You may hear two words regarding a real estate project: real estate developer and real estate promotor. Even though the roles can sometimes overlap, they are entirely different real estate roles.
The real estate developer is the individual or company responsible for building and renovating the land, home, office, retail center, and industrial site. The developer will start with the project from the beginning and stay with it until the project is sold. The real estate promoter’s primary role is to help promote and sell the real estate development to potential buyers.
Table of Contents
- What Is A Real Estate Developer?
- What Is A Real Estate Promotor?
- Real Estate Developer Vs. Real Estate Promotor
- Frequently Asked Questions
- Related Questions
What Is A Real Estate Developer?
A real estate developer is also known as a property developer. A real estate developer is the person, company, or partnership responsible for building and renovating homes, offices, retail centers, or industrial sites. They will take vacant land or obsolete buildings and turn them into new businesses or homes.
Real estate development coordinates all these activities to develop or create the property from paper to reality. They are the vision behind the project.
Real Estate development usually includes three main phases for the project as follows:
- Pre-development Phase – This is where the planning takes place, and the developer will look at all aspects of the development, including the feasibility and finances. In the pre-development phase, they must ensure they have the government, city, and other permits in place.
- Constructions – The construction phase is the actual construction of the project. Some developers will do their construction, and others will hire builders and others.
- Post-development – once the project is completed, the developer can either sell the development to a real estate investment company or sell it to individuals if a project is a project like a housing project.
Developers will buy the land or real property, finance the deal and then build or have builders develop their project. They are the ones that will coordinate the project from the beginning to the end.
Here are aspects of real estate development:
- Property Value – The developer’s goal of real estate development is to increase the property’s value.
- Government Permits – A developer usually works with the government, city, and others to get the permits they need for the development. They may hire consultants or others to help them if they do not do this themselves.
- Handle Project – A developer will handle the project from start to finish, including the plan, design, and finance, and get the team together to implement the project.
- Sell When Completed – The developer will usually sell the property when it is completed. Their goal is usually not to hold on to the property but to sell it and profit from it. Many times the property is sold to a real estate investor or investors.
- Real Estate Development Can Have Risks And Challenges – Real estate development can be very lucrative, but it is also an area of real estate with many risks and challenges. Everything from financing to completing the project to selling the development has risks.
Some real estate developers may also act as builders for the project. But will hire and contract out with a builder and other companies with the expertise they need to complete the project.
What Is A Real Estate Promotor?
The real estate promotor is the person or company who will help to promote and sell the development. The promoter is responsible for selling the development to the right buyers.
It can get confusing as some of the developers will also be the ones that will promote their projects. For example, you may go to a housing project and see a sign that says, “Sold directly by the developer.”
The developer is trying to tell you that they did not hire a promotor or promotion company to help sell the property. Because they make this statement, it does not mean that the property will be cheaper than any other similar properties; it is usually the same price or even more.
Some developers will hire and contract with a real estate brokerage or agency to help them promote and sell the property. One reason they would do this is that the real estate agency or brokerage would have the connection and expertise to help sell their property.
Real Estate Developer Vs. Real Estate Promotor
A real estate developer is the individual or company that develops the land or building. They are the company with the vision of what they want the building or land to look like and why.
The developer will work with the designs, government approvals, implementation, and building and will see the project through until it is sold.
On the other hand, the real estate promotor will be the individual or company whose main focus is to advertise or sell the project to investors or homeowners. They are a company like a real estate agency or brokerage firm with the expertise to sell the project to potential investors.
Even though sometimes these roles will overlap in that a developer may advertise they are selling their project directly to the homeowner, the truth is that the developer and promotors are two very different roles that work hand-in-hand to help see the successful sale of the real estate development.
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Frequently Asked Questions
What is a real estate developer?
A real estate developer is an individual or company that is responsible for constructing and renovating properties such as homes, offices, retail centers, and industrial sites. They oversee the entire project, starting from its inception until it is sold.
What does a real estate developer do?
A real estate developer initiates and manages the development process. They acquire land, secure financing, obtain permits, plan and design the project, hire contractors and subcontractors, oversee construction, and market the completed development for sale.
How does a real estate developer differ from a real estate promoter?
While the real estate developer focuses on the construction and management of the development project, the real estate promoter’s main role is to promote and sell the completed real estate development to potential buyers.
What is the primary responsibility of a real estate promoter?
A real estate promoter’s primary responsibility is to market and sell the real estate development to potential buyers. They use various promotional strategies and techniques to attract buyers and close sales.
Does a real estate developer only build new properties?
No, a real estate developer may also renovate existing properties. They may acquire and redevelop older buildings, refurbish them, and bring them up to modern standards.
How does a real estate developer acquire land for development?
Real estate developers acquire land through various means, such as purchasing it directly from owners, negotiating deals with landowners, participating in land auctions, or collaborating with government entities for land allocation.
How do real estate developers secure financing for their projects?
Real estate developers secure financing through various sources, including banks, private investors, real estate investment trusts (REITs), partnerships, and syndication. They present their project plans and financial projections to potential financiers to secure the necessary funds.
What permits and approvals are required for a real estate development?
The permits and approvals required for a real estate development vary depending on the location and nature of the project. Common requirements include zoning permits, building permits, environmental impact assessments, and approval from relevant local authorities.
Related Questions
Can You Take The Real Estate Exam Without Taking Any Classes?
Becoming a Real Estate agent in the United States requires you to take a real estate exam for the state or area where you want to sell real estate. Each state will have some slightly different real estate laws.
By clicking here, you can read more about Can You Take The Real Estate Exam Without Taking Any Classes?
Why Is Real Estate Called ‘Real Estate’?
The word Real Estate comes from the Latin word realis, but it refers ideally to the physical and economic characteristics of real estate or real property. The word Real Estate can date back to the 17th Century. Real Estate is a legal term used in many English-speaking jurisdictions worldwide.
By clicking here, you can read more about Why Is Real Estate Called ‘Real Estate’?.
