Guest Tony Bucci with Mission Pointe Planning & Retirement talks about recent business roundtable proclamation that shareholder, employee, client & customer interests must be taken into account. Could this affect the current business model of iBuyer Real Estate programs that look to buy homes directly from sellers. Is this a good thing for you? Are there stocks or funds specifically for conscious investors?

Jon Lafferty:
And it was you woman right down the line.

Tony Abate:
Just got that out of my head.

Jon Lafferty:
I do not sing. I cannot sing, but I’m going to keep that in your head for the rest of the day.

Tony Abate:
Aw, thank you.

Jon Lafferty:
Hey, everybody. Welcome to Avoiding Real Estate Turbulence podcast. This is your pilot, Jon Lafferty with Century 21 Town & Country.

Tony Abate:
And Tony Abate with Ross Mortgage and we are your real estate pilots. Our job is to be your real estate advocate and also make sure you’re educated about buying and selling process. We’ll keep you informed throughout until we get you safely closed.

Jon Lafferty:
In a real estate transaction, there are many reasons why you can encounter turbulence. Today we’re going to talk with Tony Bucci with Mission Point Planning & Retirement about financial turbulence and how that may have an impact on your decision to whether to sell your real estate or buy. Welcome Tony.

Tony Bucci:
Hey guys. Thanks for having me back again. I appreciate being in the jump seat.

Tony Abate:
Good to see you, Tony.

Jon Lafferty:
Good to see you back in the jump seat. Before we get underway, Tony has a disclaimer he has to read. So we’ll get that out of the way right now and then dive in and have some fun.

Tony Bucci:
You guys can appreciate being in a highly regulated industry and I am as well. So before we get started, it’s important to know that securities offered through Securities America Inc, Member FINRA/SIPC. Advisory service is offered through securities America Advisors Inc. Mission Point Planning & Retirement and Securities America are separate entities.

Jon Lafferty:
All right.

Tony Bucci:
Now that riveting part of the conversation is done with.

Jon Lafferty:
I feel like I was just in a coding class in Detroit. What the hell did that mean?

Tony Abate:
I think I was just Mirandized by a financial guy. Mirandize, is that the word?

Tony Bucci:
Could be. It could be.

Jon Lafferty:
So Tony, something happened a few weeks back. There was a Business Roundtable and they came out with this proclamation, I guess you could call it, basically saying that, “Hey, we need to consider not only the shareholder in the decisions that we make going forward, but also our employees, our customers and our clients.” And that was a bit of a shift from how things have been for quite a while. And so, I thought it was interesting enough that I said, “Hey, we’ve got to get Tony back in here to talk about this because there seems to be a bit of a shift. And why is that? Why is this happening?” It seems to be out of the blue, but it really isn’t, is it?

Tony Bucci:
No, I don’t think so. And I guess as it relates to turbulence, this could be considered turbulence in the stock market. If CEOs of companies are now more focused on other things and not maximizing shareholder value, at first blush, it can look like that somehow as an investor you might not want to be a part of a company that isn’t maximizing shareholder value. But when you peel back the onion, there is a couple of different perspectives on this. One, which is completely cynical and that’s that this is just window dressing given the… and that this is something done by CEO’s and their publicists to make the companies look more attractive.

Tony Bucci:
And then the optimist is that this is great, this is real change and this is change that’s been really driven by a lot of factors, but really mainly by the folks here in the United States demanding more out of their companies. People are not willing to work just for a paycheck anymore. And I hate to typecast entire generations, but millennials are a very big part of that. There’s studies show that it’s there… they need something more. And I think a lot of folks want something more out of their work. But it’s the Business Roundtable, which is a non-profit organization comprised mainly of CEO’s.

Tony Bucci:
I think this is just more of a reflective of the business reality. And that in order to be profitable, you need to… I mean, it seems basic and common sense, but you need to respect your employees, you need to respect your customers and through that you’ll actually make money and therefore, increase shareholder value. So the question is it new? Is it not? I have a couple of feelings on that and we can discuss it further, but I think it’s more of just the cost of doing business in today’s world. And I think in the long run, if you have happy employees and happy customers, you’re going to make money. And if you’re a shareholder of a company that’s making money, you’re making money.

Tony Abate:
I was going to say maybe I am in that optimistic group, but those additional elements that are added in, they do circle back to adding shareholder value.

Tony Bucci:
Yeah, absolutely.

Tony Abate:
Ideally.

Tony Bucci:
Yeah, no, 100%. And I think it’s also, it’s important departure from the previous doctrine of just maximizing shareholder value in and of that. Inherently, it’s a more of a long-term view of a corporation. Is some of your listeners may know, maybe some don’t, publicly traded corporations, they have to share quarterly earnings and quarterly reports, and a lot of times the stock prices will move and jump based on earning season. If you watch CNBC like I do, earnings season is like it’s a big deal for them. And so, the question really remains, I guess if you’re a shareholder, do you want a company that makes short-term decisions in order to maximize the quarterly earnings or do you want them making decisions although may be painful in the short run or best for the long-term view of the company.

Tony Bucci:
And that I guess that really from an investor standpoint, and Jon and I were talking about this earlier, it was, it really depends on how you view your investment. We’re in Detroit area, if you own GM stock and you’re in it for the long haul, you want to see GM viable for the next 5 to 10 years. But if you’re a short term trader, if you’re… let’s use a real estate term, if you’re flipping your stock and you’re buying just for a few… just for six months to a year, you don’t really care. You want them to maximize that shareholder value in the short run. And that really goes to the rub. This is good or bad news also based on how you view your investment. No different than if you were flipping a real estate home or whether you are a long-term investor and you had tenants.

Jon Lafferty:
You may or may not know the answer to this, but I’m just curious, was publishing quarterly reports always… has it always been this way where a company issues a quarterly report on earnings or at some point, did that just become the norm?

Tony Bucci:
It wasn’t always like that. If I had my trusty Google in front of me, I could tell you the year it changed, but it wasn’t always the norm. And actually, there’s been discussions lately, and when I see lately in really in the last year or so about whether or not that needs to continue to happen, and whether maybe releasing earnings every twice a year, maybe every six months would be better. The flip side of that is if you’re more of a corporate watchdog, you don’t want to hear that because you want them reporting earnings more regularly.

Tony Bucci:
When I say corporate watchdog, if you inherently distrust a corporation, which a lot of folks do, you want to see those books all the time. I guess it just really depends on whether a company’s willing to have a bad quarter for a long-term gain. I don’t see it changing anytime soon to be honest with you, but there has been some discussion.

Jon Lafferty:
That’s interesting. Okay. So the logic of having quarterly earnings reports is so you can keep an eye on a company and make sure they’re not going astray. And if they are, you can correct it as opposed to doing once a year, annual or every six months.

Tony Bucci:
Yeah, absolutely. And the key thing is publicly traded company, they are companies that have not gone public for this reason alone. They do not want to have the push, the responsibility to have to always, every three months, release earnings release numbers and have to deal with Wall Street consensus. This is maybe a little outside of this particular topic, but there are abilities to manipulate publicly traded companies. I mean, this is big in the ‘80s with corporate raiders. I mean, Richard Gere’s like character and like pretty woman was a corporate raider. So you could tell-

Jon Lafferty:
… from Wall Street.

Tony Bucci:
Yeah, it’s good. Yeah, exactly. Yeah. If you get a consortium of investors and you… Carl Icahn is I think is a big guy in this. You get 15% to 20% of the company stock, you can move that company. So there’s some incentive for companies to not want to be public or return to private. Yeah. So it’s there’s two sides of the coin here. There’s the side of that there’s the, as an investor you want to know, but then if you’re the owner of the company, you might not want to have that responsibility.

Tony Abate:
Yeah.

Tony Bucci:
No. I mean, it’s definitely interesting, but I think more than anything, it reflects just really the changing dynamic of our society. And it certainly reflect… I mean, you see it in real estate or you see it… I mean, you guys might see in your own personal companies or in that, like I said, it’s the companies realize that nowadays, in order to be profitable and to actually return shareholder value. And as an investor, a return on your own investment, the company has to be viable for a longer period of time.

Tony Bucci:
And that involves getting good quality employees and actually having people that want to buy your product. I mean, I hate this like one of the very first times this has happened… we call this… there’s actually a whole brand of investing called the ESG or Environmental, Social And Government’s Investing. Let’s go back to the ‘80s, there is a time that this country thankfully boycotted South African companies during apartheid. That was one of the very first examples of social upheaval really spilling over to the business world. That’s an extreme example, but this is not new. It’s just becoming more mainstream now.

Tony Abate:
There’s a logical segue because I think a lot of the things that you’re talking about in the investing world are happening on the real estate side. It really is. The way people hold homes, the type of corporations that are getting into real estate. It’s an interesting parallel. So it’s almost like a cultural thing that businesses overall are changing and we’re definitely a seat on the real estate side for sure.

Jon Lafferty:
Yeah. A lot of venture capital money is in real estate now and in these FinTech companies, other technological companies. You have these start-ups who are creating… well, they call them iBuyer programs. And so the theory behind them is, what we’re going to do is we’re going to take the normal real estate people out of the transaction. Mr. Seller, you and I are going to work together directly. We’re going to come into your home. We’re going to do a walk around. We’re going to look at comparables. We’re going to make you an offer. If you accept our offer, we’re going to pay you this amount of money.

Jon Lafferty:
We sign a contract and you’re going to pay us a percentage, typically anywhere between 6% and 12%. We’re not going to involve a realtor, but we’re going to give you your number. We’re going to do an inspection on the property and if there’s things we find wrong, we’re going to renegotiate. And as long as you’re okay with that, we’ll give you your money in about two weeks and you move out after the process, after a 6% to 12% fee that you pay us. And then what we do is we plug money in this… I’m speaking of the iBuyer program, not me, we. They then plug in some money into the house, whatever it needs, new carpet, paint, whatever, and then they turn around and flip it and sell it.

Jon Lafferty:
And in theory it sounds like, “Wow, what a convenience for sellers. What a great idea.” But of course the flip side of that is they’re not paying market value. The only way this works, the only way this program works is if they buy low, sell high, make enough money on the fees in between to cover it, and they’re still operating at a very razor thin margin. They’re not making a ton of money, which is why these programs, if there’s anything that upsets the apple cart, let’s say a recession where house values start to drop, if there’s anything like that, these companies all fail. They start losing big money.

Jon Lafferty:
And at some point is as we’ve seen in other industries, venture capitalists are willing to invest money, invest money if they see a return eventually coming. But something like this, operating on razor thin margins, it’s not sustainable. And interestingly enough, I read an article, one of the political candidates who’s running for president released one of their programs. Did you read this Tony? So-

Tony Abate:
Yeah, yeah, but go ahead, yeah.

Jon Lafferty:
So one of the things that this candidate is proposing is a vacancy or a flipping tax. So if you buy a home and flip it, and never have lived in it, I think there’s a 25% fee on that. And if you own a home and it’s vacant, there’s a 2% fee on that. So you take either of those fees…

Jon Lafferty:
I think it was 25%.

Tony Bucci:
Anyway, it’s-

Tony Bucci:
The first question, why would you want to disincentivize somebody to improve a piece of property? I don’t understand that.

Jon Lafferty:
Right, right. The incentive from their perspective is, well, we’re trying to encourage home ownership. We want owner occupants. We don’t want investors buying up neighborhoods and areas. That’s their theory, is we’re going to solve the housing crisis by making homes affordable again, and this is how we’re going to do it. We’re going to disincentivize investors from buying big blocks of homes and putting tenants in there. They destabilize neighborhoods. That’s the theory, anyways.

Tony Abate:
So they’ll go back to being vacant for years and years, and years, that’s what’s going to end up happening.

Jon Lafferty:
Didn’t we just get over these zombie foreclosures?

Tony Bucci:
I’ll play devil’s advocate and say I’m sure there’s good intentions behind that somewhere, but like any good intention, there’s some unforeseen consequences. And so, yes, I understand maybe if you have a big investor say to… I’ve heard, I don’t know that you guys would know more about this.

Jon Lafferty:
BlackRock?

Tony Bucci:
Yeah. Like big institutions, I get that. But from a financial advisor’s perspective, I don’t advise specifically on this, but it’s very common. I’ve seen a lot of our clients who are retired own rental properties and still get into this because they were very handy. And what you’re basically doing is you are going to really disincentivize the small mom and pop flippers. And these are people, these are big and income… and what their-

Tony Abate:
Good point.

Tony Bucci:
-and it’s going to hurt another part of the economy. And the other thing too is I’ll speak personally, I’m not the handiest of guys. I honestly, I guess I’m going to really hurt my man card here, but I’m sure I could learn, but I don’t have the time necessarily. So when I was purchasing my home, I was looking for a house that was hypothetically already flipped. Like I wanted to be able to move into the house. And so, the converse was I could have bought that house, I would’ve had to hire a contractor and then have to manage it myself. And I’m sorry, that’s not necessarily at that particular point something I wanted to do with and running the business.

Tony Bucci:
So that’s interesting that that’s… first blush, it’s not something I think that is necessarily a great thing, but I’m sure there could be some other reasons behind it. That’s more of a citizen view as opposed to a financial advisor’s view, I guess.

Tony Abate:
Yeah. You know what? And Tony, I’d be interested to hear your opinion on this, but from an Econ 101 standpoint, the residential real estate market as it operates right now is really driven by a healthy bucket of natural forces of supply and demand. All the right things come into play. And my fear is, is that when you start poking at the bear, if you will, hey, we’re going to put taxes where we never put taxes before. We’re going to have an iBuyer platform that has got a completely different goal than a real estate agent’s platform. You can really start to upset the apple cart in a really unhealthy way.

Tony Abate:
We’ve seen that in the past and I’d be interested to hear your take on this, but you think back in the ‘70s when they tried to just put arbitrary price ceilings in effect, it just didn’t work. Inflation went rampant and things got crazy. So I’m very, very nervous about being on the cusp of things tied to real estate that are a complete departure from the norm with this picture that it’s going to be great. But past history says you got to be careful with shaking up nature.

Tony Bucci:
Yeah. I mean, I have to admit, I’m not as familiar with the iBuyer program, with the description you guys just provide… just different-

Jon Lafferty:
It’s different.

Tony Bucci:
Different, different versions of it.

Jon Lafferty:
Different versions of it.

Tony Bucci:
I would say it scares me to know that just that somebody would pay a 6% to 12% premium just for convenience. We see this a little bit in the financial advising world where some of the big companies are… one of my biggest bugaboos is, “Hey, roll over your money in seconds.” And I’m thinking, “Well, why would you make a financial decision on your 401(k), which is supposed to be the bastion of your retirement, your future based off of convenience?” And I get it. People are busy, but you always pay a premium for that convenience.

Tony Bucci:
Regarding upsetting the apple cart with some tax legislation and not letting market forces work, especially in the real estate. Yeah. I mean, I sometimes think that sometimes we’re solving problems that don’t exist, and-

Tony Abate:
Well put, yeah.

Tony Bucci:
-and part of… and this goes back to relating to this corporate governments change. Market forces will work. I mean, I’m going to go back to you, but the CEOs are responding to what the public is demanding, not what the government is demanding. And so I think it would be better if there is an issue with flipping that people… that there is a company’s coming in and making tons of money and pointed out of the community, and not bettering the society. I think there might be a better way, but I don’t see that. I think you are going to really hurt the local business owner.

Tony Bucci:
And I have a few of these folks that are real estate end developers, and they’re not corporations and publicly traded companies. They have kids in their schools. And I think, I hope I’m hitting the point here, but is disruption natural within an industry? Absolutely. We have disruption in financial advice and you guys are going to have… you had it in heck and mortgages. And after 2008, disruption happened due to the reality of the economic crisis. But that that wasn’t a made up crisis. There were issues. And so the question is, is once again, are we fixing problems that don’t exist? And I guess had I not known about the flipping thing or the extra tax, and honestly, I think there’s bigger fish to fry.

Jon Lafferty:
And there’s more organic waste, I think, to possibly address this. And there’s a couple of communities out there, I think Minneapolis’ St. Paul is one of them where… and one could argue, maybe they went a little too aggressive, but their idea was we’re going to create higher density areas. So on these lots that are larger than normal, we’re going to create duplexes or triplexes where possible so that two or three families can move in there, or one family can move in one unit and rent out the other for potential income. So we have higher density in certain areas and that might help offset some of that as well as may help offset price appreciation year over year.

Jon Lafferty:
So I understand it and I think that’s a more appropriate way to possibly address that. Now of course, you’ve always got to fight the people who live in certain communities, “Because I don’t want these triplexes down the street from me. I don’t want three families living out of one home. Not in my neighborhood or not in my backyard.”

Tony Bucci:
It’s the same. I live in one of those communities right now.

Jon Lafferty:
Not in my backyard. Oh yeah. They’re angry about all the mansionization of your community. People are angry about that.

Tony Bucci:
Now, certainly. But I mean that goes back to the solution. It shouldn’t be more of a local solution, the local community decides or works within local government to discuss zoning and things like that as opposed to I feel like I’m a this is a political talk here, but like state’s rights versus federal government anyhow. My history teacher would be proud that I remember that stuff. But anyhow, yeah, I mean it’s… I don’t know. It’s certainly one of those things that, like I said, I think going back to legislation and taxes to address issues. I mean, I think it has to be broad enough and it has to be a problem that’s pervasive enough to matter. If not, market or the public should demand change-

Jon Lafferty:
From their local government or-

Tony Bucci:
Yep, absolutely.

Jon Lafferty:
Yeah. So and that’s typically where we see it.

Tony Bucci:
Yeah.

Tony Abate:
Well, yeah, if I could, let me paint a picture because I feel strongly about this and I’m feeling more strongly about it as time goes on about this iBuyer impact as it relates to the current real estate community. So I’ll be brief because it touches really more on what you do, Jon. But so let’s look at a conventional situation. So Jon, professional real estate agent, he goes to list a person’s home and what is his agenda? His goal, his through shared responsibility is to get as much money as possible for that home seller. So he markets appropriately, he advises and negotiations, and so on, so that if there’s a high water mark that he can obtain for that seller, that is what he is set out to do.

Tony Abate:
And in doing so, the seller wins, the community wins, future sellers win because now that sale is a comp for the next guy. All the right dominoes seem to fall. Now comes the iBuyers, I’m sorry, so I’ll put it out there. So you have the Zillows, the Redfins, Open Door. Who am I missing? There’s a couple others, but their goal is to provide that shareholder value. And so how does that work for them? It works for them by buying that home at the lowest possible price to appease that shareholder and then sell it at a later date for a larger spread and for higher than typical fees. And really, there are cross-purposes to what has worked for years and years, and years, and I really, I’m troubled as to how sustainable that really is.

Tony Bucci:
To interject just briefly, for us, it’s actually illegal. So they have something called front running, so I cannot… so front running essentially is, say I advise you to buy Facebook stock because it’s a great deal because Facebook stock dropped. If I make a trade in my own personal account before I make a trade in your account, I’m actually doing something that’s illegal. Because what I’m doing is I’m putting myself in front of you. I’m getting a better… now, is my little trade going to move Facebook stock? No, but the point is, I’m basically, I’m putting myself in a more advantageous position at your expense.

Tony Bucci:
And in a roundabout way, the iBuyer program you described, yeah. As a home seller, I don’t want the individual buy-in my or representing me to sell my house to be able to be incentivized to actually make a profit on the house. I want them to give me that profit. I totally agree with you.

Tony Abate:
Yeah.

Jon Lafferty:
You bring up a really good point and it’s one of the discussions that I continue to have with people who see this as a benefit. In fact, you and I were talking about this because what they’re doing in order to make this work is they’re rolling in, “Hey, if we come and buy your home, you’re going to use our escrow company to do the closing and everything. And then we’re going to charge you the closing costs. And hey, by the way, we need to do an owner’s title search for you. So you’re going to use our title company and pay them to do the title search and issue a commitment for title insurance.

Jon Lafferty:
And hey, by the way, we’re going to do this and this, and this, and you’re going to use our company, and we’re going to make this work for you. And by the way, are you going to be buying a home after we sell this to you? Hey, we’ve got a lending company. What do you know?” So they roll all these things in and now you have a viable company. You’ve got all these services rolled into one, and you would think that having all these things would be a rasp of red flags. But these guys, these iBuyer programs, these companies seem to be occupying this gray area where nobody seems to know what to do with them yet.

Jon Lafferty:
And they’ll eventually figure it out once people start getting screwed over by these companies. “Yeah, I sold my house and gosh, they turned around and sold it for $80,000 more. Plus they charged me 12%, the title fee was two grand. My closing costs were a grand and this and this, and I just found out I got taken to the cleaners.” It ain’t going be long before it.

Tony Abate:
It happens in a short-term. It happens in a short-term.

Jon Lafferty:
Absolutely, yeah.

Tony Abate:
You’ve sold your home. It was a quick sale. So it was convenient and it’s like, “You know what, I got my money. I didn’t have to put up with a lot of hassle.” But wow, three months down the line, my prior home is now the market for tens of thousands of dollars more for… And in their own websites they’ll say, “We are not flippers.” So you’re not talking about a home that is going to look dramatically different than the resale. They’re doing some cosmetic repairs, they’re doing some stuff that was super highlighted when they purchased the property to drive that price down to the seller. And then, “Boy, it looks like my very same home was up for sale for $50,000 more now. What happened?”

Jon Lafferty:
I was going to say something, back in the day, back in ’08, ‘9, ’10, ’11, when you had people buying these homes and flipping them, you had these contractors, right, or people who had money and were buying these homes and flipping them, and they would make these improvements, updated electrical, updated plumbing, new dry wall. And one of the things you never knew was is this guy a psychopath who bought this home and did this stuff in here, or did he actually know what the hell he was doing? I have no idea. Did he pull permits to do any of this crap? No. It’s a nice house. Do we take a chance? I guess we do if we’re going to buy the house.

Jon Lafferty:
So you had people buying these homes in ‘9, ‘10, ‘11, ‘12, ‘13, and three, four, five, six years later, all of a sudden things start going wrong with the house and they’re having to replace things, and do different things. And so these companies are no different than any other company that wants to make money and maximize profit. Are they going to trim corners when they need to fix something in electrical or do something with the plumbing? “Hey, the main line seems to have a lot of tree roots in it and there appears to be a crack.” “Wow. Let’s just do the easiest thing we can and the cheapest one, and we’re not going to pull permits to do anything we’re going to do.” I see it as an all-around problem. Where’s the accountability for the buyer who buys this home, right?

Tony Bucci:
So, exactly. So if you’re buying a home, you’re not buying it from the individual, you’re buying it from the company.

Jon Lafferty:
Buying it from the company.

Tony Bucci:
Okay.

Tony Abate:
Right, right. Well, and you know what?

Jon Lafferty:
And you’re paying a fee for buying that home too, by the way. There’s a fee on the back end.

Tony Abate:
Yeah. Yeah, the fees rack up in a way that are almost egregious, I would say. And I would argue that this is going to impact the home buyers that can least afford that sort of a thing. So if you’re a first time home buyer or you’re a modest price home buyer, what do you probably not have? You probably don’t have a lot of extra cash to do fix ups in that home. So your investment in that closing represents probably the majority of your saving. And so now you found that really nice home where all the other ones in that price range are somewhat distressed and you’re relying on the fact that the person that made those improvements did it all right, did it perfect because you can’t afford to do it again.

Tony Abate:
So I would say arguably this type of practice could have an impact on the low to moderate home buyer that could have difficulty recovering from that kind of thing. Again, I feel like we’re putting artificial things in a financial process that was working fine by using natural dynamics.

Tony Bucci:
Yeah. As an outside observer, but financial, someone who deals into finances quite often, it seems to me that it’s like the real estate version of the payday loan. For convenience, I’m willing to pay a percentage for that. And for some, as you know, payday loans exists because people need them, and there’s nothing wrong with that especially in the short-term cash crunch, there’s always a fee. And it sounds like going back to our discussion about the proposed tax on flipping, I guess I can see if it was a company like this that maybe that would be a good thing. I know we’re talking about two different things, but yeah, as I said, as a financial advisor but also as a homeowner, it would be very difficult for me to believe that this was in my best interest.

Tony Abate:
Let’s take it one step further. It’s bad enough when it’s isolated in one transaction that impacts the seller, but that’s not how it works in real estate, right? I mean, the whole essence of appraising property is based on what other properties have sold for. So now as the percentage of sales of iBuyer transactions go up, so will the percentage of homes that have sold at a lower than market value. So the sale of home A through an iBuyer transaction becomes the comp for the sale of home B, and now that number is lower because of that. I’m really concerned about how that’s going to trickle through.

Tony Bucci:
Since we’re talking about market forces and consumers, what’s driving iBuy? Just convenience or are there other factors?

Jon Lafferty:
I think it’s convenience and I also think it’s being falsely marketed as a cheaper way to sell your home to get the realtor out of the transaction. And so it’s really a false promise. It’s, “We’re going to save you the convenience and the hassle of having people come through your house and you got to deal with a realtor, and pay his fees. We’re going to do it for you much cheaper. We’re going to simplify it and we’re going to get it done in two weeks. So if you need your money in two weeks because you’re going to go buy a new construction down the road, hey, we’re here for you.” So okay, I can see for instances like that, I can see where something like that may come in handy. But in general, I don’t see how it works.

Tony Bucci:
So there’s a local real estate celebrity I hear on the news that guarantees they’ll buy your home if they don’t sell it. Does it work in a very similar manner? I think you know who I’m talking about.

Jon Lafferty:
Let me explain to you. I’m glad you asked. So here’s-

Tony Bucci:
We did not pre-plan that.

Jon Lafferty:
No, it’s-

Tony Bucci:
I’m in the car lot.

Jon Lafferty:
Yeah, me too. So not that I have read this person’s marketing plan and know exactly how it works. So this is just me taking a little bit of a stab in the dark. I sit down with you. I say, “Tony, here’s my marketing booklet. Here are the comparables for what homes have sold in the area that are similar to yours. Here’s where I see your home selling. It’s going to sell between,” let’s just pick an arbitrary number. “Tony. I see your home selling between 400 and 410, that’s where I see it sign. That’s where I see the market value. That’s what the comparables say.”

Jon Lafferty:
You say, “Hey, that doesn’t sound right. Actually, I think my home… I know my neighbor down the street just sold his house for 435 and my house is nicer than that,” it’s what we hear from a lot of sellers by the way, all the time. “My house is nicer than the guys down the street.” But I say, “But Tony, this is what the comparables are saying, 400 to 410,” and you say, “Wow, ah, I don’t know. I don’t know if I agree with that.” “Well, Tony, you know I do have a guarantee or a…” let’s change that word up. “I have a promise that if I don’t sell your home in this amount of time, I will buy it from you.

Jon Lafferty:
So Tony, I’m willing to list your house at 429,900 and start there or 435 and start there if you think that’s where it is. But if we can’t sell it there, we need to drop the price to get to the range where I think it’ll sell.” And you say, “Oh, okay.” And then you say, “Well, what about your promise to buy my home after a certain amount of time if I don’t sell it?” “Tony, I’m glad you asked. So, here’s how this is going to work. After this certain amount of time that I say that I’m going to buy your home, we said that your home is valued between 400 and 410, right? And you do you agree with that? That that’s where I think it’s going to sell. That’s where the value is?”

Tony Bucci:
For the sake of this, yes.

Jon Lafferty:
Okay. I agree. So here’s what will happen, Tony. We agreed on a 6% commission, correct?

Tony Bucci:
Yes.

Jon Lafferty:
Okay. So we’re looking at about $24,000 or $25,000 in commission after everything’s said and done, with fees and everything, and let’s call it an even $30,000. So what I’m willing to do right now, Tony, for my promise, is I promise that I will buy your home from you at 365.

Tony Bucci:
No commission?

Jon Lafferty:
And I’ll charge you no commission. 365, no commission. I’ll buy it. I’ll write you a check and you can walk away.

Tony Bucci:
That sounds like the iBuyer program you guys have described.

Tony Abate:
Wow. What do you know?

Jon Lafferty:
Hey, what do you know?

Tony Bucci:
Yeah, I understand. And there is no such thing as a free launch. And I think when I hear that, I instantly think, “Okay, what’s the catch?” I just wonder, and just like if I was listening to the iBuyer program, I would wonder what’s the catch? But I don’t think a lot of… not everybody does that. By clear indication, if somebody is advertising that much on the radio, there’s funds to… there’s a reason why they’re doing that. That’s interesting. That’s just another interesting change or man, I don’t know if it’s a change, how many other real estate agents do that, but certainly an interesting upheaval we’ll say. But it doesn’t sound as altruistic as is it looks like. It doesn’t seem to be as altruistic as it sounds like, I should say.

Jon Lafferty:
It’s not. But for marketing purposes, it sounds great, doesn’t it?

Tony Bucci:
Yeah.

Jon Lafferty:
If I was to tell you that and I, “Hey, if I can’t sell your home in this amount of time, I promise I will buy it from you.” And it opens doors, it makes the phone ring but the reality is something different.

Tony Bucci:
Got you.

Tony Abate:
Maybe economic comparison too is trading in your car versus selling it on your own. Everybody knows that if you sell your car on your own, the likelihood of getting a higher price is very, very good. Most folks don’t because of the inconvenience, and so on and so forth, and probably not knowing how it works. This is the same kind of thing, but I think the stakes are so much more higher. They’re so much higher. So you’re talking about a home, you’re almost always talking about a six figure transaction, and really what these iBuyer platforms are bringing to the table is a time saver.

Tony Abate:
And so I would hope that homeowners would just hit the pause button for a second and saying, “All right, is going from 10 to 14 days versus 50 to 60 days, is it really worth $20,000, $30,000, $40,000, $50,000 in lost sale proceeds?” That’s really where it seems to distilled down to, is a huge amount of… and I guess that’s relative, a huge amount of loss in profit or equity is really what it is in exchange for, in my view, a small amount of time savings and of course, the inconvenience of having people traipse through your home or whatever. For some people, that’s probably really important, “I need that money now.”

Jon Lafferty:
If you’re a murderer like John Wayne Gacy, it’s probably really important not to have people marching through your house.

Tony Abate:
Very true. Very true. Yeah, but I would say that these companies are marketing it as, “Hey, this is going to be the norm. Everybody is doing it, so get on-board. It’s technology based, it’s the cool and sexy thing to be doing. You’re doing what hundreds of thousands of other people are doing,” and it’s just not true. But I think that’s what they’re trying to make it sound like.

Tony Bucci:
Well, I mean, I look at like this is a couple things to unpack here, but one of the things using your analogy of buying a car or selling a car on your own, in a traditional real estate transaction, there’s trust in the buyer as if I’m buying. Like I know there’s somebody on my side and there’s someone on your side. So if I’m buying a car, I’m buying it from a private seller. I’m not really sure. Therefore, I may want to just buy it from a dealership and therefore, you may want to trade it in. So I feel like there’s already advocacy there on both sides of the equation.

Tony Bucci:
But also the other thing I was thinking is just we… and Jon and I were talking about this, is just this concept that people don’t want to be bothered anymore. People don’t want to talk to people and people don’t want to be bothered. And we see it in the financial planning world when it comes to life insurance. Life insurance is… I know that we weren’t going to hear to talk about life insurance, but life insurance ownership, depending on the study you look at, is at an all-time low in the United States people. Well, it’s because people… life insurance agents are looked at as wants to speak in cars, one step above a used car salesman. And so people get-

Jon Lafferty:
So it’s a matter of your opinion or one step below.

Tony Bucci:
Yeah, yeah. Interesting enough as opposed to cars, there is no dickering and dealing in life insurance. Whether you go online or you go to an advisor, or an insurance agent, the prices are set by the insurance company, which is… but people don’t want to be bothered. And I get it. I come home, I have two little kids and I have another one on the way, and the last thing I want to do is make decisions. But at some point, as a financial advisor, I’m saying, “Okay, you have to take the time out to make the best economical decision for your family. And that may involve allotting some time to tackle this.”

Tony Bucci:
We spent plenty of time planning vacations and I mean, I’ll speak to my generation, I’m a man in his 40s and I spent plenty of time researching my fantasy football draft. I can certainly spend a little bit of time doing other things. And I understand I’m not a disinterested third party because I’m in this world, but you guys are professionals, you deal with people and you probably see… Tony, you see it in the mortgage business with the rocket mortgage. Now you can get a mortgage in two seconds.

Tony Abate:
Sure.

Tony Bucci:
And I’m not saying that’s necessarily a bad thing, that product or that platform, but convenience as a method, as an attraction tool to make a big financial decision is something that I would like to see curbed a little bit. And the only way it’s going to be curved unfortunately is enough people get burned by something. And if enough people get burned by the iBuyer, then they won’t do it. And I hope that’s not the case. I hope that’s not how we have to learn about this stuff. Because I hope that iBuyer companies are taking a cue from the Business Roundtable. They’re looking at their customers and saying, “Okay, it’s not just for our shareholders.” But if those iBuyer programs, here’s another level. If those iBuyer programs are being funded by private equity, it’s not going to happen.

Tony Abate:
Sure.

Tony Bucci:
Because private equity, their number one job is to get their money out with a profit. So I know we’re dancing around a bunch of subjects here, but as you guys talk, it just makes me think about some of the… this trend and inconvenience versus accuracy of a financial decision.

Jon Lafferty:
Yeah. You and I talked before about… basically we were talking about different analogies and how the investor, and how they don’t want to invest in certain companies unless they’re doing certain things correctly. And there seems to be a push toward disinvesting in funds and maybe portfolio type things that have got any manufacturers in it or environmental companies that are coal companies for instance, don’t want to invest in that anymore. And you gave the analogy of not a direct analogy, but you used the analogy that as real estate goes, you have these companies that are like slumlords, they own these buildings that are dilapidated and aren’t up to code, and they don’t want to put any money into it because the tenants that are living there are paying a small amount of rent.

Jon Lafferty:
But you take them and you look at another landlord who’s got a nice place and people are happy to live there, and people are happy to pay there. And so they’re happy to give their money to the landlord versus this slumlord. And I almost see a little bit of a parallel between people who are willing to invest in certain types of things that are doing well for society and for things as a whole, and the same thing over here. And so I’m just curious in your take, do you see that this is the way moving forward and do you see in overall effect on everything with this attitude? Starting with maybe investing in stocks and companies and things, and just being pervasive throughout society as a whole?

Tony Bucci:
Yeah, no. So what we were talking about also was real estate investing, we use the word slumlord. The word slumlord instantly conjures up negativity. And I think when you own real estate, I think it’s a much more visceral experience. You own a piece and that’s what a lot of people love that aspect. But I want something that I know is real and tangible versus owning this stock, which technically is just as real and tangible. You are now part owner of a company. And when it comes to this new governance, when it comes to investing in stocks, essentially the question is, if you are investing in a company called ABC Automotive and ABC Automotive treated their employees like, you know what, they had a plant in, we’ll say in Brazil, that polluted the Amazon rainforest had killed a wide swaths of land. Is it really any different than it being a slumlord?

Tony Bucci:
It shouldn’t be. Now here’s the thing. Do you really care? So it really depends if you’re an investor, do you just want your return? And most people say, “Hey, this is for my retirement.” Given the fact that we talk about this all the time, how today’s the average Joe is our investors. Now, I mean, with a deep proliferation of pensions, they’re not here anymore, with social security, with concerns about social security. More and more people invest money. And at the end of the day, if you need a certain rate of return does it, does it matter to you? Well, some people will never will. And that’s fine.

Tony Bucci:
I mean, financial advisors, we get judged based on our rate of return. It’s a question we ask our clients, are there any investments that we have to stay away out of personal philosophical reasons? Heck, when I started in the early 2000s, it was standard question to ask a Ford employee if you wanted to screen against GM stock. I hate to say it like that. It was the case or heaven forbid, international automotive companies. But it’s also leading to now the convert is, I think people are waking up to this. They want it from an investing perspective. Not everybody wants to own things that conflict with their values.

Tony Bucci:
This type of investing that actually is called… started as what’s called SRI investing, a socially responsible investing. And really, and that’s been around for… and I mentioned that the one example of apartheid earlier, but really that’s an example of socially active investing. It has now morphed into something called ESG investment, for environmental, societal or governance investing. So there is a whole list of mutual funds investments that you can pick that reflect your values down to… and the converse too. There are funds that invest completely opposite. There is a fund called Vice. Vice is what it is. They invest in ammunitions, arms, tobacco, gaming.

Tony Bucci:
So there’s a belief that those companies generally are profitable. The technical analysis of that kind of stuff is that, yeah, alcohol is generally, we call… it could be someone known as a defensive stack, meaning defensive as in that defense industry, but tends to do okay even when the economy’s bad. So, but either way, there’s a lot of different options for investors to choose nowadays. And we’ll see what they will vote with their feet. I would say most of our clients, it’s not something that’s on their radar, but I think it’s they were starting to talk about it now. And I think it’s because people want their money to say something about themselves.

Tony Bucci:
And I think going back to this Roundtable, I think the younger generation is the 30s, the 40s and maybe in the 50s are starting to really to think about that. Going back to the slumlord, no different than if you had a real estate investor and you offered them, “Hey, you can own this eight unit apartment building, you’re going to be a slumlord, or you can buy this condo in this nice end residential real estate area.” I’m sure they’re going to take that because they don’t want to be known. So we’ll see, but it’s certainly something good to watch moving forward.

Jon Lafferty:
It’s going to be interesting to see what happens in real estate coming down the line. You’ve mentioned that people now own stocks on average about eight months before they trade and/or sell. And we’ve definitely seen in the real estate and lending industry that people are buying homes. And it used to be let’s say the… What’s that generation called? The notch baby generation, born in the ‘20s and ‘30s or the ‘30s. Not the greatest generation. They’re in between. So you had that generation that bought homes and is typically stayed in them for 30 years, 40 years, 50 years plus. And then you have the boomers where that was less.

Jon Lafferty:
And, and so now you have our generation that you bought a starter and then you move up to the family home, and this is where you’re going to raise the kids and they’re going to go to school. And then you’ve got the generations after ours, the millennials, and then the Gen-Zers who are probably typically going to stay at home two or three years and move, two or three years and move. And so, I don’t know if real estate’s ever going to get to a point where it’s more transactional than emotional, but one could argue that we’re heading in that direction for the younger kids.

Tony Bucci:
Yeah. I mean, I think some of that, I’m interested in your opinion, but you guys were in a previous podcast I was listening to nod. You’re talking about California real estate and negative amortization law instead of it’s based on the premise that real estate always went up. And so speaking to the concept of real estate always went up, I think the mobility is tied to real estate always going up. We saw mobility get really restricted 2008 when people all of a sudden became underwater and now they’re just… maybe not just for the last few years or with a price appreciation. Now people that were in their home, they’re able to move. And that’s almost creating kind of a… I don’t know if that removed the log jam or are now still a log jam.

Jon Lafferty:
Still in a log jam.

Tony Bucci:
Jon’s shaking his head right now. Or it could be something more like, “Hey, yeah, people… just the concept of home is different.” And that’s a whole nother podcast under discussion of neighborhoods and people talking to their neighbors instead of texting them, and all that kind of jazz. But not to sound like the angry old guy here.

Tony Abate:
I think there’s something to that though because in past decades, just the event of moving, that was an epic thing. It just didn’t happen very often. Usually it happened because of some reason behind it. And it was a big deal. Now it’s just we’re moving because it’s time to move or we’ve worn out our welcome in this home, we’ve got out of all we want and now we’re just going to move out. I think there has been societal changes.

Tony Bucci:
Yeah. Yeah. I mean, in the stock world, we know for a fact it’s we’re definitely more temperamental. So there was a study done, or not study, but stats, stats that show average stock ownership is, I think I mentioned it earlier in the podcast, about eight months, it used to be eight years. And so going back to this whole environmental, social and governance, does it really matter if people are only holding a stock for six, seven months? I’m guessing that homes are different than stock ownership, so yeah, you’re not going to be moving every six to seven months. I mean, personally moving is definitely one of those things that is traumatic for… I mean, I’m sure most people are, but remains to be seen.

Jon Lafferty:
It’s interesting. I don’t know that buying and selling a house will ever get to a short period as that, and I think that even at two years, you’re pushing it with the costs involved to move. It almost doesn’t seem worth it at that point. You brought up… I just can’t get the damn episode of leave it to Beaver out of my head where Wally and Beaver decide that they’re going to invest their money. Their dad, Mr. Cleaver, invested their money in a utility stock and it was a consistent performing stock over a number of years, but it was only going up incrementally, very incrementally.

Jon Lafferty:
And so they read a tip in the newspaper about this hot tech stock back in the late ‘50s. I forget, it was a Rocketdyne stock or something like that. So they requested that Mr. Cleaver take their money out of the utility stock and invest it in this stock. And he was resistant and resistant, and they kept pestering him. And finally he said, “Okay.” And he invested their money in the stock. And then of course, fast forward a week later, there’s a news report that the company didn’t get the government contract and now it goes belly up. So now they think that they lost all their money. And of course they didn’t because their dad never took the money out of utility stock. Slow and steady.

Jon Lafferty:
So I’m reminded of with the idea of the long-term investment, that you sit on it and you just let it perform over time as the market ebbs and flows over that period of time to now we want instant gratification and instant return.

Tony Bucci:
Yeah. They’ve done studies that show… I mean, people, they track investor performance and the only variable in the study groups was how often people receive their statements. And so they had a group, and I’m going off of memory here so I can’t say it exactly, but they had a group that got their statements every six months, every quarter, every month, every week. And you would believe it or not, of course, the more frequent they got reminded of their return, well, either positive or negative the worst they did.

Tony Bucci:
And I think of real estate, like, I mean, I know what kind of my house is valued, but I don’t track it on a monthly basis. And I certainly don’t react because there is some of course ingrained reasons you don’t want to move. There’s the old Kenny Rogers’ song, know when to hold them, know when to fold them. And for the most part, you should hold them when it comes to investing. But just like real estate and mortgages, financial advising, we deal with headline risk. The news is pervasive, Twitter, Facebook, social media. And so, it’s constantly bombarding you with worry. And so worry, we know worry drives… worry and fear drives decision making much more than greed, believe it or not, even though Gordon Gecko said greed is good.

Tony Bucci:
And so that’s why the people that get their statements quarterly did better than ones that did get it monthly. But yeah, I mean, it’s I think Warren Buffet said something about like… he alludes to the fact that he got so rich because it took so long to do so and that most people are not willing to get rich slowly. Use the leave at the Beaver episode. So I guess it just depends on what your money’s for. That’s one of the things we always tell as financial advisor, what’s this money for? If it’s play around money and it’s something you’d like to take a chance with, great. But if it’s your house, it’s your mortgage, and I’m not investing, these are just decisions I say, then pruritus is usually better and patience is usually better than reacting to market or reacting some hot stock.

Tony Abate:
An interesting parallel, and I know we got to be thinking about wrapping up, but it struck me when you were talking about how the people who received their statements frequently tended to underperform. And you mentioned something about your own home. I really don’t know what it’s worth and that goes for all of us. And in times past, we didn’t know what it was worth unless we call somebody like Jon and he did some in-depth analysis. What do we have now? We’ve got Zestimate that tells us instantly. So it’s the same thing going to happen? Are people going to make poor decisions because they’ve got that data right in front of them that they’re seeing every day if they want? And of course we could have a different conversation on the validity of Zestimate, right?

Tony Bucci:
Well, if my Zestimate is higher than what I think it is and it’s true, right?

Tony Abate:
Good point. Yeah, yeah, got that data right in front of them.

Jon Lafferty:
You can envision somebody saying there are houses in June here and then in July it’s up here. And they say, “Honey, pack the bags, we got to sell now.”

Tony Abate:
Yeah, yeah, yeah.

Jon Lafferty:
Get that sign in the yard.

Tony Abate:
Or if they had not known that similarity being not receiving the statement, they would just let slow and steady win the race. But because they saw it, is that going to affect a certain number of homeowners [inaudible 00:56:51] say?

Tony Bucci:
I absolutely think it will. I mean there’s a… we don’t have the time for this. This may be another podcast, but there’s a psychological bias called anchoring. Anchoring is where we mark to a price internally. And so famous example is when Ford went to 25 a share back in the early 2000s. Talked to a Ford employee when it was at three a share, I ought to get back to 25 because that’s what they remember it. And so if you see that Zestimate and it says your house is worth X, Y, Z, you’re not going to forget that assuming it’s going to be difficult.

Tony Bucci:
And as a real estate agent, you’re trying to accurately price the home and there’s something to be aware of that, if they’ve looked at Zillow or Zestimate, either way. This estimate from Zillow, they may be stuck on that price. Personally, I can tell you that first-hand, I was stuck on a price with Zillow. So Jon’s laughing at me.

Tony Abate:
Think about the influence. In your world, nobody would be able to put data out there that would influence the price, right? But in real estate, Zillow does it every day. They can put any number on that Zestimate that they want really. They’re influencing the market.

Jon Lafferty:
And you and I talked about this, he and I talked about this a couple months ago and I said is it going to be interesting that you have a company who puts an estimate of what your home is worth and at the same time they’re in that local market, purchasing homes from sellers and flipping them. Do you see a conflict of interest there down the road? [crosstalk 00:58:15] 100%

Tony Abate:
Let’s us put 15% lower market values out on Zestimate six months before we go into that market.

Jon Lafferty:
Hey Phoenix, we’re coming in guns loaded, ready to go.

Tony Abate:
Not that we’re biased, but we’re a little biased.

Jon Lafferty:
Before we go though, I wanted to… we’ve been talking about the average investor was eight years, now it’s eight months and things are changing in real estate, and people are buying on shorter, selling in shorter amounts of time. And so talk a little bit about why having a knowledgeable financial advisor to help somebody with that mindset by providing them a strategy and an education, and advice, and how that plays a vital role in helping them make correct decisions.

Tony Bucci:
Yeah, at the heart, financial planning is using an expert to give you wisdom and judgment on a decision that they feel is best for you or that together you feel is best for you. We do this all the time. You ask for relationship advice. Your best friend knows you better than you do. And so there’s a certain level of judgment with a financial advisor and you guys feel there’s a certain level of technical expertise that comes along with that. But ultimately, there are… I mean, in financial advising and investment management, it’s a world of gray. This is not tax and not accounting. It’s not one and one equals two. It’s trying to determine and clarify your goals, your objectives, which is an important part of the puzzle.

Tony Bucci:
Most individuals come in wanting to invest money, we stepped them back to discuss goals and objectives because the merits of the decision really it’s really good or bad if it brings you closer or farther to your goals. If it brings you closer, it’s a good decision, farther, bad decision. And so, in a real estate business or transaction, somebody wants to buy a house, something often like, we’ll take a look, okay, if you buy this house, what are the ramifications on your other goals? And then you prioritize and you make your decision. And then of course, yeah, then we promise you X… no, I’m just kidding. We’re not going to promise returns.

Tony Bucci:
But yeah, and then we tried to grow your… then we of course grow your money to achieve your longer term goals. But ultimately, it’s organizing your decision and arming you with hopefully the peace of mind to make the decision that’s best for you.

Jon Lafferty:
Yeah.

Tony Bucci:
Yeah.

Jon Lafferty:
I like it.

Tony Abate:
Very good. Good discussion today.

Jon Lafferty:
All right, well, we definitely want to thank Tony Bucci with Mission Point Planning & Retirement for stopping by. Hey Tony, if people want to reach out to you, get in touch with you, contact you, how do they go about doing that and who should be contacting you? Who are you looking for right now?

Tony Bucci:
Well, I appreciate that, the simple answer is we’re just located in Troy. We’re a boutique wealth management company. Our broker dealer, our back office is Securities America. You can maybe reach us in one of two ways. A direct line into my office, I still answer the phone, believe it or not. 248-504-6015. Our website at Mission, www.missionpointplan.com. We’re really big on transparency. So you get to know basically everything about our firm, including our personal lives. Our family might interest you. My favorite food to eat is on there partly because we think financial advice is very personable and you have to really trust and know the person you’re getting it from. So we like to think of our clients as family.

Tony Bucci:
My particular specialty within the practice is really for those folks that are retirement is… they’re in the seventh inning and on their way to retirement. And so it could be 50 plus, but really, I really do a good job in helping to organize decisions to shepherd somebody into retirement and then develop a plan so that they don’t outlive their money. We have other advisors in the firm that specialize in millennials, physicians, Gen-Xers.

Tony Bucci:
But I would say the reality is if you’re unsure about the future when it comes to your finances and you’re not sure about big financial decisions, it doesn’t have to be us. I think you said having a good financial advisor in your life that you trust and that you can confide in is probably crucial for just about everybody. But if it’s us and you’d like to learn more about us, those are the two ways to contact us.

Tony Abate:
Great.

Jon Lafferty:
That’s great.

Tony Abate:
All right, Tony, always a pleasure having you on.

Tony Bucci:
Thanks. Thanks guys. I appreciate it.

Jon Lafferty:
Thank you for listening to Avoiding Real Estate Turbulence podcast. If you’d be so kind as to subscribe, review, rate us, we would appreciate it. Please share with your friends and family, co-workers that they too can find us… the website’s not up here. Dammit, I got to change this verbiage.

Jon Lafferty:
Website to be coming-

Jon Lafferty:
The website coming soon is avoidingret.com. Soon we’ll have each podcast episode on that page that you can listen to directly from there. That’s coming soon, don’t go there yet, but it’s coming soon. In the meantime, you can find us on Google podcasts, Apple podcasts, and Spotify. Thanks everybody.

Tony Abate:
Thank you.

Tony Bucci:
Thank you.

Jon Lafferty:
And I still don’t understand the verbiage from what he said earlier about his disclaimer.

Tony Abate:
Yeah.