Making an Offer
I use a three-pronged approach to constructing an offer based on the following:
The most common approach is to offer an amount based on a “feel good” percentage discount. Historically a reasonable offer was typically within 10 percent of the asking price. As this is much more of a buyers’ market a serious offer can represent a discount as high as 20 or even 25 percent. Even with this higher discount, it is common to see a final closing price that is 10 to 12 percent lower than the asking price. This is the easiest approach, but there are a lot of circumstances where this approach does not work. This brings me to the second component of constructing an offer, knowing the true “market value” of the yacht.
As a CPYB broker, my recommendations to clients include researching the “market” value of the boat. Within the CPYB network I research what buyers have actually paid for similar yachts and compare that to current offerings. This is much more accurate than other “guides” such as NADA book values. An offer will carry much more credibility when it can be presented with supporting market data. Occasionally the data might indicate that the yacht is already deeply discounted below market value due to special circumstances, which brings us to the third component.
Knowing the true market value will make the “great deal” really stand out. Sometimes a yacht can be found that is priced well below the market value and the seller will not consider a discounted offer. The seller may have urgency for a number of reasons. Using our Vessel History Disclosure we work to uncover the special circumstances that surround a below market sale. In these situations where a purchase is made, it is not uncommon to make a full price offer if the asking price is low enough.
Constructing an offer that represents your best interests requires having the data to make an informed choice. Of course all of these approaches have to take into consideration of the buyer’s financial goals and prequalified financing.