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Go Back   SailNet Community > On Board > Boat Review and Purchase Forum > Asking vs Selling price
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Topic Review (Newest First)
02-23-2005 12:56 PM
Sasha_V
Asking vs Selling price

Boats and real-estate are not the same thing, they just cost the same.


What I mean is that even someone that needs to off-load a house quickly and realise some income from it (motivated seller) has options that a boat owner does not. Anything from leasing out to getting a bridging loan or flexible mortgage, until the property can be sold.
This buys them the breathing room to hold to their prices and get what they ask (just maybe a bit later then sooner).

Boats do not work that way. Getting a loan/mortgage based on a boat ownership is *interesting* (see; nigh on impossible at anything other then ruiness interest rates).

A house that gets left sitting for six months still looks like a house, just one that needs a spring clean. A boat left totally ignored for six months *can* turn into a write-off. They lose value far faster when upkeep is neglected (mind you, they also exist in a far harsher climate and move around ALL THE TIME when in the water)

Marina or hardstand fees make the interest rates acrued on even the most harsh of bridging loans look like loose change. So there is a lot more incentive to "just sell it" once the desicion to sell is made.

Unlike most real-estate however, you often hit the emotional baggage and strong "attachment" to the boat of the previous owner, so being prepared for way more BS then you have ever had to deal with in order to give someone around 100 thousand dollars will be an issue. Be prepared to force yourself to be amused by it, or only deal with a broker that really gets between you and it.
We decided to pretty much not use a broker at all, dealt directly with the former owner, got about 400cubic hours of "stories" but also learnt a lot, got handed truckloads of extra gear and found it to be a useful if somewhat tiring experience, but at least the sellers finally got "closuer". We still exchange the odd freindly phone call two years later, just to see how "the boat" is going.

What all the above is trying to say is that you should offer what you think the boat is worth, or maybe a little less and see if they go for it. You can try tactics like concluding what it is worth and then offering a lot less and then climbing in increments until they say yes or you hit your mark, this seems to sometimes work. Just remember, the worst they can do is say no to any individual offer, You can keep coming back with more offers or can go find another boat. Forget getting a "positive" response from the broker taking the message to the buyer. He would really be positive about it if you offered twice the asking price and his commission reflected this!
He is the middle man, the carrier-pidgeon of the exchange, your job is not to make him feel warm and happy.

Most important thing to keep in mind;
You are not trying to make friends with the broker or the owners. You are trying to buy a boat. Remember this as they try to manuevure you with social and emotional levers. You are not applying to be their friend. You do not want them to talk nice about you to all their broker friends etc.
(Oddly enough, if you do a deal that completely screws them to the wall, most brokers will speak of you with a kind of awed respect, if you give them exactly what they want, they will laugh at you and feel superior..after you have gone, of course.)

Having said all that, inviting the former owners out for a sail and a meal on board once you have gotten settled is a good way of learning something extra about your boat and you can at that point decide whether you want to be friends with them. But not before!

It is also advisable to have a sweetener held in reserve that will break a "near thing" in negotiating a price. For us it was "if we get this wrapped up before 3pm, we can do this in cash, today, right now."
So for us, having the loan part of our boat''s price sitting as pre-approved funds in the account was a valuable bargaining tool and well worth the few dollars extra it cost to process the loan that way.


Anyway, hope that helped get you looking at things a certain way.
02-23-2005 06:35 AM
wallandj
Asking vs Selling price

Are imminent buyers, we are struggling with this issue too: what do boats REALLY sell for?

Of course, there are thousands of variables, but what is the industry average? For example, where I live real estate goes for 90-100% of asking price. Many brokers will not favorably present an offer of less than 85%. Why? Probably because real estate around here is pretty tightly appraised and values are well known. Also, most properties are priced realistically and closings are in the newspaper.

But sailboats are different. We were able to "peek" at some soldboats.com data and found selling prices were 85-90% of asking. But is this all the data? Probably not. I suspect that many closings that were substantially less than asking price just do not get posted.

Near as we can figure owner pricing probably goes like this:
- She''s really worth (or we paid) about $70k but we''d like to clear $80k.
- Got to cover the broker''s 10%. Figure $88k.
- Better dial in 15% for negotiating - Call it $99k.

And you''ve got a boat that''s really worth $70k (or less) listed at $99k.
01-01-2005 05:08 AM
Billpjr
Asking vs Selling price

I don''t know about you guys but every broker, lending institution and boat dealer around me uses NADA or BUC when dealing. They trust those sources more than you or me. It''s a starting point and the buyer needs to know why or how to change their minds on values that don''t fit the book. There is nothing scientific about it...you just need to know boats well and be able to communicate the reasons to the bank, seller or buyer.

I''ve bought a few boats at 1/2 book and resold at book. The key for me on this is to make offers before the boats are actively for sale. Once owners decide to sell, the "for sale" sign goes up and so does the price. Boat deal are made by the buyer, not given by the seller.
01-01-2005 04:05 AM
dman
Asking vs Selling price

The problem we are having with this type of question is that it is too general.There are countless variables.Any boat is only worth what someone is willing to pay,bottom line.Many owners get an inflated price when a survey is done and believe if it is insured for x amount it is worth that.Any insured boat is worth more sunk than floating in my opinion.Remember it only takes one sucker,I mean buyer.
01-01-2005 03:41 AM
DirtManly
Asking vs Selling price

Hello,
I am a broker and my experience has been that most owners have 10-15 % figured in for negotitions. Please know that we do NOT set prices on our customers boats. We do the research for them and give them the best information available, but in the end they tell us what to set the price at and what they will accept for the boat. Some folks are reasonable some are not. Most folks seem to think that there boat is worth much more than it actually is. It is my opinion that this is because people want to believe all the wonderful and expensive gismo''s and gadgets they installed when they bought the boat still add value years later. Unless all that stuff is very new it doesn''t seem to add much value. It takes time for it to sink in that this is part of the cost of ownership.
Having said that, are there deals to be had, yes, are they on every dock, NO. A deal is going to have a lot to do with your expectations. If you expect to find a Pacific Seacraft 34 in Bristol condition for $5000.00 I would recommend psychiatric care, it aint going to happen. If you are looking to get a PS 34 for $5000.00 under market value, that could happen but it will require patients, and dilgent searching. You will need to know your market in order to realize when you are looking at a deal. Derelick boats are rarely a deal, I can''t tell you how many people dream of finding a boat that they pay near nothing for and find out it only needed cleaning up. That doesn''t seem to happen much, from what I''ve seen these folks end up spending more on the old boat getting it up to speed than it could ever be worth. There is some merit to this idea IF you plan to keep it LONG term.(at my house this is defined as, long term = they are in my last will and testiment) If you plan to fix it up and sell it to make a couple bucks, you will more than likely end up one of the folks with that ridiculuosly over priced boats out there that wont sell.
Heres an idea for you, call a broker and be honest about what your looking for. It may take several brokers, but you will find one. If they have an owner that is anxious to sell or a boat that is undervalued to move quick we will tell you about it.
My personal experience has been, the problem with buying 1/2 price boats is the math doesn''t work well. When you add water to math everything seems to become exponential. The result works something like this, 1/2 X 1/2 = 1/4. You pay half price for the boat, being as how you got such a good deal you pour the other half in on goodies and a year later the boat is worth about a quarter of what you paid for it.
Very best of luck to you on your search. If you are in the southeast email me direct and I will help you find a boat.
12-31-2004 05:29 PM
TrueBlue
Asking vs Selling price

You''re asking if there is a scientific process to determine what a boat is worth? You may not get any definitive answers here, since used boat values are market driven. If a new boat interests you, of course brokers/dealers will not reveal their bottom lines publicly. When bartering for a car, a dealer will never tell you his cost and profit margin.

I just bought a 18 year old, 33 foot Finland-built boat for 75k that was listed for 89k. My broker shared inside info on two exact model boats of the same vintage that sold regionally within 6 months prior for 135k and 118k and listed for much more. My surveyor valued the boat above the listing price . . . so, did I get a good deal? I feel like I made out OK. Unless, I see a similar boat selling for less $ months from now. But then it may not be as well maintained and have fewer upgrades. I certainly won''t beat myself over it.

Work with your broker to research current and past offers and selling prices on the boats you are interested in, when serious about one, hire a good surveyor and give the owner your best price.

Steve
12-31-2004 04:00 PM
DaveB.
Asking vs Selling price

Does anyone have any real information on this topic? Like, for instance, a broker, or anyone else, who has seen the asking price and selling price of 20 or 50 or 100 boats and can give some idea of the average--or mean--difference? Or even anyone''s individual buying or selling experience? We all know that ''it depends.'' But averages, or industry trends/tendencies, can be useful information to a buyer going into a transaction.

There''s a thread here called "Blue Book Values" (or something like that), where NADA says they use reports from their "industry advisors" or some b.s. like that... Brokers who have actually seen sales figures. They give the value of a 1975 Islander 36 (for instance) as $23,000. The average asking prices of Islander 36''s on Yachtworld is 150-200% above that. That''s a VERY big fudge factor! Markets work best when they''re efficient, and to be efficient they need to be transparent. We need information! Where to get it?!

Dave.
12-31-2004 11:41 AM
PaulBl
Asking vs Selling price

People think they know what their boat is worth. Often a broker will not work hard to discourage them since they could scare off the seller. Some sellers need more time to understand that sometimes the boat is worth more to them than in the market. It''s not at all unlike selling your home. It is perfectly possible for a boat to be worth more to you than the market price.

People are free to ask what they will. I would not however assume that all aksing prices are atrificially high all the time because they expect to negotiate down.

Few buyers will offer more than asked. Smart sellers will attempt to hit the price correctly and thus not scare off would be buyers. A good broker would help a seller if they were willing to listen.

The last variable is the survey. If you have issues in the survey they work the best at real reasons to offer less.
12-31-2004 10:43 AM
TrueBlue
Asking vs Selling price

"What I don''t understand is why so many list their boats at unreasonably high prices."

BarryL,
I believe the "high" asking price initially set by the owner, is a reasonable figure to him/her. The amount is most likely based upon a compilation of the Owner''s total investment in the boat, the broker''s fee and a negotiation margin.

Just a matter of time before market reality sets in and the Owner accepts the inevitable loss. I suppose it''s human nature to not account for the cost of enjoyment during ownership.

Steve

12-31-2004 10:02 AM
BarryL
Asking vs Selling price

Hello,

Unless you are looking at a very rare boat, you should be able to get a general idea of what the boat should sell for by checking yachtworld, boattraderonline, and a few other sites.

I bought a used boat back in June. I searched (casually at first, then more seriously when I became more anxious) for about six months. During that time I watched many boats just sit and site. Eventually the price would drop until it became reasonable, then the boat would sell.

Study the ads for a few months and you will learn what prices the boats are really selling for.

What I don''t understand is why so many list their boats at unreasonably high prices. It takes six months before they drop the price to something reasonable, then the boat sells. However the owners wasted six months!

Barry
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