It is the wish of investors in the world to have a breakthrough in the real estate development industry. This is because the industry is known to be very lucrative the world over. Real estate developers are the investors but they require the services of builders for them to achieve their eventual goals. 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.
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. First of all, the developer must have all the necessary construction documentation. Documentation is the guiding blueprint for the project.
The builder uses a good bulletproof documentation as the core pillar of the project. The details of how construction will be done are contained in the documentation. There is no room for assumption during quotation if the developer came up with a bulletproof documentation. Things that should be included in the documentation include, energy reports, soil reports, landscaping and engineering.
There is room for the builder to inflate costs if they are not presented with watertight documentation for the project. The loser then becomes the developer who incurs loses. If something is missed in the tender process, it will still have to be included but the cost will be significantly higher. 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. This states what amount of money shall be paid as damages to the developer just in case the builder violates timeline agreements. Trusting a builder’s word that the project will be completed on time is not a good idea. 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. If you allocate the project less time, the results could be less than impressive due to the haste in completion. Also consider the real estate concept that time equals money before deciding on which builder to contract for your real estate development work. 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. Applying all the strategies above will enable you to get the best financial deal for the tender.
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