Ethics of negotiation

[valhalla360]

Originally Posted by crooks

I attempted to buy a boat. My offer was what I could afford.

I insisted on a survey. The broker said no, because my offer was so low.

I won't buy a pig in a poke.

Both sides used perfectly acceptable tactics.
- Seller wants no hiccups in finalizing the deal...in exchange for the lower price.
- Buy uses his ability to walk away if the deal was unacceptable.

[sailingharry]

Originally Posted by Mike OReilly

Too often I see people online suggesting that potential buyers make an offer, with the premeditated plan to demand a renegotiate based on whatever the survey turns up. I think this is false use of a survey. If the survey simply confirms the boat is old, and has the expected problems, then that's an acceptable survey. If it turns up serious unexpected issues, THEN it is grounds for renegotiation.

Amen! My 1979 Sabre 34 just sold, with survey, and ZERO renegotiation. I wouldn't have contemplated any price reduction anyway, unless it found something bad. Simply confirming that the boat was 40 years old is not "bad." Standing rigging was 20 year overdue for replacement, just like most boats her age (but routinely inspected and in great shape). Some moisture in the core, just like most boats her age. An engine that isn't a modern Yanmar. I'm just guessing the findings -- I haven't seen the survey. Bottom line, the price was fair for a good condition 40 year old boat, and I wasn't going to take a "here's the findings, suggest we knock off $5K" response. The response would have been "Sorry, no, I guess the deal is off."


Of course, on the flip side, we just bought the replacement for more than 30% off the initial list price. It had come down some before we finally low balled it -- accepted without counter, but the note that they wouldn't consider any "survey renegotiation" which I was fine with. I told the broker that in my mind, there are only two outcomes for the survey -- "great, let's do it" or "damn, would have been a nice boat." Survey found "stuff." But nothing that is critical. Oh, and the offer on the boat before that one, survey was a walk away -- no negotiation could fix it.


Survey should be a binary outcome (good = close, bad = cancel), not a negotiation tool.

[Poche]

Originally Posted by sailingharry

Of course, on the flip side, we just bought the replacement for more than 30% off the initial list price. It had come down some before we finally low balled it

Getting back to the original post low balling worked out in this example.
Did you find the seller insulted, Harry?

[Jammer]

Originally Posted by pjbori

I'm looking at buying a 1977 cruiser in a relatively decent condition, selling under 13000 euros. Apart from obvious negotiation points due to stuff that needs fixing, what is the common practice in making a bid? I read somewhere that it's perfectly acceptable to go 30% below the asking price as a first bid, but that seems like a stretch as I wouldn't want to 'alienate' the seller either.

What has not been mentioned is that you can discuss the situation with the seller (or their broker) without necessarily making an offer:


-- "How did you arrive at the asking price?"


--"How willing are you to consider offers below the asking price at this point?"


--"I am only considering boats that are within my budget which is below your asking price. Would you like me to offer what I can even though the boat might be worth more than what I can afford?"


But as posted upthread, you have to know the market to negotiate well. I have paid the asking price at times. At times I have paid much less.

[Jammer]

Originally Posted by sailingharry

Survey should be a binary outcome (good = close, bad = cancel), not a negotiation tool.

It depends. I would think that on a $200,000 boat a survey that identified, say, a leaking fuel tank, would justify renegotiation.


Similarly, a sea trial that identified a non-functioning autopilot or windlass, would justify renegotiation.

[sailingharry]

Originally Posted by Poche

Getting back to the original post low balling worked out in this example.
Did you find the seller insulted, Harry?

Well, yes and no. This was the third instance of this model we tried to buy.


First, we proposed 40% below an asking price that didn't compare well with the comps. The broker suggested we might not want to go that low, that it would really sour future negotiations. So we walked. The boat is still overpriced, but has fallen about 25%. Our initial offer might well be taken now (18 months later).


The second boat was at 100% of asking price, but it failed survey horribly. The owner was honestly unaware. We still chat by email.


The third boat was 30% (maybe 35%?) off original asking price. Our first showing was a tire-kicker, as the price was too high and there were "issues" (7' of draft on the Chesapeake Bay!). The owner learned of us, and we chatted on the owner's forum. But weren't interested even as price fell, because of the draft. We finally decided "perfect is the enemy of done," and made an offer that sort of addressed our draft concern with money, sort of (it still was in line with comps, but better equipped than comps). He took it on the spot (it had been on the market 2 years by then, in a very expensive yard). I try really hard not to burden him with post-sale support, but I've asked a few questions that have been very nicely answered. So, in short -- our low ball didn't seem to insult him at all!

[slug]

Very few people know anything about boats , equipment , service schedule and working life

Only a second opinion can educate a new buyer

The description.....in class or in survey is very powerful
Simple failures like missing technical manuals will fail survey and greatly reduce the value of a boat

This inspection to educate s future buyer could be from a surveyor, the shipyard who built the boat or a specialist buyers representative