Why It’s Vital To Involve Your Agent Early in the Development Process
June 1, 2019
The push/pull nature of the property development process can leave people feeling as if they have lost control, as town planning permits evolve and development plans are forced to adapt.
And when the final result leaves you with a project that seems vastly different than the one you started with, too many inexperienced property developers can suffer the stress of being left with a product that is difficult to market to a clearly defined audience.
Involving your sales agent as early as possible in the process is a critical step that many developers overlook. When that relationship is properly nurtured the positive flow-on can be projects that are easy to market to willing buyers – something that can improve your potential to achieve solid sales results.
Clear Vision Leads to Strong Sales Results
“It’s always good to have a clear vision about who you want to live in these properties,” says Heath Thompson, Director at Projects by Buxton. “It’s okay to have an apartment development that has something to offer a range of people – with some first-home buyers, some professionals and some downsizers – but unless you know precisely who your target buyer audience is, it’s challenging to successfully market a development.”
From a town planning perspective, Heath cautions that, although your first draft might hit that nail on the head, the town planning process itself – complete with enforced modifications – can change your original vision dramatically.
Be Prepared to Adapt – But Never Forget Your Target Market
“Evolution does happen but you still need to end up with a product that does make it easy to sell to your intended target market,” he says. “If the product you planned becomes a product that your original target audience will not recognise or appreciate, your agent is left with something that is hard for them to market in a way that’s cost-effective and successful.” Successful property development walks hand-in-hand with measurable sales results and to ensure that process happens smoothly, Thompson says involving a real estate agent early in the development process helps manage potential risks and maximise value from the get-go.
“There’s a fine line between maximising value and minimising risk and, in the past, when the trend was that bigger was always better, there was a point too many developers reached by creating apartments that were just too expensive,” says Thompson. “Research must be thorough to ensure that you meet what your willing market wants and needs, without over or under-providing.”
Minimise Risk to Maximise Potential for Success
Settlement risk is real and by understanding the impact it can have on the sustainable livelihood of property developers, it can be avoided.
“You might be able to achieve record sales prices but if you go too far with that, you can still fail because, at the end of the day, the most important thing is to always keep an eye on the purchaser’s ability to secure finance for property settlement,” Thompson says. “If you get to the end and the purchaser can’t buy, the developer is at risk of being left with apartments they can’t sell,” he says. It’s why Thompson’s own experience in property development, as a Director of the newly-merged Projects by Buxton, informs every decision made – with comprehensive feasibility studies guiding every aspect of property development projects. “If you’re asking yourself when you should be engaging your sales agent, the answer is always: ‘the earlier, the better”.