It is 6 minutes now past 11 and you're listening to mid-day on the FM news station. Good morning. I'm Marc's ad act like in the Twin Cities today real estate will be our focus on midday and is always as I was a case on Saturday. Midday. We hope you'll be part of our discussion with me in the studio this morning Minnesota real estate shareholder George Carville from st. Cloud State University also hear Gloria aren't a burglary is co-owner of buyers resource Metro Realty and she's on a National Association of exclusive Buyer Agents board of directors. Thank you both for coming in this morning. You're welcome from the 1995 real estate market in this part of the country over the past couple of years record low interest rates help to boost sales significantly in some areas. It was even difficult to find existing homes for sale or available lots to build on now that interest rates have risen with a realist are plants real estate market slow down on average how much are people spending on Holmes what percentage of income can people afford to spend?Housing what's the best way to ensure you're getting the best deal whether you're buying or selling a home? And how do you select a realtor? We talkin about all of that and more today at midday to join our conversation to 276 thousand is a number to call if you're listening in the Twin Cities metropolitan area to 276 thousand in the Twin Cities anywhere else. You can hear the broadcast this morning. You can call toll-free and join our discussion about real estate the toll free numbers one 800-242-2828 toll-free. Once again one 800-242-2828. Well Glory, I think that would be appropriate to start with you this morning around the board of the National Association of exclusive Buyer Agents, which apparently is a new organization. What is an exclusive buyer agent and from your Vantage Point? What are the advantages of dealing with exclusive buyer agency as opposed to traditional realtor? Well, thank you. I'm very pleased to be here. This is a new issue that I would like to open up tomorrow the consumers and the public we have exclusive buyer.Brokerage has extensively been available since 1986 and what we are as we dealing representation only to the buyer. We offer all the services that a traditional real estate agent would offer and more all of our information that is received from the buyer is kept confidential especially dealing with their financials in the presentation of offers. Their financials are a valuable tool in getting the proper price for the property rather than coming in with information opening up their checkbook to sellers. We have been pre-approved pre-determined is to the value that they can purchase. The representation that we offer to them is exclusive only to them much as representation should be exclusive only to the seller and how is that so different than the regular relationship between a buyer and it in a regular traditional realtor company does not take listings. There will never be a conflict.In an exclusive buyer brokerage company, whether it be buyer's resource or any other company that is exclusive exclusive means only a company does not take listings. We will never have a conflict. Once we have told you that we work for you a hundred percent to then turn around in the middle of we call it a football game change the jersey and decide that because it would be beneficial to us as an agent and not to our client necessarily to back away sit in the middle of the right on the receipt in the middle of the field and not give representation to either party which is what a traditional agent would be doing. If in fact your company did take listings as well as represent buyers George Carver type of a business's. What do you think about the new trend in an exclusive buyer Agency New organization formed? Apparently there's some interest in it of the real estate market Mark thatThat feels that they want representation that specifically for them on the other hand real estate transactions have gone forward for a 40 or 50 years and a traditional mode worthy real estate agent. In fact represents the cellar and has a duty of fiduciary duty to that Cellar and I think by and large many people are more concerned and selecting their agent with how they're able to work with them. How comfortable they are how they feel there may be helping them in the selection of a home than they are with the technicality of who the legal representation happens to be with him by a large shabar agency serves the need for some people but certainly does not is not the Panacea for the answer for all purchasers of homes when I get to the phone so I can get some people on on the air. If you have a question about what to expect from the 1995 real estate market around this part of the country. You can join our conversation with me here this morning George Carville from St. Cloud.State University and Gloria are Nuremberg who's with a National Association of exclusive Buyer Agents were talking about real estate. If you're in the Twin Cities near the question 2276 thousand is a number to dial in the Twin Cities to 276 thousand anywhere else. You can hear the broadcast. You can call toll-free. 1-800. 242-2828. Mike is in Golden Valley. Good morning on the FM news station. I think we have Mike morning. Good morning experience with real in the local area and am and have since that to your mark ago in a lawsuit with that Realtor. What happened? The point being is is that it was then and this is now and then there was not the supposed to say closure of the realtor representing. Whomever on paper also. I've got two questions with regard to that area. For myself part of the problem was that the realtor brought it upon themselves to tell the listing agents who were part of the same brokerage house where we stood that was found out after the fact that was not a pleasant thought considering you're playing poker. Excuse me. Can you tell me what is the question? The question is how does one protect themselves without having any forms that stayed what the realtor is going to go into a bargaining session with with? Realtors, I would like to address that this is Gloria effective October of 1993, and I'm not certain you said two years ago. Are we dealing prior to October of 1993? Yes, now I am in the process of effective October of 1993 you would be required. They would be required to present you with a different types of agency that are available and that would include exclusive buyer agency seller agency and dual agency Or Glory. We explain what Mike is at Mike's complaint is an end. And then what would the written forms would have protected him and the fact that he tells he would tell that agent what he wants disclose because that age is not allowed to disclose. I slow down even more than that. Take a step back Jorge explain. What a glorious started with the correct forms of what happened in the past is past today. The agents are going to be required to attend either assume one of three roles one is a buyer's representative or agent they're going to have a role in seller's agent or representative or three they could conceive play have what is called a dual agency in which the assuming neutral roll between the buyers and sellers and consequently today that one of those three disclosures is going to be made by every agent that you're working with and I think that sex with you answering that is designed the Department of Commerce develop those rules in cooperation with the Minnesota Association of Realtors in order to protect both buyers and sellers and to protect agent so that their role in the transaction is clearly understood by all the parties and I think that's worth Lori was headed and those that change was so many people I need for representation became effective in 1986, but the fact that it be written disclosure only became effective in October of 1993 that problem right now and what effect does not going to happen because they are going to get the written disclosure disclosure doesn't prohibit an agent from violating the relationship that he has and then we can have a Agent who breaches the trust of that Cellar in discloses things to the buyer. Then in fact should not be disclosed are the reverse conditions occur with a buyer's agent who because of their interest in completing the transaction and receiving a commission could conceivably breach the buyers confidence. Well that's in the same that can occur in any professional relationship with an attorney or any other where that fiduciary responsibility is violated by the party, but I'd like to point out that even though it's possible that would be an extraordinary small percentage of the cases in which it would occur. I think by a large licensees are responsible to the parties as they are supposed to be this is Mike still on the line. I am not sure. Where does it state that a buyer should not go with the agent when a offers being presented? He doesn't state that any place. Why is it that fled tours seem to prefer going and presenting to the buyer alone? It's an option that they choose call is Mark a let's let's talk about this for a minute now. I guess Mike. What is your complaint that that that the realtor is Izzy is going in a negotiation saying here's what Mike the buyers offering to do and the Realtors not bringing you with and you're not sure exactly what kind of information the Realtors bringing to the table or what at this point. I am not Mike what I would tell you this is Gloria both stand as far as the arbitration clause in all these different contracts that are not standardized are not standardized throughout the industry and each and every one of the Realtors have different forms that They may use are similar but not the same. Where do you all stand on standardized forms and the elimination of the this so-called arbitration Clause I can tell you I think the standardized form meet most people's needs and I think that's probably about the best and shortest answer that we could give you and I'd like to thank you very much for calling in this morning and sharing your questions with us. I'd like to just add one thing again. If you will recall that you do have the opportunity to have an attorney review your contract and I would suggest that at any time that you have concerns Nick out who's listening in Minneapolis make thanks for waiting on the FM news station. Good morning. Good morning. Everyone have a couple of questions. And number one favorite question will go with that when I move on here. Okay, I the favorite question would be there any advice about buying a HUD or VA home in are there any other kind of repossessed homes are properties available? There certainly are a variety of repossessed homes that are available you would be able to if you are working with an agent that definitely is working on your behalf. They should be checking additional sources whether it be from bank foreclosures receivership properties. If you're dealing in commercial and then in reference to the head or the VA properties, you would be taking those properties in an as-is fashion. So I would suggest that you are very detailed in reviewing the property and if in fact you are serious about it and have major concerns about the property encourage you to have an inspection done by a professional going that route George Wright looking for the good deal on the house and they the big ads in the in the Sunday paper for that the hot how much is an opportunity for a bargain purchase. Potentially. There's also an opportunity for a disaster when you buy VA HUD or real estate owned and repossessed by a bank, but on the other hand the desire is to get rid of the property and because there may be some damage or work that needs to be done. There could be an opportunity to Riot for less than the value of that property. Once the repairs have been corrected the caution that Gloria gave is excellent. And that is to have the home inspected be fully aware of the need for any changes and wiring plumbing heating systems air conditioning replacement of roof. You have to remember when a home is foreclosed upon generally that family has suffered some kind of disaster either the loss of job or illness divorce. It's hard to say but the point is is that before one loses the home very often. There's a tendency to defer the maintenance on the property and the consequence is most of these homes do need some degree of work before their market-ready or livable and so have it inspected and be aware of what you're getting into not made readily available to you those disclosures are not required by law in the state of Minnesota. They are simply requested. So the agent that you were working with should very strongly pursue whatever and whoever Avenues they have Serebii research through the County Records building permits excetera to find out what in fact has occurred to that property that is recorded sign if your bidding on a property of the a property or HUD property go 20% under what they're asking, you know, okay. Let's go somewhere. Good morning Joe. I was always under the impression that in the past and was told that usually they're appraised or assessed at under market value as far as Taxation and let them when a home is sold its usually appraise higher. Do you can have you found that in recently it that that has changed my friends were accessories will tells me and we'll tell you that the attempt to arrive at an estimated market value or an assessed value that is equal to 100% of the fair market value which in essence means the resale price. However, I also informed my assessor friends that typically speaking assessments do lag behind the actual Market values of homes and consequently assessments do not represent a good indication of the resale price of a property end of it. Any individual property has the potential at the extreme of being under Fast by potential as much as 40% and maybe even as much as 120 or 125% of market value on the high side on average the Assessor's generally. What is SAS at something close to 95% of market value for all homes within the taxing jurisdiction, but that doesn't mean there aren't individual mistakes that are made so consequently, you don't want to look at assessed value in front of set a resale price glory. I'm sure can tell you a good way to get it an estimate of the fair value of the property. If you're trying to sell it when you are looking for when you're when you're referencing assessed values and then you're referencing fair market values. Those are two separate entities. The fair market value would be would have a buyer is willing to buy in a seller is willing to sell for that would be the fair market value assessment value would be based again is George has stressed on perhaps the watersheds the taxable Arenas that that home is in and I do agree. They have a tendency to lag behind as far as far as set a hundred percent ratio difference that amount agreement with it's about 23 minutes. Now past 11 you listening to mid-day on the FM news station. George Carvel is here from St. Cloud State University as is Gloria our neighbor whose with the National Association of exclusive buyer agency. Tulsa co owner of buyers resource Metro Realty. We're talking about the 1995 real estate market. If you're in the Twin Cities, you have a question. You can join the conversation by calling to 276 Thousand Oaks 2276 thousand a metro area anywhere else. You can hear the broadcast this morning. You can get you a question in calling toll-free 1-800 242-282-8809 who we have on the line, but that whoever you are you're on Saturday midday with the George Carville and Gloria arneberg. Good morning you do and how are you paid? Are you paid according to the certain percentage your I've been I've been waiting for you. I knew somebody would call in. This question very good question. In fact and a very strong point in dealing with the differences between traditional real estate agents and exclusive Buyer Agents traditional real estate agents. In fact can be paid and are usually paid on a percentage of the final purchase price of the home. However, and I want to go to Legal that I'm able to say this that in the state of Minnesota 7% seems to be and we have now, but they are negotiable and if you look at the missions throughout Minnesota, you'll find Opportunities available from Brokers as low as for four and a half percent commission can run as high as seven generally conditions are set by each individual broker based on the level of services. They wish to provide in the level of compensation. They choose to provide to their agent analysis of clothes. Transactions in the state of Minnesota would reveal if there's a substantial proportion of those commissions that deviate from any notion that there's one prevailing rate and it's just a matter of how you work with that agent and what the circumstances of the sale maybe that may determine. In fact about the commission turns out to be Friday ranges. We work on hourly fees much as attorneys would do simply because we do work under the same agency as attorneys would be working on so we work on hourly fees. We work on flat fees and it's a pre-agreed Arrangement between our client and ourselves. We have frequently do trades. I've received boats as my compensation a variety of different ways. And I don't think that you'll be finding that in a traditional real estate company is my question. What is a little bit more to the story than that? I paid to you by the buyer that you're Also buyer's agents do act to represent buyers. But in fact receive a proportion of the commission from the seller in it, but it would be very similar to a Cooperative split as well between a buying agent in a selling agent so that there's that those forms as well that exists and to my knowledge most of the buyer agency transactions to take place within the state of Minnesota and the Metropolitan Market or ones in which the buyer's agent is compensated through the commission paid by the seller offering to the multiple listing service. If in fact that is the route that you are going versus another out of a for sale by owner or foreclosure property or repossessed property the compensation that is offered is noted but George would not have the availability to know what my contract with my client is which could be widely different than the compensation that comes from the second part of the transaction. It would be that that is offered to an agent that brings in a buyer getting myself in a little trouble occurs to me that the both sides are the exclusive buyer agency and maybe more of the traditional realtor relationship side are saying that they represent of the people's best interest exactly. But when it comes down to it on both sides regardless of the arrangement your folks make money when you turn houses and move on to the next customer and you make more money, the more people you meet shake hands with sign a contract with finish the contract and Anna and move on that has in fact close that transaction and has in fact not incurred problems as we're hearing a gentleman previous to this caller did and didn't factor in her whether whether somebody holds themselves 4th is a buyer's agent or a dual agent or seller's agent real estate licensees earn their money by completing helping people to find homes that they want. Live in and helping people who want to dispose of her sell homes to sell them and their best interests are served by doing the best job possible for all the parties in the transaction. If we look at the nature of a real estate licensees business, those who survive in this business ultimately end up having the majority of future business come to them on the basis of referrals and referrals come from prior satisfied client. And so it's a wise agent who's trying to serve the needs of all the parties and that agent is the same Gloria. I'm quite sure is courteous and polite and works with and tries to represent yourself professionally in front of sellers agents as well because they potentially represent future business and similarly a seller's agent is exposed to both the buyer and seller and trying to do exactly the same thing. And that's the way they are in their living is by working with people trying to facilitate a lot of interest in hearing repeat it. Locate facilitate. I don't particularly care for that but we've discussed this before and again is the old school is we do have a tendency to repeat what we want to hear but with reference to a seller agent and a buyer agent. Those are the two agencies that are very important to Julie Chen is somebody that's going to stand on the sidelines and not assist you in any fashion that agent is not in fact working for anybody. Okay. What is the legal next a legal fiction is not the case that is not the case. I'm going to do it. You accurately stated the role of a dual agent who always know Duty or loyalty to either the buyer or the seller and cannot disclose information to either of the parties, but I assure you if you let me finish I assure you that that individual is acting to complete the transaction for both the buyer and the seller without violating any responsibility they have in terms of trust that has been placed and then by either of the parties and they do that. because that is the way in which they are living it's the way in which they survive and succeed in this business and it is not an inappropriate way in which to do a transaction what time's the last several years with the some efforts to reform the way certain things were going on Georgia Wellmark, your glory is correct and she tells you the fire agency has been energized in existence since 1886 what she's probably not aware of is the basis in which that came about and that was an FTC study of real estate transactions and they talked to Byers and they went out in the ass by are the? In the question was Something to the effect of the buyers feel that they were satisfactory represented by there real estate agent. And the answer to that question was yes, then the FTC concluded from that that all buyers thought they were being legally represented by the cellar by the seller's agent in the fact is that question is biased you can't reach that conclusion from the way in which the question is asked because you're not sure if the seller is responding in a legal sense or they're only responding in the sense of how they were satisfied with the agent. They were and the FTC actually had dissenting opinions written to that study concluding that that was an inappropriate research conclusion based on the design of the questionnaire laughing turn. However, did not deter the various Departments of Commerce throughout the United States. I'm going to the legislators and seeking enabling legislation that permitted the buyer brokerage and representation and n And many senses buyer agency is a solution to a problem that didn't exist shuffling through your work under legal guidelines here 1983 is when the Federal Trade Commission study that George is mentioning was done. So be hidden under the corners until they actually are troubled, and especially dealing with real estate agents 70% of all those home buyers mistakenly believe that they were being represented by that age of smoke true. And and this is documented 1986. The agency disclosure act get in fact come into effect buyers and sellers need to know that this is a year of options. This is a time of something need to know what is available to them. They need to have these items disclose to them. They need to be able to make the choice. Let's get to them Bonnie's waiting. I think in Plymouth, right? I'm not sure where Bonnie is good morning in the morning by buyer can pay for a home inspection. My question is is it a state law Minnesota state law that the seller has too loud is home inspection not a seller who would reasonably wish to be successful in selling their property is going to permit it personally about the time of by seller told me that they will not allow my inspector to come and look at the home in my behalf. I would walk and go in another Direction because all that does is tell me there's something that they don't want discovered and would prefer not to disclose to you and I think you're probably dealing with a non-ethical Cellar and I think I would just forget about that house everybody. I would stress that a inspection be done. It's beneficial for both the buyer and the seller and if in fact is George said the seller does not want it have done I would be concerned. There's something going on. That's not been disclosed properly to Me Gloria are de Burgh is a co-owner of buyers resource Metro Realty. She's on the National Association of exclusive Buyer Agents board of directors. George Carvel is holder of the Minnesota real estate Sharon is a professor at st. Cloud State University were talking about real estate 2276 thousand is a number to call if you're in the Twin Cities, you have a question to 276 thousand in the metro area anywhere else. You can hear the program. You can call with the question toll free at one. 800-242-2828. Deborah is in Minneapolis. Thanks a lot for waiting by Deborah. My question is my husband and I are thinking about building a home and we're wondering if it would be better to have a real estate agent representing Us in the transaction or have another possibility is just have a lawyer look at the contract for purchase and we would like to have hit some representation on our side. We felt more comfortable doing that but we don't know if what the benefits to be either a real estate agent or lawyers or anybody if they're going to build a house. How how do you go about getting that done with who do you go to? You know, I don't know what glory is the answer to a day that if I had to choose one of the two, I think I would prefer to have the lawyer examine the contract. Although my all my real estate licensee friends are going to shoot me for having the given that answer but I think the larger problem is in not choosing whether it's an agent or a lawyer, but it's in choosing the Builder and that's a difficult process and for my own purposes where I choosing a builder I would base it primarily on the reputation. The community references prior inspection and knowledge of homes that they have built because no matter how tightly the contract is drawn and no matter who represents you in drawing that contract that builder for whatever reason is not financially sound is not ethically reliable problems going to rise in the construction of the home and I have a greater concern that people select builders that are trustworthy and I think those would have been in business and have experience and it had positive experience have good references and are proud and pleased to tell you who they've Built Homes for previously and perhaps even the range for the opportunity to inspect them so that you can see the work now. I'm curious. What are you going to say Gloria? I noticed the comment you made to review the contract. I think that in referencing for new construction getting up to the contract is probably the most important time. I would encourage you to have an attorney review the contract but knowing what you wanted to the home knowing the flexibility that is there. A review of the materials a documentation of exactly what product from the stick building of the lumber to the type of lumber to the location of the electrical excetera. Excetera are not items that that particular tourney is going to be able to help you with. Once that contract has completely been drafted. I think you need somebody that's on your side from the moment that you're looking for the lot from the moment that the whole is Doug encouraging you to have an inspection of the foundation through the entire process of the construction of the home. There are many entities that will save you money from the drafting of the blueprints to the actual final selection of the window sizes a variety of items. I would encourage you to get an agent that understands new construction. And that is Thoroughly on your side through the entire process. Okay. Well Georgie want to have no knowledge whatsoever of new construction and then effect we have The risk of having the blind leading the blind I guess if I would have been all that I rethink it and listen to Gloria's answer. I would think I would want the individuals who's helping me design the home home designer or architect and internet since I know I'm getting somebody lets, you know you already with the pieces the parts and knowledge of how design effects value utility and use of a room in properly paid Place doors closet. It's a Windows can essentially render space non-functional and it can even detract from the value. And so I guess I would back away from that one in and move to an architecture house designer for that. I think that's a good suggestion again sitting with the architect so they can because one of the jobs of the person that works for you is to listen that is one of the primary primary complaints of people that purchase today if they do not listen agents are not taught to listen agents that work an exclusive buyer brokerage one of the fundamentals along with everything else is taught to listen. Set a second. Let's quickly talk about what kind of Market were expecting this year. The interest rates are are at what George right now for 30 years and put me on the spot before interest rates for about 2% higher than they were then and that what you would tend to view the market negatively in light of that are we looking at but on the other hand if you look at the current approximate 9% rate of interest on a 30-year fixed-rate mortgage and recognized at that rate is comprable to the average mortgage interest rates. It's existed over the past 30 years in other words and nineteen seventy-five people were paying 9% from mortgage. It's a fair rate. It's not high. It's not low. It's reasonable and quite frankly given the volatility of interest rates in the uncertainty of forecast. My recommendation is if you're in the market for a home do it now, don't put it off. What do you think Gloria things going to slow down this year cuz rates are up or is it going to be a good year again? It but since we started in this in 1992, exclusively with this company, we've never had a downtime don't base what you're doing strictly on the interest rates at base it on the money that you're dealing with the property that you're looking into and the way that you structure items. And also the way that the offer is structure. It's going to be a great year and I agree with George if it's the time that you wish to purchase and if it's the moment in your life span when you need to do this, this is a great year to do it to 7% what you can refinance call. Well last year the Twin Cities like the seventh fastest new construction Market in the country was way up in the top 10 and we are down now that's slowing down and why is that slowing down because of the interest rates essentially and there's also depending on demand as well for new construction. We have a lot of homes that are out there that now perhaps we are at we can be a Transit city as well until we have people that are moving in and people that Moving out we have homes at perhaps a year old which would still be not designed for that particular owner, but would be considered a new construction Range Avenue Station. Hi John. Thank you for allowing me to put questions to the professionals will thank you for that compliment market value of 5% over last year. The question is is this representative of the current status may or may not be the change in your tax statement would be representative of two things one a combination of any change in General market values as well as any adjustment that might be taking place because of previous undervaluation 5% is very nominal and it would approximate the price change in the market. But if somebody had a 20% change in their estimated market value, as long as the home is still not valued greater than its Fair. Resale price that's a fair assessment. And what you have is a combination of those two factors affecting the current assessed market value equation, that could be a reflection just moving up to where it needs to be. Okay. Jack is an Apple Valley. Good morning, Jackie. fire and I have Tom and I have been it's been recommended to me by both the mortgage company in my real estate agent to go with an adjustable rate mortgage rather than with a fixed rate mortgage and I was just looking for an impartial. I want to ask you guys something on this one because the other the other day I had gotten into a home, you know, I will rate they they do, you know, we're paying for for 4 and 1/2 5% interest and then they were complaining it all Jeezy interest rates on the way up in there just for rate was going up and now they can't afford the home. They bought a year ago. Why why does it make sense to look at an adjustable-rate that for anybody? I just don't understand that you want short answers one quick short answer is it's easier to qualify for the mortgage loan. Another short answer is that some Studies have indicated that even with increases in the adjustable-rate mortgage that they have turned out to be on average lower cost and a fixed rate. So the question might be why do you want to consider a fixed rate while some people don't like the to consider the risk that's associated with higher. Payments because the mortgage interest rate goes up. So what are you do? Well, you do what works if you are uncomfortable with increases in your payment go with a fixed rate mortgage, if you need to qualify for a mortgage loan in need a lower initial rate go with adjustable rate mortgage. There's no perfect answer depends on each individual person. Guess you'll be able to qualify for more but understand that's part of what you should be getting when you're working with someone is a Consulting if in fact your income is going to be going up and you there are no guarantees of jobs today, but if in fact you're comfortable that your income is going to be going up that should be a reflection in any increments of increase. So what you need to really bring all the issues together when you discuss an adjustable rate or fixed rate mortgage, who should you be discussing that with a banker or a realtor or an exclusive buyer agent? I mean, who do you take this all of the above all of the above? All right, that's all of the above. No services. Do you talk to Mom to she'll give you some advice maybe reflecting her experience in the Great Depression? How are you paid if patient with doesn't buy house, or if they buy a house for sale by owner where they didn't use you or if they happen to wander into a situation in our client. If I am if my client has me working with a for sale by owner. I would do a market analysis and if the client wishes for me to ask that their agent be compensated through the for sale by owner, then it would come through them in the cellar with in pain. But ultimately the money would be coming from The Entity of the for sale by owner. They placed value on their property. We've negotiated if they if my contract is on an hourly basis. I am paid regardless if you close if I am willing to work on a contingency basis. I am not compensated if you do not close on the property. Can you time to get down to some brass tacks regarding give us a quick question will give you a quick answer. Quick question is always good and I was told that I had to be concise and I will try to be but I think it's good to have a debate on occasion because it's time us as a public. I really loved a little bit more about real estate in my question is when are we going to consolidate all these activities regarding buying and selling properties so that the customer who is buying and I can't deal with one person and not run around like a goose with a side of dropping off taking everyone and all the parties concerned. It seems to be so uncivilized and it doesn't seem to be very much to us who takes that first. You want to dress up a dress that one. I don't know that that issue can ever be addressed in the fashion that you're asking the question because what you have if you have a seller that yes indeed does wished to sell the property has placed a value on that property and his come up with their requirements needed to in fact sell that property. You have a buyer that has placed value on that property and their requirements in order to perch That property I'm not aware of the circumstances. It would bring those two parties exactly the same and so you need someone in there that is able to with a non bias be able to negotiate and and bring all the issues together. Not just the pricing but what type of financing the closing. That were looking at address all of those issues without any of the emotional concerns Sony answer to your question. I don't foresee that in the near future and help facilitate all the interactions you have with lender's title agents housing inspectors. Is Conference Center and buy a deal with one person and all the way. It would require a change in the law that would require at least give you the answer to that is no it's not that likely to occur at any time in the near future. Everybody has and plays a different role and nobody is particularly interested where there's a title company or mortgage company or brokerage company in seeing their role in their part played in that transaction supposed to land financing in house moving and brokerage all rolled into a single company, but those have not proven to be uniquely successful. Who is the way it is both sides are in a different position is your analogy of a goose with his feathers dropping off is a very accurate description of a closing process. And what would a realtor does in preparation for that closing? Okay. Thank you for calling you want to say something Glory. I'm sorry for not being very quickly. I didn't want to address the National Association of exclusive buyer agency. He got off cut off very quickly for that. It's an organization that stretches across the United States and really should be International because we're in Canada and we also are in Mexico dealing with exclusive buyer Brokers only throughout the country and contact us and we'll certainly put you in I know but I thought I'd Drive. For sale by owner in the best way to Market their home. Well, a lot of people try that an interesting study I ran across I mean, you're welcome to do it. You're simply substituting your labor and your knowledge or the lack of it for a real estate licensee or Realtors knowledge about 15 to 20% of the transactions each year in the United States are completed through for sale by owner efforts like yours, there's some argument as to what that percentage happens to be the study. That's interesting though indicates that most people tried it on their own will not do it a second time and consequently, I tend to advise people that they need the services of a professional to help them and pricing preparing the home for sale and in representing their interest in one wants information from you. They wanted immediate we live in an instant society and that's probably one of the strongest issues which is d t r d for sale by owner Market. Be there Bill still. Why do you want to do it the independent Labour a realtor a buyer's agency? Company doesn't have to deal with the Realty the short answer. Your question is is if you were paying a 7% Commission on $100,000 house to save $7,000 other Studies have indicated that when you deal with a for sale by owner buyers knowing that you're not having engaged or list of that property for sale with a real estate agent 10 to then offer a price lower than the one you're asking for. The studies have indicated that for sale by owners. Do not realize in net proceeds any significant amount greater than if they sold the house through a licensed agent other words if you had $100,000 house and paid at 7,000 commission, you collect 93,000. But if you're selling it for yourself and your say starting out all free 98,000 the Tennessee would be to make an offer it would nephew $93,000. Anyway, another words financially. Most people do not are not better off and there's two other problems if you want to bargain purchase listener. The place to buy it is through for sale by owners who mistakenly underpriced their property and if you want to not sell a property in a reasonably quick. Of time, look at some of the for sale by owner properties the mistake again is the Reversed its the tendency to know every piece of paint and shingle and repair that you've made and because you loved your home so dearly price it be on the level that others will pay in the market in these things will sit on the market for 6 and 8 and 9 months and not move and the danger of over and under pricing is a significant one on for sale by owners. Thank you. You need to know the for sale by owner need to know the entire Market not just the arena that they are working in and the majority of them do not in exactly what George has said you have a tendency to underpriced it and therefore reduce your net or two overprice it and have it sit on the market considerably longer and then in essence we knew reduce your net again. Thank U appraisals have traditionally been part of the loan process recently. Fannie Mae has been experimenting I think mostly in California with loans that do not use traditional appraisals my two questions already see that coming here. And do you see any effect on this for buyers for lenders? Absolutely, the residential appraisal business is going to change significantly over the next 5 to maybe seven years artificial intelligence systems are being designed that will it and test it that can actually yield appraisals as accurate if not more accurate than those currently provided by residential appraiser does a consequence what buyers are going to find as they will be able to go in and make a loan application and with computerized systems obtain credit reports. And as well as an appraisal through an artificial intelligence system and probably be approved for that loan within 24 hours reducing the cost of closing in the time that it would traditionally take and the residential appraisal business is going to change. Significantly, I agree with George is a matter of fact, I'm glad you brought that up because the artificial intelligence that he's talking about will be available in in an exclusive buyer brokerage firm within the next two months in the Twin Cities. It's bent s market in Chicago and also in Boston for the last two years and it is going to be available here at the latest in June 4th is missing right at the present time is most lenders want a traditional short form appraisal buy a residential fee appraiser as these artificial intelligence systems are tested in the discovery is learned by lenders that the evaluations are accurate and are reliable and that they're accepted in the secondary mortgage Market by Fannie Mae and Freddie Mac, which regret going to see us a gradual substitution of the artificial intelligence system for the current traditional the appraisal. It's essentially a career field. That is not going to have any growth. Okay. Good morning. Good morning. I wanted to ask a question. That was some of the traditional agents that I've been talkin to. They say that they can do everything a buyer broker can do and maybe I need further clarification on that. I think you're going to get a difference of opinion. Lori is going to tell you you're absolutely incorrect agent does things different I'm of the opinion that essentially they perform the same Services. Although they have a different legal responsibility to the parties. They represent being one that works with a company that also takes listings that company would an Essence if they if you wanted to purchase one of their listings would need to act in the capacity of a dual agent at that point. They would step aside and would not be able to offer you any services that would be detrimental to the seller or detrimental to the buyer if there's any distinct difference between a traditional. Real estate agent in an agent that is an exclusive buyer broker. That is the main one. They would not be able to assist you in any fashion whatsoever. That would be harmful to the seller or harmful to you. The essential difference is Gloria said that is that to whom they have a responsibility to disclose or not disclose information beyond that they provide essentially the same service to actually come up with a value on the property that is best suited for that buyer to negotiate the time frame that is best suited for that buyer to discuss into a dress with that buyer the best financial situation for that buyer. It encompasses a variety of other things not not at all in agreement with mr. Car bill overall. Would you folks say the people take the whole process of buying a home spending a hundred thousand to a hundred and fifty thousand or $80,000 on a on a product so to speak and take it as seriously as they shouldn't do the diligence that they they should I think they take it seriously, but I guess I'm generally of the opinion that no, they don't do the diligence that they should both with regard to inspecting the property in any limitations that it may have fish. Bickley and making themselves aware of the mechanical workings of the property. I think that should be done in spite of whether they hire a home inspector. Similarly. I think they have a responsibility and spite of who they are represented or not represented by to inform themselves of the fair market values of similarly priced homes in the neighborhood in which they're seeking to buy a property. Gloria what do you think? I think that an individual a buyer needs to to write down prior to going out what they're willing to pay for a property to put it in a notebook and when they get into finding something and emotionalism takes over to go back and look at that and say this is what I was willing to pay if it was the perfect home. This is what I was willing to pay if it's not perfect in this is what I am really willing to pay does this feat does this meet all the criteria that I talked about before I got into this emotional situation that's part of my job when I get wings with someone bring them back to reality after all if they secure a mortgage I'm not making a mortgage payment nor am I paying their taxes? It's emotional buying first and then the facts of hard facts of this is how we're going to pay for it. We do not have buyer's remorse when we work with exclusive buyer Brokers agent working with the buyer if they're doing their job in my opinion properly. They're going to qualify the buyer in terms of what they can afford to buy and has is limited by their annual income and they're also going To do that in light of what they're seeking to acquire in terms of the features and characteristics of the home and an agent was working with the buyer should not be showing them $200,000 homes when in fact of income limit to purchase in ones that are $100,000 in value showing them something that they are not in a comfort level. They may be able to maybe be able to financially afford it. But if that is not their comfort level that they should never end you should drop at age and immediately if they in fact are doing that. Well folks. I appreciate you being here. It's been an interesting hour Saturday midday, but interesting nonetheless going to have to call it quits now for this edition of Saturday. Midday. My guests have been George Carvel holder of the Minnesota real estate chair and professor at Saint Cloud State University also here this morning Gloria Ardon burgers with the National Association of exclusive Buyer Agents, Gloria arneberg is also a co-owner of buyers resource Metro Realty. Thank you both for coming in this morning. I appreciate it. Kumar I hope that you'll invite me back and thanks to those of you who listened and called in and to produce a kitty Isaac Isley along with technical directors Clifford Bentley and Jeff Conrad. Enjoy your rainy snowy sleepy Saturday and marks it act like midday on Saturday is supported by the oriental rug company celebrating its 10th anniversary year at 50th and Bryant in Minneapolis.