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Can You Negotiate Off The Plan Prices?

 

Buying property off the plan can be an exciting prospect, offering the opportunity to secure a brand new home or investment before it's even built. However, one common question that arises during this process is whether it's possible to negotiate off the plan prices. Throughout this article, we will explore off the plan purchases and unpack whether negotiation is a viable option for buyers.


Understanding Off The Plan Purchases

 

When you buy a property off the plan, you are essentially entering into a contract with the developer or builder to purchase the property upon completion. During this time, the property may still be in the planning or construction phase which means there is a level of uncertainty about the final product.

Buyers decide to make a purchase based on architectural plans, floor layouts and property specifications provided by the developer. These purchases often come with unique advantages such as potential capital growth, stamp duty savings and the opportunity to customise certain aspects of the property.

 

The Pricing Process


When it comes to off the plan pricing, developers determine the initial price. This would be based on factors such as construction costs, market conditions, location, demand and profit margins. The initial pricing reflects the estimated value of the property upon completion, with the developer aiming to achieve a reasonable return on their investment.

 

Can You Negotiate?

While negotiating the price of an off the plan property is not unheard of, it's important to recognise that the scope for negotiation may be more limited compared to purchasing an existing property.

 

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What Should You Consider?


Here are a few factors to consider when contemplating negotiation:

1. Market Conditions

The state of the property market plays a significant role in determining the potential for negotiation. In a seller's market with high demand, developers may be less inclined to negotiate as they have less pressure to sell. However, in a buyer's market or when sales are slow, developers may be more open to discussions.

2. Timing

The stage of the development can directly impact your negotiating power. Developers are more likely to negotiate during the early stages when they are looking to secure pre-sales to fund the project. However, as construction progresses and demand increases, the opportunity for negotiation may diminish.

3. Developer’s Flexibility

Some developers are open to negotiation and may offer incentives to buyers such as upgrades or discounted prices. On the other hand, other developers may have less flexibility due to financial constraints or contractual obligations with financiers or investors. It's crucial to research the developer's reputation and past projects to gauge their willingness to negotiate.

4. Additional Factors

Looking beyond just negotiating prices, you may also have the opportunity to negotiate other terms or inclusions. These can include modifications to the floor plan, fixtures, finishes or even additional features, like parking spaces or storage.

 

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Tips For Negotiating


If you decide to explore negotiation options for an off the plan purchase, here are a few tips to keep in mind:

1. Do Your Research

Find time to understand the local property market, comparable sales and the developer's history. This knowledge will ensure you are fully prepared and will also strengthen your position when entering negotiations.

2. Talk To A Professional

Consider hiring a buyer's agent or a conveyancer with experience in off the plan purchases. They can guide you through the negotiation process, provide advice and advocate on your behalf.

3. Be Realistic

While negotiation is possible, it's important to approach the process with reasonable expectations. Presenting unrealistic demands may discourage the developer from engaging in further discussions.

4. Focus On Value

Instead of solely focusing on price reduction, explore opportunities for value-adding incentives such as upgrades or additional features. These can enhance your overall satisfaction with the purchase and increase the appeal of the property.

 

While negotiating off the plan prices may not always be as flexible as negotiating the price of an existing property, it's worth exploring the potential options. Market conditions, timing and the developer's flexibility are key factors that can influence the outcome. Before making your final decision, remember to compare the advantages and disadvantages and consider the property’s overall value.

By conducting thorough research, speaking with professionals and maintaining a realistic approach, you can increase your chances of securing a favourable outcome in your off the plan negotiation.

 

Buying off the plan property can be a daunting process, but there’s an easier way. iBuyNew is your all in one solution that supports you at every stage, from search to settlement.

We take the pressure off you by doing the research, shortlisting the best properties that suit your needs, connect you to excellent brokers and conveyancers and keep you updated throughout the construction process, all the way until you get your keys. Book a FREE discovery call today or call 1300 123 463.

Published on 8th of August 2023 by Davina Deluao
Davina Deluao
Davina Deluao

Davina graduated from Swinburne University in 2018 with a Bachelor of Arts, majoring in Journalism. Through travelling and studying abroad in NYC and LA, her interests in property and design grew and became a strong pursuit. Davina has been writing for iBuildNew Group since 2019.

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