Cases of bankruptcy of developers in our country are not uncommon. Therefore, in order not to be left without a solid amount of money and the desired real estate, you need to choose a development company carefully. Our tips site will tell you what criteria you need to follow when choosing a reliable developer.
Let’s first define how a developer differs from a builder. The concept of “development” is much more capacious. The development company has more functions. She doesn’t just build real estate by fulfilling a specific order. The developer chooses a project, decides where to invest, studies the real estate market, builds, controlling the entire process, and then sells the object or objects. A developer is an investor, a designer, a developer and a realtor. And often he also takes on the functions of the management company, maintaining and repairing the facility after commissioning. Choosing a reliable developer is often difficult, but our advice will help you do it right
First criterion – work experience
An important indicator is how long a developer has been working in the real estate market. The portal wrote how you can collect data on the Internet about a builder-contractor. You can also find a lot of information about a development company, in particular, in an extract from the Unified State Register of Legal Entities. If the developer is already several years old, this is a good indicator.
The second criterion is the number of completed projects and the geography of work
If a developer works in several regions, has branches and divisions, this indicates the scale of work, the scope of the company. In addition, it is important how many construction projects were commissioned in advance. If for all the years of its existence the company has commissioned only one cottage village – this is alarming. What did she do the rest of the time, why are the construction volumes so low??
In 2019, the Moscow PIK group was in the lead in terms of construction volumes in the Russian market, building about 7.4 million square meters of real estate. This is an important criterion for choosing a developer, but not the only one! It is also necessary to assess the deadlines for the delivery of objects and the fulfillment of the schedule, whether the developer is building with his own money, how balanced his business is. The choice should be made according to several criteria, data set.
Third criterion – availability of project documentation and declarations
According to the law, a developer must post on his website projects that he has implemented over the past three years. One-day firms don’t do that. In addition, it is important that potential customers have the opportunity to familiarize themselves with the company’s declarations. This allows you to make sure that the developer has no debts, he works with a profit.
Fourth criterion – partners and investors
You should find out who the developer is working with. If there are large banks, leading enterprises, state-owned companies among its partners and investors, this is good. This means that they trust the developer, they are not afraid to invest in his projects. Banks also carefully check their large clients, assessing the results of their activities.
The fifth criterion is the presence of all the necessary documents
We are talking about a building permit, title documents for a land plot and a developer’s liability insurance contract. If the developer does not have one of these documents, it is better not to cooperate with him. In this case, the building permit must correspond to the type of object. That is, to be issued specifically for an apartment building, for example. If the land is leased, you need to find out for how long the contract was concluded, whether the object will be commissioned before the specified date.
Criterion six – how fast is construction going
On average, developers build two or three floors of an apartment building per month. This indicator should be guided by. If the house has not grown by a single floor in a month, this is a wake-up call, with a high degree of probability the developer has problems at some stage..
Seventh criterion – how workers are paid
You can just go to the construction site and ask the builders a couple of questions. If their salaries are delayed for the second month already, this indicates problems with money at the development company. There is a risk that the construction will be suspended.
Criterion Eight – Contract
The contract with the developer should contain as much information as possible about the object, the rights and responsibilities of the parties, the deadlines for delivery, the price, force majeure and so on, must be prescribed. If you are not sure that you will deal with these important documents yourself, it is better to resort to the services of a specialized lawyer working in the real estate market. He will assess the quality of the contract with the developer and the possible risks.
Criterion nine – customer and investor reviews
Online reviews cannot be 100% trusted. They can be written by copywriters at the request of competitors or the developer itself. It is advisable to visit the already commissioned objects of the company, to talk with the buyers of apartments and cottages to find out if they were satisfied with the cooperation with the developer, if there were any problems in the process of commissioning the real estate.