actual sale price will of course depend on the relative bargaining strengths of the buyer and seller.

 

[purplerobbie]

I was always told to buy a boat on the hull, deck, sails and engine.
All the other stuff however desirable will be out of date in a year and then will add little value.

There isn't much point in having the latest chart plotter if the sails and engine are shot.

I have been quite interested in this thread because there is a boat i would love but it is out of my price.
I hate making offers on things i just tend to think its either worth what there asking or it isn't
It could be worth making him an offer on it.

Rob

 

[Refueler]

There is still confusion about "price" and "value". Both words need to be qualified if they are to be used accurately.

"Asking price" is an amount quoted by a prospective seller. Some are negotiable, such as the asking prices for second hand boats. Others are not negotiable, for example the asking price of Yachting Monthly in W H Smith.

"Sale price" is the actual figure something sells for. It may be disclosed if the buyer or seller has a reason for doing so. I suspect that many claimed sale prices are quoted inaccurately, for example when boasting.

"Value" can be qualified in various ways, the most common being perhaps "open market value" (OMV). My definition is the amount that would be paid in the open market by a willing buyer to a willing seller.

The most common mistake made when assessing OMV may be the failure to realise that most OMVs are subject to a margin of error or tolerance. For example, an expert may say that a Georgian dining table going to auction should fetch between £6000 and £10000. That opinion puts the OMV at £8000 plus or minus 25%.

I suggest that when estimating the OMV of a reasonably standard boat of a fairly common type the margin is about plus or minus 10%. With more unusual boats the margin will be considerably more.

So asking price or sale price are specific amounts. But open market value is a matter of opinion. Those with vested interests will of course be more likely to pitch the figure high or low. The OMV will also vary with market conditions. This is very similar to the residential property market. In that market expert opinions on OMV can be obtained from suitably qualified and experienced Chartered Surveyors. However in boat markets there appear to be proportionately fewer independent valuation experts.

So far as the Cirrus mentioned above is concerned, the sum of the sale prices paid for the new equipment does not equate to the kit's current OMV. I don't know enough about such values but I suspect a seller would be lucky to see the kit fetch more than 30% - 40% of the amount paid for it when brand new. I suspect that the Cirrus OMV will only be increased by perhaps 25% of the equipment's original prices.

In most second hand boat sales the actual sale price will of course depend on the relative bargaining strengths of the buyer and seller.

I agree in principle with your post but do not agree with your %ages ... particularly the 10% on a boat ... Personally I think sellers price based on what they see in mags / adverts for other similar boats, they then try at top whack they see ... it perpetuates the potential over-pricing.

 

[alan_d]

There is a (subscription only) website which records the actual selling price of boats which change hands, a kind of marine equivalent of Glass's Guide. You might find someone who has access to this.

 

[Spyro]

There is a (subscription only) website which records the actual selling price of boats which change hands, a kind of marine equivalent of Glass's Guide. You might find someone who has access to this.

Occasionally you can get a password for soldboats.com if you google it. But it's usually not long before it gets changed.

 

[bluedragon]

As boats get older there is a huge disparity in cosmetic condition, age of rigging / sails, etc, and quality of the inventory. I've noticed that just everybody asks about the same price in their ad. Some need to be knocked down by a third for anybody to even consider buying them...others are worthy of their asking price, or even more! The ONLY way to differentiate is to go and see lots...there is no magic formula.

Regarding the "spreadsheet" approach to valuing one against another...yes this does work to a point (we did it), but I also know there are lot of unforeseen costs in bringing a boat up to standard. People get quotes for sails, rigging, engines, etc, but completely forget how paint, varnish, screws, nuts & bolts, wiring, etc, etc, add up in the end, never mind the cost of labour or the value of your time. So be as realistic as you can...and then add-on a sizeable chunk!

 

[BurnitBlue]

The ONLY way to differentiate is to go and see lots...there is no magic formula.

I have begun to enjoy the challenge of finding the perfect boat (for me). This in itself causes me some concern because I seem to be heading down the Professional Tyre-Kicking-Route.

I used to be able to make instant decisions and make an offer on the spot. But nowadays I delay making them until I get home so that I can study the photographs I took during the viewing.

Maybe I will leave the camera at home next time. Get back to one on one and reading the situation live.

 

[maxi77]

I agree in principle with your post but do not agree with your %ages ... particularly the 10% on a boat ... Personally I think sellers price based on what they see in mags / adverts for other similar boats, they then try at top whack they see ... it perpetuates the potential over-pricing.

I have some problems with the OMV concept here. It works reasonably well for things like cars where in general there is very little variation in fit out for each particular model. In the boating world particularly in electronics you can get very wide variations in the fit out over any particular model. Also intended use will also reflect the value the purchaser places on the boat.

At the end of the day the buyer should have a pretty fixed budget, a range of possible boats that may fall within the budget and fulfill his intended use requirements, and an equoipment fit requirement. To the purchaser the value of any boat offered that meets his general requirements will be his budget less his estimate of the cost of bringing the baot up to his requirements. Now this correction factor may well reduce the value to the buyer, but it cannot raise the value above the budget, and in fact it is clearly possible for a boat to be in finacial terms over equipped. At the end of the day any boat will have potentially different values to different buyers.

 

[Tranona]

At the end of the day any boat will have potentially different values to different buyers.

Equally any particular boat has a value for the seller. It is just as difficult for a seller to fix an asking price as it is for a buyer to make his offer. Where there are lots of transactions such as with a popular volume boat it is easier as there is more information. So Centaurs ask £10K +/- about 20% because of the wide age range and conditions. Sellers have a sort of mid point to aim for with an adjustment to reflect condition/age. Same principle applies to less common boats but the comparators are different and you have to look at what else a potential buyer might be looking at.

I think it is rare for a popular boat to sell for more than the perceived top price because that often moves buyers into a different market, but common for the lower end to be breached because of poor condition or desparation of the seller. A friend bought a Centaur for £5.5k against average of £10k - but it did need over £4k on remedial work to the hull!

Similar principles apply to other popular classes such as Sigmas - hence the range of asking prices. You have to know what you are looking for to position an individual boat on the scale.