How much below listing price to offer?

I will likely be selling my PT38 Europa and purchasing another boat in the near future. Not sure if it will be a 1999 - 2001 Bayliner 4788 or a slightly older pilothouse like a Defever or Ocean Alexander. My question is..... if a boat is in good condition with reasonable hours on the engine, decent electronics and looks like it should pass a rigorous survey, how much below asking price should my initial offer to purchase be? I don't want to insult the seller but i also know that once i present an offer i can't lower it unless the survey shows up a bunch of issues.
Question two... if a boat was listed for $250K and a survey found no significant issues, with similar boats with listed around the same price, what do you think the average final selling price might be?

If you use a 'buyers broker' to help with your purchase, one of the tools they should have is access to Soldboats.com. They will be able to tell you what similar boats actually sold for as opposed to the listing price. You then need to factor in the condition of the boat that sold, if you can, and once again the buyers broker might be able to ascertain that.

In any event they can guide you as to where to start and unless you want to negotiate yourself they will negotiate with the seller's broker. Well worthwhile I think.

What Brian said. A broker who will represent you has relationships with other brokers also, knows who of them can be trusted and by how much, and can learn (or may already know) how motivated certain sellers are, the history of the listings (if they have been in boatwizard) and the histories of some boats for sale via previous experience.

Soldboats is very useful/applicable on production boats such as the 4788 where there would be a good array of recent comparable sales. It gets tougher with older boats with widely varying levels of care and updates, and custom boats. I am in contract on an older Monk pilothouse, custom/small PNW builder (only commissioned two hulls that year) and comps are hard to come by. I had to agree to 97% of list price. But, I was told upfront that the seller was firm, attached, had no pressing financial motivation to sell, and the list price had been reduced by 15% just two weeks earlier (which I saw happen, and put it on my short list). It just so happens that the boat is the right one for me... So, okay, fine. We will see how she surveys. On other boats I was told "very motivated" and "pretty flexible, just make an offer, sure we can get it at a good price." However, those boats would simply not work well for me, for non-price reasons.

Anyway, there is no formula but a broker will be very helpful in all those ways, and typically the seller pays the commissions (actually, the listing broker pays via a co-op agreement, but it's the seller's money).

If you know boats and how to locate the ones you are interested in, a buyer's broker is not necessarily helpful. Brokers are in cahoots to keep prices up and a buyer's broker will seldom want to upset the broker community's apple cart and submit an "insulting" offer.

Each used vessel has a different story and owner's desire and timing to get out. A few years ago I made an offer on a 55 Nordhavn for 80% of asking price. The owner was shocked and insulted and summarily told the listing broker to close any further discussions. Six months later I was called and asked if my offer still stood. It didn't as my money was now invested elsewhere. The boat sold a month later for 75% of asking price.

in the end, the buyer pool establishes sold price. With enough looking and head scratching a knowledgeable buyer can pretty well ferret out each seller's "get out" bottom line. All bets are off if the buyer cannot put money on the table immediately. Have cash or financing already lined up, that is key IMHO.

I have had poor results seeing and reviewing sold boats numbers as valuable over the past 2 years.
Its great to see that such and such year 4788 has sold at say $150K but you have no idea what condition that boat was in as it sits in the sold boat database.
On a few occasions I pulled up the old pictures of some of these sold boats on the lower price range and saw why they were on the lower end - I think I still have those pics. here somewhere.
Anyway one of the low priced sold boats had a few engine room pics which wen blown up for detail were frightening. ON another boat you could 'clearly' see a waterline inside the boat very high in the engine room showing proof of a partial sinking.
I am with Sunchaser on this one - and also go visit the Baylinerownersclub where you can search for much more info and ask any questions you may have on the boats or maybe even the specific boat you are looking at.

smitty477 said:

I have had poor results seeing and reviewing sold boats numbers as valuable

On a few occasions I pulled up the old pictures of some of these sold boats on the lower price range and saw why they were on the lower end - I think I still have those pics. here somewhere.
Anyway one of the low priced sold boats had a few engine room pics which wen blown up for detail were frightening. ON another boat you could 'clearly' see a waterline inside the boat very high in the engine room showing proof of a partial sinking..

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Sounds like valuable information to me.

"Sounds like valuable information to me."


Yes - which most people will never have access to or take the time to pull up and review.
In each case the broker I was working with at the time put forth those boats as a 'benchmark' for valuation but did not share the details of the past listing(s).
I had the ability to get those details outside of those discussions and saw what they really looked like.

I had variable experiences with both buyer's and seller's brokers so that I can't recommend having a buyer's broker as the preferred option. Even if you find a good broker to represent you and decide that you'd like to pursue this opportunity with one, you may find the buyer's broker resistant to downright hostile to the idea if you've already contacted him/her directly. If you don't already have a relationship with a broker that you know well, only bring one in that comes highly recommended by someone you trust.

I had a deal go south quickly when the seller's broker saw his commission split in half after I'd enlisted the assistance of a buyer's broker who was next to worthless. I take full responsibility for the whole mess but decided as a result that I could do better on my own.

My reason for asking these questions is that I just don't know anything about determining the fair market value of a big boat. If I buy a fifteen year old car or truck and pay 10% over fair market value I have lost a few hundred dollars but leaving 10% on the table in a $200K purchase is $20,000 dollars and that is a huge amount of money to lose from my humble bank account.

"If I buy a fifteen year old car or truck and pay 10% over fair market value I have lost a few hundred dollars but leaving 10% on the table in a $200K purchase is $20,000 dollars and that is a huge amount of money to lose from my humble bank account."


If you want to use analogies then the larger boats are much more like older homes than cars.
On an older home the condition of the house is a greater variable than just the size. So when you consider condition and equipment in detail then they should have a variable of 10% or more between various boats of the same make and model.
If you take your car analogy and apply it to older vintage cars and sports cars the same issue arises - condition is paramount and the same two cars will vary by twofold or more dependent upon condition.

List price means nothing unless you know the reason for the sale. There are hundreds of boats listed at prices that will never be achieved because the owner do not want to sell or will not see the realities of the market. They may also be upside down on financing which is another problem.
Conversely, there are vessels listed at very realistic pricing by knowledgeable owners who may be very insulted by a low offer just because "their friend" advises them a percentage to start bidding at.
You need to know the comparable "solds" and do the pluses and minuses of condition before you begin a negotiation that may turn a pleasant event into an antagonistic one.




Without this knowledge it is a difficult situation especially with boats as they have more personal attachment than houses.


Over my career I have spent the last 40 years marketing homes, first resale and now new and 35 years as an appraiser. The last subdivision I sold out in 48 hours (50 million dollars worth) while the competition took almost a year. The reason was simple, we were priced exactly at the market, not overpriced but open to negotiation like the competition.

stanfromhell said:

My reason for asking these questions is that I just don't know anything about determining the fair market value of a big boat. If I buy a fifteen year old car or truck and pay 10% over fair market value I have lost a few hundred dollars but leaving 10% on the table in a $200K purchase is $20,000 dollars and that is a huge amount of money to lose from my humble bank account.

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Stan

Smitty nailed it, condition can be a huge plus or minus once you get into + 15 year old boats.

Only you can determine acceptable to you condition and related price before survey. Spend lots (months) of time looking at boats, perusing and evaluating prices on Yachtworld and talking with trusted boat smart friends. It will come together sooner or later so you can then decide ballpark $ range and your appetite for being a good negotiator.

Always be prepared to walk if deal isn't what you want.

I have found...assume the worst on most equipment, structure and cosmetics....


If you get the boat for less than fixing at least 50 percent of those problems...you are in the right ballpark.


For more...you better be looking at a boat that would be tough to replace...


For less...you will all around be on top if willing to put up with and or help with repairs.


Note....looking at boats at the bottom end of the spectrum due to economics is a completely different mind game than looking at newer, more expensive vessels.

psneeld said:

Note....looking at boats at the bottom end of the spectrum due to economics is a completely different mind game than looking at newer, more expensive vessels.

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PS

In his first post he indicates interest in a 45 foot 15 or so year old vessel selling for around $250K. He should be able to locate several very nice boats in that price range in the WA and BC area. I quickly looked at both Irwin and Banana Belt and found at least 20 that are in the size and price range the OP desires. All well beyond a fixer upper I'd guess.

I have found from past experience is that obsessing about whether or not I have gotten the "best" price possible only leads to unhappiness. If you make an offer and they accept it, you can beat yourself up that you offered too much. If you accept a counter offer you can still wonder if you could have talked them down a bit more. You can buy a boat and then a week later see a similar boat on the market that you may have been able to get for less. It never ends.

Look at the boat, look at the market, and look at your finances. Pay what you feel the boat is worth to you then try hard to leave it behind and just start enjoying the boat.

FWIW, when I have looked at Soldboat data, the difference between initial asking price and final sale price varies a lot so I'm not sure there is any kind of "rule of thumb" you can use. If I had to pick, I'd say offer 20% below asking and see what happens.

"I have found from past experience is that obsessing about whether or not I have gotten the "best" price possible only leads to unhappiness."
dhays - I agree with you.
To a larger extent the internet has made us a bit lazy and to a certain extent stupid. When you traveled to 10 boats or 10 homes and saw the actual condition and could compare in person you did get a feel for the boat or housing market.
Now you go online and look at maybe 20 pictures of variable locations and quality and end up making some forms of decisions about value without seeing the boat or the home. It does a real disservice to your (or my) thought process as you develop a 'feel' for value for things you have not seen yourself.
I know from looking at both homes and boats that the internet can easily put your price/value meter off balance and when you look at past 'deals' it can make it much worse.
So yeah the internet has value but at the same time it can really make you off balance for where the price/value lies - too easy to mask both good and bad on the internet alone.

stanfromhell said:

I will likely be selling my PT38 Europa and purchasing another boat in the near future. Not sure if it will be a 1999 - 2001 Bayliner 4788 or a slightly older pilothouse like a Defever or Ocean Alexander. My question is..... if a boat is in good condition with reasonable hours on the engine, decent electronics and looks like it should pass a rigorous survey, how much below asking price should my initial offer to purchase be? I don't want to insult the seller but i also know that once i present an offer i can't lower it unless the survey shows up a bunch of issues.
Question two... if a boat was listed for $250K and a survey found no significant issues, with similar boats with listed around the same price, what do you think the average final selling price might be?

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Barring a negative survey, 20 - 25 points below asking would be a starting point. Let's not forget that the seller wants to recover that insane 10% broker fee ... If the boat is pristine, you know that the owner has pride of ownership and may react to a " low " offer. In any event as a buyer, I would not let emotions rule the deal and certainly you can not show any emotion or attachment to the broker......
Case in Point: Few years ago I listed my sailboat for x$ ( 10% over to cover brokerage ) I got an offer and the buyer's broker says to me; " sign back for 10% more than the offer because the buyer ( his client ... lol ) likes this boat ". Long story short .... It got sold for more as I was with hesitation, willing to take the original offer. FB

smitty477 said:

I know from looking at both homes and boats that the internet can easily put your price/value meter off balance and when you look at past 'deals' it can make it much worse.
So yeah the internet has value but at the same time it can really make you off balance for where the price/value lies - too easy to mask both good and bad on the internet alone.

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In my case, the Internet was just wrong. Says beam is 14'6, but beam is really 16'1. Kind of significant. Moreover, Internet made no mention of the fact that all the interior soft goods were refit recently (saw the $29K invoice in a drawer on board) and hardly used since then. Also made no mention of the almost $300K in yard and labor billings we found for work done in 2012, and boat not used much since. Nor mentioned the single-asset LLC which I can buy instead of just the boat, which saves $8K in sales tax. No-one would have ever known without researching chain of title and checking the drawers on board.

Looked at a newer, repowered OA Mark II, and apart from the engines and genset, it was a kind of a dog compared to the boat I am getting. (Don't get me wrong, OA Mark II can be a great boat, just not this particular one, other than the powerplants.)

But the Internet made that Mark II look very much worth the extra $80K in asking price. In reality, not so much (subject to surveys which I am in the middle of).

Maybe whittle it down to 10 top prospects, see at least the top 5 of those, try a few PH, few sedans, few YF's, and then you have your search honed in, pretty much.

Using a broker to buy or sell is kind of situational. In our case we were geographically separated from where we were buying that didn't have much choice. That said, we didn't enlist a buyer's broker on the first purchase of a trawler as it didn't cost any more than the C-Dory we were selling and I had a basic knowledge of what we were getting into based on internet research including the Trawler Forum. The seller's broker was very good and helpful once we agreed on a price and helped us get everything done remotely. He helped us arrange yard work and gave me a place to ship parts that I needed for my electronics upgrade.

When it came time to look for a bigger boat, he became our buyer's broker and helped us sort through various Nordic Tugs on the market at the time. When we settled on the one we bought, he was extremely helpful in the negotiating phase and when we kind of stalemated a few thousand apart, the two broker's made the deal happen by juggling with commissions. Our broker also sold our original trawler in about 75 days at a good price, all while we were 2000 miles away. We couldn't have accomplished this any other way.

Tom

dhays said:

I have found from past experience is that obsessing about whether or not I have gotten the "best" price possible only leads to unhappiness.

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Well put. Sometimes I'll admit I forget this; fortunately my wife reminds me of the truth here.

In my opinion looking at soldboat data, or listening to someone who's paycheck is influenced by the purchase price is the complete wrong way to go in determining offer price.

The first step in my opinion is to determine the maximum you would be willing to pay for that particular boat today. This is when to use soldboat data.

The next step is to research the seller and determine to the best of your ability how much you think you can get them to actually sell the boat for.

Then make an offer.

Dhays - As noted by other posters here, this was quite the profound comment:
"I have found from past experience is that obsessing about whether or not I have gotten the "best" price possible only leads to unhappiness."

Many thanks for that. I found your wisdom to be most useful this evening, though on a completely different subject from buying a boat. Cheers!

sunchaser said:

PS

In his first post he indicates interest in a 45 foot 15 or so year old vessel selling for around $250K. He should be able to locate several very nice boats in that price range in the WA and BC area. I quickly looked at both Irwin and Banana Belt and found at least 20 that are in the size and price range the OP desires. All well beyond a fixer upper I'd guess.

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Sorry I wasn't clear...smitty and you are correct. A tiny disagreement in evaluation of condition or equipment can be a lot of money.

I just threw that note on as an add on that advice from shoppers will be all over the spectrum too .....depending what price range and condition of boats they are looking at and willing to accept.

Kinds like the old adage that ....the only rule is there are no rules.

I paid a few grand more than I thought I should have for Lunasea. BUT the boat was just what we wanted. Right boat, near by, all was right. We gave the few thousand extra rather than say we should have. Sometimes spending a few thousand extra is worth it. IMO

I've had different results using Soldboats.com. To me, the actual sale price is, to an extent, indicative of the condition. Also is the time it took to sell (soldboats will tell you the month it was listed and the month it was sold). Soldboats keeps the listings, so you can see the pictures to confirm anomalies in the data (if one boat sold for $20k less than others and took 2 years to sell, you can probably see why).

I was able to get about 7 years of nationwide data, able to slice and dice the numbers to see how asking prices had changed over time, the PNW premium on asking prices, the asking prices for the same year boat I was looking at plus one year either side. And then do the same data crunching for selling price. And then take into account how long it took to sell.

In my case, my offer was accepted right away, was considered reasonable and not insulting, and I had the data in hand to back up why I offered what I offered. Hard for a seller to argue with actual sales data.

And if they're not willing to look at the real data you have in hand, you probably have an unreasonable seller on your hands and will probably have lots of problems throughout the entire purchasing process.

So much good information and thoughtful opinions here and I never knew about soldboats.com prior to posting my questions. Thank you all so much!

"I've had different results using Soldboats.com. To me, the actual sale price is, to an extent, indicative of the condition. Also is the time it took to sell (soldboats will tell you the month it was listed and the month it was sold). Soldboats keeps the listings, so you can see the pictures to confirm anomalies in the data (if one boat sold for $20k less than others and took 2 years to sell, you can probably see why)."


Patemey - How would a typical boat buyer complete these tasks?

stanfromhell said:

So much good information and thoughtful opinions here and I never knew about soldboats.com prior to posting my questions. Thank you all so much!

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Either your surveyor or broker can get soldboats data for you. I think I pay about $600Cdn for access

Back in 2012 I was looking at a 1999 model boat, so with soldboat.com data I put together the following table. It at least gave me an idea of where the market had been and where the market was going.

(Table formatting can't be done here, so bear with me on the list below)
Below categories, I calculated values for both asking price and selling price, and then made the related comments
average of all boats of this type model
average of all 3-year range (1998 thru 2000)
average of all 1999's
average of all sales in 2010
average of all sales in 2011 (comment: on average, 2011 sales declined by ~$x from 2010)
average of all PNW's
average of all non-PNW's (comment on average, PNW boat sales have a premium of $x)
average of all sales in 2010 of 3-year range
average of all sales in 2011 of 3-year range (comment: on average, 2011 sales declined by ~$x from 2010)
average of 1999s sold in 2010
average of 1999s sold in 2011 (comment: on average, '99's sold for $x less from 2010 to 2011)

I strongly agree that the web gives people a distorted idea of condition and therefore value. They all look great in pix but many don't stand up in person