A priest is dying. On his deathbed, he asks to see a property developer and a lawyer.
Both of them arrive timely to see him.
“We are very touched that you remember us at the end of your journey.” They tell the priest.
The priest gasps, holding tightly the hands of the developer and the lawyer.
“All my life I’ve been following the footsteps of my Lord. And I want every phase of my life to be like Jesus Christ, including my death. That’s why it is important to have both of you here.”
“What do you mean?” The developer and the lawyer are puzzled.
“When Jesus was dying on the cross, he was accompanied by two thieves – one on his left, and the other on his right.”
Some of you might have seen this joke before.
My mother can’t agree with this more. Two weeks ago, I re-told her sad story to the forty participants at the How to Buy Good Quality Properties 1-Day Workshop: During the property boom, mom bought an overpriced brand new property with her life savings. Both the surrounding environment and unit layout had much room for improvement. The actual unit turned out to have shrunk so much in size that it was unrecognizable from what she remembered showing in the sales brochure. It also had countless developer defects that were unfixed after a long wait.
Personally, I have never bought new launch projects at the peak of the market at “future prices”. Nor have I been stuck in a difficult lawsuit that keeps draining my hard-earned money. I am fortunate to finally find a good conveyancing lawyer who is a Christian himself.
We can’t deny the fact that we do have honest property developers around dedicated to build good quality projects and market them at reasonable prices. However, like any industry, you just can’t avoid seeing some black sheep every now and then.
When you are buying off-plan in an uncompleted project, whether it is local or overseas, do you have the knowledge and experience to tell a good developer from the bad one?
You may find it useful to refer to the abstract below from the article “Developers: how to tell the good from the bad” in my book No B. S. Guide to Property Investment.
When evaluating a developer, always look for three things: experience, reputation and attitude.
1. Past experience
Study the history of the developer. Sometimes the company is a subsidiary of a big developer, or a joint venture of a few players in the industry.
Check the references or past projects of the developer. How many similar projects have they built in the past? Do they specialize in commercial or residential development? Is property their new venture outside their core business? Is this the first project of an overseas developer?
Beware of ‘one-time builders’ who try their hands on properties when the market looks lucrative. They might not have the ability to cope with unforeseeable situations in the future.
2. Company reputation
If you want to understand more about a developer, look for complaints from owners in their past projects. Conduct secondary research in newspaper archives and you will find a list of projects with different complaints on poor workmanship, building defects, missing floor area, etc. (Note: Please refer to my book No B.S. Guide to Property InvestmentTable 3.4 Past projects with building defects or owner complaints)
I am not saying that it is all the developers’ fault. The percentage of problem cases may be small compared with the projects they have built. To be fair, sometimes it is the supplier, the contractor or the architect who gets the developer into trouble.
Nonetheless, the best time to put a company to test is always the time when things go wrong. The most important thing to look for is the response from the developer and the way they handle the matter.
How fast did they take action? Did they live up to their promises? Did they just shrink from their responsibility and simply put the blame on others? Did they only soften their stand when the management committee puts the case in court?
3. Vision and attitude
Does the developer have the vision to differentiate from other industry players by building the best-in-class projects? Or is it just another developer who is there to reap the maximum profit from home buyers?
The sincerity of a developer is all reflected in the details. A good developer focuses on every single detail of the development. It sets high standard in construction, offers professional workmanship, and provides good quality fixtures. It is the superior product that makes it worthwhile for buyers to pay a premium price.
Hope you have taken some hints about how to pick a good developer. Good luck in your property hunting!
This article was first published at propertysoul.com and is not an advertorial