How you handle the negotiation process can have a significant effect on the final price at which you sell your boat. As a seller, it helps if the boat is well presented, sensibly priced and has been marketed in a way that accurately reflects its condition. These are all factors that make it easier to hold out for a figure as close to the asking price as possible.
Similarly, very much like negotiating the sale of a house or a car, you may have the stronger position from which to negotiate if:
- You are not in a rush to sell.
- There’s a strong market for boats like yours
- Similar boats are listed slightly above your asking price.
- You have several people interested in the boat at the same time, or potentially even multiple offers to consider.
On the other hand, if the boat has been for sale for a lengthy period, you’ve been unable to keep the boat clean and tidy, and it’s sitting on an expensive mooring, the buyer’s hand will be strengthened.
Basic negotiation tactics
Negotiation is often an iterative process that plays through a number of rounds before the final figure is agreed. This may take place in a single conversation, or could be spread out over a number of days. Indeed, some negotiations go on for weeks with multiple offers and counter-offers, but most are over after two or three rounds. If both sides are realistic about the boat’s value, it shouldn’t be too hard to agree on a final price.
A common mistake is to dismiss a low offer out of hand. Instead treat it as an invite to respond with a counter-offer at a price that you would be happy to accept. It’s worth noting that there are boats that have been for sale for an extended period, where even the asking price has eventually been reduced to a lower level than an earlier offer that was refused.
In a small number of cases your counter-offer may simply be a restatement of the asking price, but it’s more likely to be between 2-10 per cent below the asking price. If your negotiating position is weak, your initial counter-offer may represent a reduction of 20 per cent or more on the asking price. If the initial offer is not too low, meeting the buyer halfway is a great gesture of good faith and can be a quick route to a binding agreement.
Before starting the negotiation process, it is critical to know your rock bottom selling price. This could be the same as the asking price, but it’s likely to be lower. Everyone wants to think they got a great deal, and letting the buyer talk you down will help finalise the sale. Factors that will inform the rock bottom price you will accept include how quickly you need to sell and whether continued ownership is accruing unnecessary costs.
Clearly, if you are still using the boat on a regular basis, then you already have a return for the money spent on moorings, maintenance and so on. However, if you’re unable to use the vessel these expenditures, along with any costs associated with keeping the exterior of the boat looking clean and fresh, can soon mount to a tangible percentage of the value of many boats, particularly older and smaller craft.
Besides price, there are other details of the sale that may be negotiable. These include when the sale will take place and how the boat will be transported to its new home. For example, it may be possible to settle at a higher purchase price if you agree to assist with the delivery (make sure you know what’s expected in this respect in advance), or help with fitting out in the spring. Similarly, if you’re in a position to allow the new owner to use the boat’s existing mooring for a short period after completion, this may help defray the new owner’s initial expenses, but again check with your mooring provider first.
If you have multiple buyers interested but one seems particularly keen it makes sense to negotiate with that buyer first. If you choose to negotiate with several buyers at the same time, it’s important to make sure each one knows up front that there are other offers pending, otherwise you may lose more than one buyer.
Surveys and sea trials
Many offers will be contingent on a satisfactory surveys: and/or sea trial. If so, the final price you receive for the boat will depend on whether any previously unknown material defects are found by the surveyor. What constitutes a material defect is rarely precisely defined, but a figure of around 10 per cent of the purchase price is often used as the trigger point for further negotiation. Options at this stage include reducing the price to reflect the work needed, getting the work completed before completion of the sale, or sharing the costs. The latter option often makes sense if there’s also a degree of ‘betterment’ following the work – for instance following replacement of standing rigging, upgrading the gas system or installing a new engine.
There’s a sense in which this is the first part of the negotiating process and will impact on the number of prospective buyers your boat will attract. By setting a realistic price you are also communicating to the buyer that you’re an informed and business-like vendor, which will also help to set the tone for the subsequent negotiations. For more information about how to determine asking prices read about boat valuations and how to price a boat for sale.