# Boat Prices/Boat Values-Fiberglass



## LyleRussell (May 3, 2006)

OK guys I just read your thread about valuing a steel boat. How about a fiberglass one. What multiplier does one apply to the asking price to come up with a good offer price? .85 .75 . My broker thinks .95 of asking on every boat, is appropriate! 

I have tried using NADA or asking my insurance company for what they would insure a particular boat. But that results in offers that no one seriously considers. 

Yes, condition affects the multiplier, perhaps .9 for a perfect boat ??

Equipment is another factor. With new sails and electronics, do we multiply by .85

Time on market is another factor? If on the market for 2 years would .75 be appropriate? 

I think size might be a factor, a 225,000 44 footer might have a lower multiplier than a 115,000 37' ??

What do you folks think?


----------



## LyleRussell (May 3, 2006)

Brokers feel free to put your 2cents into the pot.


----------



## PBzeer (Nov 11, 2002)

If you find a specific model boat that you want, check the online sources for prices on comparable models, then offer what you think it's worth. You can go crazy trying to figure out a formula. Time on market, age, condition, etc., are all valid things to consider, but in the end, it comes down to what you think it's worth. You could start off at 20% less than the asking price, and dicker from there. No price will be firm till after a survey, so the offered price just gets the ball rolling.

Regards,


----------



## sailingdog (Mar 19, 2006)

There really isn't a set formula that is going to work. There are too many variables in buying a sailboat IMHO.


----------



## camaraderie (May 22, 2002)

Ditto Sailing Dog's opinion. Some boats hold value much better and are in high demand and thus less open to discounting. Others are less desired and in plentiful supply. Some brokers prefer to list high and come down in negotiations...others encourage owners to be realistic to encourage a quicker sale. So...even setting aside age, condition, time on market etc. , I think it is impossible to generalize. The way I've always done it is to try to determine what the boat is worth in FULLY restored "cruise ready" condition by comparing it to others sold (BUC book) of the same model and SIMILAR boats....(i.e. BeneHuntAlinas!) ...then deducting for the cost to bring the boat being looked at to that condition. Then offering somewhat below that depending on my assessment of the owners urgency, the time it wil take to restore and how hard it would be for me to walk away from the boat! Then I let the surveyor help me reduce the cost further by finding the stuff I was not aware of and providing estimates as to the cost to repair.


----------



## LyleRussell (May 3, 2006)

The problem is when I look at a boat here or on Yachtworld and it says $150,000. Is that 120,000 that I could afford or 145,000 that I can't. I hate bothering brokers unless I am serious. Most of my local ones have labeled me a dreamer as it is.


----------



## LyleRussell (May 3, 2006)

I need some way to come up with realistic offers.


----------



## sailingdog (Mar 19, 2006)

Well, you could go with a survey, and see the results... and then compare it to the comparable prices on other boats of similar size, age and condition. 

Of course, any serious problems in the survey should lead to a corresponding drop in the price. 

Generally, IMHO your offer should be about twice the difference from what you are really willing to pay for the boat... that way, if they meet you halfway, then you'll be paying what you think is the right price. Of course, this is not set in stone. If the boat has been on the market for a while, then I would drop the amount a bit...if the boat is a particularly popular, classic, or rare model—then you should probably adjust the offer upwards a bit. YMMV.


----------



## paulk (Jun 2, 2000)

*There are more variables than you think*

You never know all the variables. Maybe the husband died, and the wife wants to be rid of it. What about the pristine boat in "like new" condition, whose owner is going through a divorce, and does not want the spouse to have the asset, no matter what it costs him? Maybe the owner has already bought another boat, and can't afford the yard bills for two. After looking around and getting a feel for what the kind of boat you're looking for should cost, make an offer. If it's rejected out of hand, it's too low, and you've learned something. If there's a counter-offer, maybe you're in the ballpark. 
If it's accepted, you may have been able to get the boat for even less. In any case, any offer should be made subject to a survey. The survey will turn up something which can be used to bring the price down further or which can cause the deal to fall apart, according to what YOU want. Each boat is different and each owner is also different. It's a totally free market. Take advantage of it if you can, and don't get hung up on formulae that don't work.


----------



## LyleRussell (May 3, 2006)

Long before I started reading Sailnet I new about the need for a survey. Certainly good advice. But the survey follows the offer. And one can't trust a survey commissioned by the broker. 

So how does one guess what a boat is worth? Saying to offer "what it's worth to me" doesn't help. I have bought a small power boat and several small sailboats over the years. Now I'm looking at a J-37c and I don't have a clue what a proper offer is. I offered .85 of the asking price but no luck

Any help here would be appreciated.


----------



## LyleRussell (May 3, 2006)

She's a good, structurally sound boat that has been on the market and basically neglected for 24 months. The owner no longer lives in the area where the boat is. Asking is $114,000


----------



## sailingdog (Mar 19, 2006)

PaulK's points are pretty good too... there are situations where the boat will be sold for far less or far more than it is worth...

Each boat and sale is fairly unique...even if the boats are similar... Some owners are willing to sell the boat for less than they're asking...others have some deluded idea that their boat is worth more than the actual market value..and will refuse to budge at all.

You also don't say what kind of boat it is... hard to give you advice on a specific offer to make...if we have no idea what the boat is. There are many boats that are worth $114,000, many that are worth more, and many that are worth far less.


----------



## Gene T (May 23, 2006)

i looked at a J37 several years ago, nice shape in California. If I remember right hey were asking 89k. One day I saw it on Yachtworld for 54k sale pending. That is a pretty good mark down. It came back on the market a year later at 57k and sold in a few months. A J37c might be worth more and location will make a difference. I think I have seen this boat on Yachtworld, it's been for sale for years. I would figure out how good the equipment list is and what the boat needs. Major issues with any older boat are: engine, bottom blisters, soft decks, sail inventory and condition. Does it have the equipment that you want? You should check out the boat very closely yourself before you make an offer and make a list of the costs you would expect to get the boat to the way you will want it. You will end up knowing how much money you will have in the boat after the purchase and upgrades are complete. It takes a lot of objectivity to get an accurate number. 

A survey won't lower the price unless there is something undisclosed or unseen, and you will need to fix those things anyway. Don't count on a survey to get a better deal. 

Good luck, they look like they would be a fun boat to sail.


----------



## paulk (Jun 2, 2000)

There's also the situation that the guy's wife says "Sell the boat." and he puts it on the market at five times what it's worth. He then gets to tell his wife "I'm trying to sell the boat, but no takers." J/Boats cruising versions are generally regarded as well-engineered and well-built. They sail well, and there are also not a lot of them. These factors tend to make them pricey, despite their apparent simplicity of design. The J/boat racers have been raced, usually hard, and though also well-built, will look more tired. There are more racer J/boats around. These factors tend to make them relatively less expensive. You pays your money and you makes your choices. If you like the 37c enough, increase your offer and see if you can't get a counter-offer from the seller. If you go up $5,000 and he only comes down $150, you'll see how much he wants to sell, and get the idea that the selling price is pretty firm. If you go up $2000 and he comes down $2000, you may expect to meet in the middle. It's a balancing act that depends upon how much you're willing to spend and how little he's willing to accept. I've seen boats that didn't sell because there was oil spattered from a well-lubricated driveshaft, and the owner wouldn't budge on his price, and others that went through, but that dropped their price by $5,0000 because of a rotted main bulkhead the seller wasn't aware of. You never know.


----------



## PalmettoSailor (Mar 7, 2006)

You need to figure out what your budget is and stay within it. Remember, you'll most likely need to to spend another big lump of money outfitting/fixing the boat to meet your needs. So if your budget is $145K, your max boat cost is probably around $140, or less if you are conservative.

The O'day we bought was one of the cleaner boats we saw that was close to what we could afford. We really liked the boats layout and it had a reputation for being a decent sailer from what we could learn, however it was priced above our comfort range. Based on other identical models on the market and the prices of other similar boats I felt the asking price was in the correct range so, we kept looking. 

However the owner needed to sell and later dropped his asking price so, I made discounted offer deducting the full cost of all the items I assumed I'd have to fix/replace, the owner countered, and I made a final offer which was accepted. After the survey, some more "small" items came up and another few hundered dollars came off the purchase price to correct them. As it turns out, every one of the small items became the worst case scenario, so so far the fixes cost about 3 times the discount negotiated with the seller, and two of the problems have been deferred until winter pull out, so the final cost has yet to be determined. The learning point is to assume the worst case for fixes. ie: If a steaming light is burned out, assume you'll have to pull the mast, install new wire and a new fixture. If replacing the bulb fixes it, you're money ahead.

If I hadn't negotiated a big discount up front, I'd really be hurting, but even with the unanticipated repair costs, I'm pretty confident I'll be able to recoup most of my costs when we're ready to move up to a bigger/newer/more capable boat in a few years.


----------



## Gene T (May 23, 2006)

One should always assume the worst case scenario. I have never seen a case where it cost less to fix up a boat than someone had planned. Some things like a burned out light up the mast you can just say FIX IT. If the surveyor recomends a new shroud, you should figure on replacing all the rigging, but you can't expect the seller to pay for the whole job because a boat with new rigging is worth more than a boat with 10 year old rigging.


----------



## mstern (May 26, 2002)

*Formula for an offer?*

I don't think that any formula will prove to be a universal success, especially those that are based on the asking price. There is nothing that controls the formulation of the asking price; 85% of a ridiculously high asking price is still "wrong". Likewise, there is nothing to control what the owner thinks the boat is truly worth. I once dealt with a guy who insisted that the proper way to calculate the asking price was to take the BUC value and then add on the full price of what he paid for the new VHF, GPS, head, sails, etc. he had installed over the years of his ownership. Nutty? Sure, but its a free country. Bottom line: the boat is worth whatever someone will pay for it. An offer of 85% of the asking price shouldn't (in a sane world) insult anyone. If the offer was rejected, you can be sure that one of two things is true: the boat is worth more and will eventually sell for more; or the owner was wrong to reject your offer because that is about what the boat is worth and no one else will offer more. In the first instance, you always have the option of upping your offer. In the second instance, you can check back in a month and if the boat is still for sale, repeat your offer, this time hoping that life has beat some sense into the owner in the interim. Good luck.


----------



## sailingdog (Mar 19, 2006)

While, I'd agree with midlifesailor that you need to reserve a part of your budget for upgrades, re-fits, and such..but I think that $5000 on a $145,000 boat is a bit low. I would estimate that you're really going to spend about 10-15% of the boat's price on re-fitting, repairing and upgrading.


----------



## LyleRussell (May 3, 2006)

My spreadsheet, using my (guess) of .85 of 114000, has an offer of 97000. When I plug in survey costs, tax and tags, engine evaluation, insurance, mooring, a dodger, upgrading the electronics (the damn thing has a Loran), bottom paint, rod rig reheaded and a variety of small fixups, fresh charts, groceries and beer to bring her home, plus a fudge factor I'm in $41,400 in extra expenses. This is the minimum I can get by with. No new sails and other real goodies. At 138400 she's quite feasible. But the owner has demanded 107,500. At 149 shes simply not feasible. 

Also she's been sitting on a mooring for 24 months for sale. The owner doesn't appear to be using her. 

Is a neglected 17 year old boat really worth 107.5. I guess not to me or the marketplace. 

I guess I'm dreaming. Again. I should set my sights smaller.


----------



## LyleRussell (May 3, 2006)

I have read Don Casey's book (memorized is more like it) about Inspecting the Aging boat. I have visited her three times, looked in every locker and cubbyhole. I have no illusions about her condition. I'm planning on doing the labor intensive work myself (bottom paint and deck reseal) and getting good pro's to do the skill stuff (rod reheading, etc). 

All I have to do is get by the purchase stuff. Duh you're thinking. 

Is 97000 a good offer for a neglected 17 year old J-37c. Ie .85 of asking?


----------



## Gene T (May 23, 2006)

Sounds like too much to me. If you offer that much you will own it.


----------



## sailingdog (Mar 19, 2006)

I'd have to agree with GeneT, that offer sounds a bit high to me too... Especially if it needs a lot of work.


----------



## Sonofasonofasailor (Feb 22, 2006)

Hasn't a $97k offer already been rejected? Owner has her listed for 24 months while she sits on a mooring goiing unused? 10k seperates the offer from being accepted but the boat is 17 years old and neglected and the owner rejects at 97k offer? Something is not adding up here.


----------



## cardiacpaul (Jun 20, 2006)

*something isn't adding up*

the owner doesn't want to sell it.

they are...
a)using it as a business tax write off
b)second home tax write off
c)second mortgage tax write off
d)asset depreciation management (tax write off) 
e)he's an ass and doesn't really want to sell the boat.

(just kidding about the "ass" part)


----------



## LyleRussell (May 3, 2006)

Yes the owner has already rejected a $97k offer on a 114,000 asking. Twice, once last summer and again this spring. A yardie told me he was only out to her twice last year. He doesn't sail her, just stays aboard. The white bottom is actually green now. 

You guys are right, something isn't adding up. 114,000 is a fair price for a J-37c given that there were only 7-8 built and they don't come on the market very often. Recently a J-37c sold here in the Chessie for 95 on an asking of 114 so I think my offer on this one is reasonable. 

I am pushing this one fairly hard because it exactly fits what I want in a boat. The J-40 I asked about earlier this month was really too big and expensive for us. A J-35c or a J-110 would be a good choice too. Over the years I have looked at everything from Swan's and Hinckleys to Hunters and Catalina's. We spent a season with a timeshare on a J-110 and loved her, so that's why the interest in mid sized J's. 

I'm thinking that the owner really doesn't want to sell her unless he can find a sucker who will pay his inflated price. Ie "not seriously for sale". It's not likely a tax deduction thing because the carrying costs of a boat far exceed the money saved on taxes. 

Back to my original question re-worded. Is .85 of asking reasonable? Is 97k for a 17 year old 37' er reasonable.


----------



## PBzeer (Nov 11, 2002)

I'd always start at 20% off the asking price. If it's too low, they'll counter offer.


----------



## cardiacpaul (Jun 20, 2006)

"It's not likely a tax deduction thing because the carrying costs of a boat far exceed the money saved on taxes"

If its in a "business name" the whole shooting match is a business expense.


----------



## LyleRussell (May 3, 2006)

To be a business expense doesn't he have to have advertising painted on her or the sails? He'd have to take customers out on her once in a while and record that fact in the ships log. She's not in good enough condition to impress anyone.


----------



## LyleRussell (May 3, 2006)

So at least one person agrees that .8 is a good starting point. Of course every broker that reads this thread is now inflating their asking prices 25-30%

Did I just shoot myself in the foot? 

I guess I'll keep looking. Thanx all.


----------



## cardiacpaul (Jun 20, 2006)

If he takes a phone call related to his business there.. holds one "party" a year, has a photo of it in his office...oh there are soo many ways...

I know a boat named "sales call"...nuff said

There were only 7 or 8 made of this particular model? Depending upon your opinion, its either "distinctively unique", "a one off bast*** child" 

look, if you want the boat, buy the boat. If its perfect for what you want to do, and the price is one you can live with, pull the trigger. What does it really matter what a few people with no "dog in the hunt" say? We're an opinionated bunch, and they've been expressed. 

The boat has been for sale for two years, you could have pulled this trigger a year ago, or someone else could pull it tomorrow, or it may set for another two years. 

Have you offered to get it surveyed yet? that might tell the owner you're serious. (no, I'm not travelling that far, LOL)

You're looking for justification for the price you want to pay, fine. Make an offer you're comfortable with, not what we're comfortable with. 

Boat prices are all over the map, listing vs offer vs actual sales price. The reasons listing for sale are all over the map as well. 

The question is, what is it worth to you.


----------



## catamount (Sep 8, 2002)

Lyle, you've made your offer and it's been countered. The counter offer still isn't low enough for you. You either raise your offer (counter the counter), or change the terms of the deal some other way that makes it attractive to the owner, or you walk away and start looking for another boat. 

The boat I bought was advertised at $12,000, but was being marketed as a racing boat, a niche where it was clearly obsolete, and the owner was "walking away from sailing" -- offers were invited. I offered $8,000 sight unseen (.66 of asking), contingent on my own inspection and a survey, and I backed this offer up with a 10% deposit and signed contract. The broker said the owner wanted to meet me in the middle at $10K, but the broker also confided that the owner would probably come down to $8K "on survey issues," although that was likely as low as he would go. My response was to stick with my $8K figure, but to say that the survey would be a buy or no buy decision point, NOT the basis for further price negotiation. The owner accepted this, the surveyor thought I was getting a good deal, and I bought the boat for $8K.

Good Luck,


----------



## LyleRussell (May 3, 2006)

Thanx Catamount. Certainly food for thought. It's interesting that the owner took .66 of asking.

OK everyone let me try another tack.

*What percentage of asking did you buy you're boat*? and why?


----------



## LyleRussell (May 3, 2006)

Perhaps I should make this a fresh thread.


----------



## mstern (May 26, 2002)

*Never calculated that before*

I wound up paying 91.67% of the asking price. In reality, it was really 100%. The original deal included a dinghy that I did not need or want, so the owner knocked some money off of the price. I offered 90% of the discounted price, and he refused it, explaining that the discounted price was the absolute minimum he would take. Well, I had been looking for this particular model for some time, this particular boat was in great shape and it was reasonably priced, so I pulled the trigger. After we closed, the prior owner told me the full story behind the price: he was ambivalent about selling. He had been using the boat less and less but still wasn't sure if he wanted to sell. He and his wife agreed that if he got a certain price (the one I paid), it was worth it and they would sell; otherwise, they would keep the boat. I think I wound up being the only truly happy party in that deal.


----------



## cardiacpaul (Jun 20, 2006)

ok, just to feed your spreadsheet here are results for the sailboats I've surveyed since jan. 1 of this year (asking vs actual sales price)

Catalina 34, 78 %
Freedom 33, 61%
Catalina 27 94%
Islander 30, 79%
J/24, 69%
Valiant 40, 85%
Columbia 36, 40% 
J/105, 72%
Catalina 30, 80%
Columbia 36, 96%
Bene Oceanis 430, 71%
CSY 44, 91%
Morgan 41, 90%
Cheoy Lee Offshore 41 60%

Now, please put down your slide rule, close your excel spreadsheet, and forget your graph. You're trying to analyze a subjective value. 

Lets say I own a Frogbobber 41. It was my first boat, I lost my virginity on her. I put 20k of repairs, upgrades and fluffernutters in her. I sailed her from Seattle to Cabo singlehanded in a hurricane.

Now, my 4th wife hates the boat. She says "her or the boat" (ok, I know I'd chose the boat). So, I call Sailor Bob, the broker, and say "put her up for sale at 120k." (the boat, not the wife) knowing that the boat is worth 50k. Billy Gotbux comes along and says, "I'll give you 50k for the boat." Nope. He comes back a month later and says "I'll give you 70k for the boat." Nope. He comes back a month later and says "I'll give you 119k for the boat".. Ok, Billy Gotbux is now the proud owner of a Frogbobber41. You see, Billy Gotbux saw a Frogbobber 41 25 years ago an fell in love with the look of it. Now, his life is complete. Me? I'm putting a down payment on an Hylas, and divorcing the 
4th cow. 
everyone is happy, the broker is shaking his head while he cashes his check. 

ask vs offer vs sale price is SUBJECTIVE!

Yes, there are boat valuation guides, the operative word is GUIDE.

Take for example the CSY 44, it was priced right and just what the new owner wanted. 

One of the Columbia 36's had set idle on the dock for over 5 years, and was an estate sale thing, and the other Columbia 36 was a boat that was used almost every weekend... from the figures I gave, can you tell which was which? 
I also know of a Catalina 30 that will probably go for no more than 10 to 15% of asking price. 

Almost every one of the responses you have recieved on this topic have said the same thing. I'm seeing a trend, perhaps I'll make a graph... 
(feeling my post toasties this AM)


----------



## Gene T (May 23, 2006)

Good job cardiacpaul

Maybe this thread should be called - boat prices and the space time continuum.

Why do people sell boats? - Because they do not have the time, money or desire to keep it. Desire is the wild card here.

Why do people buy boats? - Because they either have too much money, too much time or they can't live without one.

Throw in the long term trends or cycles like recession, inflation, world stress, oil prices and ... and you will find used boat prices fluctuate wildly over the years. Generally if things are somewhat stable and you buy a boat at at reasonable price, keep it well maintained and upgraded and you will be able to sell it for a reasonable price. That price will be somewhat more than you paid for it but less than what you spent on upgrades.

I think a broker will try to list a boat for 10% more than they think it should sell for. But they will list it for whatever the seller wants and while the broker should have a better idea of what the boat is worth they are only guessing too. If the money or the idea of paying a fair price doesn't bother you then buy the boat you want. Otherwise do some more research to find other boats you might like.


----------



## pigslo (Nov 22, 2004)

Unfortunatly you have boxed yourself into this one boat and believe me the seller knows it and or does not care if he sells it! Cardiacpaul is correct in putting the slide rule down as the subjectivity of boats, sellers and buyers multiply the variables beyond applying a formula.
That being said, I would lean heavily in the direction of a premium price for a premium boat and just as heavily in the direction of RUNNING from a boat in poor condition. Generally speaking the savings on a boat in poor condition will be outstripped in a nano second to bring the boat to par. Good, honest Boat Guys are not cheap. 
I see you have two choices.
1.) If you can live with a similar boat to this one the make your best offer and be prepared to walk away. Make sur the broker knows it and mean it.
2.) If you can't live without this particular boat model and don't want to wait for a sistership to come available; then buy the the boat and be done with it.

Either way 100 years from now, no-one will know the difference.

Pigslo


----------



## LyleRussell (May 3, 2006)

Thanx CardiacPaul et al. I get the hint, prices are subjective. I think 97 is a fair price for a J-37c so I'm walking away. Again. In my extremely subjective, unskilled opinion an extra 10k is not worth it considering the money I need to spend to get her up to my standards. 

This is getting discouraging.


----------



## PBzeer (Nov 11, 2002)

You hit the nail on the head Lyle....it has to be what YOU consider a fair price. Doesn't matter what anyone else thinks is a fair price. It's YOUR money.


----------



## sailorjim99 (May 1, 2006)

*Nett Economic Worth*

This is what I go by in my business.
The worth of something(anything for sale) is what I am prepared to pay, right there and then, for something that I want or need...
The difference between WANT and NEED is a seperate story.
I have put in 30% of asking price for cars and I get them.
They want to sell and I am buying NOW>>>

There are a lot of boats for sale. Pick the design or attritubutes you NEED or WANT and go for it.


----------



## LyleRussell (May 3, 2006)

OK guys I have walked on this one. If anyone sees a J-40, 37C, 35C, J-110 for sale feel free to email me.


----------



## CBinRI (May 17, 2004)

Having now gone through the purchasing process a few times, I was surprised to learn that the offers as a percemtage of aslkng prices seem to be much higher with boats than they are for buying a house. While one would think nothing of making a lowball offer on a house, it seems that peole are surprised when you offer more than a few thousand less than the asking price on a boat. Maybe I'm wrong but this is my general impression.


----------



## captnnero (Jul 19, 2006)

*Strategy*

I'm a boat broker who just read through this thread. It is a fascinating thread. I do appreciate the terms that the surveyor CardiacPaul recently put yacht purchase in.

From a broad perspective, the current value of a vessel is really a function of it's current condition and the current market conditions which can include regional effects. The extreme case of regional effects is when looking at prices overseas which will swing dramatically with exchange rates. Buyers need to be careful about not paying over market value or they will likely be making up the difference someday upon resale. If that resale is within a few years, paying over market will be more of an issue since there won't be much depreciation to blur the issue.

For strategy I recommend first focusing on getting recent comparable sold pricing info from your broker, including any regional effects. Then make an assessment of the condition of the vessel in question. Your offer should be contingent on a survey and sea trial. Your broker's comps can also give you input on spreads between asking and selling prices for the subject vessel as input to your offers. Some high quality well kept vessels tend to sell closer to the asking price. Your final pre-survey offer should reflect both comps and your pre-survey assessment so that you can end up at the perceived value. Finally, hire a good, reasonable surveyor and you can always renegotiate based on any nasty surprises in the survey.

Hopefully your seller went through a similar process (without survey) to determine the asking price, although the asking price will likely include some negotiating room (5-15%). If the buyer and seller don't negotiate based on the yacht condition and market conditions, there will be problems. Individual motivations also can drive the deal from either or both sides. The important thing about your own motivation is to use it to solve problems that come up in the deal, instead of getting distracted by details unrelated to your original motivation for the purchase or sale project. For example your original motivation is going to be about acquiring a particular kind of yacht at a reasonable price, not getting the best of a seller.

For some less popular vessels getting comparables can be challenging, but it can be done.


----------



## LyleRussell (May 3, 2006)

CaptnNero

Thanx for weighing in. I agree that it's important to get the boat for a fair price. One cannot get insurance coverage for an overpriced boat. Marine financing is based on a "blue book" value too. If I over-offer, I end up paying the overage. I also agree that beating down a seller just to glorify one's ego is pointless too. Also I agree that a well cared for boat is more valuable than one that needs a lot of unknown work. 

The boat I am talking about above, the J/37c, is cosmetically excellent, but there are lots of little things that indicate that the current owner isn't real knowledgeable. ie Corrosion at the foot of the mast, oil in the water in the bilge, a loran, old sails, a seriously rough bottom, rod rig never reheaded or replaced, iffy engine mounts, etc. So top dollar is out of the question. Yet what's a good price? I have researched the two J-37c's sold in the past year? One is below my offer, the other is above. 

I see you are allowing 5-15% negotiating room. On 114,000 a 97,000 offer is in the 15% range so why isn't it being accepted. 

All this said I have given up on the boat and I am looking for another. So this discussion is purely academic.


----------



## sailingdog (Mar 19, 2006)

Again, as has been mentioned, the owner may have reasons for not wanting to sell it...but may have put it on the market in spite of those reasons.

One example a previous posting used was he tells his wife he's gonna sell the boat, but doesn't really want too..so he overprices it, and is willing to sell it if he gets a fat premium over what it is worth, but can tell his wife, "Honey, I'm trying to sell it, but no one is interested in it."

_The current owner could also be clueless enough to think that the boat is far more valuable than it is. _ You've said that the current owner doesn't appear to be very knowledgeable. * A little knowledge can be a very dangerous thing.*


----------



## captnnero (Jul 19, 2006)

*Oil in the bilge ?*

I'm curious as to that oil in the water in the bilge. Did you take a close look and try to sniff it ? Often oil in the bilge is actually fuel oil indicating a shot fuel tank. That would be typical for that era vessel. Fuel oil can also be leaking from loose or cracked fuel hoses. Another typical scenario is a leaky raw water pump seal. I've even heard of an overpropped engine coking the exhaust, increasing back pressure and then causing non-specific oil leaks as the engine seals are not designed for the high back pressure.

Obviously the oily bilge issue would have had to be pursued agressively on this one if you had stayed in the game.

Happy hunting!



LyleRussell said:


> ...oil in the water in the bilge...


----------



## LyleRussell (May 3, 2006)

Don't want to get into a discussion of surveying a boat here. Perhaps a subject of a later thread. Perhaps too big a subject for a single thread. 

Having found the oil and other things what does one offer? It could need an engine seals, rebuild, a new tank, or just be a dumb ass changing the oil. I budgeted to have an engine mech check over the engine before purchase. But how do I come up with an offer? 

If this is starting to sound like a whine. Sorry folks.


----------



## captnnero (Jul 19, 2006)

*Seller's problem*

Ok, so in the survey you use your surveyor and if its complicated use subject matter professionals to bracket the cost of the fix. The surveyor often will identify a problem but recommend that a mechanic look into it further. If it's expensive/complicated, get an estimate that you are comfortable with. It's the seller's problem. Then you need to negotiate with the seller to fix it at his cost or at your cost. Obviously at your cost it should come off of the contracted price. If the seller fixes it or has it fixed, make sure that it is a proper repair or negotiate a price reduction. You may need your expert to survey the fix.

Manuevering thru such matters is one of the ways the broker earns the commission among many other things, such as showing the boat and/or not showing the boat (no-shows), and just plain answering the phone when someone calls about the boat. The broker only gets paid when the contract makes it thru closing, so he/she is motivated to make it happen for everybody. Sorry, I digress.

Back to the subject. With a significant defect the buyer has an out from the survey. If after investigation the defect is just too scary the buyer can back out. If nothing else, the seller's full motivation will come to light in a hurry at that point.



LyleRussell said:


> Don't want to get into a discussion of surveying a boat here. Perhaps a subject of a later thread. Perhaps too big a subject for a single thread.
> 
> Having found the oil and other things what does one offer? It could need an engine seals, rebuild, a new tank, or just be a dumb ass changing the oil. I budgeted to have an engine mech check over the engine before purchase. But how do I come up with an offer?
> 
> If this is starting to sound like a whine. Sorry folks.


----------



## Muckabout (Jan 17, 2002)

Then we get into the Brokers their input/use and problems. I tried to buy several (3) sailboats in Norfolk VA. My experience was that some brokers are ready to list, slow to respond. Why a broker would put a sign on the boat with their name and cell phone number take the message on their voice mail and not respond to the interest leaves me puzzeled. I also found that they don't know their product or their customers very well. I have had them tell me they didn't know anything about sailboats they were power boaters, okay so one can ask questions, learn right? I had one that didn't know how to start the motor he just kept messing around with the switches until the engine cranked, when it filled the boat with fumes I had to tell him to shut it down ! Also the sellers are unrealistic, they leave trash and dirt, broken equipment, don't leave information easily available to brokers or buyers, can't be reached and get huffy when offers are low. I can't imagine selling a house the same way it wouldn't sell, neither does their boats. Each day the boat sits there untended, is costing them money and lowering its market price. Unless some unknowing person with a fat checkbook shows up, an unlikely event, as I have seen boats sit for a year and the sign is faded out, another issue of mine signs on boats and the phone number is long gone. Actually when I see that I keep on looking eles where.
Okay, Okay my ***** session is at an end, just leave it that buying a boat or selling a boat can be a pain in the patoot for all parties involved.


----------



## PBzeer (Nov 11, 2002)

Lyle....remember, the inital offering price is just that....inital. That should reflect what you think the boat is worth to you, basically, as is. Once survey, additional component surevys (if needed) and a sea trial are completed, you sit down with the owner/broker and determine a final price, based on the findings. Don't let yourself get discouraged. Buying a boat is rarely easy, and just maybe a deal that doesn't go through is a good deal, in the end.


----------



## Johnrb (Sep 21, 2002)

captnnero:

Your input is much appreciated. Thanks.


----------



## Bollardyachts (May 17, 2006)

Hi Lyle,
I'm new to the site and curious about the various topics being discussed, and thought I would reply to this posting of yours in hopes of adding some professional insight to help you better analyze the market.
I've been in yacht sales for many years, own my own firm, and was a professional yacht captain prior. Anyway, in my opinion, your approach to determining a boats value and your offering price is flawed.
It is impossible to do this and have any stong negotiating position because every boat is different and every sellers situation is different. To simply take a price position based on a general formula tied to the asking price alone leaves out too many potential import variables such as sellers motivation and his basis for the asking price.
Let's say seller A and seller B are offering for sale the identical model boat. Both are equipped the same and both are in bristol condition. Both are in the same area and have been on the market the same amount of time. Everything is equal. Seller A sincerely desires to sell his boat and has priced is accordingly at say $100,000. He will not budge. Seller B is testing the waters and is asking $125,000. Because this boat is priced higher does not make it a better boat and visa versa. The fact seller A won't budge does not mean that if you pay his full asking price that you're not getting a fair deal.
Basically what I'm saying is that it is more important to look at each individual boat and the surrounding circumstances to determine it's value and apporpriate offer. To generalize and or try to apply any sort of formula may lead to an expensive error. Should you have offered .95 of seller B's price as your broker suggested without knowing about seller A's offering would have left you paying too much.
Sorry to ramble. Just trying to help.


----------



## LyleRussell (May 3, 2006)

The broker guy, CaptNero has an idea, make the owner a 95% offer contingent upon a survey, then beat him down when the survey shows it needs things. Engine -$6,000, Mast -$3000, Deck dried & resealed, -2000, Rudder bearings -5000, bottom job -$10,000. This technique might even get the price well below what I have already offered!!

The truth is, I don't like doing business that way. I believe that one should deal with folks straight up. 

On Brokers, I think I am going to start a thread " Has you're broker labeled you a dreamer - What to do about it" So far I haven't had much luck finding one for the long haul. 

Having said that, I have found another good sounding J-40. I am awaiting pictures and a spec sheet. If she still sounds good then a road trip will be in order. Whooaahh. Yeah I know what I said about J-40's being too big and expensive. Screwit, I have the bug very bad.


----------



## LyleRussell (May 3, 2006)

Bollard

OK Lets say for the moment I accept your premise that there are too many variables to apply a percentage. 

Then where do I start at, when making an offer? Give me a hint. 

Don't say to me that asking the broker is a solution. One, I haven't found one yet that I trust. I'm quite sure that they're out there but I haven't found one. Second a broker's motivation is to optimize his commission which is opposed to my goals. Again a broker needs to earn a living just like computer programmers do. I have no problem paying a fair comission. But note the word fair. 

Repeating my whine. Where do I start at, when making an offer?


----------



## LyleRussell (May 3, 2006)

Bollard I apologize for beating on you on your very first post. Feel free to beat on me. I have a good flame proof suit.

Also to everyone who has contributed I want to express my appreciation. I certainly have a better idea how to make an offer than I did before. I hope others have too.


----------



## TSOJOURNER (Dec 16, 1999)

There are no formulas. Your offer needs to be an educated gut feeling, based on all the circumstances surrounding the boat. 

A couple of years ago we were looking for another boat, using a broker. We had looked at many over several months, then he found one in Anacortes, WA, an hour south of the border. It was an estate sale that had been on the market for eleven months without an offer. Apparently the initial asking price was so high that nobody had even ventured an offer. The estate needed settlement shortly, and the asking price had just been lowered, so through our broker, we tendered a lowball offer that was about 60% of the initial ask and about 75% of the newly adjusted one.

The next morning, we received a fax accepting the offer, with the only amendment being that the sale did not include the dinghy. We quickly accepted the amended document, since we had made the offer subject to a visual inspection, a sea trial and a full survey. And to assist with the foreign exchange, the United States economy was foundering and the greenback was in near freefall. The Canadian dollar was 33% stronger in the US than it had been when we started our boat hunt.

By waiting and being patient, we saved nearly $200,000, which was more than enough to buy a dinghy.


----------



## TSOJOURNER (Dec 16, 1999)

The deal is - if you've only selected one boat as a prospect, I guess you should plan on paying what the seller asks.

The nature of bargaining is that you have other options, and you're going to make a decision within a set timeframe. Without other options, you're victim to the sellers asking price.

Get back on the web, find other boats (j-boats preferably) and do some negotiating.

Mike


----------



## Gene T (May 23, 2006)

LyleRussell said:


> Bollard
> 
> OK Lets say for the moment I accept your premise that there are too many variables to apply a percentage.
> 
> ...


Interesting that you want someone else to tell you what you should offer for a boat. We haven't seen it and it doesn't mean the same thing to us as it does to you! Personally I think the asking price is almost irrelevant. The real question is "what is the boat worth to you?" How will you feel if you pay a certain amount? Screwed, fair price, or a deal. How you choose to feel about it is the real question. So you have to figure out what the boat is worth to you, and you alone. I do depend on the broker for a indication of the urgency of sale and firmness of the price and comps.

So, where to start? Offer less than you are willing to pay. Then you can negotiate up to your price. How do you know what you're willing to pay? Research! Find comps, add or subtract value for the equipment and condition. Add an urgency factor, in the end it's only money. It won't matter in a 100 years anyway.


----------



## PBzeer (Nov 11, 2002)

LyleRussell said:


> The truth is, I don't like doing business that way. I believe that one should deal with folks straight up.


The problem is, is that you can't really do it any other way. All boats for sale have issues, and some even the owner may not realize. So you have to start the process, and that starts with an offering price. This isn't a used car you're buying, it's an EXPENSIVE boat. And they can be VERY expensive to fix. So if you don't pay a good price to start with, you go from a hole to throw money in, to a Grand Canyon to throw money in.

But, remember, only you can determine what any boat is worth to you. If you'd rather pay more, so you don't have to dicker over price, that's your call.


----------



## Dewey Benson (Jun 28, 2006)

I agree with PBeezer. You need to deal with the situation as you find it.

I always made offers in a price range that I thought was slightly less than fair for the condition of the vessel AS I COULD REASONABLY DETERMINE IT.

Inform your reluctant broker that your offer was just that, an offer, and request that he get a counter. Allow the seller to drag you up a bit (saving him face and getting him comfortable) but by no means bringing you to an uncomfortable point. Feel free if circumstances permit to counter more than once.

Asking for allowances after survey is not only an acceptable practice but a reasonable one. Those allowances do not generally include maintenence items (such as bottom paint, stiff seacocks, etc. Many times things turn up on survey that the seller is unaware of, and that he literally will be obligated to disclose after this point. He may be unable to sell the vessel without correcting the matter. So further negotiations are not only nessesary but of an advantage to both the buyer and sellar. (he does want to sell the boat you know).

Allowances can go in any direction as circumstances will dictate. You might want to say; Seller, take care of this and that And I will cover thus and so.
On my last personal vessel after survey, I listed the apprx cost and detail of each survey item and told the seller; I will take care of all the items except for one and for that I want you to give me an allowance of half the yard estimate. Do what you are comfortable with but remember: you arent doing yourself or the seller any favors by not trying to buy the boat.

Dewey


----------



## captnnero (Jul 19, 2006)

*My own words on the purchase process*

Dear Lyle,

I feel that I should clarify somewhat since you seem to be left with a different understanding than I intended in my postings and you are quoting me now. My advice was not to offer 95%, rather, it was to determine the market value before survey and then structure your offer process such that you end up at that market value. Typically that market value will end up at 5-15% less than the seller's asking price. I'll explain why that happens next.

Now the market value should be derived from recent comparable sales, the subject vessel condition, and market conditions such as low supply of the vessel in question. The market value does not necessarily have anything to do with the seller's asking price. Fortunately, sellers working with professional brokers tend to have a reasonable asking price with some negotiating room and that is why the contracted sale price usually ends up at 5-15% less than the seller's asking price. If the buyer is more motivated than the seller then you may even see a full price offer. There are other reasons that can cause that too. On the other hand a seller that is uninformed in some way may be expecting twice a much as a boat is obviously worth to a professional broker or surveyor.

While there are general trends in these matters, you cannot easily apply them to a particular transaction since there are so many variables. One needs to take in and judge all the variables when making an offer if one wants to end up at market value. A professional broker can be of great assistance with useful information and perspective in that process. When market value doesn't matter to someone, they just go for it !

On the matter of broker commissions, there are some other things that need to be considered other than just a higher contract price and commission. Many people are not aware that a successful broker builds up a strong business with repeat customers. People tend to buy a boat and then trade up as their boating skill, resources, and needs increase over time. Then towards the far end of a long boating career, those who stay in it do an inverse process as physical capabilities decrease and trade down to smaller, more manageable vessels. This repeat business will be severely at risk once a buyer determines that his last broker encouraged him to "just give the seller what he wants" and therefor pay over market value. The repeat business includes not only the next purchase, but selling the last boat too. That is too much future business to put at risk merely for what may average to 10% more commission on the current deal.

Another downward pressure on contracted prices is that these days most boats are purchased with loans. The loan process requires insurance. The insurance will not cover over market value, so the loan company won't loan as much as the buyer needs. To finish the deal the buyer has to dig into his pocket for more cash, fully knowing that he's paying too much. Fat chance and a risky position to put your buyer in. In the case of a full cash deal, the buyer will still need insurance to dock in most marinas (hey, it's the litigious USA) and again the insurance company will only insure up to market value so the buyer quickly finds out that he has overpaid for the boat.

Finally, what I said about a contract contingent survey and sea trial is only to ask for price concessions or repairs based on serious problems that come up. If serious problems don't occur then everyone should be satisfied with the contracted price. The kinds of defects that you listed there severely affect the market value of the vessel. Does anyone out there think it is not straight up to contract based on market value and ask for concessions or repairs based on serious defects that impact market value ?

Lyle, I can tell by the last line of your post that you are definitely motivated. Good luck on landing on a J-40 deck.



LyleRussell said:


> The broker guy, CaptNero has an idea, make the owner a 95% offer contingent upon a survey, then beat him down when the survey shows it needs things. Engine -$6,000, Mast -$3000, Deck dried & resealed, -2000, Rudder bearings -5000, bottom job -$10,000. This technique might even get the price well below what I have already offered!!
> 
> The truth is, I don't like doing business that way. I believe that one should deal with folks straight up.
> 
> ...


----------



## captnnero (Jul 19, 2006)

*You'll know when the ball is in your court*

Gene, I like what you said about what it is worth to you, the individual. One can do a bunch of figuring and form an opinion on value and strategy ahead of time. Then in the midst of the offer/counteroffer process the ball will end up in your court and you will finally know what the boat is worth to you, regardless of what you decided ahead of time. Only when the game is afoot will you really know.

The same is true for the seller. When the seller is considering the current offer along with any previous offer and contract history he will know how much the boat is really worth to him.

In the event that your gut leads you to paying more than market value, the problem comes in particularly if the boat needs to be sold in a year or two. Unless there is another buyer as over motivated as you were originally, you will be stuck with lowering your price more and basically making up the difference.



Gene T said:


> Interesting that you want someone else to tell you what you should offer for a boat. We haven't seen it and it doesn't mean the same thing to us as it does to you! Personally I think the asking price is almost irrelevant. The real question is "what is the boat worth to you?" How will you feel if you pay a certain amount? Screwed, fair price, or a deal. How you choose to feel about it is the real question. So you have to figure out what the boat is worth to you, and you alone. I do depend on the broker for a indication of the urgency of sale and firmness of the price and comps.
> 
> So, where to start? Offer less than you are willing to pay. Then you can negotiate up to your price. How do you know what you're willing to pay? Research! Find comps, add or subtract value for the equipment and condition. Add an urgency factor, in the end it's only money. It won't matter in a 100 years anyway.


----------



## LyleRussell (May 3, 2006)

Thanx everyone for an excellent education.


----------

