Blog Press Gabrielle Enfield in The Portland Business Journal!

Gabrielle Enfield in The Portland Business Journal!

By Gabrielle Enfield, March 16, 2018

Our fabulous broker Gabrielle Enfield is front and center in the cover story of Portland Business Journal by Jon Bell!


Gabrielle Enfield had good reason to be optimistic when she became a residential real estate agent in August 2016.

The Portland native had a deep network of contacts, built during a successful 20-year marketing and communications career representing big-name brands like Xbox and Dave’s Killer Bread. She had the backing of an established firm, Keller Williams Realty Portland Central, that helped generate leads. And she had the support of her husband, with whom she built a financial cushion to help ease her mid-career transition.

It’s a good thing. Despite her impressive Rolodex, and her affable, energetic personality, it would be months before she earned a dime.

“It took four months to close my first transaction,” said Enfield, who now works for Living Room Realty. “I had been working like crazy, but I was not getting paid.”

Part of that is just shifting into real estate. It takes time for new agents to ramp up. Enfield’s principal broker told her it could take up to six months to land a deal.

But there’s also the reality of life as a real estate agent in a market as hot as Portland’s. Housing inventory is low and the number of agents is high, which has heated up the competition for listings and what agents are willing to do to get them. Then there are the online services such as Zillow and Redfin. Not only have those firms put listings, pricing and other data at the fingertips of buyers and sellers, disrupting the industry and transforming the role that real estate agents play, they are now edging into sales as well.

“It’s craziness,” said Laurie Thiel, managing principal broker for RE/MAX Equity Group in Lake Oswego. “It’s just crazy how much work it is to get your buyers ready to go and your sellers ready to go. There are so many questions and just so much swirling around out there.”

Market madness

The numbers tell the story of Portland’s hyper-competitive real estate market.

Most notable is the inventory of available homes. A 3-month inventory is considered healthy, and that’s close to where the market was in January 2015, when the inventory of homes for sale was 3.4 months, according to the Regional Multiple Listing Service. By January of this year, the number had dropped to 1.8 months.

“When inventory’s tight, it makes for a challenging market to buy in, and it can leave people bewildered unless they have good support going through the process,” said Danielle Hale, chief economist for Realtor.com.

If you break Portland’s inventory down by the number of houses for sale, there were 5,671 active listings in January 2014. That number was 3,518 this past January, according to RMLS.

Housing ups and downs

One might think that with fewer homes for sale, there might be fewer real estate agents in the market. Not so in the Portland area. Even as inventory has plummeted over the past 10 years, the number of Realtors has, at least in the past two years, continued to climb.

 

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No one is forecasting a meaningful increase in inventory anytime soon, in part because homeowners who don’t have to sell see little upside to doing so now.

“If you are selling and moving out of state, it’s pretty straightforward. If you are trying to sell and stay here, it’s a sticky wicket,” said Lance Marrs, a principal broker with Living Room Realty. “There continues to be a traffic jam.”

At the same time, the number of Realtors fighting for listings is growing. The number of licensed agents in the Portland area jumped from 6,400 in 2014 to more than 8,800 last year, according to the Portland Metropolitan Association of Realtors and the East Metro Association of Realtors.

That’s about 2.5 Realtors for every listing. Of course, Realtors are also representing buyers — and some may not be all that active — but that clientele presents its own challenges, especially as home prices continue to march north.

In 2013, the average sales price for a Portland home was $333,600. Today, according to RMLS, it’s about $430,100. Newcomers to Portland are a major contributor to rising prices. Many of them are arriving from higher-priced locations in California, Washington, even New York. They’re making cash offers, or at least hefty down payments. While bidding wars have backed off a bit, they are still common in desirable neighborhoods.

“It’s become fairly regular,” said Jules Fedota, a broker with Hasson Company Realtors. In 2017, Fedota and her business partner, Myles Faulkner, did 41 deals; more than 80 percent of them were multiple-offer situations.

It can be a long, painful experience for cash-strapped buyers and their Realtors, who are writing more offers than they used to and are, in many cases, going for long stretches without closing deals — or getting paid.

“I wouldn’t want to start out in this market,” said Marrs, who has been a Realtor here since 1995. “But on the flip side, you could make the strong argument that those who started out more recently don’t know any different in terms of market conditions or inventory levels. An agent could benefit from that, because they don’t know what they don’t know.”

Digital disruptors

Mike Hasson, who recently stepped out of the role of CEO of his namesake company after nearly 30 years, remembered the days when Realtors guarded and kept watch over huge RMLS books full of real estate listings.

Clients had to come to an agency to find out what homes were for sale. They relied on their agent to keep up with new listings, schedule appointments, pull comps on recent sales, provide insight into local schools and amenities, and offer advice on pricing.

These days, that information and more is available to home shoppers in just a few clicks. Zillow, Redfin and other tech-minded firms are disrupting the industry and forcing brokers to up their games even more.

“(Clients) get a million apps, they go to a million open houses, they see everything,” said Kim Sparrius, a broker with RE/MAX Equity Group.

And the digital powerhouses are only encroaching further into the territory of Realtors.

Zillow, both its website and app, manages a huge databases of homes. Prospective buyers can peruse the neighborhoods they’re considering without setting a foot on the pavement. It also provides data and tips on ways to list homes online for free and without commissions. One recently-launched program on Zillow links buyers with investors who are looking to pay cash for homes on short notice.

“The availability of information on (these sites) makes buyers and sellers both more informed on market conditions,” Realty.com’s Hale said, “but there’s so much information that, without an expert to help, it can be a bit overwhelming.”

Seattle-based Redfin, founded in 2004, is also making waves. It’s long provided real estate databases, but it also has agents in cities nationwide, including in Portland. Rather than working on the 6 percent commission model split between listing and buying agents that has been the industry standard, Redfin brokers are salaried employees with the potential to earn bonuses.

Sellers listing a home on Redfin pay a listing fee of between 1 percent and 1.5 percent. They may still have to pay an additional 3 percent to cover the commission of the buyer’s agent, but it’s still less than the traditional model. Buyers who use Redfin get a portion of their agent’s 3 percent commission refunded to them, which pans out, according to the company, to an average of $2,000.

For now, Redfin accounts for only about .7 percent of U.S. home sales, and the publicly traded company has yet to turn a profit. Even so, the company and its digital peers, are changing the ways that Realtors operate.

Fight for listings

To win clients on both sides of the real estate equation, Realtors are employing a wide range of tactics, including paid digital and print advertising, social media, mailings and the old real estate go-to, networking. Some are also turning to tactics that would have been unheard of even a few years ago.

A prime example is that the 6 percent commission is no longer a given. Not only are companies like Redfin shifting the old commission model, but some brokers are willing to take less just to get the deal.

“We’ve lost deals to agents who’ve discounted commissions,” said Kathy MacNaughton, owner and principal broker with the MacNaughton Group at Windermere Realty Trust. “I think there’s more conversation these days about commissions, and there’s more competition. There are brokers willing to lower their commission to get a listing, so we really have to work hard and demonstrate why we should make 6 percent.”

Compensation structures vary among agencies and agents pay certain fees for services depending on where they are. When Enfield was at Keller Williams, her principal broker had a budget for marketing and advertising that produced leads. Those leads were randomly and evenly assigned to Enfield and her partner, with the principal broker also getting a percentage of each deal.

At Living Room Realty, paid staff members work with brokers on marketing and advertising, and brokers are charged various fees that are paid as a percentage of a commission.

Marrs said there are also agencies out there that work on a wholesale model focused more on volume and less on service, a model that can undercut Realtors who take the opposite approach.

“It’s the whole ‘you get what you pay for’ adage,” Enfield said. “As a broker, you have to have a really clear understanding of how you are different and what tools you have that you’re bringing to the table.”

She also said that, while competition is stiff and usually friendly among agents and brokerages, it’s not unheard of for some agents to overstep their bounds.

“Let’s be real, it’s sales,” Enfield said. “It’s absolutely friendly, but we are sales people and we all have that element of competition. There are some people who don’t play nice, and I think that the frequency is starting to increase as the market tightens as a whole.”

That tight market, coupled with rising prices, has many Realtors trekking further from their core neighborhoods to find the right home for buyers. RE/MAX’s Sparrius said cities like Forest Grove, Gresham and Milwaukie are becoming attractive alternatives to inner Portland neighborhoods, which is good for those communities but also means Realtors spending more time in their cars and slogging through traffic that is only getting worse.

“It will be interesting to see how the traffic will change a broker’s perspective,” RE/MAX’s Thiel said. “Will they go out to Gresham from Lake Oswego as often as they do now? Maybe not. They might refer that business out instead.”

Staying relevant

Realtors will consistently tell you, however, that the best weapon they have is their deep knowledge of the marketplace and their ability to build relationships, play hardball and bring all the right resources to bear to win the day.

According to Sparrius, homes don’t sell themselves, even in a sellers’ market. It takes a ton of work to get a home ready to sell and to present it in a way that will command top dollar. Buyers are eager, but they’re also in search of value. In many cases, they already feel like they’re overpaying.

“It’s past the time that you can just stick a sign in the yard and it’ll sell,” Sparrius said. “It might go quickly, but you’re not going to get the price you want.”

Another selling point for agents? Their ability to guide buyers in what can be a treacherous and risky market. With emotions running high and competition stiff, buyers are often willing to waive repairs and appraisals if it means getting the house. Having an agent who understands regulations and legal rights can save headaches later on.

“People are doing things that you wouldn’t have thought of years ago because they seemed reckless,” Fedota, of Hasson, said. “Agents have to know how you can tweak the offer to make it as aggressive and appealing as possible.”

Then there’s the other role that Realtors often come to play in the lives of their clients, that of an adviser, or even a counselor, to people on the cusp of making the biggest investment of their lives. Whether they signed up for it or not, brokers end up walking and talking their clients through the tribulations of transactions.

Real estate agents take on all of this without ever realizing the huge paydays that many think come with the business. Certainly some brokers do very well for themselves, but according to Realtor.com, the median gross income of Realtors nationally in 2016 was $42,500; in Oregon, according to the Bureau of Labor Statistics, it’s around $50,000 — and it’s an inconsistent $50,000 at that, since brokers never know when the next deal will close.

For Enfield, who’s been in the business for less than two years, the first few months may have been less-than-lucrative, but she stuck with it and soon was heading up. The team she was on at Keller Williams ended with 22 transactions totaling $7.5 million in her first year. Already this year, Enfield has closed four deals with Living Room for a total of $2.6 million.

While Enfield felt prepared for her shift into real estate, she said the “intense volume of paperwork” was more than she expected, and she was surprised by the amount of ongoing education regarding codes, legal requirements and disclosures.

“I think some people believe that all you need is some pluck and a smile, but it’s a lot more than that. It’s hard,” she said. “You can’t fake it. You have to spend time doing your homework, you have to be hungry. You have to bust your ass, but I think that’s just a life reminder.”

Gabrielle Enfield

Broker

After spending 20 years in marketing and communications – ranging from anchoring the local TV news to leading teams for some of the world’s beloved brands, including Xbox and Dave’s Killer Bread – I finally listened to the universe’s prompts to become a real estate broker. Since, I've consistently delivered results and happiness and according to my clients, a 5-star experience along the way. Working in real estate in one of the nation's hottest markets, I understand the important decision of choosing an agent. My goal is to apply my myriad experiences, both personally and professionally, to help guide my clients through a thoughtful, strategic, seamless and fun journey. Need staging help? I can do that. Looking to purchase a vacation property and need it to generate rental income? Roger. Are you a first-time buyer who needs a steady hand to help guide you through the real estate process? I've got you covered. Moving to PDX and need a proxy to get to know Rose City? Let's do this. I'm a PacNW native and proud resident of North Portland, where I'm raising my family. I was practically born with a tool belt on: my Dad is a retired custom designer and builder, my uncle is an architect and my Grandpa was a Realtor and developer. I am an active listener, have a keen eye for "good bones",  and solving my client's real estate needs in a creative and often unexpected way brings me joy. Plus, the lasting relationships formed are cherries on the sundae! Please give me a call - I'd love to see what it would be like to partner with you.
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  • T: 503-388-2788
  • gabrielle@livingroomre.com

Gabrielle Enfield

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