Join Date: Oct 2010
Location: New Orleans
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Re: Initial Offer Question
I agree with the posters who say there is no single answer. The best negotiation advice I could give you is to figure out what is important to you and also to the seller. Sometimes what they need doesn't cost you as much as it benefits the seller.
I suggest you start by deciding what the boat is worth to you. If you have been following sales sites like Yachtworld you know what people are asking, but may not know what boats sold for. If you work with a broker, he can probably access a database called "sold boats" that shows that information. It can be a real eye opener if there are a lot of the same model of boat out there, but may not help much if the boat you are looking at is less common.
Once you know what the boat is worth to you, find out all you can about what the boat is worth to the seller, and why he or she is selling. Find out how long the boat has been on the market, and if possible, find out if it has been reduced in price before you looked at it. All of these things might influence how the seller will respond to an offer. If the boat is newly on the market, and if there are no obvious indicators that the seller is in financial trouble, then the seller is less likely to respond favorably to a low offer. If the boat has been on the market for a long time, and the price has been reduced several times, the seller may be more receptive.
I disagree with the poster who said make one offer at top dollar and tell the seller it's a take it or leave it offer. The problem is, you may mean it, but sellers almost never believe it, and it makes a harder negotiation if you start at the top and refuse to budge. That is true whether you are trying to buy a car, a boat, a house, or anything else.
Besides, if you start at your top dollar, you don't know if the seller would have sold for less. If you want to pay the lowest price you can, your goal is to make the lowest initial offer that the seller will respond to with a counter-offer. That's where understanding the seller's motivation comes into play.
Two other recommendations: One is to make your offer subject to survey. It costs money to have a proper survey done, but it can save money in the long run if you find problems that need to be fixed. If there are problems, you can re-negotiate the price with the seller to cover the repairs (if he or she agrees) or walk away if the repairs make the deal not a good one after all. The second recommendation is to be careful working with a broker. They can be a source of valuable information and good advice, but if the broker is being paid by the seller (or out of the selling price) then the broker may have a duty to the seller to try to get you to pay the highest price possible. You can ask the broker who is paying him or her, and most reputable brokers will be up front about this part of their business. It may just mean you can't rely on the broker for advice about the price.
New Orleans, LA