I remember looking at buying a piece of property around 2003 in Gurgaon. It was a commercial real estate and would cost Rs 36 lacs giving rent of around Rs. 30,000 a month. The economies were coming out of the recession. I reckoned that India’s population is huge and the middle class is yet to be unleashed and all the youth will look to move to urban centers – i.e. Gurgaon and the commercial space will only grow.
But the “Expert” argued that the economy has been in recession and there is no way the property should be that high. He clearly told me to leave it. And, he was an expert in real estate in Gurgaon. So, I followed his advice although I didn’t agree with it.
And as luck would have it, in the comiing years, the prices of that property shot up like crazy. And I lost a major opportunity to make money.
So, I would say do your due diligence.
Yet, it is important to take the pulse of the market and the trends that are out there. Here is something that is important:
- There is a lot of inventory out there with the builders
- Some of these builders are cash strapped
As the following experts suggest the same thing:
“Developers are going through a phase of liquidity crunch. As home sales continue to be sluggish in many parts of the country, they are becoming more open to price negotiations,” says Ramesh Nair, managing director (west), Jones Lang LaSalle (JLL) India, a property advisory firm.
Another one confirms:
“In the current market where there is far more inventory of new properties than buyers, there is room for innovative negotiations with developers. It is important for developers to liquidate inventory,” says Samarjit Singh, director, Agni Property, a New Delhi-based real estate brokerage firm
So, if you were to negotiate well, can you use it to your favor? The answer is yes. How much? Start with 15% discount and you can safely go down to 7-8% discount on the listed price.
“Your initial offer for a house can be up to 15% less than the quoted price, but you should be willing to settle for a 7-8% discount,” says Ramesh Nair | Managing Director (West), Jones Lang LaSalle India
But if you have a good cash surplus with you, you can use it to get some more discount.
“If the customer has surplus funds and wants to make a cash-down payment, he can negotiate for further discounts, even as high as 9-10%. If a customer has outstanding home loans, the situation will be different,” says Gahlot of Brisk Infrastructure
Get Drishtikone Updates
in your inbox
Subscribe to Drishtikone updates and get interesting stuff and updates to your email inbox.
Thank you for subscribing.
Something went wrong.