Suzanne O'Clair outside a house she sold recently. Photo by Amy Radil.

Tough Times for Real Estate Agents

06/30/2009

Real estate agents don't show up on the unemployment rolls because they're self–employed. But according to the Northwest Multiple Listing Service, about 6,000 agents have left the business since 2007. Those who remain are taking second jobs, learning how to sell "distressed" properties, and simply working harder.

The Washington Department of Licensing shows that about 7,000 people have given up active real estate licenses since 2006. But many more agents have kept their licenses, despite little income to show for it.

Suzanne O'Clair is a real estate agent in Poulsbo, on Bainbridge Island. She's 59 and wears bright colors and jingling bracelets she makes herself. O'Clair says since the housing market fell, she feels like she's gained a master's degree in short sales. Those are complicated deals in which the house sells for less than the bank is owed. O'Clair says she got into short sales at the request of former clients.

O'Clair: "I thought, my gosh, I helped these people get into these houses, I made a commission then, my fellow agents made commissions then, we gotta do something to help them, what can I do? And it's not the happy place we used to be in by any means. But given the options of short sale versus foreclosure, it works for a lot of people."

On a quiet road outside of town, O'Clair points to a recent triumph — a short sale that closed in just five weeks. It's a pretty green house with a view of Hood Canal. O'Clair says some of her fellow agents look at short sellers as irresponsible and prefer not to work with them. That's not her impression.

O'Clair: "Even, like this house, they had one mortgage on it. They weren't in hock up to their ears, they hadn't been living past their means, he just lost his job."

The financial troubles of O'Clair's clients mirror her own. Her income shrank from $50,000 a year to $7500 last year. She's drawing on her retirement funds, and has health insurance only for catastrophic illness.

To make ends meet, O'Clair has been selling her handmade jewelry online. And she's been waiting tables at a local restaurant called Stella's.

Walking in the door there, she says the work is fun but strenuous — most of her colleagues are teenagers or college students.

O'Clair: "It's a workout. I was working two nights a week, now I'm working one night a week but in the summer I work more because I pick up shifts from other waitresses who are going on vacation."

O'Clair says she and her real estate colleagues are hanging on and simply waiting for something to change.

Real estate agents embrace the idea that you have to spend money to make money. They pay "desk fees" to work at a brokerage as well as money for membership dues, continuing education, licensing fees and marketing for clients.

Lupori: "Just to be a real estate agent or realtor is going to cost you about $13,000 a year."

James Lupori is an associate broker with Keller Williams in greater Seattle. His firm is housed in a nearly vacant office building in Wallingford. What Lupori notices most about office life these days is the silence in the elevator.

Lupori: "There's this old joke about getting in an elevator and all you ever heard people talk about a couple years ago was real estate. And I don't hear anybody talk about real estate anymore except perhaps how bad the market is."

In the meantime, Lupori is working part time as a credit counselor, which unfortunately is in more demand. But his real focus these days is on his blog, where he analyzes market stats, profiles local businesses, and mentions anything else of note in Kenmore on the Eastside, where he lives.

Lupori: "So I've become really passionate about the blogging end of this, and to be perfectly honest with you it's kind of filled in some of the space where I have not been working."

Lupori believes the future of real estate belongs to agents who know one area well, and hopes his blog will generate some clients when times improve. In the meantime,

Lupori: "If I Google James Lupori ..."

Blogging has its own rewards.

Lupori: "Page after page after page of me."

But Lupori says real estate is kind of like the newspaper business — there are seismic changes going on, and even after the recession, life will probably not be the same.

Lupori: "For all intents and purposes the information about real estate has become far more democratic."

He mentions the amount of information now free to the public, and the advent of companies like Redfin, which allow people to buy and sell real estate without a traditional agent. But some agents say they are staying afloat by working longer hours and offering new services to clients.

Jim Patterson is a realtor at Windermere in Seattle's Capitol Hill neighborhood. And he's working hard to drum up business. In his office, Patterson shows off a glossy magazine he sends to clients every other month — it costs him about $6 an issue.

Patterson: "It gives them all sorts of information about travel, food, home remodeling, all of that."

Patterson has also retooled his own image to reflect the economy.

Patterson: "From my former corporate life I always drove a big BMW and now I drive a Mini Cooper which I love because it's fuel–efficient. But it also, I think, gives the kind of image that you're someone who's somewhat concerned about the environment."

Patterson focuses on maintaining long–term relationships with his clients. He helps to design new kitchens for those who want to remodel, and to store electronic versions of client documents off–site. Patterson says when he saw other agents cutting corners, he decided to invest more.

Patterson: "It's absolutely working. Because I look at peers whose business is down, and again I hate to use the word throwing in the towel, but they're kind of giving up. And as soon as you start cutting back, I think people sense that."

Patterson sees colleagues returning to former jobs, from catering to staging houses for sale.

Since agents are self–employed, they can't collect unemployment. However, they can receive job counseling, and may be eligible for other forms of state aid. They just need to meet either the income guidelines, or the criteria for dislocated workers.

I'm Amy Radil, KUOW News.

© Copyright 2009, KUOW