Making an offer on a yacht...

[PHN]

I agree with the above responses.

Adding to that:
1. When making an offer on a boat always make it subject to later survey results. There can be all kinds of agreements for survey results. The best is that you can just walk away if you don't like the outcome of the survey. That is a lot better than entering into an agreement that seller pays repairs, because in advance you may not have a clue what you could run into and what "repair" you would like vs. what the seller considers reasonable. Selecting a well known and respected surveyor usually helps in making such an agreement.

2. Do some research by actually talking to private sellers and brokers about boats of your interest, even if you don't want to buy that particular boat. Just to get the "feeling" how price talks work out.

3. Do your own research what is a realistic price for a particular boat and remember that "some repairs" financially can quickly add a lot of cost as a few others already commented. Take your time to find the boat that is perfect for you. Time pressure - when you "have to" sail tomorrow - usually adds to the price tag.

Make an offer that is based on what you consider realistic. If that would be half of the asking price then don't be shy. Just try it and see what happens.


A boat offered by broker that I looked at myself this year:
Broker: this boat is the cheapest in current market
Me: yes indeed that is correct ... and zero of this particular type and age/price were sold in the last 1,5 years so they must all be too expensive. The only boats sold were "A" and "B" at a price which is less than your asking price.

Knowing the market from my research I can make such a comment and the broker had no choice other than to say that I was correct. Finally we did not agree, so I moved on.

 

[Skylark]

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.

Most of the replies are based upon buyer perspective so this post is refreshing as it shows balance.

Many years ago now I wanted to buy bigger so put the current boat on the market. She was in sail-away condition and fairly priced. Perhaps worth adding that the market was fairly buoyant at that time. The first to view used his considerable knowledge and experience (joke) to point out her short comings and offered about 20% less than my asking price. No way was I going to let him buy my (then) pride and joy. He later significantly increased his offer but I sold to someone else.

 

[langstonelayabout]

My recent experience tells me that it is neither a buyers of sellers market.

In the summer I made an offer on a boat (just under £30k). First offer was 13% less, second offer 9% less. The seller offered to drop 2%. He’s a nice chap who doesn’t really want to sell (family health is the concern). So the boat, priced above the average for that type of boat, remains unsold.

Frustrating really. Looking at the bright side, he has now paid for lifts, ashore storage and antifouling for next season.

 

[Babylon]

Most of the replies are based upon buyer perspective so [Dom's] post is refreshing as it shows balance.

Many years ago now I wanted to buy bigger so put the current boat on the market. She was in sail-away condition and fairly priced. Perhaps worth adding that the market was fairly buoyant at that time. The first to view used his considerable knowledge and experience (joke) to point out her short comings and offered about 20% less than my asking price. No way was I going to let him buy my (then) pride and joy. He later significantly increased his offer but I sold to someone else.

Which brings another factor into the equation - timing. There are two aspects to this:

The first is, in any given state of the market, how long a seller is prepared to wait until the best buyer comes along ('best' being a combination of level of final offer and seriousness of intent). If the boat is accurately priced for its make, age and condition, and the location isn't utterly remote, then there shouldn't be too long a wait until a proper buyer comes along and an actual sale is realised.. and storage costs ashore are curtailed.

The second aspect picks up on your point that the "market was fairly buoyant at that time". The market however hasn't been buoyant for the last ten years - and in this aspect 'timing' is completely out of anyone's control.

So, the only variable over which a seller has any control is the price. Get this wrong to start with and you'll have a long wait.

A few years ago I hankered over a larger boat, the 32ft version of my 27 footer, and watched an unattractive and overpriced example sit on the hard for two or three years while the price dropped from £45k to £40k and then down to £35k. I don't know what it eventually sold for but if we assume £30-35k then the vendor took a serious hit both on his estimation of original value and on hard costs.

 

[PHN]

Most of the replies are based upon buyer perspective so this post is refreshing as it shows balance.

A seller has to understand that from a psychological point of view some kind of room for negotiation is expected by the buyer. If for a particular boat 30K would be a realistic price then asking 30K without any room for negotiation will make it much harder to sell that boat than asking a little more and negotiate to the 30K you want to have anyway. In that case the seller is happy for getting the correct price and the buyer is happy to have negotiated a good deal.

From a buyer perspective it should be fairly simple. Just ask yourself the question if this is the right boat for you and if you can get if for the (realistic) price you are willing to pay for it. When not then just move on to the next boat. Everything else is irrelevant.

 

[jac]

These questions come up fairly often but have a fatal flaw that assumes there is a fixed % mark up from " value" to the asking price so that one can therefore simply take X off the price and end up at the value.

Take an example of a boat "Value" of £20k. Up for an advertised £22k and also elsewhere at £30k. In both cases it should only go for £20k but in one case you'd be getting circa 10% off the price, in another 33% off the price.

So which is the right amount to deduct from the asking price?

Only real way is to look around - Fairly easy with mass market boats. SO have a look at all the Boats advertised within say 25% above and below your budget to get a feel for size, age, build condition, equipment etc. Reasonable to assume that a "Fair" sale price will be 5%-10% below typical average asking prices so start working your offer from there.

 

[steveeasy]

These questions come up fairly often but have a fatal flaw that assumes there is a fixed % mark up from " value" to the asking price so that one can therefore simply take X off the price and end up at the value.

Take an example of a boat "Value" of £20k. Up for an advertised £22k and also elsewhere at £30k. In both cases it should only go for £20k but in one case you'd be getting circa 10% off the price, in another 33% off the price.

So which is the right amount to deduct from the asking price?

Only real way is to look around - Fairly easy with mass market boats. SO have a look at all the Boats advertised within say 25% above and below your budget to get a feel for size, age, build condition, equipment etc. Reasonable to assume that a "Fair" sale price will be 5%-10% below typical average asking prices so start working your offer from there.

 

[Spyro]

These questions come up fairly often but have a fatal flaw that assumes there is a fixed % mark up from " value" to the asking price so that one can therefore simply take X off the price and end up at the value.

Take an example of a boat "Value" of £20k. Up for an advertised £22k and also elsewhere at £30k. In both cases it should only go for £20k but in one case you'd be getting circa 10% off the price, in another 33% off the price.

So which is the right amount to deduct from the asking price?

Only real way is to look around - Fairly easy with mass market boats. SO have a look at all the Boats advertised within say 25% above and below your budget to get a feel for size, age, build condition, equipment etc. Reasonable to assume that a "Fair" sale price will be 5%-10% below typical average asking prices so start working your offer from there.

Those are all good points and I could be totally wrong on this but how I see it is it's difficult to say what the "value" of a boat is, yes there are boats for sale and previously sold boats that will give a seller hope but it's an ever changing market. More first time buyers around now looking at boats in the 30-40 ft range now. Years ago that wasn't the case so there are an awful lot of older boats around in the sub 30ft category that are getting more and more difficult to sell hence pushing the price down. This has a knock on effect on bigger boats so sometimes a persons perceived "value" is not actually what the market is dictating. Boats sitting around for years with the same asking price confirms this. If a boat isn't selling after a year or so then the seller needs to reduce the price until it does. depreciation is a factor but so is the changing ,market. So all in all a boat's value is just what someone is prepared to pay for it. No point in saying that boat is worth £50k if no one will pay more than £40K

 

[Resolution]

Those are all good points and I could be totally wrong on this but how I see it is it's difficult to say what the "value" of a boat is, yes there are boats for sale and previously sold boats that will give a seller hope but it's an ever changing market. More first time buyers around now looking at boats in the 30-40 ft range now. Years ago that wasn't the case so there are an awful lot of older boats around in the sub 30ft category that are getting more and more difficult to sell hence pushing the price down. This has a knock on effect on bigger boats so sometimes a persons perceived "value" is not actually what the market is dictating. Boats sitting around for years with the same asking price confirms this. If a boat isn't selling after a year or so then the seller needs to reduce the price until it does. depreciation is a factor but so is the changing ,market. So all in all a boat's value is just what someone is prepared to pay for it. No point in saying that boat is worth £50k if no one will pay more than £40K

Good points here as well. The demographics of the market are changing. Fewer young people today are wanting to own yachts, and when they do it is more often a bigger and newer AWB than might have been the case a generation ago. This leaves the 20 to 35 foot yachts from last century in an interesting situation. Basically indestructible, they could last for many years yet, but the sailors who might wish to sail them are getting older and more fully depreciated. Running and berthing costs will of course continue to need to be met. Heading towards nil market value?

 

[dgadee]

Good points here as well. The demographics of the market are changing. Fewer young people today are wanting to own yachts, and when they do it is more often a bigger and newer AWB than might have been the case a generation ago. This leaves the 20 to 35 foot yachts from last century in an interesting situation. Basically indestructible, they could last for many years yet, but the sailors who might wish to sail them are getting older and more fully depreciated. Running and berthing costs will of course continue to need to be met. Heading towards nil market value?

Maybe marina fees will fall and younger sailors will be able to afford them? When I was young(ish) we kept boats on swinging moorings in Belfast Lough. For a variety of reasons these have all gone, and marinas are the only option. Bangor marina seems half full (except the cheap pontoon with no services) and their customers are dying off.

 

[Babylon]

Again lots of good points.

My older long-keeled 27footer falls exactly into the category Resolution points out - of little attraction to the general modern cruising fraternity, more of the shrinking special-interest category, hence the progressive diminution in values.

I don't know the Bangor situation but it doesn't surprise me. At least on the Hamble a younger owner of a smaller yacht can almost immediately get a mid-river pontoon from a mooring contractor at roughly a quarter to a third (including harbour dues) of a marina berth. Within a relatively few years they will reach the top of the HM list for moorings up to 32ft (it took me seven years) at a fifth of the cost of the marina close by (although of course the waiting-list for larger yachts will be much longer). So - despite the centre of Solent location - its perfectly feasible to provide for all budgets, but as long as the harbour strategy is an inclusive one.

Perhaps some other places around the UK allowed their harbours to be reconfigured according to a now hopeless money-making marina model, perhaps outdated in the current climate and that of the foreseeable future - hence the Bangor situation described?

 

[dgadee]

Bangor Marina is council owned but run from South coast of England. The council has been DUP for years (they used to lock up kids' swings on Sundays) and I suspect they are not bothered about social inclusion in sailing.

 

[Spyro]

All good points and all very worrying for someone who is considering another yacht purchase.:ambivalence:

 

[obmij]

Be aware that a very low offer may succeed & you'll get a boat, but the chances of accompanying goodwill is probably zero.

I accepted a hard nosed pitch & took everything not listed on the particulars of sale and chucked it on ebay (or kept it in my garage) With a more reasonable approach I wouldn't have bothered & would have been happy to pass on pretty much everything to a fellow boater (including my phone number, for any advice if needed)

On a side note, ebay is incredible! Most of the gear was 6 years old and way out of warranty but I reckon I got back around 80% of new cost on average! Include P&P and I reckon that sometimes it would have been cheaper to go to a local chandler!

Two sides of the same bargain hunting coin..

 

[doug748]

All good points and all very worrying for someone who is considering another yacht purchase.:ambivalence:

As long as you know you like boats, the family are with you and you are in for the long haul, I think you have to put your doubts into perspective.

At the bottom end of the market purchase prices are already quite small compared to potential running costs. It would not dreadfully add to overall cost of ownership if you had to write off a 20 or 15k boat over 10 years. Compare it to motor car ownership.

If you are buying new you will know all about the potential depreciation, which will probably halve your investment over the same period, you will be braced to lose 5k, or more, pa. However, fashionably sized 10 year old boats are not the ones in the press and prices should hold up reasonably.

Intermediate cases fall some way between the two. The danger areas are buying a big boat just because you can, having to bail out early, or taking on something that needs more TLC than you are emotionally equipped to deliver