Sol Trickey - Property Development vs. Real Estate Blog Header

Originally published on SolTrickey.net

In the real estate industry, a piece of land goes through three stages: the purchase of an unfinished property or raw land, the development of said property and the rental or sale of said property. In most cases, a different individual or company is responsible for each of those stages. To better understand the process of taking raw land to sale or rent, a comparison of the differences between a property developer and a real estate agent would be beneficial.

The Property Developer

The developer’s role in the real estate process is two-fold. In most cases, it’s the property developer who invests money to purchase a raw piece of land or unfinished property. After purchasing a property, the developer works with investors, planners, contractors, and legal officials to create and oversee a property project like the construction of a new subdivision or the conversion of a dilapidated shopping mall into functional office space.

Larger property developers usually invest some of their own funds into the projects they are working on, while also soliciting additional investors to assist in funding. Responsibilities may vary from project to project, but you can expect a property developer to be involved in zoning, sustainability, construction, financing, and scheduling.

The Real Estate Agent

The real estate agent’s sole responsibility is to successfully complete the purchase or sale of a home. They have no say in the development process. It is possible for a real estate agent to be an actual employee of a development company. In that case, they are generally referred to as in-house salespeople. Most often, however, the real estate agent is an independent contractor or someone who works for a real estate agency or brokerage. Unlike returns-on-investment, real estate agents receive a commissioned percentage of each transaction they complete.

In the simplest of terms, a property developer invests money in a project, assists in the coordination, preparation, and physical development of a property, and assumes all risk. When a property is ready to be bought or sold, a real estate agent markets the property and facilitates the involvement of interested parties. While developers and agents have inherently different responsibilities, each plays an important role in the lifespans of land and property.

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