Example of broker raising owner's unsuccessful price

[SPC]

How typical is this?

An owner lists a boat for X amount in a public forum of a large boating city. (The X amount is well north of $75K). After it doesn't sell, the owner enlists a broker who posts the boat more publicly at nearly 50% more. Wow!

[bljones]

What's your point?

If he gets his price, more power to him.
If he doesn't, it doesn't sell. It wasn't selling anyway which is why he enlisted a broker after his own marketing efforts failed, so he's no richer, no poorer and the world continues spinning.

[sailingdog]

The broker is trying to sell the boat for as much as possible to make as much money on it as possible. The price he sets may not have anything to do with what the boat is actually worth, and he is probably hoping for a dumb buyer with more money than sense to come along.

[Zanshin]

Remember that the seller pays 10% brokerage, so a $100K boat now needs to sell for $110K in the owner's eyes, then the broker says that there will need to be negotiating room and put a 20% markup and suddenly the asking price becomes $132K - if it sells for that then the broker is well worth his money!

[SPC]

First, I'm not attacking anyone involved the transaction, but I am interested if similar mathematics likely apply to the majority of listed prices. Maybe this is the best way to set a price.

In this case, the negotiating range (difference between listed price and a price at which the seller would close, even after paying 10% broker's fee) is about 25% of the listed price.

Is that typical in your experience? I certainly see how it could work. I can see why a buyer would think that he was was getting a bargain if he managed to negotiate a 25% reduction in price, especially if listed prices for similar boats were in a reasonably close range.

I am also aware of BUC prices, NADA prices, and listed and selling price data available to brokers, but these sources are of limited use when the boat is not common. For uncommon boats, there are few data points, especially since the housing collapse.

[tommays]

Well

I just sold my J24 in Dec without issue BUT i made the mistake of asking a fair and correct price

There seemed to be a LOT of people who felt that despite the boat not having any deficiencies they needed to pay lower than the asking price to feel they got a good deal

I could have asked thousands more and come down so they would feel good and might just ask for to much in the future so i have wiggle room

[bljones]

The biggest reason why FSBO boats don't sell is the seller prices his boat too high based on "asking" prices he sees nationally, and a refusal to budge on the price.

The biggest reason FSBO boats sell within a week is because the seller priced the boat too low, and after receiving 35 phone calls AFTER the first buyer rushed over waving cash, the buyer is kicking himself.

The biggest rason that uncommon FSBO boats don't sell and end up with brokers is because the seller doesn't know how to market his square peg. A free ad on a local website for an oddball boat in the high five figure/ low six figure range ain't much of a marketing strategy, and it is typical of many would-be sellers.

So, where's the balance? That is where a broker comes in.

When it comes to production boats, the broker has to balance three factors:
1) owner's expectation of what a boat is worth.
2) what comparable boats have sold for in the region, nationally and internationally.
3)Duration of listing.

If an owner wants top dollar for his boat, and isn't in a hurry to sell it, or doesn't NEED to sell it, then a good broker will tag it at the upper end, and then arket it like it is worth the price- lots of exposure, lots of pictures, lots of advertising, lots of urging the owner to keep it clean and ready for showing, and a good broker will also make sure the owner understands the boat is going to need to be on the market for a year to get his price.

When it comes to one-offs, unique or uncommon boats, all bets are off. Wharram cats are really cool, for example, and an ideal boat for the south pacific/ caribbean, but trying to sell one in Seward AK or Hot Springs AR is gonna be tough sledding. A broker who understands that weird stuff requires more marketing effort is vital if you want to get your white elephant gone, let alone sold at anywhere near what you are asking.

[4arch]

Unless someone specifically states the asking price is "firm" I'm going to assume they're asking for more than they expect to get regardless of the condition of the boat or how low the asking price might be in relation to comparables. And even with a "firm" price I'd probably still make an initial offer below asking. To me, price negotiation is a critical step in establishing a working relationship between seller/broker and buyer. It's a way for both parties to gauge how serious the other is and to see how reasonable they're going to be about working through the remaining steps of the transaction.

[blackjenner]

It makes perfect sense to me. The boat may or may not be worth the original owners price. The broker also has to make a living (commission) and may indeed be pumping the price to give negotiating room.

That never offends me. The first price is what they would like to get.

It doesn't mean that is what I will offer.

Prices are highly variable. Some people are really proud of the things they have for sale. You have to find a price where you get what you want and they still have some pride in getting a good price for something that was valuable to them.

For instance, I'm looking at a 45' ketch.

Boat #1: Private owner, not highly equipped -- $140K

Boat #2: Through broker, well equipped -- $109K

Prices are variable.

[Architeuthis]

Originally Posted by tommays

Well

I just sold my J24 in Dec without issue BUT i made the mistake of asking a fair and correct price

There seemed to be a LOT of people who felt that despite the boat not having any deficiencies they needed to pay lower than the asking price to feel they got a good deal

I could have asked thousands more and come down so they would feel good and might just ask for to much in the future so i have wiggle room

I hate when that happens but I still do it.

This why Brokers are often worth the price. They can handle all that crap.

I had a car I wanted out of the yard, it was in running cond but old and wouldn't pass any inspection. So I park it at the end of the driveway with a $100 sign. People would look at the car, have me start it and then point out problems with it. When they pointed out some rust or a scratch, or some other problem I would only answer, "Its a $100 car." I must have said that a dozen times until I said forget it and took it off the market. I eventually sold it for alot more than $100 but selling stuff is real work.

Often you have to raise the price a lot before people will buy.