Just sold a boat for quite a bit after several painful months and
bought a new used one at a good price. Here's the scoop, boats
devalue by average around 5% per year. Think about it, why on earth
would you pay more for a used boat than a new one? No one would, and
no one does.

First, narrow down exactly what you want and why. That will help
immeasurably. People don't mind showing off their boats, but they
don't like "potential buyers" showing up who can't decide between a
racing catamaran and a trawler (not making that one up unfortunately).

Then go to a place like www.yachtworld.com and look at the prices, that
will give you a good idea of the market and get a broker to give you
prices from a place like sold.com and find out what people are actually
spending for their boats.

Sellers assume someone will buy their boat at around 80 percent of the
asking price, regardless really of the asking price. They start with
their ideal world price, realize that people aren't buying and that
boat payments are starting to add up, and get more and more desperate.


Boat sellers want to give themselves room to negotiate down, and you
want to give yourself room to negotiate up.

Last, the boat market tends to follow the real estate market. The
real estate bubble is allowing people to take out ridiculously large
home equity loans on appreciated houses and spend lots for new boats.
When that bubble bursts, prices will fall accordingly in the used
market, and some new boat manufacturers will probably be found sunk.

So there you go, research your boat by seeing the selling price and the
asking price, god forbid you try to get it without a boat surveyor, you
absolutely need one. Call several brokers and let them know you are
looking for a particular model and they may help you find someone with
a good deal, but as a condition for having them keep an eye out for
you, ask for the price lists from their sources for sold boats so you
can have a realistic eye for value and price.

Last, be up front, make sure you have your finances lined up and ready
to go and keep your appointments to see boats. Nothing ****es people
off more then "buyers" taking up their time when they have no ability
to actually buy the boat and finally end up leaving you standing on a
boat launch waiting for them to show up.

Good luck, you are swimming with sharks,

Doug

Hi Doug,

Thanks for your helpful comments for a newbie. Knowing that sellers
price their boats at about 20% above their real acceptable sale price
helps me better understand which boat ads to respond to, and at what
level to make offer at.

If they have vectored in a negotiating margin, by advertising at a
slightly inflated price, logic would have a buyer vector in his own
negotiating margin at a slightly deflated price, say 20% below real
market price. So a smart first offer might be at around 60 to 65% of
the seller's asking price. That doesn't mean that you won't pay more,
but it could later on in the negotiation help them see that you are
making a financial effort to meet them midway at the "real" market
price, in other words their advertised price minus approximately 20%.

Unless they've waited ages without any buyers interested in their boat,
and they're hit hard by payments and expenses, it stands to reason that
extremely low offers won't go anywhere but in the wastebin. Aside from
possibly insulting the seller, it also can discredit the buyer even if
they come back with a higher offer: "Look at what this joker is
offering this time!" instead of "Here's a buyer who isn't making high
enough an offer, let's counter offer!" Keeping channels open is
probably useful, as price expectations may change over time, and if
looking to find a good boat value you may be looking around for quite a
while.

Your suggestion that most sellers, and/or brokers, might price boats
for sale at about 20% above what they think they are worth is very
reassuring indeed. I was alarmed at a twofold price spread between the
Used Boat Price Guides, in print or online, and advertised prices for
same model boats. I guess this means that maybe the guidebooks are off
- as in lower than current high market prices due to home equity loans
boosting the boat market - but also that advertised prices aren't an
exact reflection of real sales prices for boats either.

I have no problem swimming with sharks, as long as I see them coming
and can clobber them on the nose (only sensitive spot within our short
reach). I imagine that the boat market bubble has gotten sharks
swarming at the smell of blood - your hard-earned ca$h - but there are
sure to be honest brokers out there, plus lots of for sale by owner
boats to be found too.

With the Fed planning on raising long-term interest rates, plus
economists predicting a bursting of the Real-Estate bubble soon
starting in California where it has stretched much like the dot.com
bubble, we are probably at a hinging time between high used boat prices
and rapidly deflating used boat prices. This would IMHO be an
interesting time to market one's used boat at a reasonable price
somewhat below most people's asking prices, before it becomes next to
impossible to sell one's boat. Otherwise, hope you already own a boat
which meets your needs and budget, as you will probably be keeping it
for some years to come unless you fancy (I actually do sometimes)
making someone's day by selling at a giveaway price.

As a boat buyer, I am myself toying with the idea of delaying my
purchase by a year or two, not to make a deal off somebody else's back,
but to buy a used boat at a price which I truly believe corresponds to
the unit, its equipment, and its condition. Today, I find that the For
Sale Ads show prices which are well above that amount. And it is not
because I am cheap. I sometimes refuse free giveaways and even price
reductions offered by sellers when I think that they are already giving
me a good deal.

Banks and Insurers both think that today's boats are overpriced. Often
they will even refuse unsecured loans on this basis, realizing that if
they lend more than the boat is worth and then have to impound the
boat, they'll get stuck with the market shift full-fledged in their
ledgers, that would not be an acceptable prudential consideration for
any financial institution. So why should it be for Joe 6-pack buying
his first boat? Not to blame sellers or brokers for this state of
affairs. They are just trying to stick to what appear to be the actual
prices that boats are selling for.

I guess that those really to blame are unreasonable buyers, who don't
think too far down the road, and get into hock deeper than sensible for
boats that may not be worth all they are paying. Today's new boat
prices are an extremely clear example of that. Anyone doing a cost
accounting analysis of current boat prices will have a darn hard time
making any sense of current pricing sheets of boat builders. And unless
they are prepared to back down fast in their pricing policy, as you say
quite logically: "some new boat manufacturers will probably be found
sunk."

So as boat buyers, we have a number of options.

- be in a hurry to buy a boat NOW and pay whatever we have to in order
to get the one we want fast: expect to overpay, if not by today's high
boat price standards, at least later on when you look at where you
stand several years down the road

- take your time finding the right boat at the right price: luck may
intervene, you won't get as good a price as waiting for the market to
take a downturn, but you still get a fair shake plus get to enjoy the
boat sooner

- wait for a market downturn: here you main worry will be to treat the
sellers decently, not taking advantage of their vulnerable situation by
pitting them against one another in a disrespectful and abusive
exercise of your purchasing power

I'm planning on taking the middle road here, taking my time to find a
reasonable seller who is willing to part with a decent boat for a
decent price. I didn't win the Lottery, and if the seller bought it
themselves at too high a price, I will be compassionate but cannot take
it upon myself to finance their mistakes: it may well be a crying
shame, but I shouldn't be the one doing the crying.

Cheers,

Rich