Frustrated With Prospective Purchase!

[rognvald]

A point of discussion not previously mentioned: If a seller offers a boat at "fair market value" for a quality, well-equipped, difficult to find vessel in outstanding condition that has a history of selling at this price market-wide when available, is a 20% below asking price offer a legitimate offer, let alone a 50% lowball offer? Boats, homes, cars, motorcycles have market values based upon availability, popularity and desirability. Asking price and market selling price may or may not be the same. But, a low ball offer which has no relationship to actual value will not get the ball rolling but may actually kill the sale. Not all sellers are desperate or destitute and a low ball offer on a very nice boat tells an educated seller 1.) the buyer really doesn't know what the boat is worth but someone told him/her that he/she should make an offer __% less because that is standard practice or 2.) If the buyer can't steal your boat, he/she's not going to buy. Even in a depressed market, there is market value to any good or commodity. Do your research. Determine a fair market value and make a realistic offer if you really want to buy the boat. There will be plenty of room for negotiations after the survey and seatrial if problems exist. That's the time to sharpen your pencil. Otherwise, if the boat is as described, you've bought a very nice boat at a fair market value. Is that a bad deal? Good luck and good sailing. P.S. Long after you've bought your boat, you might not remember how much more or less than market price you paid, but you certainly will remember if you bought a good boat or a bad one.

[terminalcitygrl]

We're not interested in stealing someone's boat nor low balling, we're interested in a good boat at a fair price, that we can feel comfortable buying. I haven't studied much economic theory but did foolishly take an Econ 101 class in first year uni and I remember market value as being an ever changing concept, markets rarely stagnate. Not too long ago people around the world fell for the whole "housing prices only go up" and look how that turned out. We've done a lot of research and we feel that what we offered was very much in the ballpark of fair, the brokers response was based on unrealistic expectations created when the initial listing was drawn up with a view, I would contend, to inflate the market value to the benefit of the seller and the broker, and to the detriment of the buyer. Maybe someone else will bite and be very happy with the boat. I hope not because we'd still really like that boat but only at a price we can feel good about paying for it.

[mr-canada]

The fundamentals of market value are simple.

The fair market value is the price that the seller is willing to sell for and the buyer is willing to buy for, at the moment the trade is made.

If the seller wants $1 million for a widget and the buyer will only pay $500 for that widget, until the seller actually sells the widget for some price then fair market value remains undetermined.

With cars and boats and other depreciating assets it is more difficult to determine than stocks due to varying levels of wear and tear and maintenance, but the best determination would be for the most recent trade of a product of the same age and model. To eliminate for a particularly low (good deal for the buyer) price or particularly high (buyer was a sucker) an average value of the past five trades would be a good indication of fair market value. To get a further more reliable figure, removing the highest and lowest values from the past five trades and averaging the remaining 3 would be an even more reliable figure.

This is all hypothetical and off topic however.

[rognvald]

Originally Posted by terminalcitygrl

We're not interested in stealing someone's boat nor low balling, we're interested in a good boat at a fair price, that we can feel comfortable buying. I haven't studied much economic theory but did foolishly take an Econ 101 class in first year uni and I remember market value as being an ever changing concept, markets rarely stagnate. Not too long ago people around the world fell for the whole "housing prices only go up" and look how that turned out. We've done a lot of research and we feel that what we offered was very much in the ballpark of fair, the brokers response was based on unrealistic expectations created when the initial listing was drawn up with a view, I would contend, to inflate the market value to the benefit of the seller and the broker, and to the detriment of the buyer. Maybe someone else will bite and be very happy with the boat. I hope not because we'd still really like that boat but only at a price we can feel good about paying for it.

Then, you have done a proper job and move on. Not every negotiation becomes a deal. You must be comfortable with your offer. Good luck in your boat search. If you know what you want, there will be a boat for you.

[CarlF]

Having bought and sold far too many boats for one lifetime, I've come to the conclusion that there is no such thing as a fair market price for a cruising sailboat.

To create a market you need a reasonable number of the same model boat for sale at the same time in the same region. Except for a few models, this doesn't happen.

Worse, variability in owner maintenance can lead to a 50%+ value difference. Average sale price tells you very little.

You sound like a first time boat buyer. You should not buy a project boat. You shouldn't even buy a boat with average maintenance. Frankly, you want the most expensive boat on the market if it's also the best maintained boat on the market. You can not imagine how much money can be spent in the first 12 months after purchase fixing problems with a used boat - even one with a great survey. Believe me - I know of what I speak

So instead of talking price with the broker, I'd ask about maintenance and the owner. If the boat really is a cream puff, I'd make the trip. The boat would be worth the extra 20% - although there's always some discount.

If it's not been well maintained, then your 20% below asking offer is too much. Look for another boat.

Carl

[Kettlewell]

My bottom line is always that I will offer what the boat is worth to me, and often that is less than the owner is asking, but not always. There are fairly priced boats out there, but often people have unrealistic expectations. I have paid close to asking price and I have paid 50% of the original price. It really depends on so many factors, and among them in your case is the location of the boat. For example, to you, I would argue, a boat that is thousands of miles from home and will need expensive shipping, long-distance surveys, etc. is worth much less, to you, than a boat closer to home. And, different boats are valued very differently in various parts of the world. I am often amazed at how that can make a difference of 50% in the price of a boat between say California and New England and Florida. For example, once in awhile you see someone sail a California boat with 8-foot draft to someplace like Florida and then have a tough time trying to unload it.

[Jim Cate]

Originally Posted by SailFastTri

I would send the offer in writing, along with your stipulations (e.g. subject to satisfactory sea trial and survey, that it includes all equipment in good condition as advertised, subject to ability to obtain financing or not, etc.). Put a time restriction on the offer (e.g. good for 7 days). Stand firm and tell the broker that your offer is a good one, and no money will be sent until it is accepted, and that you will send the deposit with signed contract. Tell the broker if no financing is required; as that fact will weigh heavily in his judgment of you as a "qualified" buyer (if you do need financing, send a copy of a pre-qualification letter from the finance company). If he still refuses to present your offer, tell him "The offer has a time limit... Call me if you change your mind, and if I'm still in the market we'll talk." Be pleasant and don't get emotional about it. There will be other boats.

As for stepping the mast etc. Usually used boats are sold "as is, where is" and any launching or other expense related to a sea trial is borne by buyer. IMHO the most critical parts of a seal trial are to evaluate the power-train, and to unfurl the sails to judge condition and running rigging and furling works properly, etc. If the mast is down all the better because it's easier to do a proper and even more thorough rigging inspection; and the sails can be opened up on the ground (or brought to a sail loft) for inspection without too much trouble. Also -- open the spinnaker etc. Too often people leave secondary sails in the bag only to find out later about damages that could have been a negotiating point if caught pre-sale.

BTW -- I'm not a broker... Just an experienced buyer.

Edit: Also, I implied above that that I don't think it necessary to step the mast for the sea trial. That was intentional. It's good to do but not essential, IMHO.

G'Day Sailfast,

I think that your advice about the offer/negotiating part is excellent. However, I don't understand how one can do a sea trial without stepping the mast and actually sailing the boat. How else can you determine if it performs to your satisfaction?

And if a seller expects to sell a boat from on the hard with the rig down, the price must really reflect this unusual situation. I suppose that in areas where land storage in teh winter is normal my thoughts about this may not apply.

As to evaluation of sail condition... again, to get a good idea of their shape and fit, they must be seen hoisted and under load. Passive inspection, even by an experienced sailmaker, can't address issues of fit.

Your advice to inspect (or try out) all the sails is an excellent point. I blush to admit that when I bought my previous boat I only checked the head of the alleged star-cut kite. Looked fine, still nice and crisp... imagine my surprise the first time I set it and discovered that it wasn't a star-cut at all, but a radial head cross cut! Silly me!

Cheers,

Jim

[Kettlewell]

It depends on where you are located, but here in New England you can request a sea trial, but the expense is up to the buyer if the boat has to be launched, rigged, etc. And, that can be a pretty hefty expense, so it isn't something to stipulate lightly, unless you are pretty close to positive you want the boat. And, the big problem with this is that if you do buy the boat she is now in the water, and you may very well want her out in order to fix all the things you always have to fix on a used boat. Just for example, somebody launching a boat just for a sea trial is very unlikely to put on multiple coats of high quality bottom paint--it will be a cheapy paint job just to make the bottom look good for the sea trial. You'll need to fix that pretty soon.

[Kettlewell]

Also, I personally don't care much about a sea trial. I would much rather be able to crawl over every inch of the boat out of the water, and having the rig down helps make that inspection easier too. You can spread out sails and look at them. You can even run the engines by running water to the intakes. Much more important is to do your research on the sailing characteristics of the boat in question--you can learn a lot more by doing your research than by puttering around the harbor for a few hours. Yes, a sea trial tells you the boat floats, the engine runs, and the steering works, but not much more.

[hellosailor]

We were doublehanding a very new semi-custom boat one day and I'd just been given the helm. The boat had many two or three days on it prior. Helm's alee, tack, whoosh. "What'id you do to the instruments?"

Turns out the new expensive professionally installed intruments with repeaters all over the boat, crapped out every time you made a starboard tack and the boat heeled over. There was, yes, a tack sensor that shifte knotmeters and some other stuff whenever the boat heeled, and without SEA TIME you'd never know that was defective. Inspect it in the yard all you please, you'd never find the problem.

I also knew a big Westerbleak that ran just fine at the dock. But after a couple of hours under load, produced enough heat to blow the safety valve on the freshwater hotwater tank, and dumped half the water supply into the bilge before it got caught.

You'd never find a defective release valve that way, without being under load, underway for a while.

Inspection on the hard, important. Sea trial? Shakedown cruise? Irreplaceable.

[ctl411]

Your story is not that different than a experience I had. Two boats on the market one has a new motor new self tailing winches and fully set to cruise. The second boat original motor original winches halfway into a refit. The first boat dropped the asking price down to the second boats it sold. The second boats broker still thinks his is priced right been for sale over two years that I know of. This boat is on the hard not being used getting worth less every day. Some boats won't sell until a sucker comes along or gets sold by the widow. Move on lots of boats life is to short to deal with the delusional.

[geoleo]

Originally Posted by terminalcitygrl

So we fell in love with a boat from afar but found it way, way overpriced. Recently saw that the list price dropped to reality (in line with other high quality boats of that particular year). We offered about 20% off list and the sellers broker would not present the offer. It's tough because I think the expectations of the broker and seller as reflected in the initial list were beyond optimistic but given the price drop they are now expecting close to current list as the sale price which clearly I think still is a little high... If they had listed at the right price in the first place, I don't think an offer of 20% less would be considered out of the ballpark. Interested in what you all think?

You might consider hari-kari lol

[geoleo]

There is no such thing as 'list' The owner obviously told the broker his firm bottom line aand you arent close to it.

[Kettlewell]

Here's a good example of what can happen with long-distance purchases.

[terminalcitygrl]

Originally Posted by Kettlewell

Here's a good example of what can happen with long-distance purchases.

Really?! This sucks for this guy but does this actually happen very often? It seems loads of folks buy boats long distance every year without too much problem, I've never heard of a seller reneging on a contract like this before...