' lowball offer ' - is there such a thing... ?

I recently made an offer on a trawler that was around 20% under listing price, they would not come back with a counter. I am so glad they did! Kept on looking and found same boat with much more features and equipment and saved myself over 10 grand!
Keep on looking and learn as much as you can.

The beauty of a boat not under warranty, you have no idea how much you actually saved for at least a couple years...maybe up to 5...possibly even up to 10 years.

Yes, that is what I'll do.
Lot to learn!

newbernbuck said:

Keep on looking and learn as much as you can.

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psneeld said:

The beauty of a boat not under warranty, you have no idea how much you actually saved for at least a couple years...maybe up to 5...possibly even up to 10 years.

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Reminds me of the saying...just because you aren't paranoid doesn't mean they aren't watching you.

I know our boat has "issues", but the effect it has had on our quality of life offsets the future work and money to set things right(ish).

The kind of response you experienced may be a form of negotiation saying" No. Make a higher offer." As dhays says, it indicates the seller sees no prospect of a successful negotiation due to gap between price and offer. Purporting to be offended is a negotiating tactic. The "wince", oral or in behavior, is a negotiating tactic to signal the offer is low. Requesting permission to not put the offer to the seller, as it may "do harm", is as much a negotiation as anything else.
Sellers and or agents assume an initial offer is probably a "probing first offer" and will try to elicit the next offer right away. A question like "What if the seller says no, what would you do, would you offer more, how much?" is typical.
Sellers will vary enormously. Some are keen, some even anxious, some are reluctant. Expect a wide range of responses.
In litigation we used to get responses like "We spit on your offer" and "May the fleas of a thousand camels infest your armpit". Hopefully you won`t get to that level.

After reading about a million of these boat buying/selling/pricing/negotiation threads, I'm beginning to think we waaaayyy over-think all this.

You offer what you're willing and able to pay. It's either accepted, rejected, countered, or ignored. The end.

(An "insulting" offer? There is no such thing. It's business Sonny, it's not personal. I'm not tendering an offer on your wife or daughter.)

Lol, that is a good one. Thanks BruceK. I need to memorize them.

BruceK said:

In litigation we used to get responses like "We spit on your offer" and "May the fleas of a thousand camels infest your armpit". Hopefully you won`t get to that level.

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The only reason I say it's personal and not business...is because of all the "other" threads that discuss boats as love affairs and that no price can be put on what they ultimately give you...

I sit back every day and enjoy the constant contradictions made on this site.

I have known people, like my PO that took every comment and this or that very personally...thus I approached my multi-lever offer to him very carefully.

When I called about the craigs list ad, he said it was cancelled (only a couple weeks old) because he was going with a broker to get a much higher price....but would honor it for me if I paid full price. We still wound up negotiating a bit...but I was very specific and used 3rd party input like the survey before I dickered on final price.

Absolutely! When we do make an offer we will sit down with our buyers broker and consider his knowledge of the market and what we actually feel the boat is worth to US. I really don't care what the buyer thinks his boat is worth. If he doesn't like our offer, oh well, there are plenty others for sale.
Another thing we're taking into consideration is when we do sell the boat in however many years that will be. We don't expect to make a profit, or even come close to breaking even. But we will want to price it as high as we think the market will bear. And we will be ready to consider all offers. Like my broker said "the first offer is usually the best".

There is no such thing is a low ball. However that doesn't mean that a un educated guess
is not insulting!

Do you think the listing broker could just handle this on his own? Meaning, if the seller has already told him no for a different offer, the broker can just not to bother submitting another incoming offer, regardless, if it is over the limit, or under? Do listing brokers required to submit any type of offer to the seller? Or, just the ones, which are close enough to the seller's limit?
This is just a question, I am not suggesting anything.

dhays said:

I think 20% is a low initial offer, but not an unreasonably low initial offer. That is an offer that the broker should give to the seller. Now, if the seller has already rejected offers higher, that is information the broker can share but nothing wrong with making the offer.

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Good advise above. If the boat has been listed for a long time and is obviously not quite desirable, then come in wherever you wish. Plenty of buyers have made offers of 50% the asking price and walked home happy with a new boat. I bought one that was listed at $175 and paid $135, and honestly could have negotiated even lower. There are no rules and you don't have to be fair.

What I learned from my brother when it comes to buying is to make it a purely business transaction, never get personal, you can fall in love with your new boat after the closing. So statistically if you make 10 lowball offers then 1 will take your offer.

makobuilders said:

What I learned from my brother when it comes to buying is to make it a purely business transaction, never get personal, you can fall in love with your new boat after the closing.

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Great advice. Maybe someday I will actually follow it. I have fallen in love with my boats before I owned them.

There are many people with $10,000 and have $100,000 dreams. They are an annoyance. Better brokers will weed out most of them, but some always slip thru. If you are locked into a certain make, model, year, you'll have to pay a fair price unless you find a desperate owner. And then there may be many undone maintenance issues.
If you watch boat sales over a long period of time, there will be boats that remain on sale and maybe have price reductions. Those boat owners are more likely to accept a lower offer. How low depends on many things. Having cash or preapproved credit helps.
Usually a bargain boat isn't a bargain after all.

utazo89 said:

if the seller has already told him no for a different offer, the broker can just not to bother submitting another incoming offer, regardless, if it is over the limit, or under? Do listing brokers required to submit any type of offer to the seller? Or, just the ones, which are close enough to the seller's limit?

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A seller could instruct a broker not to communicate offers under $X, and the broker might tell you that.
A broker might like submitting multiple offers in the same ballpark if trying to persuade(?condition)a seller that the value or price of the boat is less than the seller thinks.
A broker is an agent, that carries fiduciary obligations to the seller( ie his principal). Ordinarily that would include truthfully communicating events concerning the sale of the boat, including of course offers. Agents get their instructions from their principals.
How it works in practice might be different, and could depend on the arrangements.
I`ve heard that in real estate brokers may invent multiple offers in a certain range to persuade the seller that is the correct price range. But I`m sure that would never happen.
Of course I`m looking at this from an Australian not US viewpoint and things could be different across the Pacific, but an agent is an agent.

Lepke

I hope I am not considered an annoyance with 20% below, starting offer?
Like I said earlier, I do have my financing in order. I don't see a problem there.
Where I see the problem is available comparison. This boat is customized, so it is not easy to get the real value.
Again, I don't mind to upper my offer, but I really that hope you are not recommending to pay the asking price as it is?
I believe, everybody is trying to go below the listing price. Is it 1/2/3/5/10/20/50%, will depend on many things. I am receiving excellent advices here, but very few have suggested to pay the listing price full.

Lepke said:

There are many people with $10,000 and have $100,000 dreams. They are an annoyance. Better brokers will weed out most
Usually a bargain boat isn't a bargain after all.

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dhays said:

If a seller gets an offer that they consider "too low to be serious", they won't give you a counter because they feel it is a waste of their time. If they are listing their boat for $300k and get an offer of $200k, they figure there is no way that the prospective buyer would come close to that bottom line mystery number they have in the head of $270k. So they ignore it.

Folks are busy. They don't want to waste their time with buyers whom they feel there is no chance of coming to an agreement on price. To make a counter, they still have to have their broker write up the counter, sign it, etc....

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I have seen several boats over the years drop over 70% of their original ask.
I posted one up here a week or so ago that had $1.7 million on it a few years back and now has $500k on it.
This post http://www.trawlerforum.com/forums/showpost.php?p=457199&postcount=69

The sad reality of it is with the world economy the way it is some people have to sell at any price. The wolves are at their door and they cant keep paying $1000/mth in marina fees forever.

Here's a case in point. A certain model we're looking at has 4 for sale right now that are very comparable. They range from $60k, $80k, and $130k. We looked at the $130k one since the broker said the seller has health issues and needs to sell. From the highest asking price we expected the boat to be in very good to excellent shape and turnkey with recent electronics, etc. Well it was very much not the case. Had large soft spots on foredeck around pulpit, to the point of hearing cracking when walking on it. Quite a few mildew stains around the windows. Oily bilge looks like it had water at least a foot deep at one time. Water stains and almost rotten wood in closet. Dated electronics. Very dirty. Air conditioners not working properly. Gouges in hull sides. And a few other problems. Talking with the listing broker we probably could have gotten the price down to the others on the market. But why not look at the others first, which we will do soon. If we would have made an offer on that one it could have been truly insulting.
My point is the listing broker and buyer have no clue what the boat is worth in todays market. It badly needs $30-40k in work and still would not be worth any more than the other lower priced ones.
Why do people not take care of boats then try to sell them in this condition overpriced?

folivier said:

My point is the listing broker and buyer have no clue what the boat is worth in todays market. It badly needs $30-40k in work and still would not be worth any more than the other lower priced ones.
Why do people not take care of boats then try to sell them in this condition overpriced?

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I think most brokers have an idea of what a boat is worth; it's the owners who aren't prepared to face reality. My boat was on the market for several years at a price that may more have reflected what the owner paid for it. The broker knew what it was worth and assumed when offers weren't coming that the owner would eventually get the message. Some brokers are more realistic valuing their time and will tell the owner the truth at the risk of loosing the listing.

Owners see what they want to see and tend to ignore the negatives. Buyers look at everything and focus on the negatives to lower the price or protect themselves.

Ted

"He presented his offer with comps for recently sold identical base boats."

This is a rational way to give and take with an owner.

The simple concept "all boats are overpriced" is not rational.

To me the biggest problem is many would be buyers have no concept of what they want or need the boat to do.

So they compare boats built with different design goals ,scantlings , outfitting , and builders , ,, "they are all 45 ft so should be priced the same ",, NOT.

Am I incorrect that a selling broker is required to bring all offers to the seller?

I know that is true with real estate in NJ.....but I have no idea if it is a widespread requirement.

psneeld said:

Am I incorrect that a selling broker is required to bring all offers to the seller?

I know that is true with real estate in NJ.....but I have no idea if it is a widespread requirement.

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While I don't know it for a fact, my guess is that it would be covered by state law and thus may vary from state to state.

Ted

I have always made offers on what the boat is worth TO ME and not the selling price.
To me, what a serious offer is, is a written offer with a check made out with 20% down.
Now when the broker presents it to the seller, he has money with the offer. Money talks and BS walks. If he refuses the offer, the broker will give you your check back.
Sometimes a broker will have a prospective buyer asking "how much am I willing to come to?". I tell the broker that the buyer has to make a written offer with $$$ for me to answer that. That's because I think that is someone just out playing and not serious.
All of the above is based on a buyer offering way less than the seller is asking.

Generally, I think 20% lower than asking is about normal.
As for insulting the seller, well, thats the brokers problem. He is obligated to make all offers known to seller no matter how rediculous.

utazo89 said:

Insult offer.... I think that is what I was trying to dance around.
My point was, there is no ' insult offer ' in other countries.
I am not judging anyone's act, just trying to get the picture about the system here.

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In that you are wrong, I'm afraid. I am in Australia, and the boat sales scene here is still somewhat depressed, to the extent folk are starting to make insulting offers. By that I mean about 1/4 to 1/2 the market rate.

The broker told me the other day someone offered so little for a near new boat, he told him to "get real, if the owners would sell for that price I'd buy it myself, even though I don't need another boat." It was about 1/4 of estimated value.

Just to illustrate how frustrating this can be to a seller, as most opinions expressed on here are from potential buyers, here is an excerpt from a PM I recently sent to a friend on here re my own boat sale saga...

"Actually, the way things are going, I may well just hang onto Lotus and get some retirement use out of her, than basically give it away, as that's about all folk are being offered for boats these days - giveaway offers...
I'm so teed off I've advised the brokers to use reverse psychology now. To tell the potential buyers I'm hesitating over selling - don't really want to - so would have to receive and offer I can't refuse to let her go now."

Maybe that observation might be a bit enlightening to folk on here, as you don't often hear how it is on the other side of the buy/sell equation..?

FF said:

"He presented his offer with comps for recently sold identical base boats."

This is a rational way to give and take with an owner.

The simple concept "all boats are overpriced" is not rational.

To me the biggest problem is many would be buyers have no concept of what they want or need the boat to do.

So they compare boats built with different design goals ,scantlings , outfitting , and builders , ,, "they are all 45 ft so should be priced the same ",, NOT.

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Having recently sold a boat I agree strongly that many buyers just don't know how to tell the difference between boats. The web makes the problem worse because buyers just look at size and price as if condition and equipment don't matter.

they approach boats like car buying where boat buying IMO is more like house buying. many customizations and condition make houses more difficult to compare.

To the OP: Not everyone understands or enjoys negotiating. Shopping in the Kasbah is not like buying boat where written contracts must be carefully done.

Offers are just the first part of bargaining. When I have made offers I included a list of faults I found during my inspection (generally an entire day) and my estimates to fix them. The list of faults and costs generally exceeded the asking price of the boat. My rationale was to make my offer look generous. It worked. My last boat purchase I started at 20% of asking price and ended up paying 25%. The boat was pretty rough though and did take me 4 years to put into decent enough shape to launch it.

TDunn.

Are you saying that you bought your boat for only 25%? That sounds amazing.
I envy you, because you could make a skillful judgement during your inspection. I have to admit, I am not knowledgeable enough to do so. I am learning everyday, but to know every little bit of mechanics, electronics, maintenance; I would need few years to catch up. I don't mind learning, but it is a slow process for a land rat like me. If I was around boats all the time, I am sure I could claim more expertise.
Knowledge is power, in this scenario, it is money. I know, I will have to hire very qualified surveyors for good money, to feel confident about the purchase.
This is why I am here and asking questions and learning from others' experiences.

TDunn said:

Offers are just the first part of bargaining. When I have made offers I included a list of faults I found during my inspection (generally an entire day) and my estimates to fix them. The list of faults and costs generally exceeded the asking price of the boat. My rationale was to make my offer look generous. It worked. My last boat purchase I started at 20% of asking price and ended up paying 25%. The boat was pretty rough though and did take me 4 years to put into decent enough shape to launch it.

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When a seller has their boat listed so high that even the broker tells the buyer that it is to high. What happens to this boat as it sits on the hard year after year. It can't be good for the systems to not be used.

utazo89 said:

TDunn.



Are you saying that you bought your boat for only 25%? That sounds amazing.

I envy you, because you could make a skillful judgement during your inspection. I have to admit, I am not knowledgeable enough to do so. I am learning everyday, but to know every little bit of mechanics, electronics, maintenance; I would need few years to catch up. I don't mind learning, but it is a slow process for a land rat like me. If I was around boats all the time, I am sure I could claim more expertise.

Knowledge is power, in this scenario, it is money. I know, I will have to hire very qualified surveyors for good money, to feel confident about the purchase.

This is why I am here and asking questions and learning from others' experiences.

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Boom!!! Not so fast.

Re read his post and look at his avatar. He has an 80 year old wood boat that took 4 years of work just to launch it. Is that what you are shopping for???

Peter B said:

In that you are wrong, I'm afraid. I am in Australia, and the boat sales scene here is still somewhat depressed, to the extent folk are starting to make insulting offers. By that I mean about 1/4 to 1/2 the market rate.

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The key is what is the "market rate"? It certainly isn't asking price. It is what the average buyer is willing to pay. That changes. During a down economy boat prices drop dramatically. If a seller gets nothing but offers for 1/2 the list price he can be insulted all he likes, but that is probably what the boat is worth now.

I bought my boat at a price the seller had previously rejected from another potential buyer. He finally realized that it really was what that boat was worth in this market.

BTW, I am trying to sell my sailboat. The broker and I priced it based on comps. However, we have lowered tha asking price as we are seeing what the market is doing for that type and age of boat.