Buyer Incentives

I know 500 fourth avenue in park slope offers a 10% discount. I believe there are creative options to use the 10% towards the closings costs and down payment. At Bridge View Towers in Downtown BK, they are offering rent with the option to buy with a 2-year lease and up to one year can be used towards the purchase price. I think I also heard something at 125 North 10th street where they are giving a $35K credit towards the purchase of a 1 BR.

There is no set rules for this becasue the "panic levels" differ greatly across sellers (both developers/individual sellers).

Also, the initial pricing as well as the desirability of the units vary greatly, so it is unwise for us to talk about "XX% off"-type numbers as though those figures are generalizeable--even w/in one development (i.e., less desirable units w/in a bldg. command higher discounts, making price/ft a bad pricing-discount indicator). The 35% off sale ($1907?) at 20 Pine, for example, is a good example of this "undesirable" unit yielding a higher discount scenario.

With this said, for new developments/conversions, the following may be reasonable to ask, and you may get them depending on how desperate the sellers are:

1. Seller's attorney fee
2. Buyer's closing costs
3. A storage unit and/or a parking spot
4. X months common charges waiver (I have heard 3 to 5 months)

Some developments offer incentives you don't want (e.g., a free vacation to Hawaii; personal assistance service for 12 months, etc.), but some of my friends successfully negotiated w/ the developers to give them further discounts instead.

I would ask for 20% off plus all closing costs at the least. We're pretty much done doing that and trying to negotiate anything. We never really did before as they always cut us on the pass, and we're either being told that the developer is either non-negotiable or asking for more that 10% discount or closing costs will not fly with the developer. But then again, that was sOOO last year. :) Unfortunately, we could not wait for any of them to lower down their prices long enough to buy. We decided to rent instead for at least a year and we have moved forward with the lease.

Why 20% off the offer? If the unit is grossly over priced, you might as well offer 30% below, with good logical reasons, of course. By contrast, if the unit is already well priced compared to the comps, then sticking w/ the 20% figure may be unwise because the sponsor/seller may already been assuming a loss at that price point or they may not want to set a precedent, and that's a waste of everyone's time, including yours, in my opinion. I think, in such situations, they may respond better to other incentives (e.g., 6 months CCs waived) although it makes no difference to YOU in the end (i.e., less money spent).

For both discounts and incentives, be ready to walk if they say "No." Based on my own experience since early this year, they will call you in a day or two (if not right then and there) saying, "I have great news for you! I spent 7 hours on the phone w/ the sponsor last night, and I was able to get you a better deal!"

Has anyone asked for common charges to be paid by seller for 6 months? I was thinking of putting in a counter offer on a place in UWS with that concession since seller is not willing to move further on price. The seller is an investor who bought several units in the area but ran into trouble. The CC/TX are $1500 total on a 2 bed/bath in doorman building, older construction but otherwise nice building. The sales price would be $975k and the CC/TX concession would be about $9k for six months.

"the seller is an investor who bought several units in the area but ran into trouble."

What was the asking price? Based on what the bears are saying on these boards, you should be able to get it at 600 psf.

Does anyone have experience negotiating with developers of high profile new developments lately? I'm talking about projects that are still listed at $2000-3000 psf range. Many of these units have been listed for almost a year or more, without drastic reductions in price (or at all). What would be a good opening bid, and what kind of incentives might one expect?