Can I negotiate the asking price on a new condo (construction)? If so, how much negotiating room do I have? 5% ? 10%?

Asked by Stellasmom, 11209 Sun Oct 11, 2009

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Thu Jun 28, 2012
Hello Stellasmom,

First things first: when making an offer, focus on what your monthly payment will be for the mortgage financing, including taxes and insurance. If that payment is within your means, then your Mortgage Banker will determine the maximum loan/purchase price for you based on all the factors of the monthly payment, your down payment and your mortgage qualifications.

Begin making an offer with the following standards:

1. WISH LIST. Does the home meet MOST of the requirements from your Dream-Home-Wish-List? The Dream Home exists only in our minds; it's NOT out there waiting for you to stumble across it one Saturday afternoon. But you can find the right home using your Wish List. When you find the home that meets most of your requirements from the wish list, then it's time to make an offer.

2. FORGET LIST PRICE. Based on your own research, shopping in your chosen area, select the price you're most comfortable with, regardless of list price/asking price. In other words, you'll find a home listed at $268,000, but you've seen at least a dozen other similarly constructed homes in the immediate area priced or sold at $235,000. What makes this home so special that it's priced $33,000 more than the average price? Remember, your Lender will appraise the home based on similar homes and those prices.

3. MAXIMUM OFFER. Never exceed the price based on your mortgage qualifications, no matter how much you LOVE the home. You have to be able to afford the payment for the next thirty years. That in-ground swimming pool you love isn't going to pay the mortgage for you!

4. OFFERS ARE NOT PERSONAL. An offering price can NEVER be misconstrued as an insult to the homeowner. This is business; you're not going to hurt anyone's feelings! Make the offer based on a price you're most comfortable with!


5. OPENING OFFER. NEVER open with your maximum offering price. Test the waters with your opening bid: you want to see if this Seller is a SERIOUS Seller who understands this is a BUYER'S MARKET. If there's no reaction to your offer---assuming the price you offered is within the reasonable range of current market prices---you may be wasting your time with this home/Seller. It might be time to move on to another home.

See my "Five Steps To Making An Offer" for the best way to negotiate on your home purchase.
http://www.tcurranmortgage.com/2010/04/09/five-steps-to-maki…

Trevor Curran
NMLS #40140
1 vote
Alen Moshkov…, Agent, New York, NY
Mon Oct 12, 2009
Stella has a great mom, but what is her moms name?

You have some good answers below.
There isn't a set percentage that you can come in and take off the price, it doesn't work that way. You have to consider the building, number of units available, number of units sold or are in contract. If there are only few apartments remaining the developer may consider paying your transfer taxes and closing costs, but that will all depend on the price of the apartment and developer. If he isn't money hungry and can sit on the building you probably won’t get very far in negotiations. Some developers want to make a deal, others don’t. You can to go and ask.
Also keep in mind that many condo buildings are being converted into Rentals.
Know many apartments sold, the building will need to be between 50-70% sold for a bank to approve your loan.

Get all the facts before you go in.
Where in Brooklyn are you thinking or purchasing?
0 votes
Debra (Debbi…, Agent, Livingston, NJ
Sun Oct 11, 2009
Hi Stellasmom

You asked a simple question...I will give you a simple answer.

Yes, it is possible to negotiate the asking price. You can't assume, however, that every builder will be open to that!
No one can tell you how much of a percentage you can negotiate. The builder may be firm on his price, or anxious to move his condo sales along.
If the price is firm, often they will included various upgrades, or give you a dollar amount for upgrades, as an added incentive.

Good luck...speak to your agent..............let him or her guide you. If you are dealing directly with the builder, then give it a try......the worst he can say is no. There is no magic formula....each builder will respond differently.

Best wishes.....
Debbie Rose
Prudential NJ Properties
0 votes
Can one pay a flat fee to an agent to negotiate on new condo construction?
Flag Mon Dec 28, 2015
Mitchell Fel…, Agent, Brooklyn, NY
Sun Oct 11, 2009
Dear Stellasmom:

Everything in life is negotiable. Submit an offer in writing to the developer along with a pre-qualification letter from a good bank if you are getting a mortgage. If you do not offer the full price you may lose the property. If your not worried about losing the property, do whatever you feel is best. Beauty is in the eyes of the beholder and you have to offer what you feel it is worth for YOU.

I have learned through experience that when a buyer looks at a property and thinks it is a good deal, it is fairly certain that many other buyers who view the property will feel the same way. This happens especially when the property is priced right, then everyone thinks it's a great deal and the seller will get many offers.

If you are making an offer simply because you like the place but not because you perceive it to be a great deal, then by all means try to negotiate and see what happens. If you are making an offer because you perceive the property to be a great deal then you may want to offer the full price.

Also bear in mind that with new construction the developer usually will require you to pay his (or her) closing costs.This can be 2-3% of the purchase price on top of the other traditional closing costs you will incur as a buyer (typically 5% of your mortgage amount). Sometimes you can negotiate with the developer so as to not pay those additional closing costs. You should speak to your attorney about that.

Also, many times if a developer is not willing to give any concession on the price, they may be willing to give you upgrades or add-ons to the kitchens, bathrooms and/or appliances.

So as far as how much you can or should negotiate, only you can answer that questions as it depends on how badly you want the condo! ;)

Sincerely,
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665
Email: MitchellSFeldman@aol.com
0 votes
Patrick Thies, Agent, Anytown, IL
Sun Oct 11, 2009
There isn't any set percentage, it will be up to the builder to decide if they want to give any concessions on the price. Sometimes it depends on how far along the construction is as to whether or not the builder will negotiate the price. Everything is negotiable. All you can do is try. Good Luck
0 votes
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