I Keep getting offers on my boat

[hlb]

Geez, you weren't actually looking for sensible answers with such questions, were you?
Then again, Jonic did give you some... Unbelievable, innit?

When in Conwy, the rules said. I had to adverties with on site brokerage, so I did . Then they said they were delisting me forth with.

In the mean time I thought that no one could argue about a personal sale, so got a bloke to put signs on my boat. Most were riped off.

Anyway I got a call, asking if it was £650 pounds.??

 

[jonic]

There's a fundamental error there Jonic. An offer of £50K on a boat you have listed at £75K isn't 33% off at all - it's simply a gap of £25K between two arbitrary numbers. The ONLY price that matters is the agreed price that leads to the sale. All other numbers are just figures in the air, be it offer or asking prices. Whether that gap can be closed has nothing to do with the size of the gap and everything to do with the willingness of the two parties to close it.

See the situation from my point of view as a buyer - I may have a limited or no ability to do any research on the seller so I have no idea if he's just flying a kite to see if he can get a good price or if he's desperate to sell for some reason and will take a haircut if need be. From my perspective it's difficult for me to lower my offer if I find I've come in too high - but what is too high? In this market it could be anywhere.

Buyers make the same mistake though - how often do you hear someone say "he's taking the pee at that price" and just dismiss it out of hand instead of getting in there with an offer and using negotiating skills to get an acceptable price...

Boats are absolutely no different to any other asset that is the subject of a negotiated transaction between two parties. The unique skills a broker brings to the table are product and market knowledge but a salesman is a salesman - a good broker needs the specialist knowledge and to be a good salesman but he should be able sell anything.

Grumpy. I have specialist knowledge.

That's why people use me. For instance I have access to the following.

The boat in question has an AVERAGE ACTUAL SOLD PRICE in the last two years in the UK of £86,000.

I work with the market day in day out. The owner wants to sell this season so a price of £75k has been set.

No broker wants to waste time flying a kite. It costs money and loses money.

At the same time my clients do not want to be ripped off by someone flying their own kite and offering way under current market value.

That's the last from me on this thread.

 

[Tranona]

The problem is that the "market" is a very slippery thing. The GoG approach ignores the market and focuses on the individual transaction - seeking to find an individual who in the specific circumstances puts a low deprival value on that specific asset. This may be forced upon him by circumstances (ie his need for instant cash is greater then his need for the asset) or through ignorance. Such situations are likely to be rare, but not unknown. As a buyer using this strategy you limit yourself to a very narrow section of the market.

A "Perfect" market has to meet a number of conditions - many buyers, many sellers, homogeneous product and good information. If all these conditions are met then the clearing price for each example in the market is the same. However, as these conditions relax, the certainty of a single clearing price reduces. The boat market is not strong on these conditions, but within it there are some boats where the market is more "perfect" than others.

So high volume, mass produced boats which sell regularly usually do so within a narow price range. My boat falls into this category - there are 7 listed on Yachtworld in the UK at the moment - and are different boats from the similar number on the market a year ago. Asking prices are between £50-55K, and again very little different from the past. Quite reasonable to expect a seller to achieve (after expenses) between £45-50k. If I put my boat on the market for £45k (to undercut the competition) the first question would be "whats wrong with it?" and if I asked £60k probably would not get any questions at all!

However, many boats don't fall into this category - low volume sales, big variations in specs and condition etc so much more difficult to establish a "clearing" price. Add to that the current volatility from external factors and you can see the difficulties for both buyers and sellers in coming to an agreement on price.

Hopefully as Jon has said, what a broker brings to the party is superior knowledge of actual transaction prices in setting the basic asking price. Some of this knowledge is in the public domain, but an active specialist should always be ahead of what is public knowledge. The final price depends on negotiation at the margins. The "you are asking £75k and I offer £50k" is I would suggest not a good basis for "negotiation". Negotiation is about trading what you have against what the other party has, and if it is purely about price then it is not negotiating but testing the strength of the clearing price, and if there are no trade offs it is simply waiting to see who gives in first. As can be seen from many of the stories told above, it is usually the potential buyer who walks away, usualy blaming it on the intransigence of the seller rather than his own possible misreading of the situation!

 

[Deleted User YDKXO]

You are wrong If you think I am dismissive.

Every seller will have a bottom line and he will have instructed his broker accordingly. This will vary from boat to boat and owner to owner. If the offer is so out of line it will go nowhere. Brokers get paid only on completion and believe me I will never pass an opportunity to put two diametrically opposed people together if it can be done. It is 100% in my interest to get a deal done.
There is no point at 33% under if you are getting offers between 5 and 10 %.

Well we're not talking about that situation. Quite obviously if other offers are coming in at asking minus 10%, you're not going to enter negotiations with the minus 33% buyer. What we're talking about here is a situation where the only offer(s) are considerably below the asking price and probably below the seller's minimum. All I'm saying is that you have a duty to take seriously any offer that comes along at whatever price level it may be because we all know that buyers can increase their offers and sellers can decrease their minimums

 

[Deleted User YDKXO]

So high volume, mass produced boats which sell regularly usually do so within a narow price range.

Thats not true. You've said it yourself. The boat market is not a perfect market because information is not 100% available. The information that buyers generally don't have is knowledge of actual selling prices. A popular model may have asking prices within a narrow range but that certainly does't mean that selling prices are also within a narrow range because of the many other variables involved such as condition, hours, location and of course how keen the seller is to sell.
So take hlb's boat, which is a popular model, as an example. Maybe all P35s have asking prices around £75k, that certainly doesn't mean that they all sell for £65-70k, especially in the current market. IMHO, a buyer offering £50k for a £75k P35 can have some expectation of being successful with his offer but obviously it all depends on the seller

 

[jimg]

Grumpy. I have specialist knowledge.

That's why people use me. For instance I have access to the following.

The boat in question has an AVERAGE ACTUAL SOLD PRICE in the last two years in the UK of £86,000.

I work with the market day in day out. The owner wants to sell this season so a price of £75k has been set.

No broker wants to waste time flying a kite. It costs money and loses money.

At the same time my clients do not want to be ripped off by someone flying their own kite and offering way under current market value.

That's the last from me on this thread.

Before you go, from your Yacht Broker database, what is the average price for a P35?

 

[Phill]

Up until two years ago we had a flourishing and very profitable business that allowed my family a certain lifestyle. At that time I had a Princess 33 that I wanted to replace with a 35. I knew what my boat was worth and how much extra I would have to part with to achieve that goal.
Then work dried up and I had to invest and diversify to keep the business going. I needed to keep the house, food on the table and the kids in their schools. That was my priority so the 33 had to go. I looked at others and priced mine below those and removed all our personal belongings. We spent time cleaning and prepaing the boat for sale. It sold to the second viewers within two weeks. I estimate I could have sold it for 10% more but that was more than compensated for by the ending of Marina fees. I note that one of the others was until recently, still for sale but at a lower price and assume the owner has had a further two years of berthing fees.
Business is now much better and we will return to boating next year I hope. Financially, I am not where I was and as the country isn't either I can't afford to pay what I was considering two years ago so I will negotiate harder.
I guess what I'm saying in short is most of us have circumstances that have changed over recent years and buyers as well as sellers should take stock of that. All offers however low should be given and considered. If the broker is doing his job properly he will intervene and try to get an outcome that BOTH parties are happy with. Sometimes it's better to lose some money on a sale just to save it in Marina, maintenance and travel fees.
All in my opion though.

 

[jonic]

Well we're not talking about that situation. Quite obviously if other offers are coming in at asking minus 10%, you're not going to enter negotiations with the minus 33% buyer. What we're talking about here is a situation where the only offer(s) are considerably below the asking price and probably below the seller's minimum. All I'm saying is that you have a duty to take seriously any offer that comes along at whatever price level it may be because we all know that buyers can increase their offers and sellers can decrease their minimums

Ok I said i was going but I want to be clear, ALL offers are passed to the owner unless he gives a specific instruction not to bother him under a certain level.

I will ALWAYS try to get the person making the offer onto a playing field where serious business can be done. However you may be surprised to learn 99% of them never go anywhere at all - except to waste an awful lot of time, money and resources. Unfortunately it comes with the territory.

More so since daft house buying programmes.

They are boats not houses.

Good bye and good luck.

 

[DAKA]

I guess what I'm saying in short is most of us have circumstances that have changed over recent years and buyers as well as sellers should take stock of that. All offers however low should be given and considered. If the broker is doing his job properly he will intervene and try to get an outcome that BOTH parties are happy with. Sometimes it's better to lose some money on a sale just to save it in Marina, maintenance and travel fees.
All in my opion though.

I expect on the same basis Phil a Broker should be at least courteous to your 70% offer , as 6 months afterwards the boat may still be on the market and you may have managed to save enough during that time to increase to an 85% offer.

 

[Tranona]

Thats not true. You've said it yourself. The boat market is not a perfect market because information is not 100% available. The information that buyers generally don't have is knowledge of actual selling prices. A popular model may have asking prices within a narrow range but that certainly does't mean that selling prices are also within a narrow range because of the many other variables involved such as condition, hours, location and of course how keen the seller is to sell.

Think my example is pretty sound to illustrate the difference. Not suggesting the actual sales price is the same as asking price, but the narrow range will hold good. In this case probably 10 boats a year of that type change hands, so if you know that, and asking prices are staying the same, that it is a pretty good indication of selling prices. If that range was way out from reality then the 7 different vendors would not all be asking in the same range.

Just like the stock market - when trading is thin, prices tend to be volatile. Problem in the current depressed market is that there are often too few transactions to help set a starting price - and if many sales are distress sales it will depress prices, or more likely as currently inhibit people from putting their boats on the market.

Sort of self regulating - if the price in the market is perceived to be too low then sellers will not enter. However, if external factors change and confidence returns then prices will firm up and supply will increase.

 

[Phill]

I expect on the same basis Phil a Broker should be at least courteous to your 70% offer , as 6 months afterwards the boat may still be on the market and you may have managed to save enough during that time to increase to an 85% offer.

Quite right. But that could only happen if all parties remain on speaking terms.
After reading this thread, I'm quite looking forward to buying again. Roll on 2012!

 

[Phill]

Jonic

Love that Dehler. I'm not a sailor although I once had a flotilla holiday in the Ionian. The photos of that interior are so inviting and I could imagine life on board.

Really nice and very interesting website.

 

[Deleted User YDKXO]

However you may be surprised to learn 99% of them never go anywhere at all - except to waste an awful lot of time, money and resources. Unfortunately it comes with the territory.

Thats true of all businesses. The vast majority of marketing spend doesn't yield any customers. We all waste time chasing prospects who don't turn into customers, especially in the current climate

 

[bumpy_the_dog]

A lot of the posts on this thread are assuming a reasonable level of market stability from here on out. But what if the next few years see the UK boat market take a real step down? What if the real crash hasn't happened yet?

That's not unrealistic.

House prices seem to be beginning a long slide down, even in the south east, with unsold inventories growing steadily. Add to this growing unemplyment, flattening economies in Germany and Holland turning off a big part of the UK used boat customer base, education cost hikes taking cash away from expensive hobbies, future diesel increases, and the fact that the next interest rate change has to be upwards, and it's easy to see a future which will make today's mobo market seem like a golden period by comparison!

Could be that the smart strategy is to just grab any offer that's made.

I remember the crash in 1989-95. I lost a boat in the hurricane and by the time the insurance paid out I ended up with something very much better and very much newer with the same money. Prices fell to unbelievable levels as boaters just wanted out at any price to escape marina, maintenance, and insurance fees. The killer with mobo's is that you can't just mothball them and wait for better times. They're burning up money whether you use them or not.

My guess is we'll see the same 1989-95 crash again.

 

[DAKA]

What if the real crash hasn't happened yet?

That's not unrealistic.

If you are going to be that pessimistic you really dont want cash in the bank, best held in GRP .

 

[jonic]

If you are going to be that pessimistic you really dont want cash in the bank, best held in GRP .

With gold taps and a lead keel

I really am going now! Thanks to the poster who liked my site. Totally hand built by me so I appreciate the comment.

 

[Whitelighter]

Yes, while I was being a pedant about your text, i should have said that your site is really rather nice. Big, well taken photos and lots of detail.

Its very similar to James Dickens site which I also hold in high regard.

Any idea how common the DuFour 365 GL's are?

 

[grumpy_o_g]

The problem is that the "market" is a very slippery thing. The GoG approach ignores the market and focuses on the individual transaction - seeking to find an individual who in the specific circumstances puts a low deprival value on that specific asset. This may be forced upon him by circumstances (ie his need for instant cash is greater then his need for the asset) or through ignorance. Such situations are likely to be rare, but not unknown. As a buyer using this strategy you limit yourself to a very narrow section of the market.

A "Perfect" market has to meet a number of conditions - many buyers, many sellers, homogeneous product and good information. If all these conditions are met then the clearing price for each example in the market is the same. However, as these conditions relax, the certainty of a single clearing price reduces. The boat market is not strong on these conditions, but within it there are some boats where the market is more "perfect" than others.

So high volume, mass produced boats which sell regularly usually do so within a narow price range. My boat falls into this category - there are 7 listed on Yachtworld in the UK at the moment - and are different boats from the similar number on the market a year ago. Asking prices are between £50-55K, and again very little different from the past. Quite reasonable to expect a seller to achieve (after expenses) between £45-50k. If I put my boat on the market for £45k (to undercut the competition) the first question would be "whats wrong with it?" and if I asked £60k probably would not get any questions at all!

However, many boats don't fall into this category - low volume sales, big variations in specs and condition etc so much more difficult to establish a "clearing" price. Add to that the current volatility from external factors and you can see the difficulties for both buyers and sellers in coming to an agreement on price.

Hopefully as Jon has said, what a broker brings to the party is superior knowledge of actual transaction prices in setting the basic asking price. Some of this knowledge is in the public domain, but an active specialist should always be ahead of what is public knowledge. The final price depends on negotiation at the margins. The "you are asking £75k and I offer £50k" is I would suggest not a good basis for "negotiation". Negotiation is about trading what you have against what the other party has, and if it is purely about price then it is not negotiating but testing the strength of the clearing price, and if there are no trade offs it is simply waiting to see who gives in first. As can be seen from many of the stories told above, it is usually the potential buyer who walks away, usually blaming it on the intransigence of the seller rather than his own possible misreading of the situation!

I think that bot yourself and Jonic are actually agreeing with me to an extent. Absolutely the broker brings a knowledge of the market and product to the table as I said. In the case of the Brokers on the forum there's no question that that knowledge is extensive and very valuable. I'm not saying that you won't maybe even get your asking price on some occasions either - just that, in the current market especially, you have to expect that people's expectations will often be further apart.

You can only bring knowledge of historic transactions and of the seller to to the table unfortunately - you have no knowledge (at first at least) of the buyer and and a historical price is of as much use as the last match you won - an indicator of form definitely but nothing more. The whole market is uncertain about where it's going or, more importantly, the buyer's perception is likely to be that the market is all over the place which is a long way towards the same thing. In those circumstances there's no such thing as an unreasonable offer - it's just one that is a long way away from your asking price. If you keep believing that the negotiation process for buying a boat is different to that of buying a house, a car, an aeroplane or any other similar asset is different then you will end up only dealing with those who are willing to do business on your terms though. In good times that can be the best option but it rarely is when you are having to fight for business.

 

[jonic]

If you keep believing that the negotiation process for buying a boat is different to that of buying a house, a car, an aeroplane or any other similar asset is different then you will end up only dealing with those who are willing to do business on your terms though. In good times that can be the best option but it rarely is when you are having to fight for business.

Grumpy its not I keep believing in it I work in it and see it every day.

As I keep saying houses are bought and sold out of need and have wild swings both up and down.

Boats are bought out of desire and prices travel usually one way....slowly down.

That is why it is different. The big 30% offs on houses are a result of the 30% or 60% increase in the boom period.


Over a 10 year period a house can easily go from £250,000 to £450,00 and back to £300,000.

A moody 38 would in the same period go from £113,000 to £95,000.

That's a real world example.

When the market slows with boats, transaction levels drop far more than prices.

That's it. I really am finished.

If any one wants to buy one of my boats, I Solemnly promise to the forum all sensible offers will be considered.

And I'll even look at daft ones

I'm going to the pub now to pay 30% more for beer than I did a couple of years ago

 

[ari]

Interesting comments Jonic and appreciate what you say. I notice that you just deal with sailing boats.

I wonder whether the market is different for yachts than power. Probably generalising spectacularly, but it sometimes seems to me that yachts (in the main) are bought by serious sailing types that know what they want and therefore perhaps prioritise the boat over the deal.

And whilst there are motorboaters that fall into that category, a lot strike me as successful businessmen buying a nice toy. That's not a criticism, good luck to them. But with a lot of businesses doing less well I wonder whether that kind of buyer might be a lot thinner on the ground than the yachting enthusiast, and also of the mindset to "buy the deal", rather than the boat (ie prioritise the best deal over the best possible boat because they're less focussed about what they want as it's a toy more than it is a passion).

If that's the case then it's entirely possible that the way the used yacht market works, driven by different priorities, could be quite different to the power market.

As I say, do appreciate I'm generalising wildly before I get besieged with indignant "well that's not me", but please bear in mind that the sort of person that frequents this forum is likely to be an "enthusiast" purchaser rather than a "nice toy" purchaser, but that doesn't mean it's the case in real life.