Understanding Professional Real Estate Consultancy Services

In this article, we will discuss the importance and significance of Real Estate Consultancy and how does it work for sellers and buyers.

The Real Estate Consulting team covers the full spectrum of real estate valuation services, ranging from evaluating large and diverse portfolios to performing single property analyses as well as the identification and valuation of tangible and intangible real estate related assets.

The Republic Act No. 9646, which shall be known as the “Real Estate Service Act of the Philippines,“ begun and held in Metro Manila on July 28, 2008 and was approved by the Senate and House of Representatives on July 29, 2009. According to the RESA Law, It is an act regulating the practice of real estate service in the Philippines, creating for the purpose a professional regulatory board of real estate service, appropriating funds therefore and for other purposes. Under this article, Real Estate Consultant is defined as a duly registered and licensed -natural person who, for a professional fee, compensation or other valuable consideration, offers or renders professional advice and judgment on: (i) the acquisition, enhancement, preservation, utilization or disposition of lands or improvements thereon; and (ii) the conception, planning, management and development of real estate projects.

Professional real estate development consultants work directly with organizations and companies to develop real estate projects. The primary role of the development consultant is to manage the entire real estate development process – from initial concept to the start of operations for the finished project. While other members of the real estate development team perform specific tasks at different stages during the course of development, the development consultant oversees the entire process and is engaged throughout all stages.

2. Highest and best use, or highest or best use (HBU), is a concept in real estate appraisal that shows how the highest value for a property is arrived at. In any case where the market value of real property is sought that value must be based on its highest and best use. Highest and best use is always that use that would produce the highest value for a property, regardless of its actual current use. It is also the reasonable probable and legal use of vacant land or improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value.

Market research is any organized effort to gather information about target markets or customers. It is a very important component of business strategy. The term is commonly interchanged with marketing research; however, expert practitioners may wish to draw a distinction, in that marketing research is concerned specifically about marketing processes, while market research is concerned specifically with markets.

Feasibility studies aim to objectively and rationally uncover the strengths and weaknesses of an existing business or proposed venture, opportunities and threats present in the environment, the resources required to carry through, and ultimately the prospects for success. In its simplest terms, the two criteria to judge feasibility are cost required and value to be attained.

A well-designed feasibility study should provide a historical background of the business or project, a description of the product or service, accounting statements, details of the operations and management, marketing research and policies, financial data, legal requirements and tax obligations. Generally, feasibility studies precede technical development and project implementation.

Real estate development requires that you investigate the possible negative and positive outcomes of a real estate project before you start investing time and money into it. Such an analysis is called a (real estate) feasibility study. In more concrete word this analysis allows you to take into consideration legal, economic, technological, and other factors, which are important for the successful completion of real estate development.

Project study

Before a project is built, a study must be done to determine if it will fill a transportation need, will not negatively impact the surrounding area and fits the department’s overall plan. During the study phase, potential projects are analyzed to determine if they are cost effective, while also efficiently improving mobility. Some of these projects have moved beyond the study phase and are under construction.

Many of these types of organizations and companies developing real estate is an infrequent activity. For this reason, many lack the internal capacity including available time, skills, and knowledge to develop real estate in an efficient manner. Engaging the services of a professional development consultant is a cost effective method for many organizations and companies to acquire the knowledge and skills necessary to develop real estate without the need to hire new staff or re-direct existing resources.
What does a Real Estate Development Consultant do?
By working together, the owner and development consultant become the “developer” of the real estate project. While the owner is responsible for decision making, the development consultant takes on the responsibility for managing the entire development process, coordinating the work of the development team, serving as central point for communication and decision making, and providing advice to the owner. In addition, the development consultant takes on a number of specific tasks either independently or in conjunction with other members of the development team. These tasks normally include:

§ Oversee the preparation of development program and concept plan(s)
§ Undertake market/need/demand analysis
§ Identify, evaluate and assist with negotiating property acquisition
§ Assist with project design (particularly from market and budget perspectives)
§ Prepare capital and operating cost budgets
§ Assist with zoning and other development approvals
§ Prepare applications for government assistance
§ Prepare marketing materials and coordinate marketing/application/pre-leasing/pre-sales process
§ Prepare financing applications and negotiate terms
§ Coordinate an acceptable procurement method and construction contract
§ Account for all project costs
§ Assist with organizing property management
Because each project is unique, it is difficult to list the exact tasks the development consultant may take on. In fact, because development consultants are frequently involved very early in the development process, the exact list of tasks may be impossible to know until the development process has begun and the full scope of the project is known.

Development Consultants and the Real Estate Development Process
For most projects, development consultants guide owners and the development team through a five step real estate development process.

Step 1: Organization and Property
During the first step, the development consultant helps the owner assemble the development team, identify the project’s goals and objectives, secure/define the property to be developed, and develop an initial building concept. The development consultant also assists the owner in assessing its own financial and operational capacity to undertake development of the project.

Step 2: Feasibility

The development consultant works with the owner to assess the project’s feasibility. This step typically involves helping the owner with tasks such as: market/need/demand analysis, preliminary designs, preliminary capital and operating budgets, financing applications and negotiations, and zoning/development approvals. The goal of the feasibility stage is to help the owner determine whether it should proceed to the next stage of development.

Step 3: Pre- Construction

Once feasibility has been determined the next step is pre-construction. Deciding to go to pre-construction is normally a major step for an owner as it usually involves significant expenditure of funds for architectural and engineering services. During this stage the development consultant also helps the owner determine an acceptable construction contract. The goal of step three is to arrive at a final capital cost budget, finalize agreements, and achieve all necessary approvals in order to proceed with construction.

Step 4: Construction

Step four is construction of the project. During this step the development consultant participates in construction meetings, helps the owner resolve any construction issues that arise, accounts for all project costs, and facilitates advances from financing agencies. Depending on the project, the development consultant may also need to initiate and coordinate the marketing/pre-leasing/pre-sales process.

Step 5: Post-Construction

The final step in the development process involves assisting the owner with setting up for on-going property management, initial move-ins, clearing-up construction deficiencies, and finalizing the project’s capital cost. Depending on the situation, the development consultant may also need to help the owner initiate staffing or enter into an on-going property management contract.

Because developing real estate is a cumulative process with each step forming a foundation for the next, it is important for the development consultant to be hired by owners as early as possible in the process. Decisions made, or not made, early in the development process can have a major impact later in the process. Awareness of how early decisions impact later in the process is one of the skills a qualified development consultant brings to a project

Who can benefit from the services of a Real Estate Development Consultant?
Professional real estate development consultants are engaged by a wide range of non-profit and for-profit organizations and companies interested in developing multi-unit residential, health care, institutional, and commercial projects. These organizations and companies include:

§ Health care agencies and authorities
§ Non-profit housing authorities and organizations
§ Churches and other faith based organizations
§ Hospitals and personal care/nursing homes
§ Colleges and universities
§ Community service organizations
§ Government departments/agencies
§ Private real estate investors/trusts

For many of these types of organizations and companies developing real estate is an infrequent activity. For this reason, many lack the internal capacity including available time, skills, and knowledge to develop real estate in an efficient manner. Engaging the services of a professional development consultant is a cost effective method for many organizations and companies to acquire the knowledge and skills necessary to develop real estate without the need to hire new staff or re-direct existing resources.

How do Real Estate Development Consultants get paid?

Typically, real estate development consultants get paid fees based on a percentage of total project cost. The percentage amount depends on the size and complexity of the project, with smaller projects tending to have slightly higher percentages than larger projects.
For many projects, owners ask development consultants to share some of the up-front financial risk associated with developing real estate by deferring payment of fees until the project proceeds to construction. This sharing of financial risk translates into the development consultant assuming more of a partnership role through pre-construction phases of the project. Asking development consultants to share in the financial risk may alter the development consultant’s percentage fee calculation.

Developing real estate is a complex process involving years of effort, large sums of money, and the work of many professionals. In recent years, changes in financing procedures, shifting market needs and demands, increasingly more complicated government programs and development regulations, and evolving design requirements have all added to the complexity of the real estate development process. An experienced professional development consultant offers owners the comfort of having someone “on board” who understands the complexities of real estate development and has navigated through the process many times before.

CONCLUSION:

Source: http://en.wikipedia.org/wiki
http://www.wgkastes.com

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Ramon Cuervo III
To john Paul MendozaMe
Today at 9:21 PM

What does a Real Estate Development Consultant do?

By working together, the owner and development consultant become the “developer” of the real estate project. While the owner is responsible for decision making, the development consultant takes on the responsibility for managing the entire development process, coordinating the work of the development team, serving as central point for communication and decision making, and providing advice to the owner. In addition, the development consultant takes on a number of specific tasks either independently or in conjunction with other members of the development team. These tasks normally include:

§ Oversee the preparation of development program and concept plan(s)
§ Undertake market/need/demand analysis
§ Identify, evaluate and assist with negotiating property acquisition
§ Assist with project design (particularly from market and budget perspectives)
§ Prepare capital and operating cost budgets
§ Assist with zoning and other development approvals
§ Prepare applications for government assistance
§ Prepare marketing materials and coordinate marketing/application/pre-leasing/pre-sales process
§ Prepare financing applications and negotiate terms
§ Coordinate an acceptable procurement method and construction contract
§ Account for all project costs
§ Assist with organizing property management
Because each project is unique, it is difficult to list the exact tasks the development consultant may take on. In fact, because development consultants are frequently involved very early in the development process, the exact list of tasks may be impossible to know until the development process has begun and the full scope of the project is known.

Development Consultants and the Real Estate Development Process
For most projects, development consultants guide owners and the development team through a five step real estate development process.

Step 1: Organization and Property

During the first step, the development consultant helps the owner assemble the development team, identify the project’s goals and objectives, secure/define the property to be developed, and develop an initial building concept. The development consultant also assists the owner in assessing its own financial and operational capacity to undertake development of the project.

Step 2: Feasibility

The development consultant works with the owner to assess the project’s feasibility. This step typically involves helping the owner with tasks such as: market/need/demand analysis, preliminary designs, preliminary capital and operating budgets, financing applications and negotiations, and zoning/development approvals. The goal of the feasibility stage is to help the owner determine whether it should proceed to the next stage of development.

Step 3: Pre- Construction

Once feasibility has been determined the next step is pre-construction. Deciding to go to pre-construction is normally a major step for an owner as it usually involves significant expenditure of funds for architectural and engineering services. During this stage the development consultant also helps the owner determine an acceptable construction contract. The goal of step three is to arrive at a final capital cost budget, finalize agreements, and achieve all necessary approvals in order to proceed with construction.

Step 4: Construction

Step four is construction of the project. During this step the development consultant participates in construction meetings, helps the owner resolve any construction issues that arise, accounts for all project costs, and facilitates advances from financing agencies. Depending on the project, the development consultant may also need to initiate and coordinate the marketing/pre-leasing/pre-sales process.

Step 5: Post-Construction

The final step in the development process involves assisting the owner with setting up for on-going property management, initial move-ins, clearing-up construction deficiencies, and finalizing the project’s capital cost. Depending on the situation, the development consultant may also need to help the owner initiate staffing or enter into an on-going property management contract.

Because developing real estate is a cumulative process with each step forming a foundation for the next, it is important for the development consultant to be hired by owners as early as possible in the process. Decisions made, or not made, early in the development process can have a major impact later in the process. Awareness of how early decisions impact later in the process is one of the skills a qualified development consultant brings to a project

Who can benefit from the services of a Real Estate Development Consultant?

Professional real estate development consultants are engaged by a wide range of non-profit and for-profit organizations and companies interested in developing multi-unit residential, health care, institutional, and commercial projects. These organizations and companies include:

§ Health care agencies and authorities
§ Non-profit housing authorities and organizations
§ Churches and other faith based organizations
§ Hospitals and personal care/nursing homes
§ Colleges and universities
§ Community service organizations
§ Government departments/agencies
§ Private real estate investors/trusts

We end this second part, and hopefully , Understand and Appreciate the important role of Professional Real Estate Consultants. Real Estate Projects , are divers, and require specialization in terms of Advisory and Consultancy services. Property and Land, are Unique and no two sites exactly alike. Development Projects depend on several types of Utilization, that is why, its a good decision to have a Professional Real Estate Consultant on board. They serve the needs of the Public and Private Sectors, Society, and the Nation.

Development Corporations, Builders, Institutions, Property Owners, and Conglomerates will do best in capitalizing on the expertise and specialization of Real Estate Consultants.

In conclusion, engaging the services of a professional development consultant is a cost effective method for many organizations and companies to acquire the knowledge and skills necessary to develop real estate without the need to hire new staff or re-direct existing resources.It is for the best interest and benefit for all concerned.

Tomorrow we shall give you some specific details on how to ” read” Economic and Financial Data and information. I shall endeavor to include an analysis on certain variables that have direct effect to the trends and opportunities of real estate in the Philippines.

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One Response to Understanding Professional Real Estate Consultancy Services

  1. Thank you for sharing valuable information. Nice post. I enjoyed reading this post. The whole blog is very nice found some good stuff and good information here Thanks..Also visit my page Accountant Auckland

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