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3 Reasons the Housing Market is NOT in a Bubble

by Allison Simson

With housing prices appreciating at levels that far exceed historical norms, some are fearful that the market is heading for another bubble. To alleviate that fear, we just need to look back at the reasons that caused the bubble ten years ago.

Last decade, demand for housing was artificially propped up because mortgage lending standards were way too lenient. People that were not qualified to purchase were able to obtain a mortgage anyway. Prices began to skyrocket. This increase in demand caused homebuilders in many markets to overbuild.

Eventually, the excess in new construction and the flooding of the market with distressed properties (foreclosures & short sales), caused by the lack of appropriate lending standards, led to the housing crash.

Where we are today…

1. If we look at lending standards based on the Mortgage Credit Availability Index released monthly by the Mortgage Bankers Association, we can see that, though standards have become more reasonable over the last few years, they are nowhere near where they were in the early 2000s.

2. If we look at new construction, we can see that builders are not “over building.” Average annual housing starts in the first quarter of this year were not just below numbers recorded in 2002-2006, they are below starts going all the way back to 1980.

3. If we look at home prices, most homes haven’t even returned to prices seen a decade ago. Trulia just released a report that explained:

“When it comes to the value of individual homes, the U.S. housing market has yet to recover. In fact, just 34.2% of homes nationally have seen their value surpass their pre-recession peak.”

Bottom Line

Mortgage lending standards are appropriate, new construction is below what is necessary and home prices haven’t even recovered. It appears fears of a housing bubble are over-exaggerated.

Homeownership Is a Good Financial Investment!

by KCM Blog

According to a recent report by Trulia, “buying is cheaper than renting in 100 of the largest metro areas by an average of 33.1%.” The report may have some people thinking about buying a home instead of signing another lease extension, but does that make sense from a financial perspective?

Ralph McLaughlin, Trulia’s Chief Economist explains:

“Owning a home is one of the most common ways households build long-term wealth, as it acts like a forced savings account. Instead of paying your landlord, you can pay yourself in the long run through paying down a mortgage on a house.”

The article listed five reasons why owning a home makes financial sense:

  1. Mortgage payments can be fixed while rents go up.
  2. Equity in your home can be a financial resource later.
  3. You can build wealth without paying capital gains.
  4. A mortgage can act as a forced savings account.
  5. Overall, homeowners can enjoy greater wealth growth than renters.

Bottom Line

Before you sign another lease, let’s get together and discuss all your options.

23 things artificially intelligent computers can do better/faster/cheaper than you can

by Seth Godin - Feedbliz 04/05/2017

23 Things Artificially Intelligent Computers Can Do Better/Faster/Cheaper Than You Can.....

Predict the weather
Read an X-ray
Play Go
Correct spelling
Figure out the P&L of a large company
Pick a face out of a crowd
Count calories
Fly a jet across the country
Maintain the temperature of your house
Book a flight
Give directions
Create an index for a book
Play Jeopardy
Weld a metal seam
Trade stocks
Place online ads
Figure out what book to read next
Water a plant
Monitor a premature newborn
Detect a fire
Play poker
Read documents in a lawsuit
Sort packages

If you've seen enough movies, you've probably bought into the homunculus model of AI--that it's in the future and it represents a little mechanical man in a box, as mysterious in his motivations as we are.

The future of AI is probably a lot like the past: it nibbles. Artificial intelligence does a job we weren't necessarily crazy about doing anyway, it does it quietly, and well, and then we take it for granted. No one complained when their thermostat took over the job of building a fire, opening the grate, opening a window, rebuilding a fire. And no one complained when the computer found 100 flights faster and better than we ever could.

But the system doesn't get tired, it keeps nibbling. Not with benign or mal intent, but with a focus on a clearly defined task.

This can't help but lead to unintended consequences, enormous when they happen to you, and mostly small in the universal scheme of things. Technology destroys the perfect and then it enables the impossible.

The question each of us has to ask is simple (but difficult): What can I become quite good at that's really difficult for a computer to do one day soon? How can I become so resilient, so human and such a linchpin that shifts in technology won't be able to catch up?

It was always important, but now it's urgent.

Price It Right From the Start!

by KCM Blog

Selling Your Home? Price It Right From the Start!

In today’s market, where demand is outpacing supply in many regions of the country, pricing a house is one of the biggest challenges real estate professionals face. Sellers often want to price their home higher than recommended, and many agents go along with the idea to keep their clients happy. However, the best agents realize that telling the homeowner the truth is more important than getting the seller to like them. There is no “later.” Sellers sometimes think, “If the home doesn’t sell for this price, I can always lower it later.” However, research proves that homes that experience a listing price reduction sit on the market longer, ultimately selling for less than similar homes. John Knight, recipient of the University Distinguished Faculty Award from the Eberhardt School of Business at the University of the Pacific, actually did research on the cost (in both time and money) to a seller who priced high at the beginning and then lowered the their price. In his article, Listing Price, Time on Market and Ultimate Selling Price published in Real Estate Economics revealed:

“Homes that underwent a price revision sold for less, and the greater the revision, the lower the selling price. Also, the longer the home remains on the market, the lower its ultimate selling price.”

Additionally, the “I’ll lower the price later” approach can paint a negative image in buyers’ minds. Each time a price reduction occurs, buyers can naturally think, “Something must be wrong with that house.” Then when a buyer does make an offer, they low-ball the price because they see the seller as “highly motivated.” Pricing it right from the start eliminates these challenges. Don’t build “negotiation room” into the price. Many sellers say that they want to price their home high in order to have “negotiation room.” But, what this actually does is lower the number of potential buyers that see the house. And we know that limiting demand like this will negatively impact the sales price of the house. Not sure about this? Think of it this way: when a buyer is looking for a home online (as they are doing more and more often), they put in their desired price range. If your seller is looking to sell their house for $400,000, but lists it at $425,000 to build in “negotiation room,” any potential buyers that search in the $350k-$400k range won’t even know your listing is available, let alone come see it! One great way to see this is with the chart below. The higher you price your home over its market value, the less potential buyers will actually see your home when searching. Price & Visibility | Keeping Current MattersA better strategy would be to price it properly from the beginning and bring in multiple offers. This forces these buyers to compete against each other for the “right” to purchase your house. Look at it this way: if you only receive one offer, you are set up in an adversarial position against the prospective buyer. If, however, you have multiple offers, you have two or more buyers fighting to please you. Which will result in a better selling situation? The Price is Right Great pricing comes down to truly understanding the real estate dynamics in your neighborhood. Look for an agent that will take the time to simply and effectively explain what is happening in the housing market and how it applies to your home. You need an agent that will tell you what you need to know rather than what you want to hear. This will put you in the best possible position.

HOUSING MARKET HEATS UP

by Allison Simson

Happy Wednesday to YOU

Great real estate information in the Summit Daily News today.  Even though it's Wednesday, I didn't want you to miss it! 

HOUSING MARKET HEATS UP

It’s summer, and that means the local real estate market is sweltering hot.

That’s not always the case — only three years ago, Summit investors were still gun shy from the 2008 Recession — but, the past two summers have brought booming business to commercial and residential brokers, leading to a whopping $114.5 million in total transaction during May 2015. That’s nearly $20 million more than last May, which itself saw $95.1 million in sales.

One thing’s for certain: Early summer is when everyone — from prospective homeowners to established business owners — starts signing papers for the properties they eyed all winter. A total of 204 properties moved this May — that’s 25 more than in 2014 — ranging from four $375,000 units at Lake Forest Condominiums in Frisco to two homes over $2.5 million in the Highlands at Breck-Highlands Park neighborhood.

Compare those lofty sales totals to the figures from February 2015, when sales barely reached $50 million, and only four transactions hit the $1 million mark.

Just three months later, 15 properties went for more than $1 million, including the big daddy of them all: the final undeveloped plot at the posh Shock Hill neighborhood in Breckenridge. It sold for $10.25 million in early May to a small group of local developers, and, before the papers were even signed, they had tabbed Double Diamond Property and Construction of Frisco as the developer.

Managing broker Ned Walley says the Shock Hill sale was highly competitive — a major change of pace from when he first took on the property in 2013.

“When I first got the listing, I just sat and stared at a phone for a few months,” said Walley, who notes the 6.67-acre plot was originally slated for a resort-style condo complex that never came to be. “It never rang. But then, when things started getting better, when the economy turned, I started getting more interest. No one was interested in a major project, but, when people were willing to pull out checkbooks and write a seven-figure check on the spot, that’s a sign the economy is picking up. Interest picked up.”

All told, the 15 high-dollar sales in May 2015 accounted for nearly $33.7 million of the $114.5 million total, or roughly 30 percent of all sales. But here’s a fascinating tidbit: In terms of sheer volume, last May actually outperformed this May in the $1 million-plus arena, with 20 transactions totaling $30.86 million (about 32 percent of the total). Yet, 2015 saw seven sales over $2 million, including the Shock Hill plot. That sale skews the comparison a touch, but more sales at a higher price point speak to Walley’s point: Investors and homeowners alike are now more willing to seven-figure checks.

“When it seemed like the dust settled and other suitors didn’t pursue, we took another stab at it,” said Chris Canfield, spokesman for the Shock Hill owner, ROCA Holdings. “We’ve had a plan from the start to build homes that fit into the Shock Hill aesthetic. It’s the most coveted area in Breckenridge, and we are looking at a unique and special product.”

THE DARK SIDE OF SUMMER

As any developer knows, unique and special in a red-hot market is key, particularly as inventory continues to shrink across Summit. Breckenridge is now at 90 percent build out, while Frisco has even less room for properties larger than 1 acre.

The looming property crunch shows the “dark side” of a sizzling real estate market. At some point, as property values climb to peak levels, inventory will reach all-time lows and developers will be forced to continue expanding. This tug-of-war between development and conservation has already sparked heated debates in two local towns, Blue River to the south and Silverthorne to the north, where the combination of a rejuvenated economy and fervent interest from second-home owners led developers in both towns to triple density levels. Yet, none of the units on either parcel is considered affordable, at least as defined by the state and county: Ruby Placer in Blue River calls for units around $500,000 and up, while South Maryland Creek Ranch in Silverthorne calls for units in the $550,000 to $625,000 range.

And, only time will tell what happens to Summit’s southern and northern limits. Maryland Creek was approved by the Silverthorne Town Council in late May, and Ruby Placer is scheduled for a public vote on Sept. 15.

MAY’S MAGIC NUMBERS 2015

204 — Total real estate sales

179 — Total real estate sales (2014)

$114.5 million — Total value of all sales

$95.1 million — Total value of all sales (2014)

$10.25 million — Most expensive sale

$2.525 million — Most expensive sale (2014)

15 — Sales of at least $1 million

If you want to know the inside scoop on what these numbers might mean for you, please give us a call or reply to this email! 

AND Check out this property- Do you know anyone who would be perfect for it?

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62 TWENTY GRAND CT

Price: $430,000

Beds: 3

Baths: 3

½ Baths: 1

Sq Ft: 1915

In the heart of Wildernest, this gracious townhome was created to very comfortably accommodate a large family- retreat style! Lovely finishes & furnishings w/ pretty hardwood floors that shine. Loads of space for you & all your gear. Tucked away w m...

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4th of July County Events

by Allison Simson

Happy Tuesday to YOU! 

Thinking of skipping town in favor of cooler mountain temps and fresh air this Fourth of July holiday? You’re definitely not alone.  Here is a rundown of all of the different town events.  Bring your cooler...and a chair!  You'll be busy!  

See you on Main Street!  Happy Independence day to YOU! 


Frisco’s Fabulous Fourth of July

8:00am – Team Summit Pancake Breakfast (110 3rd Ave.)

9:00am  – Kids Fishing Derby (Meadow Creek)

10:00am – 11:00am – Summit Concert Band (Historic Park Gazebo)

12:30pm – Fabulous Fourth of July Parade (Main Street from Madison Ave. to 6th Ave.)

1:30pm – Guild of Ages (Historic Park Gazebo)

3:30pm – 5:00pm – Interactive Drum Circle with Peak Rhythm  (Main Street from 3rd Ave. to 4th Ave.)

7:15pm – 9:15pm – The Long Run– Eagles Tribute band (Marina)

9:30pm – Fireworks over the Marina

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Dillon Fun

 

July 3 - Cash'd Out - Johnny Cash Tribute 
The only tribute band endorsed by the official Johnny Cash web page, JohnnyCash.com, Cash’d Out has played to over a million fans since forming in 2005. 
https://www.youtube.com/watch?v=raSESCGj7KA

 

July 4th - NRO Performance- The National Repertory Orchestra takes the Dillon Amphitheater stage for a special Independance Day celebration unlike any other concert in Colorado. The beautiful mountain and lake backdrop frames this free concert starting at 10 AM and featuring the Lake Dillon Theatre Company Summer Musical Theatre performers. Show up early to reserve a prime seat on the lawn.

2015 SUNSET AT THE SUMMIT CONCERT SERIES 

July 4- Forever In Blue Jeans

Forever In Blue Jeans creates for the audience an authentic Neil Diamond experience that's sure to please. Featuring some of the best musicians in Colorado, this tribute band plays all the hits and truly delivers! 

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Keystone Mountain Resort Events

 

 

 

 

 

 

 

 

 

 

4th of July Celebration

 

Keystone is celebrating our nation's birthday with flare. Start the morning with a Fishy Derby and our popular annual bike parade. Enjoy a BBQ, live music and a day full of family activities. Cap off your night with a fireworks show.

Ages: All ages.

Schedule of Events:

8:00am-9:30am Fishing Derby
This event is for children 12 and under. The entire family can cheer and enjoy a morning on the lake. Raffle prizes, BBQ, and live music will follow the event.

9:00am - 11:00am Super Slimy Science at Kidtopia Headquarters
Join Keystone Science School in discovering the wonders of our Colorado waterways! Our Super Slimy Science Program will allow guests to familiarize themselves with Summit County aquatics. We will focus on the biological and chemical aspects of our very own Snake river. The program will consist of hands-on activities, including searching for water bugs and performing fun chemical tests on the river. Don't miss out on all the Science. Adventure. Fun!

9:00am-10:00am - Strider Balance Bike Followed by Strider Balance Bike Series Races from 10:00am - 11:00am
This one is for the little tikes. A race designed just for them! Come out to the River Run Village and enter your kids in the only Summit County Balance Bike Race Series. Entry is FREE. Age categories 2yrs – 3yrs // 4yrs – 5 yrs girls and boys ride together. Prizes for top finishers.

10:30am - Bike Decoration Party Followed by Children's Bike Parade at 11:00am
River Run is celebrating our nation's birthday with flare. Bring your bike, tricycle, or wagon and join us for our popular annual bike parade. The bike decoration party starts promptly at 10:00AM. Then line up for the annual bike parade at 10:30AM. Children will receive decorations for their bikes and must be present to receive the decorations. One decoration bag per child. Parents are invited to join the fun and encouraged to bring their own decorations. All KNC staff reserve the right to deny adults decorations so that more children may enjoy the race-day fun. Children's Bike Parade will start at 11:00am.

11am-1pm - Ala Carte BBQ at Edgewater Grill

9:00pm - Fireworks Show
Free Fourth of July Fireworks show - show begins at 9:00pm and is visible from Lakeside Village

Parking: Free parking will be available in the River Run Parking Lot (River Run Village) and the Keystone Conference Center Parking Lot (Lakeside Village) just off of Hwy 6, across from the Keystone Lodge. Walk through the underground tunnel to the Village.

Location: 
195 River Run Road  Keystone, CO
Closest Landmark - Gondola

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Breckenridge 4th of July

CELEBRATE INDEPENDENCE DAY Enter a float in the parade! When: Saturday, July 4th , 2015 at 10:00 a.m. Where: Main Street, Breckenridge 

Kids’ Water Fight – Kids’ can join the Red, White & Blue Fire Dept. in an old time water fight on Main Street. Free for kids to participate. A hit every year. 1:00pm - 3:00pm

Street Arts Festival (July 3-5) - A celebration of street, pavement and graffiti arts that will feature a weekend of 3D murals, chalk drawings, live music and hands-on workshops at the Breckenridge Arts District campus. Presented by Breckenridge Creative Arts.

Viper ‘Show and Shine’
 - Vipers will be parked on Main Street allowing spectators to view the cars. 12:30 p.m. – 3:00 p.m.

Free 2:00 p.m. concert at the River Walk Center BoDeans

National Repertory Orchestra: 4th of July Patriotic Concert 8:00pm - For almost 20 years, the Town of Breckenridge and National Repertory Orchestra (NRO) have collaborated to present a Patriotic Concert each July 4th at the Riverwalk Center in Breckenridge, CO. In order to prevent numerous empty seats due to unused free tickets and in order to offer tickets online at a greater convenience to all of our guests, the Riverwalk Center Box Office will sell indoor reserved seat tickets at a cost of $5, $10 and $15. There will be a limit of 5 tickets per order.


Fireworks (weather permitting)- 9:45pm A full professional fireworks display will be set off in town and can be visible from all over town.

32th Annual July Art Festival July 3-5, 2015 – The 31th Annual Breckenridge July Art Festival is annually ranked one of the top art shows in the United States. Located at Main Street Station at the corner of Main Street and South Park Ave. For further information please visit 
www.mountainartfestivals.com.  Admission is free.

And as always, check out the listing below....maybe it would be perfect for someone you know!  

 

 

Image Unavailable

980 LAKEPOINT DR

Price: $440,000

Beds: 2

Baths: 2

Sq Ft: 1005

Jaw-dropping views of the lake w perfect firework viewing! Updated & upgraded- granite island, new tile, carpet, cabinetry. The quick-dash-to-dinner, close-to-shopping & shuttle location is perfect. Quiet complex & owners who adore it! 8ft garage do...

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Summer is HEATING Up!

by Allison Simson

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Happy Tuesday to YOU!

After a pretty gloomy May, we are ready for the mountain sunshine!  You've heard it before, but it's TRUE!  People come to Summit County in the winter to visit, and they come back in summer to stay!  Summer here is just, well, heaven!!  

The market overall in Summit is HOT- warm in some segments and sizzling in others. Values are hyper-local- as usual! 

For some of the nitty-gritty details in our different communities, check out the links below.  If you are wondering about values in a particular neighborhood or complex, reply to this email and we can get you the details - STAT!!  

1) Breckenridge
 
 
2) Dillon
 
 
3) Frisco
 
 
4) Keystone
 
 
5) Summit County Update
 
 
6) Wildernest/Silverthorne
 

See you on the trails!

And check out this new listing....the perfect mountain getaway:

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161 North Side CIR

Price: $475,000

Beds: 3

Baths: 2

½ Baths: 1

Sq Ft: 1624

Wait till you see the inside of this one! Tastefully updated & furnished DP w/ new hardwood floors, carpet, freshly painted deck. Take in the Keystone & Divide views while sitting in your private hot tub. Sunny & large master suite, that's very priv...

View this property >>

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Second Home Owner Stats

by Allison Simson

Happy Tuesday Morning to YOU!

Check out this information just in from the National Association of Realtors Annual Second home and investment property report:

Vacation Home Sales Soar to Record High in 2014, Investment Purchases Fall

WASHINGTON (April, 2015) – Vacation home sales boomed in 2014 to above their most recent peak level in 2006, while investment purchases fell for the fourth straight year, according to an annual survey of residential homebuyers released today by the National Association of Realtors®.

NAR’s 2015 Investment and Vacation Home Buyers Survey,* covering existing- and new-home transactions in 2014, shows vacation-home sales catapulted to an estimated 1.13 million last year, the highest amount since NAR began the survey in 2003. Vacation sales were up 57.4 percent from 717,000 in 2013.

Lawrence Yun, NAR chief economist, says vacation sales in 2014 showed astonishing growth, nearly doubling the combined total of the previous two years. “Affluent households have greatly benefited from strong growth in the stock market in recent years, and the steady rise in home prices has likely given them reassurance that real estate remains an attractive long-term investment,” he said. “Furthermore, last year’s impressive increase also reflects long-term growth in the numbers of baby boomers moving closer to retirement and buying second homes to convert into their primary home in a few years.”  

Here's a quick look at the details:

 

 

 

 

       

* If you are interested in seeing the full report, please reply to this email and I'll send it to you directly!

Good news for Summit County second home buyers and sellers!

Maybe this spot in Breckenridge would work for you:

 

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110 Sawmill RD

Price: $175,000

Beds: 1

Baths: 1

Sq Ft: 296

This incredible location sits streamside in one of Breck's original historic ski lodges, and can be your very own ski-in powder paradise & summer getaway! Just 3 blocks from Main St you'll find everything you would expect from one of N. America's pr...

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Desire to Own a Vacation Home Growing

by Allison Simson

Desire to Own a Vacation Home Growing

Posted: 14 Apr 2015 04:00 AM PDT

Desire to Own a Vacation Home Growing | Keeping Current Matters

The National Association of Realtors just released their 2015 Investment and Vacation Home Buyers Survey which revealed that vacation home sales boomed in 2014 to above their most recent peak level in 2006. NAR Chief Economist Lawrence Yun said favorable conditions are driving second-home sales:

“Affluent households have greatly benefited from strong growth in the stock market in recent years, and the steady rise in home prices has likely given them reassurance that real estate remains an attractive long-term investment. Furthermore, last year’s impressive increase also reflects long-term growth in the numbers of baby boomers moving closer to retirement and buying second homes to convert into their primary home in a few years.”

The report shows:

  • Vacation-home sales catapulted to an estimated 1.13 million last year
  • This was the highest amount since NAR began the survey in 2003
  • Vacation sales were up 57.4% from 717,000 in 2013
  • Vacation-home sales accounted for 21 percent of all transactions in 2014, their highest market share since the survey was first conducted

Bottom Line

If you have been considering that waterfront condo in Florida, that ranch in Wyoming or that special getaway you someday will retire to, maybe now is the time to act. Prices are good and mortgage rates are at historic lows. Contact a local real estate professional to help you put your dreams to a plan.

2015 Real Estate Trends to Watch

by Allison Simson

The beginning of a new year - and everyone has their thoughts, opinions and wise-cracks about the real estate market.  I've boiled down a few articles that I think have some merit and interesting points of view!

 

1) Five real estate trends to watch in 2015 - (MarketWatch, 12/29/14)
While the U.S. housing market and home lending levels in 2014 continued an uneven recovery from the Great Recession of 2008-2009, the coming year could see many of those gaps finally filled in as economic and job growth in the U.S. accelerates and consumers benefit from low inflation thanks to plunging gasoline and energy prices. Read More


2) What to Expect From the Housing Market in 2015 - (Time, 12/29/14)
Consumers think 2015 will be a better year than 2014, especially for selling a home. But the recovery faces an uphill climb. Read More


3) Wells Fargo’s 7 housing predictions for 2015 - (HousingWire, 12/29/14)
As the calendar ticks toward the end of 2014, it’s time to look ahead to what next year will hold for housing. Will the next 12 months see any legitimate movement on housing reform legislation? Read More


4) CoreLogic: 5 drivers of housing in 2015 - (HousingWire, 12/29/14)
It’s been five years since the financial crisis, and the housing economy continues to steadily improve, paving the way for an even better 2015, CoreLogic’s 2015 Housing Outlook said. Read More

 

Of course, all of this information is just that, information.  If you would like to further the discussion to see how the Summit County market can best work for you and your lifestyle, please give us a shout!  We knows the in's and out's of this market - all the likely spots as well as some hidden local gems!  

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Photo of Summit Real Estate Real Estate
Summit Real Estate
The Bright Choice
330 Dillon Ridge Way, Suite 10
Dillon CO 80435
970-468-6800
800-262-8442
Fax: 970-468-2195

Allison Simson, Owner/Broker, is a licensed Colorado Real Estate Broker