Developer’s Role
The Developer owns the land and generally adds value to it by attaining approvals from the city for the proposed land use. The Developer may also be the builder in many cases. Once the overall project concept has been finalized and approved by the city, they commence with their marketing phase. A good marketing program will create excitement, curiosity, and a desire from the general public which usually involves a registration phase – in it’s simplest form, this is a database of people who have shown interest in the project which was sparked by some form of marketing i.e.: signs, advertising, direct mail, web-site etc… Once the Developer has generated a desirable amount of interest, they will offer the project to them in some form (an official launch date). The intent of pre-sales (offering a project before construction has started) is to generate enough firm sales to secure construction financing from their lenders in order to start construction activity. The number of required sales the Developer needs is usually dependent on their lender requirements. Once construction has started, the level of risk that the Developer takes is reduced significantly and they continue with sales activity until the project is sold out.
Not All Developers Are the Same
Once you have decided to purchase new do your research and complete Developer background checks. There are many Developers and builders out there with great intentions with a few not delivering what they promised. Since buying a new home is most likely your largest purchase in your lifetime, we encourage that you do some homework. Here are some suggestions:
- Homeowner Protection Office – Is the Developer registered with the Homeowner Protection Office? This is an organization (www.hpo.bc.ca) that is part of the Ministry of Housing and allows consumers to make inquiries about a particular Developers track record.
- UDI – Is the Developer a member of the Urban Development Institute? Members of the UDI sign a code of ethics ensuring that they are building to certain standards.
- New Home Warranty Program – New condominium and townhouse developments in BC are required to have warranties but owner-built homes may not.
- Word of Mouth – Speak to other people who have bought through the Developer you are considering and get their opinions on how their purchase was.
