Cutting out the middle man
Alecia Warren | Hagadone News Network | UPDATED 12 years, 11 months AGO
Making it through the recession in the construction industry has required some adaptation for builders.
For some, even moving into real estate.
A handful of builders and contractors in Kootenai County have obtained real estate licenses to help them survive the sluggish construction industry, either by making them more competitive in the housing market or just allowing them to earn some extra coin.
"The economy's slow. I needed to figure out some way to get the prices of our houses down," recalled Tim Timmins, owner of Eagle Ridge Builders. "One way is to save on real estate commissions."
The recession hit his business hard, Timmins said. His company is building about five homes a year now, he said, compared to the 15 to 20 a year in the mid '00s.
By earning his real estate license a year ago, he said, he can list homes built by his company himself, without having to sacrifice a percentage to a Realtor.
"I'm not actively pursuing the real estate part of it. I just wanted to list my own houses," Timmins emphasized.
It hasn't been in vain, he noted. He saved "quite a bit of money" on a home he sold this past year, he said.
"I'm just sorry we didn't do it in the boom in 2004," said Timmins, newly elected to the Hayden city council. "A lot of times we were selling our own houses anyway, we just had the Realtor write them up."
Don't look for realty signs with his face on it, though. Timmins assured he isn't going full time with realty.
"I'm a builder by heart, and now being on the city council, I have a lot of irons on the fire already," he said.
It's a different story for Greg Washington, owner of Courtyard Construction, who now considers himself more a Realtor than a builder and plans to stay that way.
"It really feels like I'm a Realtor who happens to have a construction company," Washington said.
After the recession killed his construction business, Washington said, he decided a year and a half ago to indulge his longtime notion of selling real estate on the side.
"I figured I've got nothing to lose, there's not a lot of (construction) business out there anyway," he said. "I might as well try it."
It wasn't a difficult transition, he said, thanks to his earlier career in marketing and his network of contacts in the local construction industry.
"It's been a super good fit," Washington said.
While his Hayden construction company only built two houses this past year, he said, he's been able to make a living selling real estate at Windermere.
It doesn't require the cash investment that construction does, Washington noted. And despite the slow real estate market, there are still folks who need to sell homes, he said, whether to accommodate a smaller income or a growing family.
"There are some people who flat out, they want a new house," he said.
Washington isn't earning what he did during the construction boom, he acknowledged.
But he's able to feed his family, he said.
"Right now, that's really all I care about," he said.
Another local builder who has acquired a real estate license preferred not to be quoted.
There's no hard feelings in the local real estate industry over some builders switching over, even if they're doing so to cut out the Realtor's commission, said Rick Vernon, executive officer with the Coeur d'Alene Association of Realtors.
"We haven't experienced any negative feedback," Vernon said. "That's not anything new. We saw that 30 years ago."
He can see an advantage for real estate teams to have builders working as Realtors, he added, because they know the building industry so well.
But he suspects it won't become a trend, he added, since most builders don't have time for both.
"I think if it was going to happen, it would've happened already," Vernon said.
Rod Underhill, president of North Idaho Building Contractors Association, also doubted there will be a great migration from construction to real estate.
"I don't see a large number of builders getting their real estate licenses. They have to have a reason to do it," Underhill explained.
Some builders are riding out the recession by returning to other careers, he noted.
Those who don't know anything else are simply waiting for things to get better, he said.
"Yours truly," Underhill said with a chuckle. "I've got 35 years in remodeling and reconstruction. I've seen it bad before and waited it out, and I'm just waiting it out again."