Negotiating a puchase

dlochner · Nov 5, 2016

Make an offer about what you think the boat is worth. I don't think there is any rule. If you had buyer's broker, the broker could look up the sale price of similar boats, that would give you an idea.

If your offer is too low, the seller will make a counter offer, you can then walk away or make another counter offer. All depends on how anxious the seller is to sell. With winter coming, the seller probably doesn't want to pay winter storage.

Good luck. What kind of boat?

jssailem · Nov 5, 2016

That is about the cost of the broker.... Look at other boats in the area. Read the trials of the member Seattle-Hunter-31. He followed all the rules and has a mess of boat problems.
It is not easy.
Might ask the broker what similar boats have sold for. Also might get a price valuation from USBoat. They will give you a value based on the info you give them. It may help to form your price.
Good Luck.

Don S/V ILLusion · Nov 5, 2016

dlochner said:
Make an offer about what you think the boat is worth. I don't think there is any rule. If you had buyer's broker, the broker could look up the sale price of similar boats, that would give you an idea.

If your offer is too low, the seller will make a counter offer, you can then walk away or make another counter offer. All depends on how anxious the seller is to sell. With winter coming, the seller probably doesn't want to pay winter storage.

Good luck. What kind of boat?

This is good advice. A broker who is not involved now can easily pull actual sale prices in less than one minute and would probably be happy to do it for free or a free lunch.

Gunni · Nov 5, 2016

Looks good, or is good? Does he have thorough maintenance records? Anything at end-of-life? Deduct replacement. All systems run, power up and work as designed?

This is a bad time to be selling a boat, it is end of season, folks are planning for the holidays not shopping for boats. He is about to have to store this boat until spring and try again. It is a GREAT time to be a buyer. Figure out what it would cost him to keep the boat until next June, take that off the price along with any of the other items above. Deduct for poor maintenance records. Maybe even pull an oil sample from engine and transmission, send it in for analysis (don't let him change the oil prior to sampling).

Navicula · Nov 5, 2016

start at 50% and walk.....you will get a call back

capta · Nov 5, 2016

I got this boat for around 60% of the asking price, saving myself around 60k. I didn't mess about and I did my research. The owner had been injured and could barely get aboard. He hadn't been able to use the boat in 3 years. The market was at it's lowest point (July 2009) and the season was nearing an end, so the possibility of selling was dropping daily.
I was prepared to walk away, but wanted the boat. As it was in NY, if he didn't sell it, he would have been on the hook for another winter's storage and insurance.
I wasn't looking to make a friend. I WAS looking to buy the boat at the best price I could, which would leave me with more cash for upgrades like a watermaker.
He grudgingly made the deal and wouldn't come by or even talk to me for 10 days after I took possession. Everybody (not me) told him he was being a jerk as he had gotten out of the boat when boats weren't selling, so he finally came by and we got on OK.
Make an offer that you feel is rock bottom. You can always go up, but you can never go down. Remember to make your offer conditional to an acceptable survey. Good luck.

Kings Gambit · Nov 5, 2016

There are hundreds of boats for sale all of the time. In the used boat market, the qualified buyer has nearly all of "the power." You won't have it when you try to sell it, eventually. So put it to good use now. Try not to be in a hurry, and don't let them hurry you up. There will always be a better, or as good a, buy later on, if you decide to move on from this one.

Gunni · Nov 6, 2016

"Not looking to make a friend", "subject to acceptable survey". Good advice from Capta. This would be an easier deal if you had a buyer's broker as intermediary. Just figure your price based on the reality of the market, the season and put it over his transom with courtesy. If he goes high n' right (likely) keep a calm demeanor, let him vent and smile. You're taking his girlfriend. Be classy. And as KG notes, there are other fish in the sea. Be ready to walk.

jssailem · Nov 6, 2016

Gunni is right on the money... Time is on your side. Watched a Coast Guard Sailor who wanted a boat to live on move a price down 65% by waiting for the owner to decide that his love was a financial burden. Patience is your key. MANY MANY boats are available. New ones pop up every day.

When I was looking for a boat I came across an article on MorganCloud.com. The author talked about making a list of desired capabilities not boat features. (For example. a Car- 4 serviceable tires that can carry me for 2 years. Not - Flashy spinning rims with low height tires that look cool.)
Once I identified the desired capabilities for the cruising I wanted to do the boat appeared at a good price. Not at all what I had been looking at. Focus on capabilities and your search will be easier.

LeoLambert310 · Nov 6, 2016

This is what I did. I gave a low offer and the broker came back with a counter offer from the owner only 1k less than asking I told the broker no deal. He then stated that he had others that like the boat, told him then sell it. 2 weeks later the broker phone and stated that the owner would take the last offer. I stated that offer was off the table and here's the new offer 20k less than the last offer he came back with a counter offer but I told him that my last offer was the only one that would work, take it or not nice boat but then there are others on the market. He came back the next day and said the owner would take the offer and when do you want the survey done. Total savings was 45k less than asking. this was in 2002 and the boat was a built in 2000.
So if your not in a rush and willing to play hard ball you can get a boat at a good price.

capta · Nov 6, 2016

I've owned a lot of boats and operated a hundred times as many.
I've learned that the looks of a boat is about at the bottom of the list.
I put together a list of;
1) must haves
2) nice to have
3) gee, that would be cool
When searching for this boat I must have in no particular order;
good ventilation
a real queen size bed, not a bunk (no custom sheets)
an engine room (plenty of room so mechanical maintenance wasn't a horror) and I could add equipment like a watermaker without losing storage space)
electric winches (good for docking, going aloft and a real help for an old guy singlehanding)
all roller furling sails
a rub rail (again, single handing, rub rails make life easier)
a pilothouse (sitting in a comfortable helm chair with good visibility, my music and climate control seemed like a great idea).
I got everything but the pilothouse. Oh well, no boat is perfect.
I got lots of things not on the list that are a definite plus.

CarlN · Nov 6, 2016

Lousy boats with bad PO's who are short of cash sell at huge discounts from asking. Often because asking price was way too high. With these boast, starting at 50% makes sense.

On the other hand, high quality boats with knowledgeable PO's often sell quite close to asking.

I've sold six boats over the year. All great boats. I wasn't short of cash so didn't need to sell. And I always picked an asking price that I would be willing to pay myself. This was often a lower price than I liked but saved a lot of time.

I said "no thanks" to all deep discount offers. I never countered if the offer was less than 75% of asking. All my boats sold at a 10% discount or less from asking - including the cost of things found in the survey.

I'd suggest being cautious about getting a buyer's broker unless you pay them by the hour and they agree to rebate to you any commission they receive (which is perfectly legal). A broker paid by commission is a business. The business makes money by closing as many sales as possible as quickly as possible. Walking away from a bad deal or negotiating a lower price means less revenue. While some are great guys - your interests are not aligned. Think about it.

And don't get too focused on the discount. As I said, big discounts often have a reason. It is not at all uncommon to spend $50,000 in repairs/upgrades during the first year of ownership of a boat. Don't expect a survey to find everything. They never do.

A final tip. Some (many?) PO's deeply love their boat and want to see it go to someone who will love and care for it as much as they did. I favored this kind of buyer when selling (I didn't always get it). Years later I still hear from the owners of my old boats about their sailing adventures. It makes me smile. Life isn't only about money.

dlochner · Nov 6, 2016

CarlN said:
A final tip. Some (many?) PO's deeply love their boat and want to see it go to someone who will love and care for it as much as they did. I favored this kind of buyer when selling (I didn't always get it). Years later I still hear from the owners of my old boats about their sailing adventures. It makes me smile. Life isn't only about money.

Had an offer on my boat but had bad vibes about the prospective owner. He made an offer, had a survey and made a second offer. I questioned the surveyors judgement and he didn't seem to love the boat that I had spent a lot of time and love on. The deal didn't work. It took a couple of years and a lower price but a buyer came forward who fell in love with the boat. He thought he died and went to heaven when I accepted his offer. A while later he texted me that he was in love with the boat. It warmed my heart and I didn't care about the money I didn't make from the initial deal.

In the end the folks who made the first offer that didn't work bought a different boat that seemed more fitting for their lifestyle.

It ain't all about the money.

capta · Nov 6, 2016

My buyer's broker flew from WI to NYC on his own nickle and other than picking him up, dropping him off at the airport and lunch, he didn't cost me a dime. He knew the boat very well, having spent several winters on one in the Caribbean and was pretty helpful in my pre-survey inspection, escrow and the transfer of money.
A good buyer's broker makes his money from repeat business and referrals, so he doesn't need to worry about the price of each sale. Even if he only made $500.00 for a day's work after expenses, he had a great day, saw a great boat and made a good friend. Where's the down side of not screwing people in that scenario?
Don't listen to those who hate all brokers. Some brokers are just boat lovers like you and I who have found a niche in the industry that works for them and their clients.

dlochner · Nov 7, 2016

Buyer's brokers don't charge the buyer. The commission is split between the seller's broker and the buyer's broker. How much expense they are willing to absorb is dependent on the cost of the boat. A $2K commission on a $20K boat won't go very far, but a $20K on a $200K boat is a different story.

Crazy Dave Condon · Nov 7, 2016

There is much being said but NYsail has yet to tell us which boat and the length. Then I would tend to think he will get some good responses.

JamesG161 · Nov 7, 2016

A lot of great advice in this post.

If you plan a boat loan, the age of the boat matters. (It is very similar to buying a car.)

For the boats in the size and class we shopped, a boat was depreciating about $8000 to $10,000 a year.
Banks use this for a loan value until the boat is 20+ years and some banks won't loan on that age.

I saved ≈ $10k buy waiting for....

Annual Bank Depreciation kicks in January.

Jim...

PS: We didn't get a loan, but the owner and his broker didn't know that when we made the offer.

BarryL · Nov 7, 2016

Hey,

Are we talking about a cheap boat, medium boat, or expensive boat? Common type of boat or rare type of boat? The rules are different for each type. If you are looking at buying a cheap, 30 year old boat, just to play around on the water, there are thousands available and you can get a great deal. If you are looking for something specific, expensive, relatively rare, that market is completely different. For example, if you decide you want a J111 for one design racing. You are not going to buy one for %50 of asking price (assuming the asking price is reasonable). The reason is that the market is well known, the number of boats available is small, and that's the way it is.

When I was in the market for a boat (in 2006 and again in 2013) I did a lot of looking on yacht world, other internet places, and local marina's. I decided on the particular model boat I wanted (3 types in 2006, 3 again in 2013) and then I decided on the highest price *I* could afford (which was way lower than what most models were advertised for). When I found a particular boat that looked good I would call the broker to get a feel for the boat. If that checked out I would go and look at the boat. If that checked out I would call and tell the broker my sad tale "I love the boat but I only have $XX. I know it's way under your asking price but it's all I have." In 2006 the offer was countered, I was able to come up with a few more $ and the boat was mine (after survey, etc.). In 2013 my offer was rejected. The broker received and accepted a higher offer and I thought that was the end of it. Two weeks later the broker called me back b/c the first deal did not go through - buyer could not get financing). I had to come up with another $500 and then we did the deal.

I always buy boats in late fall - that saves the current owner the cost of haul / store - which gets passed on to me. Of course I then have to cover that cost ,but it gives me the winter to really look the boat over, clean ,decide on course of action, etc.

Lastly - to those of you who state that there are SO many boats out there to buy - just wait until you actually try to buy one. Yes ,there are lots and lots of boats out there - but many are overpriced junk and not worth the trip to look at.

Good luck,
Barry

Negotiating a puchase

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