Re-negotiating the price of a new condo
Q. Two years ago I signed a contract to buy a new condo in Williamsburg, and the market has dropped so much since then that it makes more sense to walk away from my deposit than close on the apartment. But I still want it - at the right price.
Are there any tips you can suggest for negotiating a better deal with the developer at this point?
A. Fortunately for you, most developers these days are more interested in making sales than keeping a forfeited deposit, say real estate attorneys Eric Goidel and Jeffrey Reich.
“Increased sales make projects more marketable and easier to finance,” explains Reich.
First, do your research to learn the price at which the developer is selling comparable apartments for now. You need to base your re-negotiation on hard numbers.
Next, says Reich, ask to speak to a decision maker at the developer’s office to discuss the economic realities of the situation.
“Developers realize they are better off trying to make a ‘deal’ with an existing purchaser than having the purchaser walk away and potentially face legal challenges to a contract and/or deposit retention, and also have to remarket a particular unit,” says Reich.
A developer may offer free upgrades in addition to or instead of a price reduction, says Goidel.
As extra ammunition, you can ask a good real estate lawyer to carefully review the prospectus for grounds to cancel the contract, like a drop-dead date by which the developer needs to obtain a certificate of occupancy.
If the review turns up something, “the developer may be willing to make some concessions in return for a reaffirmation of the deal,” says Goidel.
Real estate broker Max Dobens says that's the advice he gives his clients too.
“The developer will take you much more seriously when you have an attorney,” says Dobens.
Still, he says, “in my recent experience, the developer was very hard lined about not renegotiating the contract price, but he missed the deadline for the certificate of occupancy, so my buyer got all of his contract deposit returned.”
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