The Main Differences Between Developers and Builders

The differences between a developer and a builder aren’t always clear at first glance, and the responsibilities of each vary from location to location.

Generally speaking, a developer will start out with an idea and from there carry out all the work necessary to ensure that the idea becomes reality. They perform market research, risk analysis, and work with professional planners, city planning boards, engineers, and architects, in addition to the City Council and project management to handle the behind-the-scenes details. Essentially, they take care of all the complex details necessary to allow building to commence.

Only at that point, do builders enter the picture and step in to undertake the physical work of translating design to construction.

Let’s take a deeper look at the split between the different roles and responsibilities between developers and builders:

Developers Are Involved From The Start

Developers are involved in the project from day one, and in general, are the people who first envision the project. They are responsible for generating the idea and working out how to turn it into a reality.

One of the first steps a developer will take is to look for potential land that meets the basic requirements for the project. Will putting an apartment complex on this land increase its value? Is it likely to get approved? How risky an investment is it? Most importantly, are buyers and investors interested?

Once the developer is happy with the answers to these questions, they will move to the next step.

Getting Approval

Without approval, the project simply isn’t going to happen. The concept has to meet the standards and visions of both the city officials and the community groups.

City officials often have strong opinions about how their community should develop. Maybe officials seek to construct additional high rises to have the capacity to welcome more residents. Perhaps they want to attract more tourists so opt to construct a museum or a hotel complex. However, the community board may have other ideas and will push to have a new park or mall instead.

In the case of differing opinions, developers will do their best to work with the architects to find a  compromise and propose revisions. However, the critical factor remains that the project must appeal to both investors and future buyers and secure the developer’s return on investment. If those are at peril, the project will not proceed.

Cutting through all the red tape

Once the developer has found a buyer, received the necessary approvals, and the finances and paperwork are in order, the reigns can then be turned over to the builder. But not always…

Occasionally, in locations with simpler bureaucratic systems, the developer will take extra measures like designing and building streets and curbs, and preparing lots for cement pours and utility connections. They do this both to increase the value their service and speed up the completion of  the project.

Builders bring the project to an end

Once all the bureaucratic (and sometimes physical) groundwork has been put in place by the developers, the project is handed over to the builders. In fact, oftentimes, the builders will actually purchase the project entitlements from the developers before they start the building work itself.

At this point, the builders go into detail, building the completion of the entire structure and making sure it meets the municipality’s building codes. They budget for the purchase of building supplies, bring in qualified builders, and submit construction plans to the town inspectors. In general,  builders will work fast and efficiently to deliver the project quickly.

APX West specializes in land development projects for clients looking to expand their personal investment portfolios. We offer consulting services and guidance to clients in the early stages of the land development process, to help them make the absolute most of their investments. If you’re curious about land development, or have a project that you need support with, get in touch with us on 928-412-3570.

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