The thread linked to by Propertunity is very good, but as a developer myself, I'll flesh some scenarios out a little bit based on my experience
First thing is to find out what the developers business model is, the nature of the land, and what they're trying to do overall. Then put yourself in their shoes and you'll quickly see what motivates them.
If the development land is new and either purchased outright or mortgaged, then the developer is bleeding interest, and is therefore more motivated to sell quickly. In such a case, they'll sacrifice some of their sales profit in order to get the project moving forward.
If the development land has an existing rented structure on it that is softening the cost of holding the land, then they have more breathing room and may delay the project until they get the price that they want.
If the developer is new, they are more likely to fall into the first category. If the developer is established, they are more likely to fall into the second.
If the developer is also the builder, then things get a bit tricky because they're making money from the development sales, and building itself, so understanding their motivation/capacity is even more important.
In regards to prices and number of units "sold", keep in mind a few of the tricky things developers do in order to make the project seem more viable than it actually is, such as:
1 Advertising that x number of units are already sold from day 1. Often, the developer will keep some units for themselves or otherwise deliberately withold some units from market in order to create the illusion that there is existing demand, and that a certain price has already been paid by others. Psychologically, people react to this by thinking that if otehr people have already bought, then the product must be good, and they should get in on it quickly.
2 Cutting deals with their contractors. Another tactic used by developers is simply to say to their contractors "You want the job? Buy a unit at x price. We can then deduct some or all of the value of works that you do from that price, and you will pay stamp duty on the total inflated price, but you'll get the job and make money anyway".
3 Including rebates to select buyers in their contract of sale, but not yours. This is where the developer will approach people that they know, or family, or contractors (whoever, doesn't matter) and sell them a unit for a much higher price than it is actually worth, that the buyer pays stamp duty on, but in the contract, it'll say something like "$50 000 to be refunded on settlement", thereby skewing the actual value of the property to the naive or ignorant potential purchaser.
4 Basing prices on nearby sales that have used the above tactics, thereby compounding the misrepresentation of actual value.
I'm very active myself, and would go so far as to get a set of the developers plans/schedule of finishes as well as the title document (for $15 from the lands and titles office), price the job up myself, and get a handle on what the developers actual costs and profit are, and negotiate from there. Yeah it's a bit snoopy, but so what.
In general, you should get at least a 10% discount OTP when compared to the price of a finished apartment.
Personally my block of land virtually maintains itself, so I can sit on it forever eating cocopops until I get the price that I want. At the same time, I'm a reasonable guy and rather than sit on the land in order to make an extra 10% profit, I'd rather lower my prices, get the thing done, and move on to the next one where the profit is 10x more than the extra 10% I could have chased were I to be greedy/unrealistic.
I say make an offer that fits with your expectations, and if they don't take it, walk away. There are always other buildings. Financial athiesm and no emotion all the way.
cheerios
