Good day, and welcome to the Redfin Corporation Third Quarter 2020 Earnings Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Chris Nielsen, Chief Financial Officer. Please go ahead, sir..

Good afternoon, and welcome to Redfin’s financial results conference call for the third quarter ended September June 30, 2020. Joining me on the call today are Glenn Kelman, our CEO. You can find the press release on our website at investors.redfin.com. Before we start, note that some of our statements on today’s call are forward-looking.

We believe our assumptions and expectations related to these forward-looking statements are reasonable, but our actual results may turn out to be materially different. Please read and consider the risk factors in our SEC filings together with the content of today’s call.

Any forward-looking statements are based on our assumptions today and we don’t undertake to update these statements in light of new information or future events. During this call, the financial metrics will be presented on a GAAP basis and include stock-based compensation as well as depreciation and amortization expenses.

In the event we discuss any non-GAAP measures today, we will post the most comparable GAAP measure and a reconciliation on our website. All comparisons made in the course of this call are against the same period in the prior year, unless otherwise stated. With that, let me turn the call over to Glenn..

Thanks Chris and hi everyone. Redfin’s third quarter net income and revenues were better than we projected in our last earnings call. Net income increased from $6.8 million in the third quarter of 2019 to $34.2 million in the third quarter of 2020. Gross profit was $93 million, up 74% from the third quarter of 2019.

Third quarter gross margins for Real Estate Services increased year-over-year by 870 basis points to 43.8%. Revenue declined 1% from the third quarter of 2019 to $237 million, but this was due to a pandemic driven shortfall in the number of RedfinNow homes we could sell.

Our RedfinNow business of buying and selling homes has an outsized impact on revenue, because we have to account for the entire home value, not just the transaction fees we get from a brokerage sale.

In our core business of brokering home sales through Redfin agents and through other firms agents working with our partners, revenues increased 36% compared to the same quarter last year.

After a first ever year-over-year decline in market share of one basis point in the second quarter, our share increased 8 basis points year-over-year in the third quarter to 1.04%. The game was even larger have we recruited more agents as Redfin employees or as Redfin partners.

In September, we gain 14 basis points year-over-year, our greatest monthly share gains since December 2019. Keeping pace with demand as Redfin’s number one challenge. Year-over-year growth and customer inquiries for Redfin agents or partner agents increased from 38% in July to 58% in October.

If October’s year-over-year demand growth remains at the same level to start 2021 will have to increase our agent capacity 13%. In our last call, we said it would take until the end of 2020 to hire enough employees and partner agents to serve our customers.

But it is now likely that we won’t be able to match supply with demand until the second quarter of 2021. This will limit share gains through the first half of 2021. From July 1 through October 31. The team recruiting employees and partners as agents is more than doubled.

Beyond the nearly 500 lead agents who returned from an April furlough we added 278 employees as lead agents, these new hires increase our lead agents census by 17%. Our most serious challenge now is increasing the capacity of the contractor network we use for some on demand tours. Despite our safety protocols.

Some of these contractors known as associate agents, have limited their availability to meet customers until the pandemic ends. From July 1 through October 31,we have added 373 associate agents increasing our network by 14%.

Our challenges in recruiting Redfin agents, as both employees and contractors have only increased the importance of our referral partners who serve customers when Redfin agents can’t. Revenues from partner referrals increased 93% year-over-year, we have recruited nearly 800 partners from July 1, an increase of 17% from July 1 to October 29.

The likelihood that a listing page we load won’t have a Redfin agent or a partner agent after service has decreased 44%. To recruit more Redfin agents and partners, we are broadening our digital marketing expertise beyond acquiring customers to recruit agents and lenders.

These campaigns can draw on formidable assets for culture, our training programs for people new to real estate in Redfin.com’s authoritative status among hundreds of thousands of traditional agents. We don’t know yet how our campaigns will perform, but our goal is to increase our capacity and our agility, letting us hire faster when demand increases.

Because demand is so far outpaced our supply of agents, we put our development of 2021 mass media as on hold. It would be madness to woo customers, we aren’t sure we can serve well. If conditions change, it would then take a speed to 10 weeks to get an ad on the air. We may still run mass media ads later in 2021.

In any event, we will keep paying for direct ads mostly through Google and Facebook, because you can target those ads to markets where we have enough agents. We projected our direct marketing campaigns will for the first time since 2017,generate full year contributing profits in 2020.

What is remarkable about a business of our size and history is just how much of our growth seems likely to happen with or without as the largest source of demand growth has been the market but we are also benefiting from significant increases in our share of listing search traffic and improvements in our ability to persuade website visitors to give Redfin agents a shot.

Comparing the third quarter of 2020 with the same quarter last year average monthly unique visitors increased 38% and acceleration from the second quarter is 16% year-over-year growth. Based on industry data about searches on Google competitors traffic tours arranged by showing time and at home sales.

We believe less than half of our traffic growth is market driven. The rest is a result of Redfin.com ranking higher from our Google searches and higher likelihood that this will return to Redfin.com for month to month. We believe the traffic gains will keep accelerating, driven in part by machine learning breakthroughs rolling out through January.

Because of the market, more Redfin.com visitors arrive on our site eager to buy or sell a home. But side-by-side experiments indicate that Redfin is also getting better at persuading visitors to become customers. We are constantly optimizing Redfin.com channels to get more and better brokerage inquiries.

But what has made the most difference is broadening the range of customer questions we can answer by licensed agents in a service center and broadening the range of products we can offer those customers especially in RedfinNow markets.

When you have a qualified local expert on hand, who can give a customer all the options for selling one home and buying another, more customers are going to contact you. Even better, our pricing now encourages customers to buy more than one service from us.

The change we rolled out at the beginning of 2020, limiting a 1% listing fee to listing customers who also buy their next home with us, has modestly increased - or excuse me has modestly lowered listing demand.

But the last listing transactions have been more than offset by an increase in purchase transactions from lifting customers so use Redfin for their next home. The result has been more transactions and higher overall prices.

The increase in demand has been the main reason that third quarter gross margins for real estate services have improved so much year-over-year, because we can’t hire enough agents for routing nearly half our increase to partner agents. We generate less revenue from those referrals, but nearly all of that revenue is profit.

Our brokerage is also becoming more lucrative with revenue per sale at 13% in the third quarter of 2020compared to the same period last year. More of our brokerage customers want expensive homes and homes are getting more expensive with September prices up 14% year-over-year.

That we are meeting customers who are more serious about their move has also improved brokerage efficiency. In our August call we looked at the customers who went on their first home tour in May, June and July 2019comparing them to the customers going on a first tour in May, June and July of 2020.

We predicted the 2020s customers were at least 10% more likely to buy a home based on their Redfin.com activity the week after their first home tour. Now, 90-days after that first tour, we know this prediction was an underestimate.

The customers for May, June and July of 2020 have been about 20% more likely to make an offer on a home through rental agent.

Not all of these offers will pull through year-over-year gains and [mediated] (Ph) productivity were only 2% in the third quarter, in part because the intense bidding wars that were once common in San Francisco are now a national phenomenon, making it harder to get an offer accepted.

But what really limited productivity gains has been our higher level of hiring. To broaden the range of customers we can serve, Redfin added 248 lead agents from the third quarter of 2020 compared to losing 43 in the third quarter of 2019. Since the typical new agent takes three months to close their first sale, hiring lowers average productivity.

We will keep improving lead agent productivity by reducing the number of tours with customers have no interest in buying a home whatsoever by adjusting the number of customers an agent supports based on our performance, by improving our systems for customer follow up and by attracting the best agents.

But even with these improvements, as the housing boom suicides, gross margins from real estate services may decline from the elevated level for the past two quarters. Some efficiency gains should carry over from 2020 to 2021.

And we also expect the brokerage to keep growing, but our investment in other potentially massive businesses should also start to pay off. The new business most deeply integrated into our brokerage is RedfinNow. And the most important RedfinNow result has come from offering customers choice between an instant offer and a brokered sale.

In our last call, we reported on a pilot that use one Salesforce presenter RedfinNow offer and a pitcher Redfin listing consultation. This pilot doubled the rate at which RedfinNow inquiries led to sales opportunities for our listing agents.

And this result gave us the confidence to expand RedfinNow aggressively starting with the addition of our 15th RedfinNow market Sacramento in October.

Redfin iBuying has only been compelling as part of a complete solution, where the essential component of that solution has always been brokerage service, even when a pandemic has made a brokerage sale less appealing, most homeowners who asked about an instant offer end up listing their home.

At some point it may also be true that most people end up listing their home may start that process by exploring an instant offer. Other competitors are only just now beginning to realize that Redfin’s holistic approach to instant offers and brokered sales is a decisive advantage over standalone eye buyers and brokers.

Despite the encouraging results from an integrated Salesforce, RedfinNow still had to ramp up from near standstill in the third quarter. We largely stopped buying homes in April and didn’t make a significant number of offers until June. We entered the third quarter with only 17 homes to sell 91% less than at the start of the same period last year.

From the point at which a customer asked for an offer on a home it typically takes five months for us to sell that home. Since we don’t expect the offers we made in June to generate revenue until November. RedfinNow is unlikely to grow year-over-year until the first quarter of 2021.

Since the RedfinNow employees returning from furlough have been busy buying homes, not preparing them for sale. RedfinNow’s gross margins declined from negative point 9% in the third quarter of 2019 to negative 7.7% in the third quarter of 2020. Even as the cost of ramping up RedfinNow’s workforce of homebuyers swamped our overall margin.

The premium between RedfinNow’s offer prices and sale prices increased. RedfinNow’s profitability should be better than ever once our new employees have completed a cycle of purchases and sales. The question is whether the market will hold.

It is easier to sell for a premium when market wide prices are increasing every month we hold the home and deciding how much to bid on a home in the third quarter. We held the line against assumptions about market driven appreciation. But the homeowners recently evaluating RedfinNow’s offers haven’t been willing to ignore this pandemic proven boom.

Even after accepting a RedfinNow offer some renamed listing the home with an Asian or taking another iBuyers offer. We are raising our offers in the fourth quarter increasing volume of potential expensive margin, but we still expect to be more disciplined than other iBuyers. Other businesses also have growing pains.

The most serious of these are in Redfin’s title business Title Forward, we lost some employees due to a furlough and then others quit just as demand came roaring back, which forced us to stop taking orders from us in July.

We have now set up partnerships to perform the most cumbersome administrative tasks which should lower costs, improve employee satisfaction, and let us adapt more quickly to up from downs and demand. We have deployed new software replacing one vendor belt system with a better one. We expect a new executive to lead this business in 2021.

After losing money in 2020 Title Forward should be a reliable source of profits. Redfin Mortgage meanwhile, had a major break through its first quarter of gross profits.

Third quarter gross margins for more than 30%, mortgage revenues for the quarter nearly tripled year-over-year lifted by nearly doubling in revenue per loan with rates below 3% and competition for mortgage talent fierce, Redfin has like many lenders limited volume by raising loan prices.

Despite increasing pay for a dozen rolls, Redfin Mortgage has struggled to staff our back office, as other lenders will entry level workers with $20,000 or $30,000, signing bonuses.

Like the brokerage Redfin Mortgage’s transaction group is gated by our hiring a problem will attack in the same way with more recruiters, new digital marketing tactics and an ability to develop people with no industry experience. The only difference is that Redfin Mortgage probably has more untapped sources of demand than the brokerage.

Even when the housing group subsides and rates increase Redfin Mortgage can grow fast for years. Just expanding to the west coast will increase the percentage of our brokerage firm buyers that Redfin Mortgage can served from 65% to 94%.

We have developed the ability to handle refinancing, and new marketing channels for promoting Redfin Mortgage directly to millions of Redfin.com visitors, not just brokerage customers will open up demand channels as Redfin Mortgage stats up. The faster Redfin can hire the faster we can accelerate share of revenue growth.

But what matters most is hiring the best most diverse workforce not filling positions quickly. For many roles and especially senior roles, our recruiters must interview at least one candidate from an underrepresented group.

The goals of this slating program has been to broaden our recruiting networks, but what may matter more is that our rapidly growing recruiting team itself has become more diverse. One result, the percentage of Redfin employees who are people of color increased from 31% in June to 32% in September. That gain is encouraging.

But we have been focused on diversity long enough to know that recruiting people of color is only half the battle. Redfin has to be a great place for black, Latinx Asian and indigenous employees to move up.

In August, we changed the promotion policies for our largest group of employees real estate agents, eliminating customer survey data as a criterion. I have been an advocate for using this customer service satisfaction data to avoid manager bias and to focus Redfin on customers over profits.

Since some customers express dismay toward a black agent the moment he steps out of his car, we just need to be as vigilant against customer bias as manager bias. What surprised me after we made this change was how many black agents called me about a policy change that I thought was obscure.

It is a lesson in how differently we see the world depending on who we are, and whom we talk to. And it is one reason why the appointment in August of a black executive to our board Kerry Chandler has also been important to our governance and our culture. Before turning the call over to Chris, let’s assess the housing market.

When I was a kid, the scariest movie I ever saw was The Thing. It was about a monster that killed people in an Arctic Research Station, and then impersonated them.

The only way you could identify the monster was by testing a small blood sample with the probe, at which point the blood exploded and Kurt Russell blasts another one of his colleagues for the flame thrower.

This analogy makes no sense except the images of the exploding blood and the flame thrower are what always come to mind when people ask me about today’s housing market. That scene is also a good reminder to treat colleagues under pressure with kindness. Mortgage rates are 2.8% a record low.

The number of homes for sale in September was down 23% to a record low 34% of September sales were for above the asking price compared to 23% last September. 48% of listings accepted an offer within two weeks of their debut up from 35% last September. In October is likely to be even more intense.

September pending sales increased 33% year-over-year, while home sales increased less 18%. Millennials who grew up by textbooks on Amazon have common Home Buying age. With a lower proportion of U.S.

home sales coming from the baby boomers who have been so hesitant to try a new service like Redfin, people are moving to idyllic places where they never thought they could both live and work like Bend, Oregon. They are also moving to the outlying areas in New Jersey.

Homebuyers still want houses and expensive coastal cities, that urban condos long price for their proximity to an office are now hard to sell. We can argue about how many folks plan to leave the most expensive cities, but the larger issue is that almost no one is taking their place. Inventories up 51% in San Francisco, and up 20% in New York City.

Meanwhile, builders so at the start of the school market, we are focused on urban infill, now have the confidence to undertake large developments on cheap land far from urban centers. The October builder Confidence Index is at its highest recorded level.

Nearly one in six listings on the market is newly built up from one 70-year ago, pre sales, where a buyer commits to a home still being built and become more common. This won’t last forever, or even for another week if our society can’t keep it together for the time it takes to count all the balance.

But what is most likely is that the housing market stays strong heading into 2021. Even when the market cools, the capacity we are building now will be put to good use. Our bets on the future aren’t based on a boom, but our competitive advantages more than a decade in the making. With that. Let’s hear from Chris..

Thanks, Glenn. As we continue to deal with the impacts of COVID-19. A third quarter results exceeded our revenue and profit projections. Third quarter revenue was $237 million down 1% from a year ago. Real Estate Services revenue which includes our brokerage and partner businesses increased 36% year-over-year.

Brokerage revenue or revenue from home sales closed by our own agents was up 33% on an 18% increase in brokerage transactions. Revenue from our partners was up 93% on a 48% increase in partner transactions. The property segment, which consists of homes sold through our RedfinNow program generated $19 million in revenue down to 76% from one year ago.

As Glenn mentioned, this decline was a result of having halted RedfinNow purchases in April and May, so we just didn’t have much inventory as we started the third quarter. Our other segment which includes mortgage, title and other services, contributed revenue of $8.5 million, an increase of 65% year-over-year.

Total gross profit was $93 million dollars up 74% year-over-year. We will say to services gross margin was 43.8% of 870 basis points year-over-year. This is primarily attributable to a 350 basis point decrease in personnel costs and transaction bonuses.

A 300 basis point decrease in home touring and field expenses, a 60 basis point decrease in listing expenses and a 40 basis point decrease in occupancy and office expenses as a percentage of revenue. Properties gross margin was down 680 basis points year-over-year to minus 7.7%.

This is primarily attributable to a 900 basis point increase in personnel cost and transaction bonuses as a percentage of revenue and was partially offset by a 430 basis point decrease in home purchase costs and related capitalized improvements as a percentage of revenue.

We bought and sold homes better than we did in 2019, but we just didn’t have enough volume to cover our fixed costs in the RedfinNow business. Other segment gross margin was 30.8%, an increase of 2990 basis points from a year ago. This was primarily attributable to a 1480 basis point decrease in personnel costs and transaction bonuses.

a 960 basis point decrease in outside services costs and a 220 basis point decrease in personal technology expenses, each as a percentage of revenues, Glenn mentioned mortgage continues to scale very well. Total operating expenses were up 22% year-over-year, and represented 24% of revenue up revenue from 19% of revenue one year ago.

Technology development expenses increased by 19% as compared with the same period in 2019. The increase was primarily attributable to an increase in personnel costs and hosted services expenses. Marketing expenses increased by 49% from last year, driven entirely by an increase in marketing media costs as we expanded advertising.

General and administrative expenses increased by 13% year-over-year, primarily attributable to an increase in personnel costs due to increased headcount. Achieving a higher target level for our performance based restricted stock units, an increase in hosted services expenses.

Our net income, including stock based compensation and depreciation was $34.2 million, compared to a net income of $6.8 million in the third quarter of 2019. We also recorded a dividend on convertible preferred stock of $1.5 million. Diluted income per common share was $0.30 compared with diluted income of $0.07 per share one year ago.

Now turning to our financial expectations for the fourth quarter of 2020. Revenues expected to be between $226 million and $233 million, representing a year-over-year decrease between 3% and zero percent. We expect our property segment to account for $31 million to $34 million of our revenue, representing a decrease between 69% and 66%.

On October 20, we close an offering of convertible senior notes due in 2025. We received proceeds of approximately $648 million from the notes offering after accounting for the initial purchasers discount but not offering costs. The accretion of the 2025 notes will be reflected in our fourth quarter financial results.

We also repurchased approximately $117 million principal amount of our convertible senior notes due 2023 using approximately $107 million of the proceeds from our 2025 notes issuance and approximately $2.1 million shares of our common stock.

For the fourth quarter net income is expected to be between $2 million and $5 million compared with the $7.8 million net loss in the fourth quarter of 2019. Yet again, this quarter we expect for Real Estate Services gross margin to increase as compared with the same quarter in 2019.

Our guidance includes approximately $10.5 million of stock-based compensation $4.2 million in depreciation and amortization and $7.5 million of interest expense associated with our convertible senior notes and other credit obligations.

The guidance also includes approximately $8.1 million for the one-time non-cash expense associated with the repurchase of the 2023 notes that I mentioned. In addition, we expect to pay a quarterly dividend of 30,640 shares of common stock or preferred stock holder.

This guidance assumes, among other things that no additional business acquisitions, investments, restructurings, or legal settlements are concluded that there are no further revisions to stock based compensation estimates. And with that, let’s open it up for your questions..

Thank you. [Operator Instructions] The first question will come from Edward Yruma with KeyBanc Capital Markets. Please go ahead..

Hi, thanks for taking the question. This is Casey for Ed.

Could you provide an update on the seasonality trends you are seeing in the business on? Do you expect this to normalize in 2021? And then my second question, can you click down a little bit more on RedfinNow, do you have any target number of homes you are aiming for 2021 as you expect that business to start growing again. Thank you..

Thanks, Casey. So first of all, seasonality has been strange this year, we had some demand deferred from the spring into the fall. But then we also have had such a strong boom, that there has been almost no break in the action heading toward Thanksgiving. So it is really hard to say if things will slow down over the next few months.

But we expect there will at least be a brief break in the action for the holidays before things roll back to life in January. The bigger factor is whether interest rates are going to stay low and the economy stay strong. As for RedfinNow we are not publishing 2021 targets. That team is trying to staff up very quickly as trying to expand to new markets.

We want to be disciplined about our pricing, but we are going to be more aggressive than we have been in the past, so I would expect volume to increase..

Thank you. The next question will come from Soham Bhonsle with SIG. Please go ahead..

Hey, good afternoon, guys. In the last quarter, you guys noted some challenges around yourself had business not having enough opportunities, since given the low inventory in the marketplace. So I’m just hoping if you can maybe help us parse out the market share gains that you had in this quarter on your sell side versus buy side on the business..

We don’t segment sell side versus buy side share gains in our reporting. But our buy side business is growing faster than our sell side business. We built a listing search site that appeals to home buyers.

And increasingly, we are going to have to recruit sellers by talking to people about the home they want to buy and then the home that they need to sell in order to pay for that. We just don’t have as natural of a demand channel for home sellers. People come to check the price of their home or what it would get by looking at the Redfin estimate.

But we don’t have as an appealing conversion channel, which would be something like on demand tours. We have done better because we are now letting people look at what their home would be worth through a conversation with a real estate agent over the phone and we are also giving them an instant offer.

So broadening the product range, and talking to people about their options through a call center has been more effective, but we still have more work to do..

Thank you. The next question will come from Ygal Arounian with Wedbush Securities. Please go ahead..

Thanks for taking the question. Just first, I was trying to maybe look at gross margins a little bit more closely, specifically on the brokerage side. So some of that coming from – account, but Chris, you also highlighted a few others areas within gross margins.

So it is kind of cycle through this hiring catches up, maybe demand slows down a little bit.

Trying to understands how much of what we are seeing is structural from things that you guys have implemented to structurally make the margins higher versus things that might settle back down when hiring is more normalized, and environments a little bit more normalized. That is the first one..

I think it is really hard to parse between those two things right now. We do think that we have implemented some programs, made some improvements that have made fundamental differences on gross margin that should drive through going forward.

But because things have been so disrupted in some ways with regard to how customers are acting this year, that it really is hard to pull that apart right now. So we do believe there is some of those.

And I think the best way for us to see that actually is just as we get into next year, and get into what is probably a little bit more of a normal, but still very busy environment..

Okay. Thanks, that is helpful. And then Glenn, did a lot of good color on Redfin Now and iBuyer model, and kind of what is happening or not, how markets having to pay higher fees and all that.

So if we are kind of in an extended market, where housing market is strong and sellers are getting multiple offers and selling their home quickly, and the kind of consumer value proposition of iBuyer model just isn’t as strong.

A, does that change how you feel about the iBuyer model, do you think that it gives you Redfin an advantage because of the way that fits within the rest of model and have synergies with the listings part of the business? Obviously, a lot of focus on eye buyer these days, so just wanted to get your take on what happens to our model is to have a real extended period of strength in the housing market.

Thanks..

It is great question. We don’t need to own the house, we don’t need to win the offer. If the market is roaring, and people want to test their luck on the market by listing the home, we are fine. The only thing we want to be sure of is that the customer calls us to understand all their options.

So we do think that being a standalone iBuyer and having all your eggs in one basket forces you to chase the market in a way that isn’t necessary for us. And that limits our risk during an extreme time of volatility. And right now, I would say that 14% year-over-year growth in home prices in September is extreme volatility..

Thank you. [Operator Instructions] The next question will come from Tom Champion with Piper Sandler. Please go ahead..

Hi, thanks. This is [Jim Callahan] (Ph) on for Tom. I think the first question I have, so I guess we saw the sort of mix between brokerage and partner shift towards partner. I’m just curious how you can kind of think about that makes going forward. And then I just had one more follow-up. Thanks..

I don’t like the mix. We want to hire more Redfin agents and give people service from our own agents, we make more money that way, not on a percentage basis for gross margin, but in absolute dollars of gross profit. And we win that customer hopefully for life.

So, the reason the mix has shifted is because we can’t hire fast enough and it improves gross margins as a percentage. But I think we will take more share when we serve those customers ourselves. Because we have a higher close rate when we meet to customer ourselves, we deliver what I believe is a better product for most customers..

There is the follow up. Awesome. That is helpful. And then I guess with RedfinNow, I have been curious if COVID has kind of changed your approach at all when looking at markets to enter into with RedfinNow? Thanks..

I don’t think COVID ha affected as much. I understand the argument for contactless sale where you don’t have people tromping through the house as the owner and instead we vacate and let Redfin handle for another iBuyer. What influences us more is just the success of our efforts to up sell.

It used to be that when we got to RedfinNow offer, if the customer didn’t take it, we lost that customer. But now increasingly, the customer calls us about RedfinNow offer decides against it, wants to list the home because the markets moving so fast, and they want to take advantage of that. And we are able to be their listing agent.

If you coupled that with some of the challenges we have had at converting website visitors for listing customers, we now have a product that is very effective at converting people off the website into inquiries who are looking to liquidate their home, and most of them are going to choose to liquidate it through a brokerage sale.

So I think that experiment more than anything else has made us bullish about RedfinNow not just as a standalone product, but as part of this complete solution. And COVID hasn’t been as relevant of a factor. Early in the pandemic, some sellers were really wary of having people walk through the house, there is still some of that.

But I think they are just greedy too now where they think Gosh, I can probably sell it in a week, people are going to be walking through the house, but that extra $20,000, $30,000, $50,000 of upside is going to be in my pocket and not somebody else’s..

Thank you for the question. I’m showing no further questions at this time. This concludes today’s conference. You may now disconnect your lines. Enjoy the rest of your day..