Securing the Right Builders for Real Estate Development
Venturing in the real estate development industry is the desire of many investors. They find the real estate industry to be very lucrative. Real estate developers do however need the services of builders who will do the actual construction. It is for this reason that the best builders should be contracted for the job. The goodness of a builder is based on many parameters.
For an initial real estate project, it is important to secure the right builder. 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. 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. 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.
Inflation of the cost of building can be done by the builder if the documentation is not bulletproof. Eventually, a weak documentation for the project ends up benefiting the builder as you count losses. Omissions from the tender cannot be omitted during building and this will attract increased expenditure. The developer will have to shoulder the extra cost. Therefore, do not lock down a builder before getting your documentation right.
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. Less time allocated means that the work done could fail to be impressive due to the rush to beat the deadline. To be considered also is the concept of time equals money that guides the real estate development industry. From the concept, there should be a positive correlation between project timelines and the money to be spent on it. You must develop a matrix that figures out the financial implications of timelines allocated for the project. 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.