How to negotiate with a builder: what can move and what cannot

7.5.1 What can you negotiate with a builder?

You can negotiate the parts of the price and terms that the builder sets, and nothing that the law fixes. The builder sets the base rate per square foot. It also sets premiums such as floor rise and preferential location charges (PLC), the price of parking, club or amenity charges, and the payment plan. Each of these is a line on the cost sheet, so each can change if the builder agrees. Whether it agrees is the builder’s choice, and it can depend on the stage of sales and the flat you want. Ask for the cost sheet of your exact flat first. Then ask about each line one at a time. The flat cost sheet chapter explains every line. Write down each answer, and the name of the person who gave it.

Line on the cost sheet	Who sets it	Can it move?
Base rate per square foot	Builder	Yes, if the builder agrees
Floor rise or PLC	Builder	Yes, if the builder agrees
Parking	Builder	Yes, if the builder agrees
Club or amenity charges	Builder	Yes, if the builder agrees
Payment plan	Builder	Yes, if the builder agrees

7.5.2 What cannot be negotiated?

Taxes, duties and the rules in the RERA Act cannot be negotiated, because the law fixes them. GST on an under-construction flat follows the GST law, not the builder. The GST chapter explains the rates and when they apply. Stamp duty and the registration fee also follow the law. For a conveyance of a flat, the IGR Karnataka table lists 5 percent stamp duty plus surcharge and additional duty. It lists a 2 percent registration fee. The RERA Act sets rules that apply to every builder. Section 13(1) caps the advance at 10 percent of the cost before a registered agreement for sale. Section 2(za) says the interest the builder charges you for a default must equal the interest it pays you for its own default. Rule 16 of the Karnataka RERA Rules, 2017 sets that rate at SBI’s highest MCLR plus 2 percent. A builder cannot offer you better or worse terms on these.

Item	Fixed by	Source
GST on an under-construction flat	GST law	The GST chapter
Stamp duty on the sale deed	Karnataka stamp law	IGR Karnataka table, row 6
Registration fee	Karnataka registration law	IGR Karnataka table, row 6
Advance before the agreement for sale	RERA Act	Section 13(1)
Interest rate on default, both ways	RERA Act and Karnataka Rules	Section 2(za), Rule 16

7.5.3 How do you prepare to negotiate?

Prepare by knowing the full cost of your exact flat and the cost of similar flats nearby. Ask the builder for the cost sheet of the flat you want, with every line. Add GST and stamp duty and registration, then divide the total by the carpet area. Do the same for one or two similar flats in launched projects nearby. That gives you a fair comparison, in cost per square foot of carpet area. The launch price chapter explains this calculation. Check whether the builder has offers running, and whether they apply to your flat. Check how long the project has been selling, and how many flats are booked. The K-RERA quarterly update shows the number of flats booked. Decide in advance which lines matter most to you, and the total you will pay. Go to the meeting with these numbers written down. A clear total helps you judge any offer quickly.

1. Get the cost sheet of your exact flat.
2. Work out the total cost per square foot of carpet area.
3. Do the same for similar flats nearby.
4. Check the bookings in the latest K-RERA quarterly update.
5. Decide the total you will pay, before the meeting.

7.5.4 How do you compare two offers from a builder?

Compare two offers by their total cost for the same flat, not by the size of each discount. A builder can offer a lower base rate, or keep the rate and waive a charge, or offer a payment plan. These can look different but cost the same in total. Ask for the cost sheet of your flat with each offer applied. Compare the totals, including GST and stamp duty and registration. Check whether an offer changes only when you pay, rather than how much you pay. A payment plan that defers payments can help your cash flow but does not reduce the price. Check whether an offer needs you to pay more early. Section 13(1) still caps the advance at 10 percent of the cost before a registered agreement for sale. If an offer has a deadline, ask for the offer in writing before the deadline. Take the offer with the lower total, unless another term matters more to you.

Offer	What it changes	How to compare
Lower base rate	The price of every square foot	Total on the cost sheet
Waived charge	One line goes to zero	Total on the cost sheet
Free parking	The parking line	Total, and the parking in the agreement
Deferred payment plan	When you pay, not how much	Total, and your cash flow

7.5.5 How do you make sure the builder keeps the deal?

Make sure the builder keeps the deal by putting every agreed change into the cost sheet and the agreement for sale. Section 13(2) of the RERA Act says the agreement for sale must state the dates and manner of payments towards the cost of the flat. So if the price or a charge changes, the agreement must show the new figure. Ask for a revised cost sheet first, signed or on the builder’s letterhead. Then check that the draft agreement for sale uses the same numbers. If a promise is about parking, a fitting or a waiver, check that the agreement or its annexure names it. A verbal promise or an email is weak evidence if the builder later disputes it. Section 12 gives you compensation for a loss caused by a false statement in an advertisement or brochure. Keep the revised cost sheet, the emails and the agreement together. Compare every demand letter with them.

1. Ask for a revised cost sheet with the agreed change.
2. Check that the draft agreement for sale uses the same numbers.
3. Check that the agreement or its annexure names each promise.
4. Keep the cost sheet, emails and agreement together.
5. Compare every demand letter with them.

Sachi reads K-RERA filings for Bangalore projects. To compare a builder’s price with registered projects nearby before you negotiate, Ask Sachi.