5 Questions Every Land Owner Should Ask A Real Estate Developer

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5 Questions Every Land Owner Should Ask A Real Estate Developer

Real estate developers are key to the development of landed properties. They purchase land, finance the building processes, control the entire process from the beginning to the end.

Real estate developers can also go into a joint venture with landowners: an instance which makes the profits/gains from such venture shared.

Lots of landowners and real estate developers relationships have gone sour and severed due to lack of well-defined and well-documented agreement. This has resulted in many ending up in courts. About 60% of severed relationship has been caused by both parties not asking very important questions that will help create a defined understanding of their partnership.

In order to reduce this common problem seen between landowners and real estate developers, this article will discuss the 5 essential questions any landowner should ask a real estate developer before signing that agreement or accepting any partnership.

What’s The Real Estate Developer’s Portfolio?

Knowing about your real estate developer can help you understand them better, finding out more about your developer should be the first thing to do when deciding on the developer to use because the real estate industry is congested with inexperienced developers. You should ask the real estate developer about their experience, their past projects, how long have they been into the real estate development project. Let them identify their strengths and weaknesses in their job. Ask them about their successfully completed projects as this should be included in their portfolios. Ask your developer if you can talk to their past clients just to have an insight into their delivery. Having a background check on your developer is the smartest decision you are going to make.

How Much Do You Plan On Investing In The Project?

The need to ask developers how much they plan on investing cannot be overemphasized. Having a developer that is not willing to spend a reasonable amount of money might result in getting cheap quality materials to balance the lack of funds. You should know who your developers are, if possible, know their source of income because lack of financial flexibility can have a negative impact on the plans for the project.

What’s the Proposed Duration of The Project?

Before any agreement is reached between the landowner and a real estate developer, it is very crucial to ask the developer how long would it take for the project to be completed. This will help create a clear understanding between them. When there is an agreed time, it makes the developer take the project with high importance. You don’t want to end up having a developer that will not take up the project seriously.

 

What Are The Payment Plans?

Over 75% of conflicts between property developers and landowners have been attributed to lack of well-designed and specific payment scheme. The landowner before starting off any partnership with a property developer should ask questions about the payment plan that they both will prefer. Landowners should always stick to the payment that best suits them.

 

What Should Be Legally Binding?

This is the most crucial question any landowner should ask a real estate developer to protect themselves from the inability of the developer keeping to his own end of the bargain. The agreement will be documented in a legal document.

This will help protect your interest should in case the property developer does not keep to agreements met during the striking of the partnership. There should be a legal document for every part of the venture. Every aspect from the agreement of both parties, through the commencement of the project to the end, payment and all.

There you have it! Hope you have been able to discover the five (5) essential questions you need to ask any real estate developer before you enter that partnership?

 Do you have other questions you feel is very essential and was not mentioned here? We would love you to ask at the comment box below.