Huge Construction Cost Over-Runs

Once the wind changed directions where it was coming from the north, it ended up being a rather pleasant day. This morning’s smattering of rain drops was just enough to cause water spots on my windshield which prompted me to turn my wipers on while driving to office.

My first appointment was an early one for my buyers to stop at office and initial a price change on a purchase agreement, just so I could get it over to the listing agent for the sellers’ signatures. When talking to the buyers last Friday, and their subsequently agreeing to up their offering price, I could tell they weren’t the happiest about it, but after having the weekend to digest it all, they were much more receptive to paying more than they wanted. While walking out, I assured them that I was confident it was going to be a good long-term investment.

Most of my morning was spent working on closing files that are coming up, along with getting a listing file readied for an appointment I have tomorrow morning to meet with a seller to get a home listed. It’s been a many week process with getting the home prepped, but I’m confident it’ll be worth it in the end when likely getting offers on it right out of the gates. Yes, it’s one of those homes offering a sought-after location and all the amenities today’s buyers are looking for.

One of my calls today was from a gentleman who’s looking at selling the home he’s been in for a number of years because he feels it’s time to move forward with a new chapter of his life. After listening to his story about the struggles of making ends meet with the rising prices and limited income from Social Security, I’m glad he’s at least seeing the handwriting on the wall before things start going sideways with his living expenses, and especially his real estate taxes. I’ll be meeting with him on Wednesday.

After I got off the phone, I started wondering just how many of our seniors are going to be in similar situations when knowing many of them have only their Social Security to rely upon, and believe me, those payments are not keeping up with inflation. Two of my sales this year were generated just for that reason, and I’ll not be surprised if the numbers start growing.

As I was driving to First Citizen’s Bank around noontime, I happened to notice Dean Snyder Construction workers tearing off the entire upper half of the roof on that building which is owned by I believe Simply Fresh, who recently managed to get a grant from the State of Iowa to do a second floor renovation of its apartments. When seeing that roof being removed, I thought to myself, “Oh my goodness! The owner of that building is going to be facing huge construction cost over-runs.” I’m not sure, but I think some of our area contractors still allow for change orders in their bids which financially opens up a can of worms for the owners. Let’s hope the removal and subsequent replacement of that roof was already part of the original bid.

Another build-out which I think is turning into another money pit, is that middle section of the building where Midas Mufflers is on one side, and Bergland and Cram on the other. I can’t remember what the name of it is supposed to be, but I’d wager those people who don’t even own that building, are going to have well over a quarter million dollars in that build-out before they open their doors. Just this morning I noticed Henkel Construction trucks parked in front of it. That’s supposed to be where they’ll be selling ceramic oven-fired pizzas. Without verifying it, I just recently heard the owner of that building up and sold it to an investor. If I were renting a building where there were suddenly new owners, I’d be fearful of rent hikes. Ouch.

My afternoon appointment to show a home ended up being a “nix” for the buyer, and mostly because of the shared garage situation which wasn’t disclosed on the detail sheet. Unfortunately there was no common wall down the middle of it, which is usually always a turn-off with buyers. Whether we want to admit it or not, most humans are territorial and not willing to share common areas. Before leaving, I assured my buyer there’d be one listed in the future that’ll be a good fit. Since I’d never been in that home before, I was glad to have been able to get a good look at it. I finally heard back from an agent hours after I sent a text asking if a home was still available, and now that I know it is, I’ll likely be showing that one sometime tomorrow. Gosh, if I don’t hate it when Realtors take their sweet time responding to text messages. Since it’s become a vogue with not answering the phone when I call certain agents, I no longer even bother wasting my time, so I just send a text message.

While visiting with my buyers today about how our society has changed since the pandemic arrived, I went on to tell them that there’ll be more drive-thru and curb-side shopping being done by our general public. Have you noticed that Wendy’s doesn’t even have their “dine-in” open as of yet? I’ve personally got to the point of not buying a burger or lunch snack unless I can get it at a drive-up window. There you go, even I’m adjusting to and accepting those trends. Yes, the pandemic has certainly created all the many societal changes over these past two years.

Knowing how short our market is getting, I’m already seeing some interesting things taking place, and especially the recent increase in “Exclusive” listings which I’ve never been a fan of because in my opinion, in the end, it works against the best interest of the sellers. Why would any seller want to sign up with an agent who’s office is the only real estate company allowed to show it? I’d like to be a mouse in a corner during one of those “Exclusive” listing presentations.

Tonight’s One-liner is: Evidently, a lie told a million times becomes the truth.

Joe Chodur

About the Author | Joe Chodur

Firstofall....JoeChodurreallydoesn'tliketalkingabouthimselfbutthisiswhatwehavefoundoutabouthim.

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