How to trust the developer, when everything is so unstable?

Signs of reliability of the developer

The question of which developer can be trusted was always relevant. But during the period of financial instability, risks increase significantly, and therefore the buyer should be especially careful before making a final decision.

Natalia Solomonova, General Director of MIT-Real Estate (MKC GC) cites the following characteristics of a reliable developer:

1. Presence of the handed over objects, apartments in which are already issued in the property;
2. Absence of frozen construction projects;
3. Activity of the working process on the site of the object you have chosen;
4. Information in the media and the Internet (including reviews) - they always write about problems;
5. Information on the website of the arbitration court;
6. Sale of apartments in accordance with 214 FZ.

Leonard Blinov, marketing director of UrbanGroup Important considers the reputation of the developer, as well as how the company adheres to the stated pace of construction. "The apartment is worth buying from a developer with a good reputation and with the construction readiness of houses at least 30%. In addition, it is necessary to purchase real estate only in those residential complexes, the implementation of which goes on 214 FZ, which protects the buyer as much as possible.

The presence of several projects, including at least one completed, and one in the mature phase of construction, in order to observe the pace of construction. Information on how he overcame the crisis of 2008 . It is desirable that the company was at least 3 years old, "the expert says.

Vitaliy Bakhvalov, head of marketing and advertising department of the SU 22 Group, also highlights the reputation of the developer. In his opinion, nothing is for the buyer such a weighty argument, as the fact that the company fulfilled all its previous obligations in time, completed the objects on time - including in the crisis 2008-2009. "People can go to the construction site and see everything with their own eyes - as a rule, after that half of the questions disappear."

Alexei Shmonov, general director of the portal on real estate Move . Su says that the openness of the developer, his willingness to communicate with the press is a good sign. According to the expert, a potential buyer can promote the PR activity of the right company: examine the comments of its experts in the media, the activity of speeches by speakers, and so on. "If a company communicates openly with the press, initiates discussions of its projects - that often means that they are confident enough in their abilities. Do not confuse public relations companies with the publicity of its key figures, based on scandalous statements, etc. Practice shows that the style of doing business with such players is appropriate, which negatively affects the performance of the company's obligations to customers, "says Mr. Shmonov.

Construction of a loan

According to the experience of 2008-2009, many developers went bust because they were excessively addicted to credit financing. The market was on the rise, literally bought up everything - and very often not for their own residence, but for the purpose of further resale. A project was being created, and even with our highly developed and civilized market, consultants were not always attracted to it. Often, about any marketing concept and analytical thoroughness of speech was not forthcoming, developers believed that it would do so - the market will absorb any volumes. Then somehow the developer managed to open a credit line, and everything was fine - until, in the crisis, banks, on the one hand, were unable to continue financing, and buyers learned to count money and began to choose carefully what they were buying. And the problems with the mortgage part of the buyers immediately cut off.

Does this mean that we should be especially cautious when buying apartments from those developers that build, mainly, on borrowed money? And is it possible for the buyer to get information about the company's financial and credit policy?

Leonard Blinov believes that the risks of the buyer with what the developer is building on the borrowed funds are not directly related. "If there is good project financing of a solid bank, and it will continue, this is a big plus. But the availability of the developer's own funds is also important - he is at great risk, so he will try to fulfill his obligations even in a difficult situation. Part of the information can be obtained from the project declaration, "the expert said.

Natalia Solomonova agrees that the liquidity crisis of 2008 demonstrated the presence of huge risks for developers who violate the fundamental principle of the company's sustainability: the correct ratio of own and borrowed funds.

However, according to the expert, reliable information to the buyer is practically not available, unless the developer publishes his financial statements publicly.

Vitaly Bakhvalov also says that the buyer is unlikely to be able to get information from the developer about what money he is building. However, one can judge how reliable the developer is, not only by how well the financial policy he leads, but also, for example, by what production capacities he has. "Our company can boast of what we build ourselves, without involving contractors. Not every company has such an impressive production and technical base, as we have. For many people, this is a significant argument, however, our reputation and the history of objects - their delivery in time - is the best for ourselves. And as we build - for the buyer this is the second question, "- says Vitaly Bakhvalov.

Alexei Shmonov also believes that no one will disclose information about financing to the buyer. But he agrees with Vitaliy Bakhvalov's opinion that the indicator for the buyer is not only the ratio of own and borrowed funds, which it is almost impossible to learn about, but also the production capacities that the company possesses.

Nevertheless, credit financing, according to some experts, has its pluses. So, Sergey Lyadov, the press secretary of the investment and development company "City- XXI Century" says that the possibility of the developer's access to credit resources of banks is an important advantage not only for the company itself, but also for its clients. In this case, the risks of non-completion of construction are reduced.

Here is what Mr. Lyadov said about the experience of his company's cooperation with banks in the difficult crisis period of previous years: "The crisis of 2008-2009. First of all it affected the developers, who conducted an aggressive investment policy by attracting a large number of loans. However, our company adhered to a more conservative line of conduct, and this allowed us to maintain a reasonable balance between our own and borrowed funds. The company flawlessly fulfilled its financial obligations to Sberbank in the most difficult economic period. And this allowed us in April 2010 to close the credit line for 60 million dollars, and a little earlier in March 2010 to get a new loan from the bank in the amount of 1.1 billion rubles. Sberbank is our constant partner in development projects, including the integrated development program for the Strogino district, and it is very important and valuable for us as a developer company that this cooperation is still going on without being complicated by external circumstances. "

Tips for the buyer

Sergey Lyadov gave the following advice to buyers on how to choose a reliable developer after all.

"The criteria for measures to determine the reliability of the company include, first of all, the conclusion with the developer of an agreement of equity participation (DDU) with the state registration of the transaction in Rosreestr. Secondly, installment payment, when possible. To minimize the risks, it is necessary to attribute the purchase of the construction object at the most possible stage of construction. However, in this case, the purchase price, as a rule, will be higher, but this is the payment for risk reduction. It is important to conclude deals with developers who have a positive business reputation and portfolio of successfully completed similar construction projects. It is mandatory to check the land title documentation and permits for construction. It will reduce the risks and attract qualified lawyers specializing in such cases to participate in negotiations with the developer and check the documentation, "the expert said.

The mood of buyers and the further development of the market

As you know, in the crisis, the demand from the primary market almost completely switched to "secondary". Today, when negative trends in the economy have intensified, has the activity of buyers in the primary market decreased, so what can be judged about changing the consumer sentiment in the industry to negative ones? We asked our experts about this.

Vitaly Bakhvalov said that in their company there is no decline in demand for apartments in houses under construction. On the contrary, according to the expert, at the end of the summer there was a boom in demand.

Sergei Lyadov said that in August interest in the primary market objects grew significantly, the company recorded a threefold increase in demand. "In September, it fell slightly, but it remained at a high level. The most demanded now are economy-class and comfort-class facilities. Reducing the volume of new construction is not observed. The previous level of supply remains at the expense of entering new projects and new volumes in the projects under implementation, "the expert says.

Natalia Solomonova shares the opinion that the demand for apartments in new houses is steadily growing. "The main criterion for making a purchase decision is the price. The strategy of developers, in which small lots of flats are being thrown into the market in the object, intrigues and supports the activity of buyers, "the expert believes.

Leonard Blinov argues that one must understand that the difference in prices on the primary and secondary market can reach 30-40%. "Therefore, those who are more at risk pay a lower price. Although the legal purity of the transaction in the secondary market is not such a simple question, and it needs to be checked verbally, "the expert says.

So, the crisis of 2008-2009 made more cautious not only for developers, but also for buyers. If developers have revised their financial and management policies, buyers have become more careful about choosing a developer, paying more attention to its reliability and ability to fulfill its obligations not only under favorable economic conditions, but also during financial turmoil. However, the high activity on the housing construction market even now, when negative trends in the economy have intensified, suggests that the credit of buyers' confidence is quite large, and their mood is generally optimistic.

Portal Move.su wishes you not to be mistaken with a choice!