Property Negotiation: Failing To Prepare Is Preparing To Fail

Accommodation Times News Services

businessman with mini house and US dollarsBy Ramesh Nair, COO – Business & International Director, JLL India

Yes, it is possible to negotiate with residential property developers. As home sales continue to look sluggish in many parts of the country, developers are becoming more open to a bit of creativity on their stated terms. How can you, as a buyer, put your best foot forward at the negotiation table? Above everything else, the Scout’s Motto holds true – Be Prepared.

You should be conversant with comparable sales in the project’s vicinity, and know how long it has been on the market. It is important to establish what the launch rates were, how they have moved since then and what the current demand for flats like yours is in the stated locality. You should also find out by word of mouth how much the developer is willing to negotiate. Typically, developers make decisions on pricing based on how a particular project is performing, as well as on how they are faring in general.

If you are interested in an apartment but feel you cannot afford it at the quoted price, have no apprehension. Many sale prices today are quoted prices, and there is room to negotiate. While developers today are willing to relent off the radar, they are averse to reducing the official quoted price below a certain point. This is partially because they don’t want to advertise the fact that certain customers paid less than others. They are often likelier to offer freebies or incentives.

  •          If possible, try to find a group of buyers and negotiate for a bulk discount
  •          Keep in mind that that if you have the ability to pay a larger upfront amount, you have extra bargaining power
  •          Ensure that you have obtained a pre-approved loan from a home finance company for a home loan, based on your income. A loan pre-approval will show the developer that you are serious. Let him know that you are pre-qualified for the amount you are offering
  •          If sales volumes have dropped and there are many unsold apartments in the vicinity, point this out to the developer and use the fact to your      advantage. An unsold apartment will cost the developer more over time than lowering the price and selling the unit quickly
  •         If market prices have fallen since the property was completed and several units remain unsold, a larger discount may be possible


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