New Construction Sales for Developers

If you are an aspiring or experienced developer, I can help you navigate the entire new construction sales process. And for me that frequently starts before you even have the property.

So the steps usually look something like this prior to buying the development opportunity:

  1. We hop on a call or meet up in person. I’ll take this time to better understand your financial objectives, your budget, how much work you can take on, and your level of experience. All of these factors will heavily influence the best approach for you.

  2. From there, we’ll identify the areas to target. This includes both towns and particular neighborhoods to focus on AND I’ll identify the nuances that come with development in each town. 

  3. Then I’ll help you find a property. While HGTV shows make it look easy, it is not uncommon to take 3-12+ months to identify a property where the numbers work AND actually get the property all the way to closing. There’s so much that goes into this step that I could write an entire article on the subject - so you’ll have to save the deep dive for another day.

OK great, we identified the property and we closed, woohoo! Now the serious work comes into play. At this point in the process, I will work with you and your architect to help determine a whole boatload of things. Below are a few big ones:

  1. The layout of each of your units. Do you maximize # of bedrooms or do you focus on fewer bedrooms but larger?  What about bathrooms - do you squeeze in as many half-baths as possible or go for quality? etc. 

  2. The parking set-up for each of your units. Are you going  tandem or can you pull off non-tandem? How many spots per unit? etc. 

  3. The yard/common space situation for each of your units. IIs all outdoor space common? Do you give one unit exclusive yard space? Do the units share? etc.

Once we have determined the general layout and big issues, you get to work. Most new developers wildly underestimate the work involved, the cost, and the time it takes to pull this off.

A typical 2-family condo conversion in my experience will take anywhere from 12-18 months to go through the entire process. Generally the more experienced the developer, the less time the conversion will take, although that is not always the case.

Sometimes surprise issues come up that delay projects. Other times there are delays due to subcontractors, material delays, permitting delays, special variance delays, and the list goes on. 

Once we get past multiple rounds of inspections from the city, it’s time to figure out some key design elements. Key design elements can be the difference between a project selling for more than expected and in less time OR a project selling for less than expected AND in more time. This area is wildly underrated by developers in my experience and unfortunately many developers think they can handle this piece on their own.

While I don’t have an A+ design sense, I work closely with my wife who has an excellent design sense and has a very good feel for what buyers are looking for at different price points. She is heavily involved in the process and often together we create “look books” to help inspire developers to ensure they are using the right finishes for the right projects.

What are some common design areas where developers miss the mark? 

  1. Flooring (Oftentimes developers will go with cheap light gray engineered hardwood or dark hardwood - we find that light engineered hardwood is often the way to go, but it depends on a number of factors including price point, area, and budget)

  2. Lighting (Poor lighting choices make units look cheap. Great lighting choices can elevate a space. Developers often don’t want to splurge on the $500 or $1000 light fixture, but sometimes that’s what a space needs to get to your number)

  3. Appliances (You really need to understand when it’s OK to go cheaper with your LG or GE appliance package and when you need to go for higher end appliances like Fisher & Paykel)

After the design and finishing work is completed, I work with the developer on pricing strategy, staging and styling, and marketing strategy.

From there, we get offers in and I help negotiate to ensure we are maximizing sales price and optimizing terms. 

And finally, I’ll help negotiate the final big piece of the new construction puzzle - the blue tape process, or punch list process. This is where the buyer goes through the home and tapes up the various tweaks they’d like to change prior to closing. The builder will make the updates prior to close and the buyer and buyer’s agent will confirm all looks good. 

Understanding what is a reasonable ask of the buyer and what is not can save you a ton of time, money and stress - so it’s critical you have an agent who can help you navigate this process. 

On a high level, this is what the new construction/gut renovation process looks like from end to end. Of course there are more details not mentioned here, but I believe you have a decent primer on what to expect.