If you've been searching for a condo in Greater Vancouver, there's an important part of today's market that many buyers never see.
Public listing prices don't always tell the whole story.
A recent Globe and Mail investigation brought national attention to a practice that has quietly existed in parts of Vancouver's new construction market for some time. Working with Veritas Investment Research, a mystery shopper was reportedly offered an approximately $700 per square foot discount, but only after agreeing to sign a Non Disclosure Agreement (NDA). According to the report, the agreement kept the purchase price, incentives and negotiated terms confidential rather than allowing them to become part of the public record.
Although this story is making headlines now, I've been helping buyers navigate transactions like these for years.
Over the years, I have represented buyers in transactions involving confidential negotiations with developers. Every transaction is unique, but I have personally signed confidentiality agreements alongside my clients when required by the developer as part of the purchasing process.
In some situations, homes are sold privately before ever appearing on MLS. In others, listings are removed from the market and negotiated through exclusive channels. Depending on the agreement, buyers and sellers may not be permitted to disclose the final purchase price, incentives or other negotiated terms.
That does not mean every developer follows this approach. Many developers continue to market and sell their homes through traditional public listings. However, confidential agreements have become one strategy used by some developers in today's slower condominium market.
Why does this happen?
One reason is that publicly recorded discounted sales can influence comparable values within a building. Developers often prefer to protect the perceived value of their remaining inventory while still creating incentives that help move completed homes. Confidential pricing allows them to negotiate individually without every incentive becoming part of the public sales history.
Veritas Investment Research describes this environment as one influenced by "shadow prices" and "shadow inventory." Shadow prices refer to discounts negotiated privately that never appear in public sold data. Shadow inventory refers to additional available units that may not be actively marketed through MLS or public websites. As a result, publicly available listings may not fully reflect every opportunity available to buyers.
Click here to read Globe and Mail article.
Today's market has shifted in favour of many buyers. Depending on the project and developer, purchasers may encounter incentives such as confidential price reductions, closing credits, deposit assistance, mortgage related incentives or upgraded finish packages. Every project is different, and these incentives vary based on market conditions and developer objectives.
The biggest takeaway is simple.
The advertised price isn't always the final price.
The strongest opportunities aren't always visible on MLS. Sometimes they are negotiated quietly through private discussions between buyers, developers and their representatives.
Having an experienced REALTOR® who understands today's market, has established developer relationships and knows where opportunities may exist can make a meaningful difference when purchasing a home.
If you're considering buying a condo in Greater Vancouver, I'd be happy to discuss current market conditions, explain how developer incentives work and help you determine whether there are opportunities that fit your goals.
Disclaimer:
The information provided is intended solely for general guidance and informational purposes in the context of real estate transactions. I am a licensed real estate professional and not a tax advisor, accountant, or legal professional. As such, I do not provide tax, legal, or accounting advice.
Any discussions regarding tax implications, financial outcomes, or regulatory matters are based on general knowledge and should not be interpreted as professional tax or legal advice. Tax laws and regulations are complex and subject to change, and their application may vary depending on individual circumstances.
Clients are strongly encouraged to consult with a qualified tax professional, accountant, or legal advisor to obtain advice tailored to their specific financial and tax situation before making any decisions that may have tax or legal consequences.
By relying on information provided by me, you acknowledge that I am acting solely in my capacity as a real estate professional to help guide you through the real estate process, and that all tax-related or legal determinations should be verified with the appropriate licensed professionals.
The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Greater Vancouver REALTORS® (GVR), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the GVR, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the GVR, the FVREB or the CADREB.