The Difference Between a Developer and a Home Builder

Published by Comerio Homes

Comerio Homes was recently part of a round table discussion where brand new real estate agents were invited to meet a few home builders and onsite real estate agents so they could ask questions about how to work with home builders and the new home sales process. We were honored to be invited to help answer some questions for these new agents. Being on the builder end of the industry, we don’t know what agents do or don’t know about the building side. We love getting to know agents and helping them understand the industry from start to finish. During our discussion, we were asked to explain the differences between a Developer and a Home Builder?

Here is how we see it in the Kansas City new home market.

Developer

• Buys the raw land
• Hires engineers, surveyors and landscape architects to design the streets, landscaping and common areas
• Decides on the amenities, IE pool, clubhouse, walking trails, price point of homes that will be built
• Ultimately sells homesites to home builders

Home Builder

• Buys homesites from developer
• Designs home floor plans / features
• Builds the home
• Ultimately sells the home to a home buyer

This is just a snapshot of the some of the things developers and home builders do.  Side Note:  Sometimes the developer is a builder also, so they must wear several hats.  This is common in the Kansas City area.  As a natural progression when a home builder’s business grows it just makes sense to start developing you own subdivisions so you can have places to build homes that you control.