There are few things better than a good bargain, more so if the object of purchase is as important as your dream house.
Steps
KNOW THE TREND
Knowledge about the local market will make you well-equipped to bring the developer to the negotiating table. You should find out the prices of similar properties in the area. You should also know the period for which the property has been up for sale. If houses in a residential project have remained unsold for long, its developer will be keen to strike a deal.
An analysis of prices is a must. Find out the launch price and compare it with the latest price. Enquire about the price trend from local brokers, who will be able to give an idea about how much discount you can expect on the quoted price. A person who has bought a house in the project is also likely to give you the real picture of the discount you can expect from the developer.
MAKING AN OFFER
Once you get an idea about the likely discount , make an offer. Talk to the developer's sales team and tell it that you want to buy quickly. A developer is more likely to give a discount if it knows that you are a serious buyer.
Spare a day or two and go on a result-oriented property hunt. A good strategy is to drive around the locality and get the best prices from a number of developers. Make a list of properties in which you are interested. Let each developer know that you are scouting for the best property at the most attractive price and that you wish to close the deal quickly. Tell developers that you will compare all the offers.
If sales in the area have been falling and there are a large number of unsold houses in the vicinity, point this out to the developer and use to your advantage. Selling quickly, even at low prices, often works for developers as they save the funding cost and get cash for new projects.
Once you have all the quotes, let the developers know your offer price. "Your initial offer can be up to 15% less than the quoted price, but you should be willing to settle for a discount of 7-8%,"
SHOW THE MONEY
Developers are interested in selling inventory as soon as possible. If you can make an upfront payment, you are more likely to get a good deal. You should keep cash ready for such a situation.
Developers are interested in selling inventory as soon as possible. If you can make an upfront payment, you are more likely to get a good deal. You should keep cash ready for such a situation.
"You should get a loan pre-approved from a bank or a housing financing company. The most important advantage a buyer can have is the cheque book and the proof of home-loan approval. These will indicate to the developer that the buyer is serious, making it more than willing to negotiate.
USING INTERMEDIARIES
The real estate market has two sales models. Some developers have own sales teams while some take help from brokers. Often, they use both. The brokers can help you find a property fast as they are aware of the market and the projects in the area. A reputed broker can get you a good deal as well, but you will have to pay him for the service. Going solo will work to your advantage if you have researched the market well enough to get a good deal.
You can also team up with other prospective buyers. "If there is a group of, say, three or more people, the negotiation is easier.
REALISTIC APPROACH
Whether you go out to buy alone or in a group, negotiate for what you estimate is a realistic price. While developers are willing to negotiate in todays market, they are averse to reducing the quoted price below a certain point. This is partially because they do not want to publicise the fact that some customers paid less than others. They are more likely to offer freebies or incentives.
Some developers might not agree to lower prices to your desired level due to various reasons such as high costs. In such a situation, let the developer know that you will analyse the offer before arriving at a decision. Analyse the offers that you have, but wait for a couple of weeks before going for the best deal. Do not be surprised if you hear from some developers willing to close the deal at your offered price or a mutually agreeable lower price.
