Making an offer on a yacht...

[ross84]

I'm on the lookout for boats and should be in a position to make an offer after the New Year. As such, I was wondering what I should offer on the asking price? Clearly, some yachts are outrageously overpriced (a recent Nic went from 16k to 9k in the space of a month), but others seem more reasonable. Obviously you don't know the final sale price! I saw lovely Tempest on sale for 22k, then dropped down to just under 21k. It sold maybe a month afterwards. I spent a lot of time looking at yachts and memorizing models/prices etc., but interested to know - is offering 20% a good proximation, assuming the asking price isn't ridiculous?

 

[Richard10002]

There is no answer to this.... it all depends on the asking price.

If it looks cheap and in OK condition, offer the asking price and get it bought.

If it looks expensive for what it is, offer what you think it's worth to you, however low that is, and see what happens.

If it looks priced right for what it is, try 5% or 10% below asking, and negotiate upwards until the vendor gives way.

 

[mainsail1]

You can always increase your offer but it is unlikely that you can decrease....so I would always start low and see what develops.

 

[Just_sayin']

Offer less than you're prepared to pay then you can negotiate upwards.

There seems to be some implied etiquette when it comes to buying boats that I don't understand, however attached people get to them.

HOWEVER. You have to balance the above statement with common sense. If the price looks right at say 40k offering 10k after wasting someones time deserves a smack

Just read Richards reply. Seems about right.

 

[Graham376]

I've found brokers, much like estate agents, will tell you how long it's been on the market and whether the owner is likely to be open to offers. Don't forget when you do make an offer, make it subject to a survey not revealing anything needing costly repair/replacement.

 

[Richard10002]

HOWEVER. You have to balance the above statement with common sense. If the price looks right at say 40k offering 10k after wasting someones time deserves a smack

Just read Richards reply. Seems about right.

In 2010/11 I was looking at narrowboats between about £20,000 and £40,000. The boat we bought was asking £18,000 and compared very favourably with boats I had seen, and missed, asking £25,000 or more. My wife and I looked around.... went for a coffee in the marina cafe, both agreed we should buy it as fast as we could. Offered the asking price and kept our fingers crossed no-one would offer more. At the survey I asked the surveyor if there was a catch, and he replied that, if we didnt buy it, he would. It was a deal, and there was no way we were going to even attempt to get it for less.

Had it been asking £32,000, and we had travelled to view it, I would have offered £25,000 happily. If it had been asking £25,000, I would probably have tried £22,500 and been prepared to increase.

There is no rule..... because asking prices vary so much compared to actual value.

In a similar way, value can vary quite a bit between different buyers.

 

[Spyro]

If you don't ask you don't get. Some will say not to offend a seller with a low offer. Personally I don't get that. If someone offered me something that I considered a ridiculously low offer I'd just say no thanks try again. A lot comes down to what a seller is prepared to take and how keen he is to sell not what a boat appears to be worth. I know of boats that have been for sale for years and are still for sale at the same price. If they aren't selling there is something wrong with the price or the boat. I sold my boat a few months ago after being on the market for about a year. I started at a price that I hoped to get and what the broker said I should ask. I gradually reduced it every few months until I got what the market was at. There's far to many hoping to sell at a price they think they should be getting or what they perceive their boat to be worth so no harm in offering what you believe you want to pay. As others say you can always increase your offer. Any seller that says they won't sell to you after you have made what they see as a stupid off is the stupid one. There aren't buyers queuing up to by boats

 

[Minchsailor]

You offer what you think it is worth to you.

"Value is in the eye of the beholder".

Most sellers (boats, house, cars, and whatever) believe what they are selling is worth much more than it actually is.

 

[Babylon]

It always boils done to what any given boat is worth to the individual buyer and what its worth to the actual seller.

The asking price will usually reflect the broader actual marketplace. A good broker will have data on comparable recent sales of the same or similar type of boats which they'll have used to estimate their own worth of value, depending on variables such as condition etc, and which they'll have tried to impress on the seller.

So the asking price will normally be within a reasonable range of the actual market value. A minority of owners will have irrational ideas about its actual value and their boats will sit on the hard, sometimes for years, until reality (and the mounting cost of the hard) eventually penetrates the vendor's mind and they become reconciled to a seemingly low offer. Other sellers will have pressing reasons to realise a quick sale and price accordingly (probably the reason for the 'steal' of the narrowboat example above).

Usually however the seller/broker will anticipate the instinct of most buyers to haggle a bit, even over a realistic initial price agreed by sensible sellers, so their initial figure will have been inflated slightly.

Most potential buyers will have spent some time doing their research, both online and in crawling over actual boats, so they will quickly gain an instinct for boats that are significantly over-priced to start with. It is these boats which eventually sell for a large discount on the initial figure.

The majority don't fall into this category of hugely optimistic prices, but rather the category of slightly inflated realistic prices. If a potential buyer then tries it on they'll be wasting everyone's time and will be sent away with a flea in their ear.

So, a yacht 'worth' £10k priced at an initial £15k will eventually sell at a 33% discount. The same yacht priced at £11k will more quickly sell for a 10% discount. In both cases a sensible informed buyer will open negotiations with an initial offer of say £9k (40% less in the first case, 20% less in the second) and be prepared to come up to £10k.

 

[V1701]

If they're for sale with a broker they'll almost certainly be overly priced, or at least right at the top of what it might conceivably fetch. If for sale privately prices vary so wildly from the utterly ridiculous (which can even mean they don't really want to sell it) to the genuine bargain. A significant number of private sale asking prices seem to be based on what the owner paid for the boat plus what they spent on it, which again results in a (probably) unrealistic asking price. You have to know what you're looking at though and that only comes with experience so if you can take someone with you when you go to view it's a big help. The RYA do a book I think on what to look for when buying older boats that might be useful. If you buy privately you'll meet the owner which can give you a feel for how they've treated the boat and the price is probably more likely to be realistic. Remember it's a buyer's market...

Edit - Babylon's post above sums it up well...

 

[Hermit]

The boat I own now was dropped from £39k to £35 just before I first viewed it - 13 years ago. I liked the boat, but she had been stripped of virtually everything; no anchor, 2 fenders etc. The sails were also in a pretty poor state and would need replacing.

I spent a couple of hours going over the boat listing all the equipment that would be needed to make her usable. I then priced this up and made an offer of £22k based on what was needed plus some margin for error.

The owner wasn't happy (!) but offered to meet at £28,500 subject to survey. Following survey the price was reduced to £28k for some small items (new gas lines etc.)

Point being - do your research and be prepared to walk away if it doesn't add up. Buying a boat is clearly an emotional decision but if you can put that to one side and be prepared to keep looking if required it will be much easier in the long run.

 

[dom]

There is no answer to this.... it all depends on the asking price.

If it looks cheap and in OK condition, offer the asking price and get it bought.

If it looks expensive for what it is, offer what you think it's worth to you, however low that is, and see what happens.

If it looks priced right for what it is, try 5% or 10% below asking, and negotiate upwards until the vendor gives way.

Hard to argue with any of that.

Also, wheeler dealering around is well and good, but one must be wary of insulting a seller who has priced fairly and knows it. People aren't always rational in pure economic terms and may sometimes simply choose to sell elsewhere.

 

[Spyro]

I made an offer on a boat recently that was advertised at £36k My offer was less than that but the owners response was "it's worth £40K" well clearly it isn't as it's still for sale.

 

[Quandary]

Location can have a remarkable effect on price. The more remote the lower the margin can be. I was selling a 7 year old boat up here through a broker, we reviewed the data on actual prices achieved world wide for similar models then set the asking price below the lowest one, knowing that we might have to accept 10-15% below that. The alternative was moving her to the south coast and asking £10k more expecting to drop up to £10 k. to match the lowest achieved price. We recognized that no one was going to come away up here unless they thought she was exceptional value and as I wanted to keep using her had to accept the loss. The buyer came up from the English midlands and took the boat to Salcombe, the delivery ( by sea in the spring) probably cost less than £2k so he had a real bargain. Depreciation from new was in the order of £10k per year but tends to flatten off between 5-10 years. Once I recognized that it made the process less painful but with hindsight I should have kept her for another 5 years or so until I finally pack it all in.

 

[pagoda]

Realistic pricing by sellers makes a huge difference.
A heck of a lot of them don't do that.
Two years ago we sold our previous boat at about a 15-20% discount. It sold quickly. Money in bank. done.
We were looking at a replacement and spotted a very nice , but tired Swan we almost fancied. Over priced.
This was at the end of 2016.
The boat remained on sale until very recently when it was withdrawn at about 20% below the original price. Had they offered the boat then at that price it would have gone quickly. Now it is unused for 4 years, rejected and unsold. Some folk don't seem to get it?

 

[Biggles Wader]

Realistic pricing by sellers makes a huge difference.
A heck of a lot of them don't do that.
Two years ago we sold our previous boat at about a 15-20% discount. It sold quickly. Money in bank. done.
We were looking at a replacement and spotted a very nice , but tired Swan we almost fancied. Over priced.
This was at the end of 2016.
The boat remained on sale until very recently when it was withdrawn at about 20% below the original price. Had they offered the boat then at that price it would have gone quickly. Now it is unused for 4 years, rejected and unsold. Some folk don't seem to get it?

There are a lot about like that and at the lower end of the market a boat can rapidly go from an asset worth a few grand to a liability with no value. Far better to sell cheap and sell quick than fail to sell and pay mooring fees and insurance while the boat deteriorates and plummets in value.

 

[dgadee]

I'm on the lookout for boats and should be in a position to make an offer after the New Year. As such, I was wondering what I should offer on the asking price? Clearly, some yachts are outrageously overpriced (a recent Nic went from 16k to 9k in the space of a month), but others seem more reasonable. Obviously you don't know the final sale price! I saw lovely Tempest on sale for 22k, then dropped down to just under 21k. It sold maybe a month afterwards. I spent a lot of time looking at yachts and memorizing models/prices etc., but interested to know - is offering 20% a good proximation, assuming the asking price isn't ridiculous?

Both recent boats I bought needed a goodly bit of spending on them - more than I reckoned when I made my offers. In hindsight I should have offered less. I probably spent another 25% at least of the purchase price on each on sorting them out. If the electronics are over 5 years old they are near their end of life. Sails, usually described as 'good', are usually poor. Everything else will be nearing replacement unless it is relatively new. You don't really know what is going to go until you get the boat. For example, I had to rebuild the steering column within a few months of purchase of my Dehler - luckily I could do it myself, but replacement or professional rebuild would have been expensive.

 

[Babylon]

Soon having to spend 25% extra sounds pretty realistic, especially for an inexpensive older boat.

But it depends on what is truly duff about the vessel, and whether you're treating the boat you'd like to buy as a short/med-term stepping stone or as a sound foundation for the long-term and possible money-munching 'project'.

In the case of my Vancouver 27, I've spent double the original purchase price over a decade (which is however still half of what I'd have had to pay for her new!). She was already getting old but in okay condition and nothing significant had been done to upgrade her except replacement upholstery and standing-rigging and reasonably good sails. She had no navigation electronics but did have Monitor self-steering. I took the view that they were so well built in the first place and held in good respect generally, that it was worth the stiff (for me) purchase price of £29k.

In the first three years the main costs were:
* Vetus anti-siphon unit for engine exhaust
* kedge anchor and replacement main anchor warp
* new VHF antenna and masthead tri-colour
* Roller-furling on the forestay (originally hanked-on)
* No1 Yankee made (originally only had the No2)
* Rope-cutter to the prop-shaft
* Furuno Radar on a Scanstrut self-levelling mount on transom pole
* NASA Battery Monitor
* replacement jackstays and shorelines, etc, etc.

This lot alone plus other bits and bobs probably came to around 20% of the purchase price (the radar kit being a luxury) and I could have sold her at this point with not too much of a hit, but that wasn't my original plan. When the 1982 Bukh then lost its front seal while motor-sailing across Lyme Bay in increasingly heavy conditions and vomited half its oil into the boat, I was then faced with either selling her at a real loss or going the whole hog.

I decided on the whole hog! Spent an entire week scrubbing the oil-saturated engine bay and bilges using industrial cleaners and re-painted, then fitted a new Beta 25, all new stern-gear and feathering prop, and replaced all the plumbing and three flexible water tanks. This came to maybe another 30%.

The next major items were:
* New guard-rail wires
* Ocean Safety 4-man offshore liferaft
* Rutland 914i wind generator
* Custom-made sprayhood and cockpit enclosure and new frames
* 12kg Manson Supreme anchor
* 50m 8mm calibrated chain and 50m warp
* Quick Aleph 700w vertical windlass with remote control
* Chartplotter and DSC AIS VHF
* New gas installation

Clearly by this point I wasn't just replacing essential items, but equipping her with kit that the original never had and upgrading her to full modern cruising condition - and with the cockpit enclosure adding 'living space' that the traditional narrow-beamed 27 footer never possessed. All in, call it another 30%... but I wasn't quite finished!

My most recent expenditure over the last few years was to have the hull slurry-blasted and Coppercoated, the topsides ground out where old damage had been bodged (previous ownership) and re-sprayed a lovely pale blue colour, the interior stripped out, sanded back and re-varnished, and all new upholstery. Needed also to replace the engine heat-exchanger, fitted a Racor primary fuel filter, bought a new EPIRB, and treated her to a stack-pack and lazy-jacks for added convenience.

If we call this last lot roughly 20% that brings my total to 100% of the original purchase price, so she's cost me £60k all in.

So what could I have bought for £60k instead? Nothing! I didn't want a bigger boat, didn't have the money at the time anyway, and I cannot emphasise more just how much I've enjoyed doing - and learning -everything I've done.

I'd be lucky to get £25k for her in the current market but she's not for sale. I know her inside out and have been sailing her up, down and across the Channel for a dozen years, largely single-handed - and she's so safe and easy for me to handle that I'll probably still have her for another decade or so at least!

... which - ignoring any scrap value at the end - will equate to about £2k per annum over my ownership.

 

[steve yates]

A vast amount of boats are overpriced. If the owner is out sailing it on a very regular basis, you are more likely to see a realistic price and get a boat you can actually use straight away safely and enjoyably.
Any boat that's been sitting on the hard or a mooring and lightly/barely used, I would suggest is truly worth about a third of the asking price, and not worth paying more than two thirds for.

 

[dgadee]

Soon having to spend 25% extra sounds pretty realistic, especially for an inexpensive older boat.

But it depends on what is truly duff about the vessel, and whether you're treating the boat you'd like to buy as a short/med-term stepping stone or as a sound foundation for the long-term and possible money-munching 'project'.

In the case of my Vancouver 27, I've spent double the original purchase price over a decade (which is however still half of what I'd have had to pay for her new!). She was already getting old but in okay condition and nothing significant had been done to upgrade her except replacement upholstery and standing-rigging and reasonably good sails. She had no navigation electronics but did have Monitor self-steering. I took the view that they were so well built in the first place and held in good respect generally, that it was worth the stiff (for me) purchase price of £29k.

In the first three years the main costs were:
* Vetus anti-siphon unit for engine exhaust
* kedge anchor and replacement main anchor warp
* new VHF antenna and masthead tri-colour
* Roller-furling on the forestay (originally hanked-on)
* No1 Yankee made (originally only had the No2)
* Rope-cutter to the prop-shaft
* Furuno Radar on a Scanstrut self-levelling mount on transom pole
* NASA Battery Monitor
* replacement jackstays and shorelines, etc, etc.

This lot alone plus other bits and bobs probably came to around 20% of the purchase price (the radar kit being a luxury) and I could have sold her at this point with not too much of a hit, but that wasn't my original plan. When the 1982 Bukh then lost its front seal while motor-sailing across Lyme Bay in increasingly heavy conditions and vomited half its oil into the boat, I was then faced with either selling her at a real loss or going the whole hog.

I decided on the whole hog! Spent an entire week scrubbing the oil-saturated engine bay and bilges using industrial cleaners and re-painted, then fitted a new Beta 25, all new stern-gear and feathering prop, and replaced all the plumbing and three flexible water tanks. This came to maybe another 30%.

The next major items were:
* New guard-rail wires
* Ocean Safety 4-man offshore liferaft
* Rutland 914i wind generator
* Custom-made sprayhood and cockpit enclosure and new frames
* 12kg Manson Supreme anchor
* 50m 8mm calibrated chain and 50m warp
* Quick Aleph 700w vertical windlass with remote control
* Chartplotter and DSC AIS VHF
* New gas installation

Clearly by this point I wasn't just replacing essential items, but equipping her with kit that the original never had and upgrading her to full modern cruising condition - and with the cockpit enclosure adding 'living space' that the traditional narrow-beamed 27 footer never possessed. All in, call it another 30%... but I wasn't quite finished!

My most recent expenditure over the last few years was to have the hull slurry-blasted and Coppercoated, the topsides ground out where old damage had been bodged (previous ownership) and re-sprayed a lovely pale blue colour, the interior stripped out, sanded back and re-varnished, and all new upholstery. Needed also to replace the engine heat-exchanger, fitted a Racor primary fuel filter, bought a new EPIRB, and treated her to a stack-pack and lazy-jacks for added convenience.

If we call this last lot roughly 20% that brings my total to 100% of the original purchase price, so she's cost me £60k all in.

So what could I have bought for £60k instead? Nothing! I didn't want a bigger boat, didn't have the money at the time anyway, and I cannot emphasise more just how much I've enjoyed doing - and learning -everything I've done.

I'd be lucky to get £25k for her in the current market but she's not for sale. I know her inside out and have been sailing her up, down and across the Channel for a dozen years, largely single-handed - and she's so safe and easy for me to handle that I'll probably still have her for another decade or so at least!

... which - ignoring any scrap value at the end - will equate to about £2k per annum over my ownership.

25% was just the start for me. Since then - over 6 year peiod - new engine, hydrovane, liferaft, watermaker, cushions recovered and just last week bought new cooker, heads and calorifier. I'm not a fan of expensive electronics so "saved" on that. But yes, constant outgoings. But, also in my view, worth it - especially when linked to retirement,

I should also add another edit: I am the kind of person who keeps a car until it goes to the scrap yard. Not one of those who change boats every two years.