Making an offer....

[Ubergeekian]

The broker and seller are both aiming to get the BEST and highest price from a buyer. Its not personal, its just the brokers job. The buyer has to take a similar approach otherwise YOu the seller have been screwed by paying more than was required. I believe that all things sell for the correct price. If a seller is prepared to let his boat go for the minimum price and you are the only person that has offered that price, then the seller has been lucky to find you. Dont be embarrased at establishing the sellers lowest price. You dont need to screw a bargain, just act in a business like non emotional manner. Be polite and friendly and no one need be offended!!

I have and had no interest in establishing the lowest possible price. I was and am only concerned with paying a fair price.

As you may have noticed, I am trying to sell my Westerly Jouster, for which I have repeatedly stated that no reasonable offer will be refused. What I consider a reasonable offer from a twenty year old student just starting off in cruising will be very different from that of a fifty eight year old banker downsizing from an Oyster.

It runs in the family, by the way - when my parents sold their house after fifty years they refused to charge more than the original purchase price increase by RPI over their period of ownership.

 

[andrewfollett]

I think Yoda and Ubergeekian have got it right. The last three boats I have purchased I have monitored the market closely and worked out a value for the type of boat I was interested in. This value would be based on an average assessment of what you would expect in the way of inventory, renewals of electrics, sails etc as well as general condition. Often brokers will tell you sold prices which helps. I then put my own value on any particular boat I am interested in. If this comes within a respectable amount of the asking price I make an offer. If not then walk away or talk to the owner or broker about whay you think the asking price is too high and you may then get their bottom line and if you really want the boat can decide to pay it or make an offer.
Good luck

I agree. If the price is high and the seller wont talk, you walk away. I agree also that you talk to the broker to establish what the bottom line is. Thats what youre trying to establish because of course putting a value to a boat relys largely on subjectivity but its the sellers value thats more important than the buyers. If you can work out the sellers true bottom line you are only then is a position to either buy it or walk away. To fail to establish what you think is the best buying price is to waste 5 or 10% of your hard earned cash needlessly. Money that could be spent improving the boat, giving to charity etc etc. If the seller will sell for less its because the value to him is less. So i stand by my buying principle that i work out waht the buyer will drop to rather than what i can afford or could pay. When selling i do the opposite. My bottom line will depend on a multitude of factors including (as once happened) owning 2 boats at the same time! I sold 1 boat at a stupid loss because i was paying for storage costs on it as well as my new one. While i would have been delighted at getting a better 'fairer' price, i do not hold it against the buyer for getting a bargain. In the end, he was the only one who stepped up to take advantage of the bargain so the price was the right one. As it happened this was in the mid 90's and the buyer was a bank manager. Who knows, if i had tried to get more out of him because he was a bank manager not a student i might still have the boat now!

 

[Ubergeekian]

If this comes within a respectable amount of the asking price I make an offer. If not then walk away or talk to the owner or broker about whay you think the asking price is too high and you may then get their bottom line and if you really want the boat can decide to pay it or make an offer.

Apologies if I have told this before. A few years ago I decided my life would only be complete with a Citroën DS. I found a nice one advertised online and talked to the seller. It was a lovely car, just imported from South Africa, but it was way (30%) above my budget. So I said "It's a lovely car, and I think it's worth every penny you're asking (it was). Unfortunately, all I can afford is £x, and I don't think you should accept it. Good luck with the sale."

Six months later the seller phoned me again. "We liked having the car here so much" he said - he and his wife were South African - "that we decided to use it for the whole summer and then sell it. Are you still interested at the price you mentioned?". I was, and Doris the DS has been with me ever since.

Overall result: I got the car I wanted at the price I could afford. They got rather less than they might have had, but got a summer of fun in the car and had a sale timed to suit them before they returned south. Fair deal all round.

 

[jonic]

If only the whole world had your outlook!

 

[Jim@sea]

Firstly you should offer what you believe the boat is worth to YOU.

Firstly you should find out how much similar boats are valued at. Then you decide if the one you are being offered is in in better or worse condition than similar ones advertised elsewhere and I would try and go and see another one first.
I would then make an offer based on condition, and subject to survey, and if its up for £30K I would start at £23K or £25K. Remember you can always increase a offer but you cant go down. (unless its a defect found in the survey)
You can always ask the broker "What will they take" and find out more.

 

[KevB]

You can always up your offer but very difficult to offer less unless circumstances dictate. Personally I'd want to get it as cheap as possible and not interested in 'a fair deal all round'. The sellers fair deal is that I'm prepared to buy his/her boat.

I'd be gutted if my first offer was accepted as I'd assume I could have got it for less. It's business so no need for emotion.
As far as the seller is concerned you are just an amount of money either enough or not.

Not knowing anything about what you are thinking of buying but if in good condition for model and year and at a reasonable price compared to others..... On a £30k boat I'd probably start at £22k and see how it goes and feel hard done by if the current owner expected more than £27k and be happy at £25k.

 

[gjgm]

I agree. If the price is high and the seller wont talk, you walk away. I agree also that you talk to the broker to establish what the bottom line is. Thats what youre trying to establish because of course putting a value to a boat relys largely on subjectivity but its the sellers value thats more important than the buyers. If you can work out the sellers true bottom line you are only then is a position to either buy it or walk away. To fail to establish what you think is the best buying price is to waste 5 or 10% of your hard earned cash needlessly. Money that could be spent improving the boat, giving to charity etc etc. If the seller will sell for less its because the value to him is less. So i stand by my buying principle that i work out waht the buyer will drop to rather than what i can afford or could pay. When selling i do the opposite. My bottom line will depend on a multitude of factors including (as once happened) owning 2 boats at the same time! I sold 1 boat at a stupid loss because i was paying for storage costs on it as well as my new one. While i would have been delighted at getting a better 'fairer' price, i do not hold it against the buyer for getting a bargain. In the end, he was the only one who stepped up to take advantage of the bargain so the price was the right one. As it happened this was in the mid 90's and the buyer was a bank manager. Who knows, if i had tried to get more out of him because he was a bank manager not a student i might still have the boat now!

But buying a boat isnt a rational decision, so there is little point in doing endless analysis. What is his domestic situation? Are you nuts !
You want it or you dont. People dont behave rationally. A seller might refuse to accept an offer simply because you have been too much a pain in the ar*e. A buyer might not pay up because he wants (not needs) some new electronics.. and so on.
So, to the OP- I agree with the earlier comment :decide what the boat is worth to you, and not the asking price- though the two might be the same. No two boats are the same. Maybe you want to spend another year haggling and peering round yards and driving all over the place, or maybe you actually would rather be out on your boat. If your aim is to get UK's greatest boating bargain instead, good luck, but I suspect you are going to get very miserable.
One thing I never understand is, lets say this boat is genuinely worth 85pct of its asking price- £25500. Why would the seller then agree to sell it for 60 pct of its value? I bet the people so keen on this approach regularly get given £50 notes in exchange for a £20, too. or at least, expect to .
So, forget about reading any Mckenna books and concentrate on the real goal- buying a boat you want to own. As long as you dont pay more than what you think the boat is worth, why wouldnt you be more than a very happy man.

 

[andrewfollett]

Apologies if I have told this before. A few years ago I decided my life would only be complete with a Citroën DS. I found a nice one advertised online and talked to the seller. It was a lovely car, just imported from South Africa, but it was way (30%) above my budget. So I said "It's a lovely car, and I think it's worth every penny you're asking (it was). Unfortunately, all I can afford is £x, and I don't think you should accept it. Good luck with the sale."

Six months later the seller phoned me again. "We liked having the car here so much" he said - he and his wife were South African - "that we decided to use it for the whole summer and then sell it. Are you still interested at the price you mentioned?". I was, and Doris the DS has been with me ever since.

Overall result: I got the car I wanted at the price I could afford. They got rather less than they might have had, but got a summer of fun in the car and had a sale timed to suit them before they returned south. Fair deal all round.

I guess its how you see things. In light of the fact that the car didnt sell in itially, it was overpriced by 30% (or more) If there had been buyers for it at that price it would have sold. If there are no buyers for a given price surely one would have to accept it was overpriced. By making contact and telling them you liked the car but could not afford it, and telling them how much you could stretch to you are putting yourself up as a buyer if the price is lower. You probably bought it 6 months later for the right price. Theres ways of skinning a rabbit and it might have taken 6 months to get your dream car, but you eventually got it because the seller hadnt been able to sell it for more (unless he wanted to give you a gift or was to lazy to readvertise). I dont think any of us are arguing much at odds with each other. No one is suggesting we need to rip sellers off, nor behave in a non ethical manner. We ALL want to buy our ideal boat/car at a price we can afford and at a price the seller is prepared to drop to. We just need to establish if that price is 5 or 30% less than adverised. It might have taken 6 months for it to happen with the car but in the end as you say, both buyer AND seller were happy with the result. Thanks for the debate ubergeekian.. much enjoyed. Cheers Andy

 

[andrewfollett]

But buying a boat isnt a rational decision, so there is little point in doing endless analysis. What is his domestic situation? Are you nuts !
You want it or you dont. People dont behave rationally.So, forget about reading any Mckenna books and concentrate on the real goal- buying a boat you want to own. As long as you dont pay more than what you think the boat is worth, why wouldnt you be more than a very happy man.

I bought my current boat earlier this year and negotiated £40k off the asking price. the previous owner had bought her new but it transpired his wife didnt enjoy the boat and his 2 very young children were a worry on board. THIS motivated him to sell. Could i have paid more for the boat ? Yes Did i need to? NO. It was only the second boat i viewed (this time) and was the one i wanted. I simply established the lowest price i could buy it for and its mine.

 

[Tranona]

I guess its how you see things. In light of the fact that the car didnt sell in itially, it was overpriced by 30% (or more) If there had been buyers for it at that price it would have sold. If there are no buyers for a given price surely one would have to accept it was overpriced. By making contact and telling them you liked the car but could not afford it, and telling them how much you could stretch to you are putting yourself up as a buyer if the price is lower. You probably bought it 6 months later for the right price. Theres ways of skinning a rabbit and it might have taken 6 months to get your dream car, but you eventually got it because the seller hadnt been able to sell it for more (unless he wanted to give you a gift or was to lazy to readvertise). I dont think any of us are arguing much at odds with each other. No one is suggesting we need to rip sellers off, nor behave in a non ethical manner. We ALL want to buy our ideal boat/car at a price we can afford and at a price the seller is prepared to drop to. We just need to establish if that price is 5 or 30% less than adverised. It might have taken 6 months for it to happen with the car but in the end as you say, both buyer AND seller were happy with the result. Thanks for the debate ubergeekian.. much enjoyed. Cheers Andy

Think you may be falling into the trap of believing in "perfect" markets - many buyers, many sellers, homogeneous products, perfect information - you know page 1 of an economics textbook. Little of this holds good in the used boat market other than in the general way that asking prices (the main source of information) tend to revert to a mean representing where negotiations start. The asking price range establishes the point at which buyers and sellers are prepared to enter the "market".

Then if there is a monopoly situation ie a popular boat with few available and lots of people wanting it (and assuming homogeneity) the final price is likely to be near the starting point (as in the HR examples in an earlier post). On the other hand if the boat is unpopular and only one person wants it then the price will represent the seller's lowest deprival value - which even he may not know until actually faced with the decision.

There are so many variables on both sides of the transaction that it is impossible to model all the possible outcomes in advance - even assuming rationality so therefore impossible to establish a single successful strategy - for either buyer or seller!

 

[andrewfollett]

Think you may be falling into the trap of believing in "perfect" markets - many buyers, many sellers, homogeneous products, perfect information - you know page 1 of an economics textbook. Little of this holds good in the used boat market other than in the general way that asking prices (the main source of information) tend to revert to a mean representing where negotiations start. The asking price range establishes the point at which buyers and sellers are prepared to enter the "market".

Then if there is a monopoly situation ie a popular boat with few available and lots of people wanting it (and assuming homogeneity) the final price is likely to be near the starting point (as in the HR examples in an earlier post). On the other hand if the boat is unpopular and only one person wants it then the price will represent the seller's lowest deprival value - which even he may not know until actually faced with the decision.

There are so many variables on both sides of the transaction that it is impossible to model all the possible outcomes in advance - even assuming rationality so therefore impossible to establish a single successful strategy - for either buyer or seller!

Ive never even read page 1 im afraid. But what was that they said in the newspapers about mark to markets or something when valuing banks assets. The only way of knowing somethings true value is to sell it. Its only on the point of sale that the real value is known. Before the sale the price is just a sellers best guess. Buyers shouldnt accept that an advertised price is the correct one. Boats are expensive and every pound saved is a help.

 

[Chrissie]

What about speaking to a surveyor before putting in an offer, which must always be "subject to survey"

A surveyor will know the local market, and can give you invaluable advice before you get as far as an offer

 

[maxi77]

I have to disagree with those who suggest you should offer what shes worth to you. Your aim is to buy the boat for as little as possible and with luck this will be substantially less than you might have been prepared to pay. To get the best price you have to determine the psyche of the seller. How motivated is he to sell. has he already bought new, is he financially commited to a sale. Does he have family reasons for requiring a quick sale or is the whole thing speculative on his part. If its a speculative sale, in other words, he is looking to sell well and wont be overly bothered if he cant get top dollar, he just wont sell it! Consequently you will struggle to get a good deal. Brokers give a suprising amount of info away. get to know the broker by viewing the boat and asking face to face why the seller is selling. Find out what type of sailor the seller is, has he got bored, How many offers he has had, how long its been on the brokers books. has she already been surveyed, did a sale fall through because of a survey etc.
If you find the boat has been for sale for a year and the seller has not had her in the water you can start by pointing out the defects and adding up the costs to put right. both broker and seller will know them already but make sure they know youve seen them too. I would not hesitate in offering 30% less if i thought the seller was a truly motivated one! The seller will always come back with a counter offer and youll end up in the right place. Start offering only 10% less and youll compromise on 5% under the ask. One things for sure..the seller wont sell if boat is more valuable to him than your offer price. The key then is not to find a price that the seller is happy with but one that he will begrudgingly accept as his absolute lowest. It might take a few days to establish this but you wont find out if you rush in. HOWEVER.. if the boat is a corker and everyone wants it and there are 5 viewing this week offer 5% off and settle at full asking! One final thought, is dont use advertised prices to guage a boats value. Its easy to find a 25% difference in prices for a marque, that will be down to condition. Also, boats might not sell for anywhere close to asking prices. If you find an old ad for a similar boat, speak to the old broker and find out how close to the asking the sale achieved. You can then be well armed with facts. Good luck.

A lot of good stuff, but the key is never pay more than first, what the boat is worth to you and that will take into account all you will need to spend to be able to use her, and second more than the boat is really worth. When I was looking a few years back there were some boats where the asking price was 25% above the going asking price for that boat with nothing extra to generate any additional value.

At the end of the day it is your choice to offer, so pump the broker for as much info on the real status, how long has it been on the market, has the owner committed to a new boat, how keen a seller really is the owner, does he still use the boat, and has he had any recent offers.

Good luck, and don't forget subject to survey and if pracical test sail.

 

[duncan99210]

A boat is only ever worth what someone will pay for it. IMHO I'd make an offer of between 15 and 20% below the asking price and see what response you get. Before making your offer, decide how much you're actually prepared to pay for the boat and let that be your final offer in the bargaining process. You should not feel embarrassed about bargaining, as it is the only way of determining just how much this particular boat is worth to you and to the vendor. When we bought Rampage, we offerred just on 15% less than the asking price and had the offer accepted - never know if we'd offered 20% below if the vendor would have taken that instead!
If you're buying through a broker, the sale will be conducted using a standard contract which requires a 10% deposit but is always subject to survey and final acceptance after a sea trial. We once got to the sea trial stage of buying a boat, decided the engine was too temperamental, the vendor refused to either fix the problem or reduce the price so we walked away from it and had our deposit returned by the broker by close of business that day.
Whatever the outcome, hope you enjoy your boat.

 

[Tranona]

Ive never even read page 1 im afraid. But what was that they said in the newspapers about mark to markets or something when valuing banks assets. The only way of knowing somethings true value is to sell it. Its only on the point of sale that the real value is known. Before the sale the price is just a sellers best guess. Buyers shouldnt accept that an advertised price is the correct one. Boats are expensive and every pound saved is a help.

Yes, it is clear you have not read page 1 - probably to your advantage as then you can just go weith what you think is appropriate in the circumstances - and you feel comfortable with.

While the price at which something changes hands is a good representation of the "market price" because it is real it can only be as good as the market it represents in this case only one exchange! On the other hand exchanges within a market which is larger and more active - such as buying a tankful of fuel, you can have much more confidence that the price you pay is the "correct" price.

In very thin markets like used boats you can only judge how "good" the price was from the perspective of the two persons involved - buyer and seller. If both are happy that is the market price (for that boat, in those circumstances and on that day) - but only a rough guide for the next transaction.

 

[PeterGibbs]

our first boat.

Hopefully this has not offended anyone out there (brokers or those in the industry) – it is not my intention – I simply would appreciate guidance on what may be regarded as “the norm” when making an offer.

Thanks
Paul[/QUOTE]

Rule 1 - There can be no offense when it's your hard earned dosh going on the table. Only tyre kickers cause offence.

Rule 2 - An asking price will always be elevated to allow for negotiation down to the expected deal price. Assume 10%+ has to come off. Plus - see rule 3

Rule 3 - When making your offer demonstrate why you come to your offer price - ie other prices for similar craft, the repairs and maintenance you will have to do to put this boat in good working order (I'm sure you and your surveyor will be able to notch up a list of relevant items)

Rule 4 - Be in no hurry, there is always anther deal. Once your money is pledged, your options are bust!

What can be worse than looking at your newly puchased boaty knowing you paid over money you will now need to put it in apple pie (not new, of course!) order.

Good luck!

PWG

 

[DaveKnell]

It is quite possible to reduce an offer - I did (twice) on a boat which we finally bought at the beginning of October, on the grounds that, as the summer wore on, she was worth less to me as I'd not had the use that I might otherwise have had. Finally, having failed to sell her all summer and with the prospect of winter storage fees looming, the vendor came round to my point of view.

--Dave

 

[blueglass]

totally agree with the post above. There are just far too many variables to arrive at anything other than very vague price "guides". This applies especially to low volume boat productions. ( and even market leaders are incrdeibly low compared to cars. There are many boats out there of which only 20 or 30 were ever produced. Sometimes far less. There can never be a glass's type price guide for that reason alone. There can never be enough precedent.
As regards not wanting to buy for the cheapest price, but preferring to pay a higher "fair" price - you may as well have M.U.G tattoed on your forehead.
Neither would I get bogged down with " I can only offer you £x because....". The seller couldn't care less. Just make your offer and make it low and work up to what you can afford. The only risk is if you make your offer insultingly low, the broker may (entirely wrongly and foolishly even) refuse to take it to the seller. I had that happen once when I offered £80k on a £100k boat. It was an opening gambit and I would have gone higher but the broker said he couldn't possibly insult the owner with it. I moved on. He phoned me back many months later to ask if I was still interested as the boat hadn't sold. And yes of course, by then I had bought elswhere.

 

[Ubergeekian]

As regards not wanting to buy for the cheapest price, but preferring to pay a higher "fair" price - you may as well have M.U.G tattoed on your forehead.

Do you haggle with Big Issue sellers? Many of them can be persuaded to take less than the cover price, particularly towards the end of a cold winter's day, when you're on your way home and they are desperately trying to raise the price of admission to the night shelter.

Neither would I get bogged down with " I can only offer you £x because....". The seller couldn't care less.

How do you know? Whether I am buying something or selling something, I like to remember that the other person is human being, and that if either of us emerges from a deal with an unnecessary feeling that it was unfair, the sum total of human happiness has been needlessly reduced.
If someone makes me a very low offer on my Jouster then I'll listen to it much more attentively if they give me some good reasoning behind the offer.

 

[gjgm]

I bought my current boat earlier this year and negotiated £40k off the asking price. the previous owner had bought her new but it transpired his wife didnt enjoy the boat and his 2 very young children were a worry on board. THIS motivated him to sell. Could i have paid more for the boat ? Yes Did i need to? NO. It was only the second boat i viewed (this time) and was the one i wanted. I simply established the lowest price i could buy it for and its mine.

You seem to feel you have masterly achieved a top deal. You have no idea whether the seller has been laughing every day since you settled for only £40k off.
You only did what everyone else does when a sale goes through.. agree a mutually acceptable price. If either you or he hadnt agreed, no deal.