Does Developers neg. on price?

[TheGuy]

Looking to buy a Town House from a developer and wondered if you can neg. or do you accept their first price?

 

[broken1]

Erm...I think it depends.

For smaller developments, three or four clusters - definitely room to negotiate. (These are the ones where you can usually start choosing your layout and etc).
For bigger developments, like summercon style (100+ units) - very little room to negotiate, unless they have completed the complex and there are unsold units.

Just one word of caution, when negotiating - just make sure that you specify the fixtures and fittings and etc. It's easy for the developer to swap out the great imported taps, for cheapo onces because you knocked R100k of the price and he still wants his margin.

 

[TheGuy]

Erm...I think it depends.

For smaller developments, three or four clusters - definitely room to negotiate. (These are the ones where you can usually start choosing your layout and etc).
For bigger developments, like summercon style (100+ units) - very little room to negotiate, unless they have completed the complex and there are unsold units.

Just one word of caution, when negotiating - just make sure that you specify the fixtures and fittings and etc. It's easy for the developer to swap out the great imported taps, for cheapo onces because you knocked R100k of the price and he still wants his margin.

It is a larger development but they are offering 5% on the price + 1 years Levy. There is also no transfer costs.

 

[broken1]

It is a larger development but they are offering 5% on the price + 1 years Levy. There is also no transfer costs.

No transfer costs (0% upto R500 000, 5% upto R1mil and 8% over R1mil) because you are paying VAT at 14% of the total purchase price. It's a nice trick the developers pull. Don't get caught up in the hype. They need to charge VAT as they are vendors, but it's still a non-recoverable tax, just like transfer duty but at a higher percentage.

If they are already offering discounts, chances are they are struggling to sell a little - however, with larger developments, chances are a whole bunch of agreements relating to pre-sales have been signed with the financier (or banks) which would leave them unable to change (the bank would mandate that a condition of the loan is to pre-sell x many units and x% markup of estimate cost to completion).

Doesn't hurt to ask though...just make sure they don't cut corners to keep the margin.