Q: I am looking to buy new construction in a 100-unit condominium complex. I’m wondering if the prices for the condos are negotiable.
Because it is a brand new property, I have not found any recent sales prices to compare the prices at the development, but I have heard that they may be accepting lower offers.
I am not sure if I should make an offer at a lower price or if I should just offer the asking price. What do you think?
A: New construction prices might be negotiable — but not in the way you might expect. Developers generally don’t like to lower the dollar amount because it messes up the “comps” of the development for everyone else. Lowering the actual price is generally a “last resort” kind of move.
That said, a developer might be willing to give you upgrades on finishes like paint, carpet, tile, or other flooring for free. He or she might also upgrade your appliance package, put in a Jacuzzi instead of a soaking tub, or give you thousands of dollars worth of landscaping for free.
How much a developer will negotiate depends on how desperate he or she is to sell. You tend to get a better deal if you’re either one of the first or last to buy in a development. If you’re one of the first, the developer is anxious to show that units are selling. If you’re one of the last, the developer is usually anxious to get out and maximize his or her profit. (The final units usually contain most or all of the developer’s profits.)
You can put yourself into a stronger negotiating position if you shop around to other comparable developments in the area and seeing for yourself what other developers are offering. Then, you can go back to your developer and ask for the best possible deal.
If there are dozens of people waiting in line to buy at this development, however, you’ll probably be stuck with whatever the developer is offering.
Published: Dec 10, 2004