Richardo wondered:

The boats for sale at brokers - in the brand and model I am looking to
purchase - are listed at around DOUBLE their official pricing on the
price rating lists.


=A4 Is this due to a Poker style "bluff" of the sellers trying to push
people to make higher offers?


=A4 Is it due to the brokers trying to swindle unexpected first time
buyers who don't know the market?

********************************

Used boat pricing works like this:

Unless you're looking at a little trailer boat that the dealer accepted
on trade, the used boats in a broker's inventory are not owned by the
broker. They are consigned to the broker by the owners of the boats.

The owners of the boats set the asking prices, not the consignees. The
broker is expected to spend a great deal of time and no small amount of
advertising money in securing a buyer for the consigned vessels. Under
the typical arrangement, the broker is out of pocket for all expenses
and will not be reimbursed unless he or she finds a buyer for the boat
and earns a commission.
For this reason, most brokers resist listing boats that are
ridiculously overpriced. At the end of the listing contract period, the
owner can simply say "thanks, too bad you couldn't sell my $90,000 boat
for $200,000" and walk away with no further obligation to the broker.

Although the sellers, not the brokers, set the asking prices most
sellers have included a good bit of "negotiating" room in the asking
price- fully expecting that a buyer will come along and hope to pay
something less than full sticker. (Imagine that!)
How much room depends on a lot of factors, but there is usually a lot
more room in the initial price offered when a boat first comes to
market than there will be several months later after the disappointed
seller discovers that dime-a-dozen suckers aren't in season right now
and the broker has finally influenced the seller to face reality with
regard to likely sale price.

Throw the price guidebook away. Boat prices are not only seasonal,
they're regional. Boats that sell well and for high prices in Florida
can go begging in the Pacific NW, and the reverse is often true as
well.

Your goal should not be to buy a boat at some arbitrary price printed
in a guidebook, but to buy a boat at or below its current market value
in your region.

Here's a procedural tip for you: Find the boat you want and make an
offer. No matter what amount you offer, the broker will hope to
influence you to amend it to a higher number before he takes your offer
to the seller.
(Yes, in nearly all states the broker is required to present your
*written* offer (with deposit) to the seller. The broker is not
required to present "wouldja takes?"
without earnest money. Cash talks, and we all know what walks.)

Before caving in to the broker's demand for a higher offer, ordinarily
based on a proclamation that your offer is *way below* what similar
boats are selling for in your area, you can ask the broker for a little
substantiation. Have the broker use his Boatwizard password on the
yachtwold website and pull up the sold boat database, for your area,
showing the listing and selling prices of similar boats during the last
few months. If the book is way off and the market is truly higher
(often the case, especially on boats that are the most suitable for use
in a given location), the report will confirm that. The seller should
not be expected to sell you his 34' Pileknocker for $110,000 simply
because the National Automobile Dealers Association says he should, if
everybody else selling the same model in your area recently has been
able to command $160,000.

Richardo also asked:

Basically, I'd like to make offers on boats which correspond to the
official pricing on professional lists. Do Brokers have an obligation
to communicate my offers to sellers? Can I write a seller a letter,
explaining my offer, and will it reach the seller? Or will the Broker
just put it in the shredder? Do I need to send it notarized and by
registered mail, just to make sure it reaches the seller?


*************

Don't plan on the broker disclosing the name and address of his
consignor before you have inked a finalized deal.

You wouldn't do this, of course, but there are buyers who will do
*anything* to get the seller's name and address from the broker simply
so they can contact the seller and try to engineer some "work around"
to cut the broker out of the deal, (assuming that the seller will then
cut the price by at least some portion of the commission that the
broker actually already earned by finding him a buyer for his boat).

Sending a letter hoping to "educate" the seller about the value of the
boat he is trying to sell is probably going to tick the seller off
about as badly as anything you could do, save one. Try sending a
letter, prior to survey, outlining all the deficiencies from which you
believe his boat is suffering. That would be worse. Telling the seller,
"your boat is overpriced, a piece of crap, or both" won't do much to
inspire the seller to work with you to arrive at a price that is
affordable to you as well as fair to him.

Most of the time, that's about as well as you will really do: A price
that is affordable to you, as well as fair to the seller. It isn't
realistic to expect to buy a decent boat far, far, below the asking
prices of any similar boat in your region simply because the NADA book
says you should.

One line that frustrated brokers have been known to use when extremely
aggressive buyers want to start with an unrealistic book price and then
dicker downward from there is "See if the guy who wrote the book has a
boat for sale at that price."

A final safety net, price wise. Even if you are planning to pay cash
for the boat, apply for a loan. If you are really nervous about paying
too much, apply for a loan at a couple of competing banks, credit
unions, or marine mortgage lenders. (You can always change your mind at
the last minute and pay cash instead).
Lenders are usually very, very, cautious about boat loans. Boats are
the first thing to be surrendered when the economy goes into a soft
cycle and unemployment ticks upward, so savvy lenders will want to be
sure that your boat isn't financed for a lot more than it could be
resold for, maybe in a soft market. (And, of course, so will you).
Marine mortage lenders, particularly, will have a front row view of
local sales price trends.

Some credit unions, etc, simply go by the NADA book.
When I was a broker, I had an amusing conversation with a credit union
loan officer once. He said, "We can't do the deal, the boat is way
overpriced."

"Why would you say that? We sold two almost identical boats in the last
several months, one at this price and the other just a little bit
more."

"Our underwriting standards require us to use the NADA book if we're
going to do a boat loan."

"How many boat loans do you do?"

"We actually haven't done a boat loan for many, many, months. Every
boat on the market is pretty well overpriced right now."

Final observation: If every boat price in the area is way over your
guidebook numbers, please believe there is not a vast conspiracy
working against you and it's not that "the rest of the army is out of
step." :-)

Good luck, hope you find the boat of your dreams at a fair, perhaps
even advantageous, and affordable price.

Hi Gould,

I much appreciate your advice, I realize from the groups that you're a
pro and have even worn the white shoes. grin

But I'm no angry husband shooting out of the bedroom window, just a
bloke looking to sink his loose change into a floating mistress, less
trouble than a walking one - even if it sinks!

I guess all the guidebooks and NADA and BUC etc. are way off in pricing
the boat I want (used to want?) because I've only seen one that did
actually sell at the guidebook price. (Got ready to arrange survey to
find another guy snatch it up faster than me.) Banks which think that
"every boat on the market is pretty well overpriced right now" may not
have it all figured wrong. Consumers have been known to get carried
away in buying stuff for far more than it is worth rationally. Modern
Marketing is chock full of concepts and techniques to get people to
attribute rational value to things for irrational reasons. You can
argue that things are worth what you can get some people to pay -
because the market sets the prices. This is why an egg is worth a
million dollars to a banker in a famine. This is why a glass of water
is worth a billion dollars to Bill Gates in the middle of the Sahara.
But is that a reason why an egg or a glass of water are really worth
that much?

A given boat might be worth more to somebody else in some other
situation. But its "real value" is what it is worth to you. The same
holds true for Dot Com Stocks. Were they really worth as much as what
some people paid for them? Ask those who lost their entire estates in
the Stock Market bubble, and just maybe, ask a few who bought boats
without being properly informed and prudent. I may not understand the
subtleties of the used boat market, but to me, a ten year old boat is
worth LESS than it cost ten years ago when new. Banks need to have
foresight to avoid defaulting loans. Thus they also need hindsight and
cannot allow irrational pricing to guide what they will underwrite.

If these boats are really worth close to what their advertised prices
are, I'm glad to hear that the used boat market isn't as rough as folks
have claimed. I didn't realize that 10 year old 30 foot cruisers sold
between $50k and $100k like hotcakes. The price guidebooks all put
average retail at around $30k, so I guess I should either throw away
the guidebooks or forget about buying a boat. 10,000 lbs of 10 year old
plastic at $10 per pound, maybe I should have invested in plastic
futures? Maybe it appreciates with age like old wines, getting ooohs
and aaahs at every gelcoat crack like antiques with wormholes.

Please don't find my irony disrespectful. When you say "Throw the price
guidebook away." you must be sensitive to the fact that we know you
used to be a broker. It risks smacking of selfserving logic, even if
that is the furthest thing from your intentions and you no longer are
active at that job.

Broker has POWER. They know the market like nobody else. They have
access to all the databases. They have informal networks. They've heard
all the stories from colleagues on how all these pigeons come along for
an expensive plucking. There's a sucker born every day, and most of
them eventually want to buy a boat. They may be honest and altruistic,
wishing a happy life to buyers and sellers alike. But then again they
may not. And with the power advantage they have over buyers, we're in
deep trouble unless prepared for the worst, even if hoping for the
best.

Regardless of the worth of Price Guidebooks - throw away or not -
someone here isn't doing their job right, either the pricing
authorities, or the brokers. Why do banks and insurance companies use
them? Because they are worthless and should be thrown away? Because
they only know loans and not boats? Or because they obey principles of
logic in price determination, and not the going rate for a sucker? A
twofold difference is a 100% error. Somebody is 100% wrong, unless each
is 50% blind.

How can the Owners of the boats be the ones who set the asking price?
This may be true legally, but in practice, who would have the gumption
to try to sell their boat for more than double book value? Obviously
they are ill advised by overly greedy brokers who, by polluting the
market by overpriced units, are maybe a big part of the used boat
market's sales difficulties. Who else tells them what price is the
right price? Nobody on commission will be happy to sell for a lower
profit a boat that they can hope to hussle some innocent buyer with
using the emotional appeal of a boat as bait. The sellers are thus
hostage to an unethical brokerage situation. Clearly, the system is
broken.

I don't mean to give you a hard time, especially as you are a valued
contributor to these groups and have been candid on many occasions
proving your good faith. But a newbie buyer is bound to see things from
a different standpoint than a seasoned seller. Maybe, just maybe,
there's some sense in the counterpoint too.

If having the market "controlled" by brokers isn't an ideal world, the
problem remaining is that in a market dominated by brokers, those
sellers who would be willing to sell at "normal" rational used boat
prices take the easy road and often choose sell through professionals.
Brokers then talk up their boat and flatter their egos and appeal to
human greed, some say it is just to get the listing, but maybe brokers
also dream of manipulating buyers into paying more? Those who are
willing to take the hard path of selling their boat themselves without
a broker are either very rarely doing so because they have become wise
and wary of brokers. It is likely that they are folks who are even more
greedy than brokers, and think the broker's overestimation of their
boat is low (after all it has been enobled by their ownership, hasn't
it?). They will believe that they can sucker you better than a pro, and
will want more $ plus the broker's fee to boot. Not exactly ideal
sellers to deal with.

To resume I'm not about to make an offer on a boat at close to its
ancient new price, especially when its best years are gone and NOW is
when the problems are pushing their owners to unload them. They have
roughly 400 hours on gas engines, and enough wear that the cosmetics
will soon show that their better days are over. When I buy something
new, I expect to sell it for something less down the road a decade
later of wear and tear.

Just possibly there is a MicroMarket for 30 foot pocket cruisers due to
recent gas price hikes - are folks downsizing their boats trying to cut
fuel costs? Most brokers seem to say that those bailing out of their
financial shipwrecks are selling to move up to a bigger boat. Even a
lame newbie like me should know better!

For those of us nonetheless willing to endure a "beating" in terms of
purchase costs, maintenance costs, marina costs, upgrade costs, repair
costs, and unexpected costs, as well as those I've forgotten, we must
enter the (m)arena like Gladiators - sizing up the odds of surviving
the encounter. And fom what I've seen so far, unless some of you folks
in the know give me some failproof pointers, I'm dead meat looking for
a barbecue grill.

Telling me that dealer list prices are correct, and that one can make
offers between 5 and 10% under - and calling such offers LOW - makes me
wonder if somebody has been eating strange brownies? Broker used boat
prices are obviously over inflated, well beyond what anyone might
believe is ordinary pricing with a small margin of built-in negotiating
elbow room. Either brokers have a tougher job than I thought with
sellers needing delirious cajoling over months of weening until they
realize they can't actually make a profit on owning their boat for
years, or they're out to empty my wallet with a vengeance. I'll let you
decide which is more likely.

My market search is nationwide, and thanks to your fine advice, I will
start making my offers in writing, clearly the only way to go. However,
I'm a bit worried about mailing brokers which I do not trust
intrinsically my personal check for 10% of the amount, before even
scheduling a survey and making sure the boat is sound. However, I guess
that there is no other way to get a broker to communicate a "low offer"
(read real market price for this buyer). Heck, if I was selling a boat
and not getting any nibbles for a year, I'd consider an honest offer
which matches Price Guidebook numbers. Why wouldn't other people?

I much appreciate your friendly advice about seller psychology, and
what not to do when making an offer. I will follow it strictly, and
keep the bickering to monetary issues, ie what I'll pay and what
they'll take, without trying to explain or argue. It will save everyone
strife, and keep the situation sane. Especially if, as you suggest, it
will only cause aggravation and give opposite results to those hoped
for.

So I thank you for your advice, which I will respect dutifully, even if
I don't quite see eye to eye with your philosophy concerning pricing of
used boats: definitely not the price that a lonely fool, or even an
army of suckers, would be willing to pay given the chance to lose their
shirt.

Cheers,

Rich (not that rich, you will notice from my posting)

Gould is very knowledgeable, but he looks at all aspects of buying and
selling boats from a "used car or used boat salesman" prospective. If you
find a boat you like, you can use the NADA book price as your negotiating
tool. If it really is a seller's market, they may not accept it, but that
is part of negotiating.


wrote in message
oups.com...
Hi Gould,

I much appreciate your advice, I realize from the groups that you're a
pro and have even worn the white shoes. grin

But I'm no angry husband shooting out of the bedroom window, just a
bloke looking to sink his loose change into a floating mistress, less
trouble than a walking one - even if it sinks!

I guess all the guidebooks and NADA and BUC etc. are way off in pricing
the boat I want (used to want?) because I've only seen one that did
actually sell at the guidebook price. (Got ready to arrange survey to
find another guy snatch it up faster than me.) Banks which think that
"every boat on the market is pretty well overpriced right now" may not
have it all figured wrong. Consumers have been known to get carried
away in buying stuff for far more than it is worth rationally. Modern
Marketing is chock full of concepts and techniques to get people to
attribute rational value to things for irrational reasons. You can
argue that things are worth what you can get some people to pay -
because the market sets the prices. This is why an egg is worth a
million dollars to a banker in a famine. This is why a glass of water
is worth a billion dollars to Bill Gates in the middle of the Sahara.
But is that a reason why an egg or a glass of water are really worth
that much?

A given boat might be worth more to somebody else in some other
situation. But its "real value" is what it is worth to you. The same
holds true for Dot Com Stocks. Were they really worth as much as what
some people paid for them? Ask those who lost their entire estates in
the Stock Market bubble, and just maybe, ask a few who bought boats
without being properly informed and prudent. I may not understand the
subtleties of the used boat market, but to me, a ten year old boat is
worth LESS than it cost ten years ago when new. Banks need to have
foresight to avoid defaulting loans. Thus they also need hindsight and
cannot allow irrational pricing to guide what they will underwrite.

If these boats are really worth close to what their advertised prices
are, I'm glad to hear that the used boat market isn't as rough as folks
have claimed. I didn't realize that 10 year old 30 foot cruisers sold
between $50k and $100k like hotcakes. The price guidebooks all put
average retail at around $30k, so I guess I should either throw away
the guidebooks or forget about buying a boat. 10,000 lbs of 10 year old
plastic at $10 per pound, maybe I should have invested in plastic
futures? Maybe it appreciates with age like old wines, getting ooohs
and aaahs at every gelcoat crack like antiques with wormholes.

Please don't find my irony disrespectful. When you say "Throw the price
guidebook away." you must be sensitive to the fact that we know you
used to be a broker. It risks smacking of selfserving logic, even if
that is the furthest thing from your intentions and you no longer are
active at that job.

Broker has POWER. They know the market like nobody else. They have
access to all the databases. They have informal networks. They've heard
all the stories from colleagues on how all these pigeons come along for
an expensive plucking. There's a sucker born every day, and most of
them eventually want to buy a boat. They may be honest and altruistic,
wishing a happy life to buyers and sellers alike. But then again they
may not. And with the power advantage they have over buyers, we're in
deep trouble unless prepared for the worst, even if hoping for the
best.

Regardless of the worth of Price Guidebooks - throw away or not -
someone here isn't doing their job right, either the pricing
authorities, or the brokers. Why do banks and insurance companies use
them? Because they are worthless and should be thrown away? Because
they only know loans and not boats? Or because they obey principles of
logic in price determination, and not the going rate for a sucker? A
twofold difference is a 100% error. Somebody is 100% wrong, unless each
is 50% blind.

How can the Owners of the boats be the ones who set the asking price?
This may be true legally, but in practice, who would have the gumption
to try to sell their boat for more than double book value? Obviously
they are ill advised by overly greedy brokers who, by polluting the
market by overpriced units, are maybe a big part of the used boat
market's sales difficulties. Who else tells them what price is the
right price? Nobody on commission will be happy to sell for a lower
profit a boat that they can hope to hussle some innocent buyer with
using the emotional appeal of a boat as bait. The sellers are thus
hostage to an unethical brokerage situation. Clearly, the system is
broken.

I don't mean to give you a hard time, especially as you are a valued
contributor to these groups and have been candid on many occasions
proving your good faith. But a newbie buyer is bound to see things from
a different standpoint than a seasoned seller. Maybe, just maybe,
there's some sense in the counterpoint too.

If having the market "controlled" by brokers isn't an ideal world, the
problem remaining is that in a market dominated by brokers, those
sellers who would be willing to sell at "normal" rational used boat
prices take the easy road and often choose sell through professionals.
Brokers then talk up their boat and flatter their egos and appeal to
human greed, some say it is just to get the listing, but maybe brokers
also dream of manipulating buyers into paying more? Those who are
willing to take the hard path of selling their boat themselves without
a broker are either very rarely doing so because they have become wise
and wary of brokers. It is likely that they are folks who are even more
greedy than brokers, and think the broker's overestimation of their
boat is low (after all it has been enobled by their ownership, hasn't
it?). They will believe that they can sucker you better than a pro, and
will want more $ plus the broker's fee to boot. Not exactly ideal
sellers to deal with.

To resume I'm not about to make an offer on a boat at close to its
ancient new price, especially when its best years are gone and NOW is
when the problems are pushing their owners to unload them. They have
roughly 400 hours on gas engines, and enough wear that the cosmetics
will soon show that their better days are over. When I buy something
new, I expect to sell it for something less down the road a decade
later of wear and tear.

Just possibly there is a MicroMarket for 30 foot pocket cruisers due to
recent gas price hikes - are folks downsizing their boats trying to cut
fuel costs? Most brokers seem to say that those bailing out of their
financial shipwrecks are selling to move up to a bigger boat. Even a
lame newbie like me should know better!

For those of us nonetheless willing to endure a "beating" in terms of
purchase costs, maintenance costs, marina costs, upgrade costs, repair
costs, and unexpected costs, as well as those I've forgotten, we must
enter the (m)arena like Gladiators - sizing up the odds of surviving
the encounter. And fom what I've seen so far, unless some of you folks
in the know give me some failproof pointers, I'm dead meat looking for
a barbecue grill.

Telling me that dealer list prices are correct, and that one can make
offers between 5 and 10% under - and calling such offers LOW - makes me
wonder if somebody has been eating strange brownies? Broker used boat
prices are obviously over inflated, well beyond what anyone might
believe is ordinary pricing with a small margin of built-in negotiating
elbow room. Either brokers have a tougher job than I thought with
sellers needing delirious cajoling over months of weening until they
realize they can't actually make a profit on owning their boat for
years, or they're out to empty my wallet with a vengeance. I'll let you
decide which is more likely.

My market search is nationwide, and thanks to your fine advice, I will
start making my offers in writing, clearly the only way to go. However,
I'm a bit worried about mailing brokers which I do not trust
intrinsically my personal check for 10% of the amount, before even
scheduling a survey and making sure the boat is sound. However, I guess
that there is no other way to get a broker to communicate a "low offer"
(read real market price for this buyer). Heck, if I was selling a boat
and not getting any nibbles for a year, I'd consider an honest offer
which matches Price Guidebook numbers. Why wouldn't other people?

I much appreciate your friendly advice about seller psychology, and
what not to do when making an offer. I will follow it strictly, and
keep the bickering to monetary issues, ie what I'll pay and what
they'll take, without trying to explain or argue. It will save everyone
strife, and keep the situation sane. Especially if, as you suggest, it
will only cause aggravation and give opposite results to those hoped
for.

So I thank you for your advice, which I will respect dutifully, even if
I don't quite see eye to eye with your philosophy concerning pricing of
used boats: definitely not the price that a lonely fool, or even an
army of suckers, would be willing to pay given the chance to lose their
shirt.

Cheers,

Rich (not that rich, you will notice from my posting)

Ever buy a boat, Doc?

(Not to be confused with a boat dock)

The value of the NADA used boat pricing guide is clearly stated on the
cover of the book itself, in Spanish.

Negotiating with the NADA book is one thing, but in some cases the
buyers decide that there is a "secret" stash of boats out there,
somewhere, all priced at or below the NADA book. Can't blame them- who
in their right mind would pay "high book" for a car in most cases?

The mistake is to decide that the NADA book is some sort of price
gospel and to assume that all sellers offering their boats for sale at
prices above NADA are out to rape and gouge the public. The boat market
is a lot more regional than you probably realize.

Then, factor in that in some specialized boats there may only be a half
dozen boats even built and sold, new, in any particular year. It's a
certainty that not all of the ten existing 1997 33' Ho Lee Smokers will
come to market in a given year, and in some years there may be only one
or maybe even no boats of that particular vintage and model even
offered for sale. Let's say there are two- one of the boats was run up
on the rocks and sold for insurance salvage at $15,000.
The other was in bristol shape and brought $110,000....(somewhat a
decent price as a new one now brings about $200k). NADA takes both
boats and calculates an "average" price of $62,500.
Totally useless. That price is 47,500 more than the junker brought, but
$40,000 less than the nice boat sold for. Is the nice boat really only
worth $62,500 because somebody dumped a junker at a sacrifice figure?
Did the guy who bought the salvage hull at $15,000 "steal it"?
(Probably not).

wrote in message
ups.com...
Ever buy a boat, Doc?

(Not to be confused with a boat dock)

Yes, 3 of them. Boats are like any other commodity, supply and demand
dictate their sales price.




The value of the NADA used boat pricing guide is clearly stated on the
cover of the book itself, in Spanish.

Negotiating with the NADA book is one thing, but in some cases the
buyers decide that there is a "secret" stash of boats out there,
somewhere, all priced at or below the NADA book. Can't blame them- who
in their right mind would pay "high book" for a car in most cases?

The mistake is to decide that the NADA book is some sort of price
gospel and to assume that all sellers offering their boats for sale at
prices above NADA are out to rape and gouge the public. The boat market
is a lot more regional than you probably realize.

Then, factor in that in some specialized boats there may only be a half
dozen boats even built and sold, new, in any particular year. It's a
certainty that not all of the ten existing 1997 33' Ho Lee Smokers will
come to market in a given year, and in some years there may be only one
or maybe even no boats of that particular vintage and model even
offered for sale. Let's say there are two- one of the boats was run up
on the rocks and sold for insurance salvage at $15,000.
The other was in bristol shape and brought $110,000....(somewhat a
decent price as a new one now brings about $200k). NADA takes both
boats and calculates an "average" price of $62,500.
Totally useless. That price is 47,500 more than the junker brought, but
$40,000 less than the nice boat sold for. Is the nice boat really only
worth $62,500 because somebody dumped a junker at a sacrifice figure?
Did the guy who bought the salvage hull at $15,000 "steal it"?
(Probably not).

Yes, 3 of them. Boats are like any other commodity, supply and demand
dictate their sales price.

***************

Exactly! Supply and demand, not a book.

The book does not dictate a price, but it can be an effective tool while
negotiating.


wrote in message
oups.com...
Yes, 3 of them. Boats are like any other commodity, supply and demand
dictate their sales price.

***************

Exactly! Supply and demand, not a book.

Hi Gould,

I much appreciate your advice, I realize from the groups that you're a
pro and have even worn the white shoes. grin

But I'm no angry husband shooting out of the bedroom window, just a
bloke looking to sink his loose change into a floating mistress, less
trouble than a walking one - even if it sinks!

I guess all the guidebooks and NADA and BUC etc. are way off in pricing
the boat I want (used to want?) because I've only seen one that did
actually sell at the guidebook price. (Got ready to arrange survey to
find another guy snatch it up faster than me.) Banks which think that
"every boat on the market is pretty well overpriced right now" may not
have it all figured wrong. Consumers have been known to get carried
away in buying stuff for far more than it is worth rationally. Modern
Marketing is chock full of concepts and techniques to get people to
attribute rational value to things for irrational reasons. You can
argue that things are worth what you can get some people to pay -
because the market sets the prices. This is why an egg is worth a
million dollars to a banker in a famine. This is why a glass of water
is worth a billion dollars to Bill Gates in the middle of the Sahara.
But is that a reason why an egg or a glass of water are really worth
that much?

A given boat might be worth more to somebody else in some other
situation. But its "real value" is what it is worth to you. The same
holds true for Dot Com Stocks. Were they really worth as much as what
some people paid for them? Ask those who lost their entire estates in
the Stock Market bubble, and just maybe, ask a few who bought boats
without being properly informed and prudent. I may not understand the
subtleties of the used boat market, but to me, a ten year old boat is
worth LESS than it cost ten years ago when new. Banks need to have
foresight to avoid defaulting loans. Thus they also need hindsight and
cannot allow irrational pricing to guide what they will underwrite.

If these boats are really worth close to what their advertised prices
are, I'm glad to hear that the used boat market isn't as rough as folks
have claimed. I didn't realize that 10 year old 30 foot cruisers sold
between $50k and $100k like hotcakes. The price guidebooks all put
average retail at around $30k, so I guess I should either throw away
the guidebooks or forget about buying a boat. 10,000 lbs of 10 year old
plastic at $10 per pound, maybe I should have invested in plastic
futures? Maybe it appreciates with age like old wines, getting ooohs
and aaahs at every gelcoat crack like antiques with wormholes.

Please don't find my irony disrespectful. When you say "Throw the price
guidebook away." you must be sensitive to the fact that we know you
used to be a broker. It risks smacking of selfserving logic, even if
that is the furthest thing from your intentions and you no longer are
active at that job.

Broker has POWER. They know the market like nobody else. They have
access to all the databases. They have informal networks. They've heard
all the stories from colleagues on how all these pigeons come along for
an expensive plucking. There's a sucker born every day, and most of
them eventually want to buy a boat. They may be honest and altruistic,
wishing a happy life to buyers and sellers alike. But then again they
may not. And with the power advantage they have over buyers, we're in
deep trouble unless prepared for the worst, even if hoping for the
best.

Regardless of the worth of Price Guidebooks - throw away or not -
someone here isn't doing their job right, either the pricing
authorities, or the brokers. Why do banks and insurance companies use
them? Because they are worthless and should be thrown away? Because
they only know loans and not boats? Or because they obey principles of
logic in price determination, and not the going rate for a sucker? A
twofold difference is a 100% error. Somebody is 100% wrong, unless each
is 50% blind.

How can the Owners of the boats be the ones who set the asking price?
This may be true legally, but in practice, who would have the gumption
to try to sell their boat for more than double book value? Obviously
they are ill advised by overly greedy brokers who, by polluting the
market by overpriced units, are maybe a big part of the used boat
market's sales difficulties. Who else tells them what price is the
right price? Nobody on commission will be happy to sell for a lower
profit a boat that they can hope to hussle some innocent buyer with
using the emotional appeal of a boat as bait. The sellers are thus
hostage to an unethical brokerage situation. Clearly, the system is
broken.

I don't mean to give you a hard time, especially as you are a valued
contributor to these groups and have been candid on many occasions
proving your good faith. But a newbie buyer is bound to see things from
a different standpoint than a seasoned seller. Maybe, just maybe,
there's some sense in the counterpoint too.

If having the market "controlled" by brokers isn't an ideal world, the
problem remaining is that in a market dominated by brokers, those
sellers who would be willing to sell at "normal" rational used boat
prices take the easy road and often choose sell through professionals.
Brokers then talk up their boat and flatter their egos and appeal to
human greed, some say it is just to get the listing, but maybe brokers
also dream of manipulating buyers into paying more? Those who are
willing to take the hard path of selling their boat themselves without
a broker are either very rarely doing so because they have become wise
and wary of brokers. It is likely that they are folks who are even more
greedy than brokers, and think the broker's overestimation of their
boat is low (after all it has been enobled by their ownership, hasn't
it?). They will believe that they can sucker you better than a pro, and
will want more $ plus the broker's fee to boot. Not exactly ideal
sellers to deal with.

To resume I'm not about to make an offer on a boat at close to its
ancient new price, especially when its best years are gone and NOW is
when the problems are pushing their owners to unload them. They have
roughly 400 hours on gas engines, and enough wear that the cosmetics
will soon show that their better days are over. When I buy something
new, I expect to sell it for something less down the road a decade
later of wear and tear.

Just possibly there is a MicroMarket for 30 foot pocket cruisers due to
recent gas price hikes - are folks downsizing their boats trying to cut
fuel costs? Most brokers seem to say that those bailing out of their
financial shipwrecks are selling to move up to a bigger boat. Even a
lame newbie like me should know better!

For those of us nonetheless willing to endure a "beating" in terms of
purchase costs, maintenance costs, marina costs, upgrade costs, repair
costs, and unexpected costs, as well as those I've forgotten, we must
enter the (m)arena like Gladiators - sizing up the odds of surviving
the encounter. And fom what I've seen so far, unless some of you folks
in the know give me some failproof pointers, I'm dead meat looking for
a barbecue grill.

Telling me that dealer list prices are correct, and that one can make
offers between 5 and 10% under - and calling such offers LOW - makes me
wonder if somebody has been eating strange brownies? Broker used boat
prices are obviously over inflated, well beyond what anyone might
believe is ordinary pricing with a small margin of built-in negotiating
elbow room. Either brokers have a tougher job than I thought with
sellers needing delirious cajoling over months of weening until they
realize they can't actually make a profit on owning their boat for
years, or they're out to empty my wallet with a vengeance. I'll let you
decide which is more likely.

My market search is nationwide, and thanks to your fine advice, I will
start making my offers in writing, clearly the only way to go. However,
I'm a bit worried about mailing brokers which I do not trust
intrinsically my personal check for 10% of the amount, before even
scheduling a survey and making sure the boat is sound. However, I guess
that there is no other way to get a broker to communicate a "low offer"
(read real market price for this buyer). Heck, if I was selling a boat
and not getting any nibbles for a year, I'd consider an honest offer
which matches Price Guidebook numbers. Why wouldn't other people?

I much appreciate your friendly advice about seller psychology, and
what not to do when making an offer. I will follow it strictly, and
keep the bickering to monetary issues, ie what I'll pay and what
they'll take, without trying to explain or argue. It will save everyone
strife, and keep the situation sane. Especially if, as you suggest, it
will only cause aggravation and give opposite results to those hoped
for.

So I thank you for your advice, which I will respect dutifully, even if
I don't quite see eye to eye with your philosophy concerning pricing of
used boats: definitely not the price that a lonely fool, or even an
army of suckers, would be willing to pay given the chance to lose their
shirt.

Cheers,

Rich (not that rich, you will notice from my posting)

Your comparison iwth the dot.com stocks is interesting.

There are two factors to consider whenever we buy anything. Market, and
value.

When the dot.com craze was in full swing, many people wondered whether
fledgling companies with no history of profitability could really be
worth 10 times their assets right out of the gate and whether those
prices should be doubling every few weeks (or faster). That was
certainly a legitimate question about the "value" of those stocks.

However, if the same people wondering about the value of dot.com stocks
actually wanted to own any, they would ultimately be forced to do so at
the market price, whether that price was in line with the subjective
values they assigned to the stocks, or not.

Fortunately the market for used boats isn't as rigid and uniform as the
market for securities.
The principle remains much the same, however. Market values are
established by what the boats actually bring in the marketplace, even
when a good case can be made that the boat *shouldn't* be worth that
much.

If it's any comfort to you, realize that the broker will usually be
grinding on the seller to come down to a number closer to your price at
least as hard as he or she will be grinding on you to come up to a
number closer to the seller's asking price.

As far as sending earnest money to out of state brokers you have never
met and for boats you have never seen.......don't do it, please. See if
you can find one local broker you like and trust, even if that party
doesn't have a listing right now that matches your want list. (In most
areas of the country, 10-year-old 30-foot cruisers are likely to be
somewhat scarce at the $30,000 level). Use the local broker you like
and trust to represent your offers. If you make a deposit on an out of
state boat through your local broker your money goes into the trust
account of the
local guy you like and know- not some guy 1000 miles away who may be
doing business out of the phone booth at the back of a waterfront bar.
Your broker will share the sales commission with the listing broker, so
it won't cost the seller any more and shoudn't cost you an extra dime.