Real Estate Development – Finding the Right Builders
It is the wish of investors in the world to have a breakthrough in the real estate development industry. The attraction to the industry is based on its lucrativeness. Builders however do the actual construction in the real estate industry on behalf of the real estate developers. It is for this reason that the best builders should be contracted for the job. A good builder can be found based on several parameters.
Securing the right builder for an initial real estate development project is very important. Much as the building work is done by the builder, the developer must also prepare adequately before awarding the tender. The first thing is for the developer to get the necessary documentation. Documentation is the guiding blueprint for the project.
You need to have a bulletproof documentation for the builder to use as a foundation for the project. The details of how construction will be done are contained in the documentation. No assumptions can be made by the builder during quotation if the documentation is waterproof. The documentation should include drawings for the work, engineering plans, landscaping, soil and energy reports among others.
Inflation of the cost of building can be done by the builder if the documentation is not bulletproof. The developer hence incurs losses while the builder celebrates increased income. If something is missed in the tender process, it will still have to be included but the cost will be significantly higher. The excess cost will be transferred to the developer. It is therefore important not to sign the contract with a builder without proper documentation.
Customizing liquidated damages is important if you are to get the best builder. 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. Ensure yu have a custome liquidated damages contract to cushion yourself from loses incase the project takes longer than the stipulated time.
As you tie down the builder with a liquidated damages contract, provide sufficient time in the contract for the builder to finish the project well. If you allocate the project less time, the results could be less than impressive due to the haste in completion. Of importance also is the concept that in real estate development, time equals money. From the concept, there should be a positive correlation between project timelines and the money to be spent on it. Plans should be put in place to ensure that there is a balance between how fast the project should be completed and the cost to be incurred. 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.