Property development can be complicated, and a successful project requires the skills of many professionals. Before starting the hunt for the ideal property, consider first building a real estate development team. Once a property is under contract, the closing timeline can approach quickly, and most real estate service providers are often committed months in advance. Establishing these relationships ahead of time will help you to stay competitive, make informed choices and avoid a last-minute scramble.
Mortgage broker and lender
Securing financing for the deal is a key first step and can take weeks to finalize. As a buyer, submitting an offer with pre-approved funds may provide a competitive edge. Mortgage brokers are licensed professionals who, in addition to collecting the mortgage application and qualifying documentation, can advise on the quality of the interest rate and loan type and how to strengthen chances of approval. Mortgage brokers often have a keen sense of the financial market. A mortgage broker works as an intermediary between the borrower and the lender by comparison-shopping multiple mortgage lenders on the borrower’s behalf. Mortgage brokers are typically paid through closing by the borrower. The lender provides the finances for the purchase of the property and/or for construction of the project and can often tailor the repayment terms to your unique needs and project timeline. A lender can be a bank, a credit union or even a private individual. The lender will assess how much of a loan you qualify for based on the financial health of your business, your credit history and the project’s projected income.
A Realtor (a real estate agent or broker) is a licensed professional who represents the buyer or seller, sometimes jointly, in a real estate transaction. Realtors advise their clients on pricing by assessing similar properties in the vicinity (aka comparables) and may assist with the real estate forms.
Land use attorney
A land use attorney may research and advise on the ability to develop real property. This person can act as an advocate and liaison between the applicant and the municipality. The land use attorney may engage in pre-application meetings with municipal staff, draft narratives supporting permit and land-use proposals, and appeal denials of development permits. Land use attorneys can collaborate and coordinate with the entire development team, and review professional reports such as traffic studies, geotechnical reports and survey work.
Real estate attorney
A real estate attorney may provide legal advice regarding the purchase, refinance or lease of property and draft customized real estate agreements such as “purchase and sale agreements,” easements, deeds, tenant-in-common agreements, homeowner association documents and leases. This person can also analyze the property’s title report and encumbrances of record (liens, easements, etc.) and advise on resolving potential issues affecting the property.
A business attorney may analyze or create an entity structure to acquire the property, advise on advantageous entity structure changes, and draft supporting documents such as corporate membership agreements and ownership transfers.
A surveyor engages a boots-on-the-ground analysis, measuring the physical attributes and boundaries of the property and any improvements/buildings, to produce a detailed map of the site. This person analyzes the property records and reports recorded agreements affecting the property. Surveyors provide legal descriptions, which are used to specifically describe the property in land-use applications and deed conveyances. In some instances, a complete survey may be required by a lender to obtain financing for the property or project.
A title officer works for a title company as a steward of property records and conveyances. This person engages with both buyer and seller to ensure the conveyance complies with the parties’ agreement and timeline. The title officer analyzes agreements of record looking for discrepancies that could interfere with the conveyance. Title officers also provide recommendations regarding title insurance. The closing of the transaction will often occur at the title officer’s office with an escrow officer. A title officer can assist in coordinating remote or multiphase signings.
The architect will create a scaled drawing to bring your development vision to life. This person analyzes the municipality’s development code and advises on schematic design options that comply and provide specific information about materials used in the development. The architect’s designs and drawings are critical exhibits in land-use approval submissions.
A civil engineer analyzes the property to determine whether the property’s physical features support the proposed development and design of the infrastructure plans, including placement of streets, utilities, waste management, drainage and other systems, by creating drawings or using modeling software to visualize the plans.
An appraiser determines the property’s market value by analyzing its unique components and comparing it to similar properties. This person will produce a report that is often required by the lender to confirm the financing aligns with the property’s value. Although this list is not exhaustive and not necessarily in the order in which to engage these professionals, when you utilize the skills of these professionals as part of your development team from the beginning, it can help reduce long-term costs, delays, and mistakes. Engaging with these professionals will also demonstrate to the seller or landlord and the jurisdictional authority that you have an organized and researched proposal. These professionals frequently coordinate with each other and help by providing a support structure to ensure your project not only meets minimum approval and compliance standards but also is in the most advantageous position.
This column is intended to provide readers with general information and not legal advice. Consult professional counsel for help regarding specific situations.
Column first appeared in the Oregon Daily Journal of Commerce on April 14, 2023
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