Tips for The Average Joe
Venturing in the real estate development industry is the desire of many investors. This is because the industry is known to be very lucrative the world over. Builders however do the actual construction in the real estate industry on behalf of the real estate developers. For a real estate developer to be successful, they must secure the services of the best builders in town. The goodness of a builder is based on many parameters.
If you are starting an initial project in real estate development, getting the right builder is of paramount importance. Before the builder gets to work, the developer must prepare adequately for the project. The first thing is for the developer to get the necessary documentation. You can view documentation as the foundation of the construction project.
The builder uses a good bulletproof documentation as the core pillar of the project. It guides the processes to be followed during construction. With a bulletproof documentation, the builder can accurately quote it without making any assumptions. It should include among others, engineering plans, landscaping, energy reports and analysis of soil.
There is room for the builder to inflate costs if they are not presented with watertight documentation for the project. The developer hence incurs losses while the builder celebrates increased income. If there is something that was missed in the tendering process, it will still have to be done but an a higher cost. The developer will have to shoulder the extra cost. Therefore, ensure documentation is watertight before tying down a builder to a contract.
The best builder can be found if custom liquidated damages contracts are signed beforehand. The amount of money payable to the developer by the builder if set timelines are not met is dictated in this agreement. Do not take the builder’s word that they will complete the project in the required time. Get a custom liquidated damages contract for them so that you are protected incase the project overrides the time allocated for it.
Even as you get a liquidated damages contract, ensure that you have given the builder ample time to complete the project. Less time allocated means that the work done could fail to be impressive due to the rush to beat the deadline. Of importance also is the concept that in real estate development, time equals money. This concept suggests that there must be a balance between the timelines for the completion of the project and the financial implicaitons. Have a plan that balances the financial implications and the timelines. If you consider all the above factors, you will be in the right position to get the best builder under the right deal for your real estate development work.
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