Negotiating Advice - Used Cruiser

[BrownBear]

I searched the forum and while I believe this question / topic may have been brought up before I was unable to find.

My question is I am looking to purchase a sail boat through a broker and the price they are asking is $151,000. How does the typical negotiations on price work? I am planning on having an surveyor meet me as I would be flying in from out of state. Any advice on how this process works, best practice and etiquette protocols, and general information would be helpful.

[sailingabe41ds]

We just bought ours in August this year. Your location may be important as well as the boat's location.

First of all....last year you couldn't give a boat away....these last 4 months it is crazy. I think because of Covid people are buying boats and RVs just to get out.
If you can ...look at the boat yourself and do your own mini survey. Since the boat is out of state....I do not know if it is better to do a mini survey with the surveyor instead of just looking at the boat on your own. When I was going to buy a boat in Seattle I was negotiating price before doing the survey and before looking at the boat. Get an idea what similar boats are going for and then make a reasonable offer. During the offer your contract should have something regarding pending financing, pending survey...dadada. This may go back and forth several times.....usually 72 hrs to accept or counter offer.
Once an offer is accepted...you are under contract. Now you are given a period of time previously stated in the contract....could be 30 days to have the boat surveyed and obtain financing. If they do not fix the items you think are important after you do the survey, then you can get out of the contract and get your deposit back (which you either sent at the time of the offer or immediately after the offer is accepted).
I found out that most brokers do not cut their fees even if they represent both buyer and seller. When I first negotiated for a Jeanneau 45ds with a dealer in Seattle it was a nightmare. Several times I walked away.....few weeks later restarted the process. This when on and off for 2 months. The broker was very abrasive. I finally walked away from the deal. That same day I found a newer Jenneau 41DS. Without seeing the boat...only on the website...we had the deal done on the phone within a couple of hours. Both boats were priced for the same amount ...and my offer the same. One deal months not getting anywhere...the other in few hours. BTW the Seattle broker on the older J45DS called me the same day and told me it was my lucky day because the owner was moving overseas and had accepted my offer...it was a little too late. Lucky, the offer had expired 12 hours prior so I was not under contract.
The 41DS was a 2015 with 158 hrs and an hour away from me in So Cal. The broker and owner allowed be to inspect boat all day....left my wife alone after he took us for sail. Given that the boat was so new I skipped a formal survey and two weeks later my wife and I sailed her to her new home. The other boat was in Seattle... it was an older boat, needed a formal survey, and had to pay someone 10k to bring her down to So Cal.
I am given you this lengthy story to show how different these two deals went.
Btw....the previous owner of the boat we bought was great ...he had the boat waxed and cleaned before I picked her up and took care everything we asked....which was not much.
The broker was Ian Van Tuyl and he made our life very easy. Even today....if I text or call he promptly responds. In my case, the broker and the willingness of the seller to work the deal made it a very pleasant experience.
In both deals the broker represented both buyer and seller. I can not explain it ...but I felt very comfortable with the broker on the J41DS. He was honest, and very upfront when I asked him a question. I never felt comfortable with the broker up in Seattle. We did not connect ...was abrassive, and rude at times. My wife would look at me as she would listen in an wonder why I was dealing with this a...hole. I should have hired my own broker down here to do the negotiations. I really thought that he was going to make the deal work since he did not have to split his commission.
FYI... I think the original price on my boat was 245k...I wanted the boat for 225k.
I wanted to offer 210k....the broker talked me into 215k. We went back and forth and eventually met 230k which was half way between 215k and 245k.

Hope this helps....

Good Luck....be prepare to walk away and trust your instincts. Try to look at is as a business deal and take the emotions out of it.

Abe

[SalingSue]

Originally Posted by BrownBear

I searched the forum and while I believe this question / topic may have been brought up before I was unable to find.

My question is I am looking to purchase a sail boat through a broker and the price they are asking is $151,000. How does the typical negotiations on price work? I am planning on having an surveyor meet me as I would be flying in from out of state. Any advice on how this process works, best practice and etiquette protocols, and general information would be helpful.

The same as buying a car/house/horse/plane/etc

Search the market, find comps, figure out what it’s worth based on comps, this is based on stated condition.

Hit decently lower than your acceptable price, settle on a price that best works for you.

Anything on the survey/sea trial goes against stated condition, thus owner fixes or you further adjust price.


The more you rely on others to figure these numbers for you and the less involved you are, the more you pay.

If you think for a second more people want his boat than your money, you’re going for a ride.

More or less.


Also who buys a cruiser new?

[mvweebles]

Some transaction customs appear to vary from region to region. I can only speak to West Coast US with licensed brokers. FSBO transactions will emulate.

Step 1 - the offer. This is usually accompanied with a 10% earnest money deposit that will be held in escrow by the selling broker. If this is a FSBO, deposit is a bit tricky. There is no reliable Blue Book or Zillow for valuation, and prior sale data isn't always disclosed by brokers, so setting an offer price is a bit more gut-feel than anything else. The actual offer contract should be a standard form that is reasonably fair for both sides. Read carefully for the various acceptance dates and contingencies. Personally, I always try for some sort of unilateral exit - an acceptance criteria that is in my sole discretion. If I become uncomfortable with a deal, rather than haggle over small evaluations, I can just pull the rip cord and get out. I've never actually done it, but it helps take the pressure of me when buying. There should be contingencies for various inspections, the survey is but one. Rig, electronics, mechanical are others you may consider. And of course sea trial.

Step 2 - sea trial. This is normally the second step. But if you're out of state, you may want to have a Surveyor do your in water inspection. This avoids cost of hauling the boat. Note - finding a Surveyor with available time has become difficult in many parts of the country so plan accordingly. But back to the normal sea trial. Goal here is to view the boat in normal operating conditions to assure condition and demonstration of systems. A representative of the owner should operate the vessel. Buyer is advised to only bring essential stakeholders (eg spouse) and advisors (knowledgeable friend, mechanic, Surveyor, etc) , not friends and family. The engine should be run at wide open throttle (wot) for at least 5 mins to show it won't overheat, all electronics and boat systems should be demonstrated. An important note: many brokers like to orchestrate the sea trial as a trip to the yard for haul out and full hull survey. My strong advise is to not agree to this but to have the boat hauled at a later date. The reason I say this is twofold. First, once you get to the yard, $$$ meter is running even faster, which is part of the reason the broker wants to go to the yard - to get the buyer more financially committed (the other reason is its just plain faster and more efficient). Take your time after the sea trial, confer with your posse, and make sure the boat is what you were hoping. The outcome of the sea trial is often a list of defects or corrections. If the list is sizeable, you may wish to negotiate a reduction then, or just note them as items to be corrected prior to sale finalization.

Step 3 - survey and inspections. Boat will be hauled. Owner makes al arrangements to have boat brought to yard, buyer pays for actual yard fees. Unless very low value or small, every boat should be surveyed. Even new ones. Period. Full stop. Your insurance company will require it, but mostly, it's just dumb to leap frog this step. SAMS is the most common Surveyor accreditation in the US, NAMS is another. Your insurance carrier will have a list. As mentioned above, they are busy these days and can be difficult to schedule. They will do a general condition and valuation survey that your insurance company is keen to receive. Some will do cursory examinations of engine, rigging if a sailboat, and electronics. But if the boat is large and relatively complex, consider a separate mechanical evaluation and a rigger for the sails/rigging. If there is a complex electronics package or a lot of wifi driven components onboard, bring an electronics expert in too. These days, it's not uncommon for an owner to give up on fixing annoying items that are difficult and expensive to diagnose and correct. Many owner-installed radars were never calibrated correctly and it can cost a lot of time and money to get it right. I know of one guy last year who bought a 5 year old 52-foot power cat who blew through $25k fixing electronic issues that were dismissed during the sea trials. In the yard, the broker will often encourage buyer to consider having the boat blocked in anticipation of bottom paint. Again, this serves to tie buyer to the transaction, but may make sense of a the need has been disclosed and you've reconciled, but my advice is to "hang" the boat, often during a lunch break, and then the boat gets dropped back into the water after the Surveyor has inspected the bottom. Yes, if you decide to buy the boat and it needs a bottom, you will have to haul again, but from simple perspective of purchase process, advice is to stop the meter wherever practicable.

Step 4 - final negotiation. After all the inspections, you are now armed with a lot of information and likely a list of defects and issues. You can chose to walk away (actually, you likely have that right after each of the above steps), accept the boat as is, or negotiate a revised price. You'll have to decide what items you want a price concession on, and which ones you want the owner to repair prior to acceptance. For the most part, pure price concession is the cleanest, but there are definitely instances where you want to see the boat after the repair. Watermaker doesn't work, or power boat won't get on plane presumably due to fouled bottom, engine overheats at WOT, newer electronics package shows vessel icon at 20-degree skew to actual track line, etc.. For items where a price concession is order, you have to be reasonable - can't expect full replacement value on 20 year old gear. That said, the survey will include high priority items that the insurance company will require be addressed prior to insuring - these are less negotiable and fall to the seller to correct or compensate in full. Faulty thru-hull comes to mind, though I might want the money so I can apply to a proper seacock vs a stem/valve arrangement that is less expensive and inferior.

That's about it. At least in West Coast. You can negotiate at any or all steps. I personally would advise only negotiating walk-away items that will stop the deal. Engine not reaching WOT being an example - no reason to haul/survey if you are potentially thousands of dollars apart on engine items. Or watermaker doesn't work. Or generator. You get the idea. I find most brokers are helpful, though they are an advisor only - their interests are more aligned to the seller than the buyer. This may be controversial to some, but in my mind, there is no such thing as a "Buyers Broker." There are brokers who work with buyers and understand the long sales cycle, but in the end, they get paid out of the proceeds from the sale - the seller receives less as a result. This doesn't mean a broker is dishonest or will give you bad advice, it just means that they get paid when a sale completes. The buyer is responsible to protect their interests.

Best of luck.

Peter

[BrownBear]

Abe, congratulations on your new boat! I understand that it would be a little off to have the broker represent both the seller and the buyer, but on a few real estate transactions, in my experience I had the agent represent both and they were two of the easiest transactions. I appreciate the advice, it sounds like you negotiated a good deal off your boat!

[BrownBear]

Peter, thank you so much for the advice. This is very helpful. I have been looking at boats for the last 6-8 months or so and this little gem has everything I am looking for. According to the broker it is a one owner boat, been dry stored off season, has lots of upgrades and really for me it looks like it was used mostly for dinner parties and cocktails.


As I read your post I created a word document outlining your steps and advice, this is all great! As you know I am flying across country to view this boat, so I feel as if it would be best to have the surveyor meet me when I come to look at the boat for two reasons - I feel the asking price is fair, and barring anything significantly wrong with the boat I will most likely move forward with the purchase. Secondly, if I am going to make the trip, a second trip giving air, hotel, and related travel expenses is going to cost me more than the price of the survey ($22 per foot). Based on your recommendations I think what I would like to do is, for lack of a better word, reserve the surveyor for maybe the 2nd or 3rd day for a few hundred dollars. Then I can view the boat, arrange the survey if I want to move forward, then negotiate from there.



Speaking of the survey, it seems like a standard, they will test all the equipment as you mentioned including the electronics. Currently the boat is out of the water in a boat yard on its trailer or a trailer which is handy for inspection of course. I am familiar with solar systems and I will be inspecting that myself. The gentleman told me they also send the oil off for analysis to see if there is any metal in the oil that would mean the engine needs to be overhauled. Fortunately the engine has less than 2500 hours so I do not see any issues there but I appreciate the peace of mind.


As far as the final negotiations, again I appreciate the advice. I understand that the broker is representing the seller and the quicker they move the boat, the faster they get paid and on to the next one. I understand that it is on me to protect my interests which again is why I would have the surveyor meet be out there. In your experience would it be wise to hire a broker to represent my interest? I would have to do my research on costs etc... but it seems on my end that having a high quality survey would be key and sufficient.



Thank you very much for taking the time to write up this detailed answer. I made a list of items you recommended and will continue to do my research and my dilligence but this goes a long long way into making me feel more comfortable about the purchase, or at least potential purchase...

[BrownBear]

Also who buys a cruiser new?



Thank you SailingSue for the advice...I am not sure who does but I would not and do not plan on it. The boat I am looking at is used..

[HankOnthewater]

I think Weebles in post #4 described the process very well (good on-ya Peter!) and that is fair way of doing business. A sharp deviation from that line either favours the buyer or the other way: the seller.
The only additional comment is that brokers do not like to operate a watermaker, with all kind of excuses. My answer to that: get the owner to demonstrate that to you as a watermaker is a big ticket item.

[BrownBear]

Thank you HankOnthewater! I will be sure to have the owner demonstrate the water maker. Thank you for your advice -I feel as if it will be a few years before I make it through the panama canal, I will bookmark your spot and check it out. Thanks Mate!

[skipmac]

Originally Posted by BrownBear

Thank you HankOnthewater! I will be sure to have the owner demonstrate the water maker. Thank you for your advice -I feel as if it will be a few years before I make it through the panama canal, I will bookmark your spot and check it out. Thanks Mate!

Excellent advice so far but as a former broker I might confirm and add my comments on a couple of points.

First, learn as much as you can about the market for the boat you're looking at. If it's a rare model then try to research similar age and quality boats. Then decide if you think the offered price is reasonable, too high or a super bargain and base your negotiations on that.

Making a low offer is often a good tactic but I have seen really low ball offers backfire and anger the seller who may be selling his/her pride and joy. Had one deal where the buyer was willing to pay the full ask but, against my advice, tried a super low offer just to see. Seller was pissed off and refused to deal with that guy any further.

Another very important point, in real estate the three most important things are location, location and location. In a used boat one might say condition, condition and condition. Some boats are well treated and maintained, some neglected and abused. Can make a difference between a great deal and a nightmare.

[Cadence]

Originally Posted by SalingSue

The same as buying a car/house/horse/plane/etc

Search the market, find comps, figure out what it’s worth based on comps, this is based on stated condition.

Hit decently lower than your acceptable price, settle on a price that best works for you.

Anything on the survey/sea trial goes against stated condition, thus owner fixes or you further adjust price.


The more you rely on others to figure these numbers for you and the less involved you are, the more you pay.

If you think for a second more people want his boat than your money, you’re going for a ride.

More or less.


Also who buys a cruiser new?

[mvweebles]

Attached is a check list I used to use. It's from 2004 long before watermakers, and before electronics got so complicated. But it's a good list to print-out while you make the rounds on the boat.

Surveyor will be your best friend - I like the idea of reserving him/her. I've always suspected a surveyor will tell you things in person that they hesitate to put in writing, so creating a dialogue will be a good thing.

I also agree with the ex-broker who posted suggested making a fair offer and adjusting it accordingly as more information is found. When my wife and I walked aboard Weebles, our 1970 Willard 36 Trawler 22-years ago, I turned to her and said what may be the absolute worst thing you can say but I don't regret a syllable "WOW! This boat is sold.....only question now is the price." We received a healthy and fair survey credit for the bottom blisters, but I honestly do not remember what we paid for the boat. The previous owners were a delightful couple who were as thrilled to find a good custodian of this grand ol' dame of a trawler as we were to take her forward.

I negotiate contracts for a living (IT Vendor Management). I honestly believe you get more out of a negotiation with transparency, explanations, and respect coupled with a smile than the hard-nosed approach many people take. If you take a zero-sum approach where one person only wins when the other loses, it makes it hard and takes all the fun out of it. I advocate sharing documents with a seller - survey, inspections, etc. It doesn't mean you're a pushover (hardly - I am extremely well respected in my industry), just means you take a more collegial and respectful approach to a deal.

My final tidbit on negotiation is to watch a few episodes of Pawn Stars. The owner - Rick (not the Old Man but his son that looks like Homer Simpson) works some decent deals with a smile and some information sharing, but he also knows his numbers. I know, they are mostly staged events for TV, but they have the ring-of-truth to my ears. I could see someone taking 60-cents on the dollar based on his explanations.

Best success -

Peter

SeaSkills Sea Trial Template (2004).pdf

[MJH]

Originally Posted by BrownBear

I searched the forum and while I believe this question / topic may have been brought up before I was unable to find.

My question is I am looking to purchase a sail boat through a broker and the price they are asking is $151,000. How does the typical negotiations on price work? I am planning on having an surveyor meet me as I would be flying in from out of state. Any advice on how this process works, best practice and etiquette protocols, and general information would be helpful.

I live in Washington and was interested in a boat in Florida. I found a surveyor that was willing to look at a boat for me and answer my questions for a small fee with the understanding that if I needed a survey it would be him. I eventually viewed and bought the boat.

Good Luck.

~ ~ _/) ~ ~ MJH

[sail sfbay]

Originally Posted by BrownBear

.................How does the typical negotiations on price work? I am planning on having an surveyor meet me as I would be flying in from out of state. Any advice on how this process works, best practice and etiquette protocols, and general information would be helpful.

First, schedule a boat viewing with the broker or seller (if seller is not going through a broker). Then if you want to make an offer then you and the seller sign a PURCHASE AND SALE AGREEMENT and you provide a deposit (usually 10% of the offer) contingent on a sea trial (paid by seller) and marine survey (and, if you want an engine and/or rigging survey) paid by you. If the survey(s) finds extraordinary repairs then you can request a CONDITIONAL ACCEPTANCE with SURVEY ALLOWANCE which is signed by you and seller. Finally you and seller sign a BUYER CLOSING STATEMENT.
Once signed by you and seller you pay the balance, transfer title and secure insurance. As far a etiquette protocols I deal with the broker ONLY and never with the seller. If the seller does not have a broker you can contract with one to represent yourself and they will make the sea trial and survey arrangements, handle all the paperwork and get it titled.

[zstine]

I've bought and sold a few boats. Typically (at least here in North East USA) you make a verbal offer usually somewhat below asking and when agreed to, a Purchase and Sales Agreement is written up. This P&S describes the buyer and seller's responsibilities and generally includes 'sale is contingent on survey and sea-trial satisfactory to the buyer'. The buyer has to pay for survey, haul-out.. seller usually will pay for moving the boat if needed and cost of fuel during sea-trial. After the P&S is signed, then the survey and sea-trial happens. Then there is another negotiation to resolve the findings of the survey. The seller typically has to either fix some things, provide a monetary credit or both. This is documented too, I forget the title of the document.
Last there is a closing statement of some kind that says the final price and the day the buyer accepted and paid in full. You also want to get the Bill of Sale form from the Coast Guard Vessel Doc service filled out, its on-line... and the boat is yours to Document with the coast guard and register.