A Guide to Negotiating Prices in Real Estate

When it comes to buying a home especially in India there’s one question every buyer should ask early on: “Can this price be negotiated?”
And the answer? More often than not: Yes.

But it depends on what you’re negotiating and where you are in the home-buying process.
Here’s the truth: not everything is negotiable, but there are definitely a few areas where smart buyers can save lakhs.

Let’s break down what’s negotiable and how to approach it, depending on the type of deal you're entering:

1. Under-Construction Properties

When buying a home directly from a builder, especially during the under-construction phase, the best scope for negotiation lies in the base price of the unit.
Note: We’re not talking about pre-launch properties. These are usually offered at bottomed-out prices to attract early buyers, and builders rarely go lower than that.

Now, depending on the type of builder, the pricing strategy varies. Here's what happens behind the scenes:

There are 3 Types of Builders (in terms of pricing behavior):

• Type 1: The High-Margin Negotiator
  Quotes ₹1.3 Cr with intention to sell at ₹1 Cr, then "negotiates" to make it look like a big discount. You’re still paying their target.

• Type 2: The Moderate Negotiator
  Quotes ₹1.05 Cr, negotiates slightly to ₹1 Cr. More transparent with smaller negotiation buffer.

• Type 3: The Fixed-Price Developer
  Established brands with no scope for negotiation. What you see is what you pay.

So, how do you know which type of builder you’re dealing with?
That’s where real estate consultants / partners (i.e., brokers with inside knowledge of builder practices) become extremely valuable.

Good marketing/channel partners:

• Know the actual closing prices of units.
• Can guide you on whether negotiation is possible or not.
• Often get builder-exclusive offers or limited-period pricing not available directly.

Typically Non-Negotiable Charges in Under-Construction Properties:

• Floor rise charges
• Car park charges
• Clubhouse and amenities
• GST

2. Negotiating in the Resale Market

Resale homes—whether it’s a 3-year-old flat or a 10-year-old villa—are far more flexible. You're dealing with individuals, not corporates.

What Can You Negotiate?

1. The Total Property Value
Sellers often quote emotional prices. Your strategy:

• Compare recent transactions in the same area.
• Benchmark against similar builder units.
• Study local price trends.

2. Registration & Stamp Duty Sharing
Sometimes sellers agree to split this if they’re in a hurry.

Clues: Is the seller moving cities? Need urgent funds? That’s your window.

3. Negotiating Home Loan Terms

Most people think home loan interest rates are fixed. Not true.

What You Can Negotiate:

1. Interest Rate – Negotiable up to RBI Guidelines

Most lenders today follow the RBI’s Repo Linked Lending Rate (RLLR) model. That means the interest rate you’re offered is: RBI Repo Rate + Bank’s Spread (Margin) As of June 2025, the RBI Repo Rate is 5.50%. Banks then add a spread (usually between 2.75%–3.25%) based on your:

• CIBIL score

• Loan amount

• Employment type

• Existing banking relationship

So, if you’re being quoted 9%, and another bank is offering 8.4%, you can and should negotiate (especially if your CIBIL score is above 750). In ideal conditions, you should aim to get your home loan interest rate down to ~8.25%–8.75% (as per the current repo rate). Tip: Some banks may try to quote you higher spreads if they assume you're not comparing options. Always ask for a breakdown - “What’s your spread over repo rate?”

2. Processing Fee
This is usually between 0.25%–1% of the loan amount. But most banks are willing to waive it especially: If you’re taking a large loan

If you're a salaried professional with a stable income

Or during festive schemes and special offers Tip: Always negotiate this or ask for waiver offers.

3. MODT Charges (Memorandum of Deposit of Title Deed)
This is a state-mandated charge that’s usually 0.1% to 0.5% of the loan amount for registering that your property title is mortgaged with the bank.

Some DSAs (Direct Selling Agents) or fintech home loan platforms cover this cost to acquire customers. Always ask: “Are you covering MODT?”

Final Words: Good Deals Are Made With Knowledge

The real estate market is not a fixed-price environment. Buyers who conduct thorough due diligence and approach negotiations with a clear strategy consistently secure more favorable terms. Whether it involves understanding a developer's pricing psychology, accurately benchmarking a resale property's value, or reducing home loan costs, informed negotiation can translate into substantial financial benefits over the lifetime of your investment.

Canvas Homes is your real estate ally – helping you negotiate fair and buy stress-free.
Let’s find the address where your dreams truly belong.