Can you negotiate new condo prices?
When you buy a new or pre-construction condo, there are lots of things to think about and lots of issues to consider. From the building location and type of unit through to the amenities and utilities, it's important to compare a number of condos to find the perfect option for your needs.
As always, price will be the most crucial factor in your decision, so you’re probably wondering if negotiation is an option.
The short answer, unfortunately, is no. Negotiation doesn't really come into play when you're buying a new condo. Unlike the souks in Marrakech or the spice bazaar in Istanbul, long to-and-fro conversations about price are pretty much non-existent. Instead, the developer sets a price for each unit based on a tier structure, with the building's location and construction, and the unit's size and location in the building having the biggest effect on the asking price.
Condo developers generally do everything they can to avoid price reductions, with one price cut given to one buyer possibly going on to affect all future buyers and developments. Instead of outright price reductions, developers focus on specific off-deed concessions in order to attract buyers and stand out from the competition.
While individual concessions vary considerably between buildings and developers, there are some common examples applied in North American markets:
Condo fees paid in advance
Legal fees paid or delayed
Utility installation and hookup paid or delayed
Free construction upgrades
Access rights to amenities, parking, and storage
Capital contribution to the contingency fund
Furniture and appliances
While some of these concessions can be negotiated to some extent, once again, developers are normally keen to apply the same concessions to all buyers due to the huge scale of condo projects. Many of these concessions are hard to find out about, with potential buyers only learning about the benefits of one condo over another when they research buildings and go through a detailed comparison checklist.
The earlier you enter a pre-construction project, the greater leverage you're likely to have in terms of concessions.
Other elements of a condo purchase can also be negotiated to some extent, including the deposit amount and installment structure, cooling off periods, and drop dead dates in the case of delays. It's also important to ensure that the developer is reliable when it comes to completion dates, able to answer your questions about rules and regulations, and willing to meet your property inspection needs.
While traditional negotiation is mostly out of the question when it comes to pre-construction and new condos, there are other ways you can save money. Choosing a building with lower monthly condo fees can save you money each and every month, so take some time and rethink whether you need all those amenities. Being realistic about location can also save you money, the neighborhood next to the trendy part of town is often just as desirable and normally much more affordable.