High street agents have almost no incentive to get their sellers a better price, online agent Russell Quirk has claimed.
He said negotiators achieving an extra £10,000 on the asking price receive a negligible £10 after tax –and may have very little interest in doing the work.
Quirk was speaking after claims by eMoov to get sellers virtually all of their asking price appeared here in the Telegraph at the weekend.
The story, which appeared under the headline, ‘I went online and saved £6,500’, featured a comparison exercise that also named Foxtons and north London independent Jeremy Leaf.
In the piece, Quirk claims to have sold properties for 99% of the asking price compared with the Hometrack average of 96%.
He also said that eMoov shifts homes faster at 20 days instead of the 65-day average quoted by Rightmove.
Eye asked him if he could prove these claims –and he insisted that he could.
He said: “Yes, we can prove it.
“We constantly monitor the percentage of asking price that we achieve across the UK and compare it to the Hometrack research that they publish quarterly. It’s the price achieved versus the asking price at the time of the sale– the same as the Hometrack stats methodology.
“Simply, we’re consistently 3% ahead of the national average as assessed by Hometrack.
“I appreciate that this won’t sit comfortably with the ‘You have to pay a high fee to ensure good performance’ brigade, but it’s a fact.
“There will also be high street agents out there that outperform the average, I’m sure.
“The point from eMoov’s point of view is that there is now evidence that a seller is, at the very least, no worse off in price achieved when using an online agent as measured against the national average using a good sample size, so the data is therefore statically relevant.”
Quirk went on: “Coincidentally, I recorded a Radio 4 piece with Evan Davis last week in which I, as part of a panel, debated the merits of pricing and related incentives.
“My view as I articulated on the programme (the Bottom Line, scheduled for January broadcast) is that markets decide price, not agents, and there is no evidence that an ‘incentive’ by way of a higher on-completion fee means a higher price achieved.
“In fact the opposite may be true.
“Firstly, the buyer and the seller are the parties that control the transaction and are incredibly well informed these days as to ‘correct’pricing due to the availability of comparables published.
“The other (in my view far less important) participant in a sale negotiation is the estate agency negotiator, and even if one believes that he/she is pivotal to price achieved, it’s worth fleshing out some practical likelihoods.
“A £10,000 difference in price achieved is worth, typically, £150 to the estate agency company in fee.
“A negotiator staff member may be paid 10% of that. So, £15. Less PAYE and NI means that the neg earns a tenner for (allegedly) working harder to get a higher price.
“I contend that he/she has little if any influence these days because of how well informed buyer and seller are, thanks to internet resources.”
Eye also asked Quirk about eMoov’s fall-through rates, normally put at somewhere around one in three.
He told us: “The last proper stats I saw for the UK as a whole amongst all agents were a few months ago from a leading national online conveyancer showing 27% across 35,000 cases.
“Our fall-through rate is 14.8% from September 1 to today. So, about half that of the average agent.
“Why? Because our sellers have already financially committed to selling by paying upfront, they are more serious sellers. And because we’re ****** good estate agents…”
* Tonight, the Sarah Beeny C4 programme, How to sell your home, returns after last week’s scheduled break, looking at online estate agents.
This lad could start a row in an empty room, calculator out, red puffy face and a wet patch on his trousers, I suggest we let the little fella have this row on his own, he's clearly cross and needs a sit down. – Jonnie
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I always look forward to Russell's comments – they are a bit like Forest Gumps chocolate analogy; you never know what you are going to get. % of asking price is always a good headline grabber. The key is percentage of WHAT asking price. I may value a property at £350,000 and get £345,000. A N Other may try £340,000 and achieve that. Is it Russell's measure which will delight the vendor? As for the negotiator – if the vendor doesn't meet the expectation set by the valuer, they won't earn anything, besides, to assume negs just do their job for the money is very cynical. They want to do a good job and nurture recommendation.
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Your chance to set the record straight Eric
“What does your local knowledge add to anything? Tangibly”
http://bit.ly/1xPc5Jw
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I am getting really fed up with companies manipulating data for their own purpose. Hometrack nobody I know even returns the data forms and even if they do they can manipulate the data themselves.
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I agree with Russell (as I'm sure you're not surprised to hear). Our stats are almost identical to Emoov.
I think Eric has hit the nail on the head about what the asking price is and there is little way of proving that one agent will get a higher price than another, whether online, offline, or any other model, for that matter.
However, the closest I can come is this:
The average asking price on Rightmove is £267,127 (according to their latest house price index)
At Hatched, our average asking price as of right now is £271,750 – extremely close the NATIONAL average.
We also achieve 99% of the asking price. And have done for the last 2 years.
So whereas the average high street agent is selling at 96% of £267,127 (£256,441) perhaps, we are selling the average house we list at 99% of £271,750 (£269,032)
That's a significant difference of sale price, and then when you factor in the fees….
Anyway, the real reason for posting was to confirm that the with the postponement of last week's show, our client should be featured next Monday instead tonight.
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Key word here is average… Take out of the equation repossessions that sell for less than 75% of market value and the national averages would be a lot different..
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Adam I shouldn't say too much on this if I were you, you could end up looking a bit of a charlie. Your averages are meaningless without an area context to them. If your stock is in Chelsea and Knightsbridge you aren't doing very well, if your stock is in Gateshead you are doing fantastically well. Best you shut up and let Russell have this bit of limelight; he is once again quoting figures he can't substantiate without knowing the commision structure and tax affairs of every neg in the land.
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More interesting stat would be how many instructed properties an online agent has sold by themselves. I.E. if you have 100 properties how many have THEY sold excluding withdrawn and Sold by another agent. And what the average selling time of THESE properties were.
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Adam, be careful mate, you have a level of stock across the country that is half that of a big single EA branch in a decent size town, you're not a player. Putting yourself in the same league as even Faisal Butt's boy is flattering yourself – Jonnie
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OK Jonnie. Not sure how many single branch agencies have 900+ properties, but you're right, I'm not a 'player'…
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You've got 170 – http://www.rightmove.co.uk/estate-agents/agent/Hatchedcouk/England-and-Wales-42536.html#ram_current_properties*_includeSSTC=on&auction=false&locationIdentifier=BRANCH%5E42536&numberOfPropertiesPerPage=10&previousSearchLocation=Hatched.co.uk%2C+England+%26+Wales&searchType=SALE&useLocationIdentifier=false – Jonnie
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Jonnie, I have 7 branch listings on Rightmove, that fall under all of my different offices. They all have a different number of properties. Do your homework 'mate'
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Okay, the same as 3 big town EAs then…………you're not helping yourself / it doesn't change your tiny market share – Jonnie
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Jonnie methinks Mr Day's still wazzed off at you calling him "the ***-chinned wonder" or whatever it was! Which reminds me – you STILL owe me a keyboard for that one, matey ;o)
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Awww… smutfilter doesn't like the BeeYouuEmmm word! Should have realised when Mr Faisal's surname got asterisked… ;o)
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Hi Adam, perhaps you can help set the record straight once and for all by providing some like for like data on specific postcode areas?
“What does your local knowledge add to anything? Tangibly”
http://bit.ly/1xPc5Jw
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Sorry, just under 600 for sale, so 2 big EA branches, PeeBee, sorry about the keyboard! I was a bit childish about the chin thing – Jonnie
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Believe me, Jonnie – that one line was worth a hundred keyboards! ;o)
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Quirk has missed one very important point. As a High Street Agent, we strive to achieve the best possible price, not just for the commission fee, but to get recommendations. I would say that around 1 in 3 of our valuation appointments are referrals from previous vendors. Just for the record (and in reply to the fall through rates quoted above), our fall through rate for 2013 was 2.7%.
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I'd like to know what you class as a "fall through" to only have a 2.7% fall through rate! I've been in this business for a long time and falls through always hover between 20%-30%.
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rubbish and rubbish Sarah Beeny too, how is it high st agents very often achieve over asking
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Manipulation of figures e.g."Guide Price" £200,000 – £225,000 – achieve an acceptable offer of £202,000 – Oh we achieved in access of asking price……. Corporates have been doing this for years.
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"the price achieved versus the asking price at the time of the sale." So not necessarily the original price, but the one it eventually comes down to? “Our fall-through rate is 14.8% from September 1 to today". I tend to look at year to date on my figures, not a carefully selected time frame to improve the stats. Mine's 8% YTD for the record. 0% from 1st 0ctober though which is even better 😉
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Brilliant comment! – Fall through rates tell a true story of an agent! 0% from October – Kudos!
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Russell Quirk seems to love his stats, most of which are rather unsurprisingly massaged to underline whatever point he's trying to make. Its not very clever and plenty of people have done it for years. The only indisputable fact here is that without establishing a database of buyers looking specifically in the locality of a property, and its only high street estate agents thats can do this, you are only ever marketing at 40% of the potential buyers. Of course you may come up with asking price, but the reality is in the market we have just been through, many of the asking prices of the online agents were out of date and therefore too cheap; a local marketing by a high street estate agent, would have probably have achieved in excess of that asking price. The bottom line is that is most cases online only estate agents cost sellers thousands.
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The other misnomer that you often see the online agents quoting is this speed of sale. Firstly it isn't sale is it, a property is only "sold" when it has completed. So what they are really quoting is we will get you an offer fast, in fact any offer. The fundamental point here is that to get the best price for a property requires coverage and exposure. It's not a race to do this. If I wanted to get a property quickly I could list it on my iPad at the property and probably have an offer on it the same day, but I don't do that because I take my responsibility of getting the best price for someones home seriously and I know that offering it to the first person that puts his hand up doesn't achieve that. Perhaps Emoove should think a little more about stats like "we sell a property in 20 odd day" and what statements like that ACTUALLY mean!
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Forgive me Mr Quirk, you're saying you have to pay an estate agent an incentive to get them to achieve the best price on behalf of their client? Get your empty head up to my office with a camera crew and I'll line up client after client that I have achieved the best/higher price with no more than the fee that I started with! Don't make me laugh any harder! I even have an Offers Over £355k property with an offer of £405k that the owners rightly wanted to accept however I persuaded to them to run the property to a Closing Date as I had another couple who I sensed might pay more….. why?…..instinct, experience, qualifying the potential buyers…. anyway…… £483k…… that's right £78k more!…… so at 1.5% which was my original fee…… NOT a sliding scale!…… that was £78k extra to the client minus the £1170 of that difference at 1.5% to my company….. you do the maths! Dream on if you think you would have delivered that! Yes?……. lucky with the level of the premium but NO luck with the skill of the agent reading the play! My work in many ways was done at £405k however I work in my clients best interests, NOT mine! So, Mr Quirk, don't dare class yourself anywhere near myself or many, many other similar minded estate agents! You are offering a cut price supermarket service which is fair enough for those clients that don't see the value of a good high street estate agent!….. as long as you remember the market you serve Mr Quirk that's fine, otherwise get a taxi to my office and I'll demonstrate why we are worlds apart!
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Russel Quirk of Emoov .."He said negotiators achieving an extra £10,000 on the asking price receive a negligible £10 after tax" ….That is £10 more than your company Russel , or your Company Adam…. as there is absolutely ZERO incentive for either of you to achieve ANY extra for your vendors on a pay up front deal!
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….. and for the record Mr Quirk…. I don't receive sales commission or bonus!…. fact!! I get paid a decent salary to work in my clients best interests! I'm sure you will be handsomely rewarded for spouting your nonsense! Reminds me of….. Roll Up Roll Up……. Quirko the Clown is in Town….. get your tickets puleeeese!
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This should be good to hear all the high street agents defend this one
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Welcome to the Scottish Property Market which retains HOME REPORTS…… a more detailed version of the defunct HIPS, in that ours arrived with a Mortgage Valuation which tends to become the core of negotiation…. yet the opportunity still exists for a good estate agent to outperform this notwithstanding buyer demand etc…… the reality that I see with clients who have bought thru online only agents is woeful service and easy pickings for buying below market value! I love the value placed on the analysis of data?…. and what real world data is being analysed……seems it speaks far louder than real world results….. if only we could go head to head we would find that I and many others would wipe the floor with New Improved Quirko……. in reality they serve part of the market that doesn't see or choose the value of a skilled estate agent….. so be it!…… that's the market and that's competition altho when the Magic Numbers are rolled out and Loudhailer in this case…..I sense the overpowering waft of the farmyard staple…..
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I should also note that not one of your Agents are addressing the claims, you're simply attacking him and his model. That in itself speaks volumes
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You not got a computer to fix?
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……Or some property industry knowledge to acquire!!!
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Lol. Anyone who can claim 99% of asking price has under valued the properties they are selling.
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I suspect in my earlier example emoov would be back slapping at £405k congratulating themselves on a job well done…… ahem?…… yes, a less common occurence however the client would overall be £78k worse off….. but think of that great online fee saving. Ho Ho Hoooooo…… Merry Xmas Santa Quirko is coming to Town……. note to self…..New Idea…..emoovlightbulbs……. half a bulb for half the price!…… excellent….. money saved!……oops…. still dark in here….. hallo?…hallo?…… anyone?
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Well it appears that Mr Quirk has had his name taken off my Christmas card list for another year.
Got to say other then the good people at EYE there seems to be a real lack of positive press about us high street agents flying about, in fact the whole of 2014 has been pretty much a pro 'online agent' agenda.
It appears this journo at the Telegraph has also fallen for it, but we all really know don't we Russell.
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The funny thing is Paul that in 10 years of online agency existence they have all only managed 2% penetration into the overall market(way below all their targets and manifestos). It seems clear to me that until they change their approach and try and market themselves alongside high street agents rather than against them they are destined to fail. Otherwise a much higher % would be selling with them. The fact that the travel industry grew online (to approx. 76% online in its' first 10 years) is indicative of just how badly they are doing. I'm pleased they keep marketing themselves the way they do(and Russell keeps talking nonsense) because the public are sticking with us as a result and online agency figures go from bad to worse.
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Oh, dear… the week has clearly got off to a terrible start – 1) I'm back from a week's enforced t'internet de-tox, and if THAT isn't enough to raise a thousand groans, 2) the Quirkster has spread his usual MDT thick and heavy in the ridiculous hope of disrupting the industry yet again. Adam Day, of course, nods in agreement in the hope of picking up an instruction (sorry – I mean GUARANTEED PAYMENT) or two by leeching off someone else. Come on, Adam – submit your OWN cr@p and see where it gets you, sunshine – you'd be the first to complain if Mr Quirk tried to hijack any of your efforts at making headlines…
Anyway – nice to be able to agree with many of my colleagues in industry that the above is pure twaddle. How much of it sticks is to be seen. In the meantime, Mr Quirk – you just keep teeing them up for people to knock clean out of sight. It's something that you excel at… ;o)
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PeeBee, as per the end of my contribution, the real reason for my post was really to inform people that the episode that our client was appearing on, was next Monday, not today, as reported at the bottom of this story when I first saw it this morning. PIE have obviously removed that part of the story now…
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Nope, sorry – you've got me on that one – and I can normally follow your drift – regardless of how relevant it is to actuality. Exactly WHAT "contribution" are you referring to, Mr Day…?
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I haven't got time to be writing cr@p anyway. However, there may be some news from us next week some time 😉
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"I haven't got time to be writing cr@p anyway",,….earlier you wrote….."Not sure how many single branch agencies have 900+ properties, but you're right, I'm not a 'player'…"…….. You currently have 13 properties in the whole of the city of Birmingham….You have 4 in the whole of Newcastle Upon Tyne!!! 17 properties in total in 2 of the UKs' major cities….and you think you are a big player? Please do tell us if you think these results are great?
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Actually, wilko, he's only got THREE in Newcastle upon Tyne – the other one is in the Staffordshire 'Newcastle'…
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Let me guess another online agent looking to "Float"
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smile please – just checking – did you mean "flirt"? Cos that IS where t'internet has taken off, isn't it – online dating? Erm… apparently, that is. I believe. Sure I read it somewhere… ;o)
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Your chance to set the record straight ladies and gentlemen
“What does your local knowledge add to anything? Tangibly”
http://bit.ly/1xPc5Jw
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"Not sure how many single branch agencies have 900+ properties…"
Ahhh, Mr Day… just when I tell your mucker that HE tees them up to perfection, YOU come out with an absolute pearler like this. Allow me to quote YOUR OWN website – "We have full time regional consultants and offices covering the whole of England & Wales." Your "Find your office" claims no less than SEVEN office locations – including your "North East Regional Office", which I would like to take you up on if you have a second. Now I know you've ducked under this one several times before but you've now stuck your head back above the parapet in an article on the 'front page' – so you will look a complete div if you dodge it again! ;o) Here, I repeat previously asked question:
In an article first published here on EYE on 1/8/14 – http://www.propertyindustryeye.com/hatcheds-adam-day-lays-agents-mutual/ –
you stated "We have fully trained employees that visit and meet with clients at their properties, face to face. They measure up and take photos at every single property we market." Champion. That being the case, please allow me to put to you the following REAL SCENARIO. I live within 5 miles of Newcastle upon Tyne City centre. Without naming names: 1. HOW CLOSE to my location does your employee live? 2. HOW CLOSE to my location does your employee work? 3. WHAT AREA does your employee cover? 4. WHAT EXPERIENCE does your employee have in selling property in MY location? 5. WHAT TRAINING has THAT employee received – who by, and when?
And I SOOO look forward to your response – I've waited nearly FIVE MONTHS so far for it – and guess what – I'm NOT holding my breath for any effort to answer it THIS time of asking either! I know you and your type far too well – comes out a Ninja; runs off a whinger.
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Go on Adam, let's hear it, the floor is yours – Jonnie
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I know I'm showing my age, Jonnie – but Mr Day's impression of Rick West of The Tremeloes is astonishingly accurate… ;o)
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Hmmm… here's something interesting I'd not spotted on the old "office" front – although the MAP shows seven locations, the site then goes on to list TWELVE locations, no less! Whassup, Mr Day – too busy posting cr@p to update your own website property?? Or is it just that "North East", "London", "East Anglia", "East Midlands" or "Wales" (that's the bit to the left of "Midlands" if you need help sticking your little house on it…) don't justify a mention…? OR… is it simply that you don't want to pay more portal charges for those "offices"?
Like I said, Mr Day – I KNOW you and your type… ;o)
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We can sit here arguing about the merits of both models until we're blue in the face.
Ultimately, it'll be survival of the fittest and those that adapt their models to offer the most competitive service while achieving results that will prosper.
I am a high street agent, and note the flaws in the online model but also accept that it is a growing market.
Do I think it will become dominant? No. Do I think it will put me out of business? No. Would it be naive not to keep tabs on the industry while ignoring the superfluous comments of the owners? Yes.
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Mr Quirk has, once again, shot himself in the foot. He says "“My view as I articulated on the programme is that markets decide price, not agents…".
I couldn't agree more. I've currently got 371 buyers on my database looking for a three bed house up to £600k. I would suggest this creates quite a nice little market. How many buyers would emoov have on their database for a 3 bed house in my area? Probably none and even if they did, would they be calling them? Probably not because a) they don't have the resources b) they've no reason to given they've already been paid!
Lets turn the situation on it's head. If somebody desperately needed to find a property within the next 4 weeks in any given town, would they spend their time contacting all the local "traditional agents" or would they call the online brigade??? The same logic should be applied to sellers looking for buyers.
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Well… it's over 31 hours since I laid down the challenge – YET AGAIN – to Mr Day to answer some simple yet hugely pertinent questions. Add that to the FIFTEEN PLUS WEEKS since I first raised the questions… that's one H£ll of a statistic and I'm sure one that Mr Day can't turn to his advantage no matter how he twists reality.
Tell you what – judging by the performance of some individuals (no names necessary – they know exactly who they are without my help…) when it comes to debating, it's NO WONDER WHATSOEVER that they eagerly snap up paltry up-front fees for simply listing and waiting for something to happen, instead of claiming decent remuneration for actually proving you have walked the walk…
Which backs up what I have long said to the likes of these individuals and I make no apology for repeating it once more…
BRING. IT. ON.
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Mr Day – instead of sitting congratulating yourself and feeling all fuzzy that you've ducked my questioning YET AGAIN, you should be wondering WHEN and WHERE your inability or reluctance to answer straightforward questions that highlight inconsistencies in your claims will jump up and bite you on your @$$. The answer, by the way, is AT EVERY OPPORTUNITY. Have a nice Day… ;o)
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