The Art of Building a Real Estate Boutique

Introduction:

This week, special guest Jenelle Etzel, who majored in weaving, tells Shawn Busse, who majored in ceramics, why she believes attending art school and managing a punk rock band were perfect preparation for building a thriving real estate business. Her agency, Living Room Realty, has 130 brokers, roughly $5 million in revenue, and a market position that stands out among the big boys. While she once considered business a dirty word, she has embraced entrepreneurship and learned lots of important lessons, mostly through trial and error. For one, she figured out that there was a segment of the housing market—or the potential housing market—that more traditional brokers were ignoring. She also figured out, somewhat counterintuitively, that her real customers aren’t the people who buy and sell homes. Her real customers, she says, are her brokers, who happen to be independent contractors: “I can’t tell anybody what to do,” Jenelle tells us. “So it’s like being a politician, in a way. I’ve got a lot of responsibility with very little authority, and that’s an interesting leadership challenge.”

— Loren Feldman

Guests:

Jenelle Etzel, who has her own podcast, The Joy Punk Podcast, is founder and CEO of Living Room Realty.

Shawn Busse is CEO of Kinesis, which is based in Portland, Oregon and works with small businesses on marketing, culture, and strategy.

Producer:

Jess Thoubboron is founder of Blank Word.

Full Episode Transcript:

Loren Feldman:
Welcome Shawn and our special guest, Jenelle Etzel. It’s great to have you here. Jenelle. There’s a lot going on in the real estate industry right now, and we want to get to some of that, but first, can you tell us a little about your own journey and how you came to start a firm?

Jenelle Etzel:
Yeah, well, thank you, Loren. Thanks, Shawn, for having me on The 21 Hats Podcast. It’s a pleasure to be here. I own a company in Portland, Oregon. We’re also in Vancouver and on Oregon’s North Coast. It’s a real estate brokerage named Living Room Realty. And we have another company as well, which is Living Room Property Management. And under that is a maintenance company that we call The Fixers. So it’s three companies under one parent brand.

It’s interesting now to be like a serial entrepreneur, because when I got into real estate, being a business person was the last thing on my mind. I have a degree in weaving, I’m an artist, and I was playing in a girl punk band called Spread Eagle. So, literally a year before I got my real estate license, I was living in a van with my band.

The reason I got into real estate was that, as an artist, as a musician, I was really concerned about what I was going to do for long-term financial stability. And I knew a fellow female musician. Her name was Jen Augusta, and she invited me over to her house. I was working, doing some part-time tile setting at the time. And so she had a tile project. She said, “Come over, check out what I’m doing, have a beer.” And I’m sitting on her kitchen floor with her, and we’re putting down some tile, and she told me that she had bought the house. And I was like, “You bought this? Like, how does someone like you buy a house?” You know, we’re both in our early 20s. And she said, “You know, the coolest thing is, I’m renting out all the bedrooms and living for free in the basement, so that I’m able to tour with my band.”

And just immediately, a lightbulb went off. And I’m like, “I’ve got to be able to do that.” One, I’m a real long-term thinker. When I had to write an essay in third grade on what I wanted to be when I grew up, it was retired. [Laughter] And I got in a little trouble for the essay, but I’m a long-term thinker, but also someone that was trying to scrap together my day-to-day existence as an artist and musician. I was just thinking, “Wow, that would take the pressure off. And that would give me more room to create.” And then in 30 years, it’ll be paid off. And at least I can control that bit of my financial well-being and financial picture. So she kind of gave me the rundown of how you do it.

And at the same time, I had another girlfriend who was able to buy a property as well. And she used the Oregon state bond loan, and I was like, “What do you need to do?” And they were like, “Okay, you gotta find a job that pays you $14 an hour.” And at the time, in 1999-2000, that was not easy. I was like, “Okay, 14 bucks an hour.” And you need to save up $14,000 for a down payment—probably between $10,000 and $14,000. And so, I just saved everything that I could. I told my grandpa what I was doing, and he was like, “Hey, kid, if you can save seven, I’m in for the other seven.” Which was just a huge, huge blessing.

So I bought a house, and it was totally life-changing for me. And I was still playing in the band at that time. And so we’d go to a show, and then I would hop off the stage and go to the bar and usually be talking to the drummers. They always get evicted, because they make too much noise. And I was like, “I’ve got the solution. You just have to buy a house, and this is how you do it.” And I was referring so much business to my stepmom, who’d had a real estate license, that she’s like, “You know, you might think about becoming a Realtor and helping all these people who you keep sending me from the bars.” And so that’s kind of how I fell into real estate. And then I worked at The Hasson Company, one of the leading brokerages here in Portland. I’ve learned a tremendous amount.

But I also eventually got a little frustrated that nobody seemed to be talking to the community of people that I knew so well. Like, in real estate, what I was seeing was that we would show this straight white family with a picket fence and two kids. And I’m like, “I’m not even seeing these people in Portland. Ever.” I don’t know who we’re marketing to, who we’re telling the story to. And that frustration finally kind of started to grow into what I realized, like, “Oh, hang on. There’s an empty stage for me to get up and really tell the story of how people like myself are changing their lives through real estate.”

And this was coming on in Portland, at about the same time, I had a lot of clients who worked at Stumptown Coffee. It was kind of changing the way that we were thinking about business. It was a local Portland brand. And I felt like they knew who their audience was. They were really talking to them. They were independent. And so I saw: Wow, you can do business in a way that is in alignment with who you are. And I think that, before this period, I grew up in a world where business was kind of a dirty word. It wasn’t for creative people. It wasn’t for people like me. And so I think seeing what Stumptown was doing, seeing what some of these other local brands at the time were doing, I was like, “Wait, we could do that with real estate.” And so the vision of Living Room was born.

And oftentimes people ask me, “What is the name all about? Why Living Room?” And that really came because most of my clients were musicians, artists. And we’d always check out the living room last. Like, when I was with a client, we’d go to the garage and see if there was a good workspace. Or we’d go to the basement to see if you could load in and out gear easily. Or we’d go upstairs and see if the light was good for painting. Because those were the spaces that my clients were making a living in. This is where they lived. And then the living room was kind of the last room. And what they were looking for is space to thrive, space for their creative endeavors. So I was thinking about the concept of living room in this really different way—not as in the actual room in a house, but as a concept of how we live and real estate giving us the ability to express that lifestyle in a way that’s really creative and really exciting to me.

Shawn Busse:
That’s cool.

Loren Feldman:
You know, Jenelle, there’s a pretty common trope of when houses are selling and the market’s hot, lots of people want to be real estate agents. They flood into the business, and then things inevitably change and a tremendous number of them wash out. Given your background, it sounds like that could have been you. Why wasn’t it? Why did you stick with it?

Jenelle Etzel:
I wasn’t attracted to it because the market was hot. Like, I didn’t know, I didn’t even know about markets. [Laughter] I didn’t know what I didn’t know. It could have been the worst time to get into real estate. In fact, when I started Living Room, it was in the depth of the housing recession. It wasn’t really about the timing of the market. It was about the timing of what was right for me.

Loren Feldman:
You started a real estate business in 2008-2009?

Jenelle Etzel:
Yep. And not only that, I started a real estate business in 2008, and I started it with a 17-month-old baby and another one on the way in a month and a half. From the outside, the timing couldn’t have been worse. And from the inside, the timing couldn’t have been better. And so I think that that’s the same counsel I give to folks who are like, “Is now the right time to buy?” It’s like, I don’t know. I don’t have a crystal ball. We just don’t know, but is it the right time for you? Or is it the right time in your life?

And so I think it’s interesting now to have an established company and navigate another major downturn with something that’s already built. I have a lot of new respect. I was a little cocky coming into this downmarket, because I’m like, “This is the stuff I’m born of.” I started in the downturn, and this is where I’m great. This is where I’ve been able to accelerate out of, but it’s a much different thing to start something up when conditions are hard than to maintain something that’s large and built. I’ve got 130 brokers. I’m leading them through whatever fears, anxieties that they have. And that’s a really different leadership challenge than that entrepreneurial, on-your-own risk of like, “Well, this is the timing for me. I feel confident.” It’s like, okay, well, how do you get 130 people to feel confident? It’s really different.

Loren Feldman:
Tell us about that transition, Jenelle. What was it like when you went from being a broker in somebody else’s business to starting your own?

Jenelle Etzel:
Oh boy, is it humbling. It’s really, really humbling. I think the first thing that comes to my mind is how there were so many things I was frustrated with at my old company. It felt like we were in a cruise ship, and I needed to do a 180 in the river, right? And so I’m like, “Forget it. I’m gonna get out and into my own speedboat.” This is exhausting trying to get everybody to come around. And so, when I was actually running my own company, and I saw the expenses, I saw the risks. I mean, I was the prodigal son coming home. I called Mike Hasson, the former owner and later would become a really close friend and mentor, and was just very humbled. And I said to him, “I hope that you know, any bit of success that I’m having is a direct correlation to all the opportunities and all the gifts that you’ve given me and all the lessons I got to see while I was there. And I had no idea. I had no idea what kind of decisions you had to make, and the weight you probably went home with alone.”

Until someone’s been in those shoes, you just have no idea. And to think, I remember asking him, “We should join this environmental building group,” just thinking that I’d had the best and brightest idea of the year. And he’s like, “Oh, let me think about it”—and being really frustrated. Like, “I think we should do this.” I’m like, “How many agents did he have wanting to join whatever small interest group they had?” You know? And how do you measure big decisions like that with, you know, he had 250 brokers, I think, at the time? And the thing that leadership has taught me, too, is that all the skills that got you to a place and all the strengths, they’ll get you to a certain level on the mountain, but you’ve got to be willing to take a hard look at yourself and be like, “Okay, the things that got me here are not going to get me here. So am I the right person to keep climbing? And where can I get those skills?”

And so leadership’s given me this incredible opportunity of self growth that I don’t imagine I would have gotten anywhere else. I’ve had to work so hard on myself, my strengths, my weaknesses, communication. I’ve had to really learn the lesson of listening to people’s commitment. When they come up to me, and they’re hot—for example, I had an agent come, and she’s pissed off about our website. And I mean, my first reaction as a human is just to be a bit, you know, like, “What is your deal? Why are you coming at me so hot in the kitchen, catching me off guard?” But then underneath, taking a minute and listening to her commitment that like, “Oh, she’s just so passionate right now, because she wants us to have the best website in the industry, and she sees an issue. And I’m the person with the power, probably, to change that. So she’s coming to me.”

So, getting on the same page as people, listening to them as bigger people, seeing the best in people, being able to lead them through and towards solutions, all of this stuff. It was not second nature to me initially, and I’ve had to work really hard at it every day. And I’ve had to work really hard on becoming a better person, a better leader.

Loren Feldman:
Shawn, you made that same transition from being an artist to being an entrepreneur and a business owner. Anything you could relate to in there?

Shawn Busse:
Jenelle, I’ve never known your full story. And it’s just so fun to hear. Because I also had that revelation of like, “Gosh, I’ve got to make some money. I can’t just be an artist.” I also moved to Portland. I moved here in ‘05, and I also rented a room. Like, my real estate strategy was renting a room out in the house that I had bought. And then the other one, too, is I started my business in the recession of 2000. And when ‘08 rolled around, I told myself this story: Well, I started my business in a recession. Certainly I can navigate through another one. It won’t be that hard. What a fricken—I was really kidding myself.

Jenelle Etzel:
They’re all hard.

Shawn Busse:
They’re all hard.

Jenelle Etzel:
Yeah, your business is a different place. It’s like, I had an infant in a recession. Okay, well, now I’ve got an eight-year-old in a recession. Or now I have a teenager. It’s just different. Every challenge is different.

Shawn Busse:
There are so many similarities, too, and how early on the stakes feel much lower in some way—and how you can just gut through it. Like, “Oh, I can work 18-hour days, no big deal.” And like, you can’t do that in your mid-life. And not to mention that the pressure you must feel of all those folks who are counting on you. Like you, I also didn’t know finance forever. I didn’t know so much stuff about business. But I do think the superpower we have is we’re both creative. So we’re like, “Well, we’ll figure it out. You know, I’m not scared of that.”

I’m kind of curious: As you’ve built this business, I mean, 100-plus people, that is a lot of communication. I think artists are actually good communicators in a kind of weird, unpredictable way, but I’m kind of curious how you manage that. How do you manage keeping the lines of communication open so people feel heard, but also, you’re not overwhelmed by making everybody feel heard? How do you balance that out?

Jenelle Etzel:
Ooh, that’s a good one.

Loren Feldman:
Jenelle, before you answer that—those 100-plus people, are they employees? Are they contractors? What’s the relationship?

Jenelle Etzel:
With residential real estate brokers who are at our company, they’re all independent contractors. And it is the brokerage’s job to ensure that they’re following the letter of the law and that they are kind of understanding our brand culture. So there’s definitely a lot of communication there, but I can’t tell anybody what to do. So it’s like being a politician, in a way. I’ve got a lot of responsibility with very little authority, and that’s an interesting leadership challenge.

And I think, if anything, it’s going to make me a really great candidate for governor one day or something like that. I don’t know, where do you take that? And then I have employees. I’ve got an employee team, and we’re at about 26 people. And our agents have their teammates, too. So they’ve got kind of small business brands underneath them. So we’ve got some folks with teams as big as seven or eight people.

Loren Feldman:
So back to Shawn’s question—sorry to interrupt—do you want him to repeat it?

Jenelle Etzel:
So yeah, how do we make sure that people feel heard? It’s really important to me, in that I think that I’m someone who wants to understand the purpose of anything. I just don’t do anything because someone told me to, right? I mean, that’s like a little bit punk rock. And it’s like, “What? What are the rules? Okay, well, let’s throw those away.” And if the rules don’t make sense, I’m not operating by those—although I’m a person who does love to create structure and follow rules. Every good bit of thing that I do came from me just fucking it up royally, to be honest. I just totally screwed it up. And then I was like, “Oh, okay, how do I build a system so I don’t do that again?”

And one of the things that I used to do is, I talk to the press a lot. My role at work is talking to press, doing a lot of our marketing. And so, I let a writer for the paper know that we were opening up in Vancouver before I let my agents know. And I didn’t realize how hurt that so many people would be that they’re finding out in the paper about something that’s coming that kind of really affects them and their brand. And sometimes I’m just like, “Am I really that dense?” But I am really that dense often. So that made me realize, “Well, geez, I should start a council. Maybe I could have a leadership council of agents. And before I tell anybody anything, I will tell them and get their feedback and make sure they know and then make sure that they can help me articulate that out into our agent body.” And so I actually came up with a communication protocol that’s really helped me a lot.

And one of the things that really drives my staff crazy is that they work at the desk. And they know that when the owner of the company says something, they’d better pay attention and read it. Well, agents are independent. So maybe they read it, maybe they don’t, you know? And so the staff just never understands, like, “I emailed them that!” And I’m like, “Oh, that’s cute that you think that anybody read the email. Nobody read it.” [Laughter]

Shawn Busse:
And so you’re basically working with 130 entrepreneurs.

Jenelle Etzel:
Oh, yeah, I mean, it’s just like, “Are you kidding me? Unless you light it on fire in front of their house, like, right across their forehead, they didn’t get it.” So I’m like, “Email it to them probably seven times, and text it to them a couple times, then make a rock poster and put it above in the bathroom and over the copy machine.” You know, like, if it’s important, we better be saying it again. And again. And again.

And you know, to get a staff that has always worked in a structured employment atmosphere to understand these agents, it’s like, just because you build systems, and they work, and they should function, does not mean that they’re successful—unless you can get an agent to actually do it. So you have to stop creating things that you think work and stop complaining about creating systems that the agents won’t use. Because if they don’t use it, then we didn’t create the right system. So we have to be really creative all the time about how we get in front of—which is basically our customer base—our agents. That’s who we’re supporting. And that’s how we make revenue.

Shawn Busse:
Do you really see your agents as your customers versus the folks who are doing the transactions?

Jenelle Etzel:
I do. Well, you know, what’s interesting from both an operations standpoint and a marketing standpoint, is that the whole world sees Living Room and that my customer is the buyer and seller of homes, and so I have to behave as if that is true in many ways. But then internally, the way I actually make money is through collecting the membership fees of agents. And so they are my actual customers, but my customers, the agents, what they want from me, is really great communication and marketing and attraction of their customers. So they’re paying me to attract their customers, and they’re also paying me to support their business in a myriad of ways.

And so, it’s like, who’s who? And when people come to work for me as staff, they think just like the rest of the public, “Oh, home buyers and sellers are our clients. Like, why are these agents so demanding? Like, why don’t they act like they’re employees, too?” And it’s like, oh, no, no, no, no. When we orient new staff to support agents, I’m like, “What we are is like a really liberal country club. And our agents are those members. And some of them play all the time. And some of them play less frequently, but we need to remember their drinks and their family and how they want to play the course.”

And also, they don’t work nine-to-five. They may have been up working since 6 a.m. and then bailing water out of someone’s basement last night at 11 p.m. So when you tell them, “Oh, I’m off at four. So I can’t get that to you,” that doesn’t compute for them. Because they lay everything on the line, service-wise. And so we have to be really mindful that, when they come in, we’re the person that’s bailing water out for them, that they feel really supported, and that they’ve got somewhere they can come where they feel like we’re laying it on the line for them, too.

Shawn Busse:
Jenelle, your business is a network model, meaning there are two networks: the networks of people buying homes and selling homes, and then the other network is the network of brokers that you have. And the larger the scale, the more effective you can be to both of those groups.

Jenelle Etzel:
Yes, it’s true. And what is hard for me is that, at the end of the day, we’re a small business, right? We have 25 staff members, and we’re servicing close to 400 landlords and then tenants, and then we do maintenance work. And then on the brokerage side, we’re supporting 130 brokers. And so it’s a small business with revenues between those two businesses of about $5 million, but in a given year, we might sell upwards of a billion dollars’ worth of real estate. So in the public eye, our signs are everywhere. We look like this huge business.

And so, sometimes there’s pressure, and I’ve had to learn to navigate the tremendous asks that we’re under. Like, “Can you give to this school? And can you give to this, and can you give to this?” And we’ve had to come up with a lot of strategies to navigate our size. We’re swinging way, way, way above our weight class out in the public arena and the public eye and how we present ourselves. And we have to do this with this tiny little staff where the expectations on a business of that size will be completely different. So it’s a really interesting challenge.

Shawn Busse:
Are you the largest at this point in the metro?

Jenelle Etzel:
I believe that we’re the largest independent brokerage now, at this point. We’ve seen a lot of our competitors go away this last sales cycle, which is just sad to me. I’m committed to trying to help other independent brokerages the best that I can. I just gathered with five different companies last week to see: How can we support each other?

Because I really think that real estate is a business where we all benefit when it’s locally-owned. You really should know the communities that you’re serving. We’ve historically, for many years, had the number one market share in the city of Portland. But the person with number two market share underneath us has more than double the agents. So we have a few agents who are highly productive, very professional. We’re a full-service, real estate brokerage, and in that way, it makes us pretty unique as well.

Loren Feldman:
Do you compete for brokers the way another company might compete for employees?

Jenelle Etzel:
One of the biggest challenges currently right now is that we have a model that only works for agents who sell 10 or more homes.

Loren Feldman:
Per year?

Jenelle Etzel:
Yes, they have to sell at least 10 homes or more. Well, the average agent sells, I think, something around like two and a half or three. And because the inventory has gone so far down because of the higher interest rates, we saw the number of agents who sell 10 or more homes decrease by 30 percent. And that’s been pretty parallel to what we’ve seen in our own numbers.

It’s been challenging, because before I could bring on a new agent, and I could easily get them up and going with just the abundant opportunity that was just like flying off my other agents. There was just so much business happening that they could pick up a lot of business that way. And when things contract, it’s just gotten harder and harder. And so it’s interesting: We don’t have a lot of agents who leave to go to other brokerages. They may leave to go to other careers, or they may join one of our top agents’ teams. But we have seen our agent count drop these last two years, post-pandemic.

Loren Feldman:
You said that under your model, an agent, to be successful, has to sell more than 10 homes a year. And I’m wondering how your model differs from others.

Jenelle Etzel:
Well, it’s a great question. Most models in our market, you pay what’s called a desk fee. We have a membership fee. So an agent, to kind of wear the brand, represent the brand, and get all the benefits of the brand that’s associated with our administrative services, they pay us pretty close to $20,000, and then some kind of auxiliary fees on top of that. And that’s pretty comparable to other full-service real estate companies. But there are plenty of digital agencies and other things, and the fee is much lower for agents. So we’re definitely different from that.

I’ll use another real estate metaphor. It’s like commercial real estate. It’s like, okay, you can go rent cheaper space somewhere, but you don’t get the benefit of the traffic and the clean streets and the really great resources that you would with a company like ours. I mean, go back to that country club metaphor: Just to be around other players who are at the top of their game, to me, is the single reason that I would join Living Room Realty compared to others. I want to be around top producers. And the kind of agents that we attract are also very values-oriented. We’re a B Corp.

And it’s not just production that they’re after. They’re after balanced lives. They’re leaders who find joy through service. And so people find, when they come to Living Room, they get community and culture and the value of being around other people who do business in a way that feels in alignment with them. Really, I’ve seen so many people come to us, and they’ve been at a ceiling of $7 or $8 million in production, and they take that to $30 to $35 million because they’re around other people where they can emulate best practices. Or like, “God, I didn’t think I’d ever build a business that big because I’d never see my kids, but you’ve shown me tools or resources and a team structure that’s allowed me to do that in a way that I didn’t think was possible somewhere else.”

Loren Feldman:
Can you tell us a little bit about how you’re perceived in the market?

Jenelle Etzel:
Well, certainly there are companies that I would say are bigger than us. They’ve got more agents, and they’re bigger, but we’re really known for our quality of agents. We’re known as the company that people go to. These people really care about you. They’re really community-oriented. They give back. We are known for being highly collaborative. The thing that we hear more than anything, like, we hear this from other agents, “I saw this was listed with a Living Room agent.” Or, “I saw the offer came from a buyer represented by a Living Room agent, and I knew it was going to be a great transaction.”

We’re gonna be collaborative, collaboratively problem-solving, that we’re gonna get to close. And so, I’m really proud of that. We’ve got really good negotiators who understand it’s not a win-lose game. It’s about having a buyer and a seller both get their needs met and feel really good about the transaction.

And from the public, what I hear all the time is, “You guys have the most beautiful houses.” We’ve heard this before, which kind of blew my mind, “How do you get your sellers to paint the front door red?” I’m like, “Excuse me?” They’re like, “Yeah, every single one of your front doors is red.” And it was like, “It definitely is not.” [Laughter] I can tell you, we just have consistency. Our brand color is red, and I think maybe subconsciously what they’re seeing is that the consistency of our branding and our marketing is always at the top level. And the consistency of that starts to really land for people that, like, we painted the front door red.

Shawn Busse:
Yeah, it’s interesting, because Loren asked that question about, what do you specialize in, or how are you known? And the first thought that came to my mind was: She’s everywhere. And I think that may or may not be true, but it’s my perception. And what I mean by that is that you have a very unique style in the types of signs you have and the types of ways you promote your agents. Maybe you can tell people a little bit about your thinking behind that.

Jenelle Etzel:
Sure. I think it’s consistency. Like Keller Williams is a much bigger company than us, but they allow their agents to sub-brand. And so you might see, there’s no quality control. There’s no consistency. So you can be driving by and be like, “What’s that company?” or “What is that?” And with Living Room, we feel like, “Okay, we’re a small boutique agency. We need to have a very aligned brand presence so that it actually makes an impact,” which is hard for individual agents, actually, to kind of wrap their minds around. Because they’re like, “Well, maybe my sign should be unique, because that’s going to give me an edge.” And it’s like, “Oh, boy, that’s not how marketing and branding work.” [Laughter’

Shawn Busse:
The feral cats.

Jenelle Etzel:
Yeah, it’s like, it’s just not how it works. It’s so much energy in the mind of consumers. You know, we think when we’re in our industry that everybody’s thinking about real estate all the time. And I know that, actually, people have a real estate thought once every five years, statistically. Otherwise, they’re not even seeing the signs, right? They just drive by them. “I don’t know, whatever.” So when we ask a consumer to remember our sub-brand, under a brand, and then our name, I’m like, “Oh, yeah, it’s just never gonna work.”

And also people forget, like agents forget all the time, unfortunately—for better or not—your name is your brand. Your level of service that you represent, that’s your brand. And that’s the only thing you can hope that people are going to remember. But like a sub-brand that you do? I mean, I know when I get in a car, I get in an Uber, and I go to the airport and people will be like, “What do you do?” And I’m like, “Oh, I’m in real estate. I own a real estate company.” “What company? Oh, I’ve never seen that before.” And I’m like, “Okay.” So for me to know that there are plenty of people who still don’t know who my company is, to think the hubris it takes for an individual agent, without 135 top-ranking agents that collaborate, to think anyone’s remembering their sub-brand, makes me laugh. Because I’m just like, “Dude, it’s hard. It is hard out there.”

But so yeah, so we have very tight brand rules that we follow, and that helps. Because a top producer, someone like Cristen Lincoln, who has been in this business for 25 years, anytime I try to do something creative with our brand, she’s like, “Please just use the regular logo, the regular font, because when people see that, no matter where they see it, they think that’s my brand. They think that’s mine. Keep it consistent, and just keep reinforcing my individual brand out there as a part of the collective.”

And then I think the other thing that Living Room does, and what we did that really set us apart and we still embrace wholeheartedly, was that, at this point, anybody can go to a myriad of sites and look at houses. Like, that’s the product. But what we know that Zillow will never know and Redfin will never know and Realtor.com will never know is the people here in our community. So tell the story of the problems that you solve specifically for the people right here in this time of our real estate market. And what I’ve noticed is that, as we have now told 16 years of these really unique stories of what it means to make Living Room in Portland, and how people pull it off, is that it makes us incredibly referrable.

Because you go to a party, you’re talking to a friend, and they’re like, “Yeah, I’ve got to figure out a way to take care of my dad. And I just don’t know how that’s gonna affect both of our living situations.” And that is a problem that, if I’ve talked about how I helped a father and son downsize to share a duplex so he could provide care, now I’m being highly referrable, because that person will hear that issue and want to help that person solve it if they care about them. And then they’re like, “Oh, you’ve got to talk to my friend, Jenelle. She did that for people.” That’s really different than, like, “I’m thinking about buying a house.” And it’s like, “Okay, well, we all know 40 Realtors.” Like, whatever, go online. That’s where houses are.

But when you really talk about the individual challenges that you’re solving, it just makes you really referrable. And whether interest rates go up or down, people are in these sorts of life situations that they can oftentimes solve with real estate. And that’s where I want to be. I want to be on the forefront of: How do I help people overcome challenges? And I’m gonna get the business, because you can go and look at houses all day on any kind of site, but nobody owns that kind of information and the relationships in the way that our firm and our agents do.

Loren Feldman:
Jenelle, are you talking about having your people share those stories in their personal lives? Or is this part of a marketing campaign where you’ve found a way to tell those stories to more people?

Jenelle Etzel:
Yeah, so when I started the company with no money and a punk-rock, DIY, kind of spirit, I knew at the time, blogging was a big thing. Everybody’s got a blog. It’s the same way that social media is now. Everybody’s gotta be on social media. And I was like, “Oh my God, I’m so busy.” You know, in the downturn, I sold 42 homes as I nursed a baby and changed the diaper at the same time. And now it’s like, “I don’t have time to be an expert blogger as well.”

But I thought, “Well, okay, we’re gonna start this little, this boutique agency. And I bet, though, if each one of us just told the story every time we’ve helped a seller or buyer, if we told a unique story, well, then we could round out communally a pretty decent blog ourselves.” And so we stuck with that, over these 16 years, where we continue to tell those stories. And of course, the momentum that we have now, I have like four or five unique content stories that are hitting our website every day. So the free SEO rankings just alone, I mean, that’s just a gift that’s kept giving. And that just came from a strategy of not having money to compete with the big guys, and it was like, “Well, what do we have? Well, we know these folks who we’re helping.”

And it also went back to my own experience of, you know, I didn’t know that homeownership was for me. Because whether anybody explicitly told me this or not, in our culture, homeownership was something that happened after you got married and you had a baby. So here I am this punk rock chick who’s like, “I didn’t know that marrying or having a baby are ever on the table for me.” So it just didn’t occur to me that homeownership could be, because it’s just not the way I saw things going. And I think there are so many people in our culture who think the same thing. They just think, “That’s not for me. That’s for someone else.” And so I really had this mission when we started that: Please show regular people—you know, funky, weird, whatever, unedited—tell the story of how they did it. Because I want more young punks like me to see that and know that it’s possible for them.

And so that’s really on a deep level why I’m really committed to the storytelling. It’s because I think until you see someone from your own community, you just don’t know it can be done. And one of our values is diversity. And I am so moved every day by the agents who I have at Living Room, the incredible diversity that we have there, and the communities that they get into, showing them that, “Home ownership is for you, too, and like I can help you. And I’m someone from your world and your community that can show you how.” And I believe in every bone of my body that a strong democracy, a functioning democracy, really is dependent on the widest distribution of home ownership.

Loren Feldman:
Well, I want to get to the litigation that’s rocking the industry, but before we go there, Shawn, I just want to ask you: I know Jenelle said she learned everything through trial and error and screwing things up, but I don’t know, it sounds like she’s got really good instincts for managing people, for marketing, for building a business. What is it about art school? Should people be going to art school instead of getting MBAs? How do you explain this, Shawn?

Shawn Busse:
It’s interesting, Jenelle. When I asked you, “How is it I know you’re everywhere?”, you said “consistency,” which I think is such an important message that people hear. There’s another part of it, though, that I think you’ve done really well. And this might be the art school thing, which is, you have your degree in weaving. I have mine in ceramics. So it’s like the least financially viable degrees you could pick. You might beat me.

But so, but I do think—to your question, Loren—I think what Jenelle has done, especially in this idea of customer segmentation and saying, “There’s a group of people out there who are not being paid attention to”—a diverse, interesting group of people who might be punk rockers. They might be non-traditional. They may not have families. They may not be married. They may be married to the same sex, blah, blah, blah, on and on and on. So you’ve got this idea of finding a niche that wasn’t being well-served.

And then the other thing, too, it’s like, I was thinking about your consistency thing. I’m like, “Yeah, well, Hasson is consistent. Re/Max is consistent.” There’s a lot of consistent brands out there, but they don’t feel so dominant to me, and I think the other part of your magic equation is differentiation. Your agents are all these hand-drawn portraits of the agents, which is cool on a functional level in lots of interesting, cool ways that I love, but it’s also just different. It’s just different from the rest of the market. And so there’s so much sameness out there that like you’ve done a good job of looking different. And I think art school teaches us that, or at least it taught me that, to think in different ways.

Jenelle Etzel:
I think being from the art world, being from the punk world, being okay to be a little different—that’s something that is challenging and hard. It’s hard for my agents sometimes. Because, honestly, do I love being a cartoon? No. Does it repel some agents? They’re like, “I don’t want to be a cartoon.” I get it. It’s not about the cartoon. It’s that they work. Like, they work though. People notice them, and they work. I think I’m a very practical person, in that, if something works, don’t throw it out because it makes you a little uncomfortable. Well, then that probably means you feel a little vulnerable. And what is that really about? What is that about? And I think being an artist, you get so used to being vulnerable. You put yourself out there. I mean, being in sales seemed like nothing to me. Like, sure, I’ll sell real estate. That’s a hell of a lot easier than selling myself all the time.

Shawn Busse:
Yeah, it’s so interesting. You used the word vulnerable, but it’s true. It’s like, the work you do to be a creative, in some ways, it’s really hard. It’s really, really hard. People often throw art under the bus. Like, it’s really a rigorous discipline if you take it seriously. As is performing, music, whatever.

Jenelle Etzel:
And it’s about self-discovery. And so I think, too, that’s where it’s really powerful for leadership. Because you have to look, like, you’re making with purpose and managing resources. I mean, managing my punk band on the road—what better financial lessons are there than that? You know, very scarce resources and negotiation skills, and it’s just like, I got an MBA on the road with those women.

Shawn Busse:
And you never took investment money in terms of the business, did you?

Jenelle Etzel:
I didn’t.

Shawn Busse:
Never? All bootstrapped?

Jenelle Etzel:
Oh, you should have heard the banks laughing at me in 2008 when I’m like, “I want to buy this building and start a real estate company.” They were like, “Have you even turned on NPR? Like, do you have a radio?”

Loren Feldman:
All right, Jenelle, can you explain the litigation to us that has changed your world?

Jenelle Etzel:
Well, I will say this. It’s really interesting to me, the press and the spin. I will say the daily New York Times absolutely broke my heart, because their coverage of it was so one-sided. It also came from a starting point as if a buyer’s agent has no value, which I was like, “Well, that’s interesting that you’re saying that. I completely disagree.” But for us in the industry, for years and years, I have been hoping they would decouple commissions, which they did. I think that there were so many of us in real estate who wanted more transparency, and also who represented buyers who wanted the ability to be able to negotiate our commission. What I am surprised by, and which is completely just media cycle and spin, is that when this ruling came out that many of us in the industry we’re excited about, we didn’t expect to be made into the bad guy or the boogeyman in the story of like, “Oh, you know, agents have been making so much money, and they wouldn’t negotiate.” And it’s like, none of that was true.

Loren Feldman:
Let me see if I have this right. The suggestion has been that there has been collusion on the part of buyers and sellers agents and that it removed the ability of buyers of homes from being able to negotiate a sales fee with their agent. It was all coupled together, as you put it, and this settlement will allow for negotiation that wasn’t occurring before. Do I have that basically right?

Jenelle Etzel:
Yeah, so when I sit down with a buyer now—which I’ve been doing. Honestly, though, this has been in practice, and this is in practice already for our agents—is that we sit down and we fill out a buyer-broker agreement. And they are clear on the fee that we are going to be paid, whether that, in the past, came from the seller. Or if there was not a fee offered, which was also something that we saw happen all the time. Or I would help buyers buy unrepresented property or trade property or buy something from their landlord or whatever. They sign a fee agreement, which now all buyers will upfront sign a fee agreement. Because the number one problem that I really feel like this solves—and I’m very happy about—is that there’s all sorts of bullshit in our market, all sorts of marketing that was saying, “Oh, well, it’s free for you as a buyer to get representation.”

It’s not free. You are paying for the cost of that home, in that you are financing the cost of not only your commission, but you’re financing the cost of the seller’s commission. They’re going to be paying their agent, too. So it was never free. And this is great, because it’s a step towards transparency. And I really do welcome that.

Now, what is a huge, I think, loss, is that it’s being brought up often that this is going to help the affordability of homes. Blaming workers for affordability, to me, it kind of reeks of the same things we see in any other industry. It’s like, “Well, if those coal miners would only work for cheaper, then we’d have cheaper coal.” And it’s like, why in this country do we blame the workers on our affordability issues?

Affordability is a much, much deeper issue than the experience and skill that two cooperating brokers take to get people to their end goals of homeownership or listing and marketing a home. I mean, affordability has a lot to do with government policies in the end, restrictions of building and wages not keeping up with the price of homes. I mean, it’s such a complex issue. And I’m absolutely devastated to see that we are once again deflecting important conversations we really need to have about affordability.

Loren Feldman:
What does this change mean for your firm? Will it have a financial impact on what you’re doing?

Jenelle Etzel:
I don’t believe so, no. I think that initially, anytime there’s big change in industries or perceived change, it’s gonna slow things down a little bit in just our process and our work, because we’re gonna have to be educating the consumer about: What does this mean in practice? And answering a lot of questions and maybe there would be some doubt. The market here is so tight. I don’t see it’s going to be affecting our housing market at all.

Shawn Busse:
I’m really passionate about housing affordability, partly because I think that there’s such a trickle down effect of economic vitality of a community. I think about: Where are we going to have our employees at if they cannot afford to live in a community, right?

Jenelle Etzel:
Exactly.

Shawn Busse:
Like, a basic thing: Every business owner should be thinking about housing affordability for that reason alone, if not for greater ethical reasons. I’m curious, if you were to kind of wave your magic wand, and you could change a policy or two that you think could have an actual meaningful impact on housing affordability, and even volume and availability of housing, what would that be?

Jenelle Etzel:
I mean, I definitely feel like the development fees in our city are absolutely astronomical. They make no sense. And also the encumbrances of trying to build. I know a lot of really great builders who’ve left the city. They just don’t want to work here anymore. And so I think that that has really impacted affordability. It’s a bigger thing, but the mortgage-interest deduction—and this is where I vary from the National Association of Realtors. They lobby and fight to keep that in place. But to me, I just think: We, as homeowners, don’t need another win. We are already winning. Let’s redistribute that and make sure that’s going more to low-income folks. So I mean, those are two big ones.

Loren Feldman:
I’m sensing, Jenelle, that you might not have been joking when you said you expect to run for governor someday.

Jenelle Etzel:
Oh, you’re funny. That’s my husband when he’s always like, “I can’t wait to live in that mansion.” And I’m like, “That sounds like a really scary reason to take that job.” But I am passionate about our city. I’ve lived here. I care deeply about it, and I want great people to run. And I want to keep doing what I’m doing, because you can have a lot of influence, I think, in business and on the ground. And I feel like I’m in such a unique and very privileged position to be interfacing with all the people that are falling in love with Portland, coming here from other places.

Loren Feldman:
My thanks to Shawn Busse and Jenelle Etzel, and to our sponsor, the great game of business, which helps businesses use an open-book management system to build healthier companies. You can learn more at greatgame.com. Thank you both.