The following program. The ENT , mortgage and Realty Show is paid for in full by ENT mortgage, LLC and equal housing lender consumer access.org number 2 5 5 3 6 8. The advice and opinions expressed during the Academic Mortgage and Realty Show are solely that at the hosts and guests of ENT mortgage, LLC, and not WTMJ or Good Karma Brands.
Speaker 2:Welcome to the Accu Net Mortgage and Realty Show, getting you inside information on buying, selling, and financing your home with expert advice from Accu Net Mortgage and Realty. And now, here's Brian and David Wickers.
Speaker 1:Welcome to the Accu Mortgage and Realty Show. I'm Brian Wicker, the real estate broker with ACU Net Realty Advisors, and also the majority owner of Acuate Mortgage, where my individual NMLS ID number is 2 5 9 6 1 0. And I'm here today along with my son David David Wicker, who is one of ACU Net's Senior Loan consultants, and our Chief Client Experience Officer. His individual NMLS ID number is 3 2 8 8 4 7. If you've got a question or a comment, you can call or text us on the WTMJ talk and text line , which is 8 5 5 6 1 6 1 6 20 . And remember, you can get a podcast at today, show wherever you normally get your podcasts. So David , uh, last week we talked about the job mark at the job report, the March job , March jobs report, which came in way better than expected. Like a hundred thousand dollars , a hundred thousand more jobs than economists thought were gonna be created. Mm-Hmm . <affirmative> . And that should have been bad for interest rates, but it was a mess this week. We weren't so lucky. We got the , uh, consumer price index , uh, for March. It came out on Wednesday, and it's generating headlines like this, a Wall Street Journal this week, stay put or pay up home buyers lose hope for lower rates or the New York Times. What was their deal? The New York Times says inflation comes for the housing market. And then they , their first paragraph is the higher for longer inflation predicament has hit the US housing market like a thunderbolt. Well, first let's tell us what happened. You tell us what happened, and then let's get re-grounded to reality, at least the way we're experiencing it at the front lines of mortgage lending and home buying . What
Speaker 3:Happened? The , the forecast for the consumer price index was 3.4 and it came in at 3.5. That , that , that's, yeah. Thunderbolt
Speaker 1:Thunderbolt. But, but it did have a, a outsize effect .
Speaker 3:Why? Well, it's because it's, you know, like think of inflation like getting fat and skinny. It's like, yeah, inflation is getting less fat, but that's not the same thing as we are getting inflation skinny. And so we're just kind of , we've been treading water it feels like on inflation. We keep stepping on the scale and stepping on the scale. And it's like, why won't this number go down? And markets, you know, are we thought we'd be losing weight on inflation and we haven't. And so markets took that as poor news.
Speaker 1:Um , and , and I think it was kind of that like, ah , well, we kind of took the job , uh, report in stride. Oh my God, now we get this worse than expected reading on inflation and they just kind of lit their hair on fire. Yeah. Kind of maybe overdid it. I think, you know, things got a little bit better late in the week Correct.
Speaker 3:For mortgage rates. Uh, sure. Yeah. It, it, it moderated at the end of the week. Uh , you know, mostly this is, all the markets are always forward looking . And so with new data, the future time when the Fed starts to cut rates kind of keeps getting pushed out into the horizon little bit by little bit. And one of the one smart thing I read this week was the fed was late to the party on combating inflation. Okay . And so they'd like to not repeat the late to the party mo in, they don't wanna break the economy. They, they might cut a little early because they don't wanna push out past, you know, when it's too late to pull the economy back from breaking . Oh,
Speaker 1:Oh, I see. Okay. So they , uh, they don't wanna be late in cutting, so, all
Speaker 3:Right . They were late to raise. They don't want to be late in cutting, but we're still not there yet. We, there's no proof, man. Hot jobs and not relief on inflation. Like, we're not there.
Speaker 1:So , um, just to say it out loud, last week , um, we said, Hey, you could still snag a 6.99 30 or fixed rate , uh, if you were willing to pay , uh, 1900 and some dollars in total loan costs, that's on a $262,000 loan amount with 25% down excellent credit and all the other Right stuff with an a PR of like 7.02 this week, you would've had to pay 1200 more dollars to get the 6 9 9. Right . Which
Speaker 3:Is crummy, but holds back zero home buyers. Okay?
Speaker 1:So that's the punchline for this segment, is we've got these headlines out here, you know, from the New York Times and Wall Street Journals. I read 'em both every day saying, wow, this is not good housing. Gloom a thunderbolt. You're not seeing that on the front lines.
Speaker 3:No, I , I'll say it to you this way, this , the CPI report came out on Wednesday. Do you know how many of my pre-approved clients called me to say, Ugh , David, we're throwing in the towel.
Speaker 1:I'm out.
Speaker 3:Zero zero clients. 'cause people are buying for real life reasons and rates are kind of just the smelly sock that they're gonna have to deal with to do the more important thing, which is achieve that next chapter in life.
Speaker 1:Correct. And I'll just blurt out, you know , the Mortgage News Daily, which we think is the best and most current source for mortgage information in America. 'cause guess what? It's daily. Yeah . They're out there saying that it's about 7.3 something for a 30 year fixed rate now. Yeah . With all the right stuff. Yeah . And so Accu Net could do 7.375 with just $940 a total loan cost . And the difference between that awful sounding rate and a 6 9 9 rate on a $262,000 loan amount is 68 American dollars. Yeah.
Speaker 3:As Yeah .
Speaker 1:Probably not gonna break most . You're
Speaker 3:Still gonna buy the house. Yeah,
Speaker 1:That's right. Speaking of buying houses, David, you, you've helped a lot of buyers this week. Uh , you got a story you wanna share us when we come back about , uh, somebody who beat out Oh , only six other offers with your help. We'll give you that info when we come back. You're listening to the Academic Mortgage and Realty Show on AM six 20 WTMJ
Speaker 2:Home buying advice from the guys who know it best. This is the Acuate Mortgage and Realty Show with Brian Wicker on WTMJ.
Speaker 1:Welcome back to today's show. Thanks for tuning in. I'm Brian Wicker, the elder. That's David Wicker, the younger, taller, more handsome of the Wicker team. And David , uh, you got a story you wanna share about a client that beat out, oh, only six other offers. How'd they do that?
Speaker 3:And , and, and , and another story after that about another client who beat out 10 other offers. But let's start with this one. Whoa . So, buyers , ANet clients are winning. And for this client, it was in , um, Ozaki County, more than half a million dollars. And there were six other offers of which dad, you'll be pleased to know that two of those competing offers were cash.
Speaker 1:Ooh . I love it when one of our rock solid peer approved buyers beats out a cash offer. 'cause the cash offer to use , uh, sheepshead parlance is the queen of clubs the most powerful, typically, right? Oh man. It's a cash offer.
Speaker 3:It , it is. And, and as I got more of this story, so like Friday afternoon, I am , I get pulled in, Hey, we saw this house. We're writing an offer. Our acua clients super strong. They had just sold a house. They've got an enormous down payment, like 50% great jobs, just like the most slam junkiest of home buyers. Sure . A safe choice for any seller. They're writing the offer on the home. I of course pick up the phone and call the listing agent who is delighted that I'm calling from my cell phone . Be like, call or text anytime your sellers, you and your sellers will never be wondering what is going on with our home sale, because you're gonna hear from me. And also you're never calling a skyscraper wondering what's going on. This is my cell phone . This is how my wife texts me. You know, there's a dirty diaper that needs changing. Yeah . It is tattooed to my hand. And furthermore, we, because we have the address of the house that they're listed in, you'll be delighted by this as well. Hey, what do you know? We run it through the software, the mortgage underwriting software. No appraisal needed.
Speaker 1:God , the sweetest words ever, no appraisal required. Do we put that on the, David, do we put that anywhere on the rock solid preapproval letter
Speaker 3:That in yellow highlighter
Speaker 1:Bold yellow highlighter
Speaker 3:Bold. Here it is. No one is walking through the house at this price with this great down payment and these awesome buyers and their great credit scores. No appraiser has to walk through the house.
Speaker 1:Were they offering over asking ? Perhaps
Speaker 3:They were, and they were using an escalator clause, pretty heavy duty escalator. Like we'll beat anybody like up to 50,000 above what our first offer is.
Speaker 1:Whoa . Okay.
Speaker 3:And so , uh, I got the story then that following Monday, that the cash offers, they were willing to go above the price that the cash offers , uh, were willing to pay. Yeah . And it helped . And we were, because the acuate team and our colleague Jason Hanson runs a tight ship in operations. You want a two week closing? No problem. Beautiful. I I even made the joke to the listing agent. I was like, I'm not even sure a seller can find their money or liquidate as fast as the AC net team can actually get the mortgage money to closing. Not every seller that
Speaker 1:The buyer, you mean that the , that the buyer can come up with the money. You're saying seller, do you mean? Right.
Speaker 3:No, a competitive like cash offer. Right. It's like I can write cash, but like, you know, I gotta sell my boat to, you know, I'm being
Speaker 1:Facetious. Well, I gotta sell my stocks and blah, blah , blah . Exactly . Or whatever. Yeah.
Speaker 3:So that all comes together. And on, on Monday, I learned the great news that they have the accepted offer. The , and the other uh , element was our buyers, in my opinion, smartly waived the inspection. Okay . Because they've got the money. There is nothing that could come up on the inspection that they couldn't fix with cash.
Speaker 1:Right . And this isn't a hundred year old house. It's probably, you know,
Speaker 3:It's not, it's not new. It is
Speaker 1:Medium . It's not new, but it's, you know , okay. It's medium and you know , they went
Speaker 3:Through it might be drawing social security, but you know, it's okay .
Speaker 1:Alright . But it's not a high risk and they can afford it . No , it's not . Like you said, it's not .
Speaker 3:And they Exactly.
Speaker 1:They can afford to fix anything that they discover. So there , this is, again, we send, this said this dozens of times. It's all about certainty in the eyes of the, of the seller. And we gave 'em a super certain rock solid. Did they have to go all the way up to their max or did they just have to go part way on the , uh,
Speaker 3:Middle? Yeah , just kind of in the middle. Yeah . Okay .
Speaker 1:Alright . Good story. I like that. You know what? I bet you can top that though, David. 'cause these people only beat out six offers. Six of us , two of them were cash. When we come back, David's gonna regale us with another story where our client beat out 10 other offers. You're listening to the Accu Mortgage and Realty Show on the biggest stick in the state AM six 20 WTMJ getting
Speaker 2:You into the home of your dreams. Here's more of the ACU Net Mortgage and Realty Show with Brian Weer on WTMJ.
Speaker 1:Thanks again for tuning in to today's show. And , uh, you know, the headlines are out there making it sound like , uh, buyers are quitting. And maybe some are , there's probably some buyers that are throwing in the towel or aren't getting into the home buying game. But the fact of the matter is , uh, inventory is still tight, at least in Wisconsin. Uh , maybe not in every part of the country. 'cause remember, all real estate markets are local and they're even more local than that once you get within a certain price range. Um, so, so we are finding that in April here, the middle of April, people are still , um, battling against multiple offers on homes. And David, tell us this one about where our client, these make me so proud. Good job David beat out 10 other offers. How the heck do you do that?
Speaker 3:They, well, you know, people bring their strength and I think some of our job is to make sure that we mirror the strength that they have and, and shout it from the rooftop so that the seller knows my client , uh, could make a great down payment more than 20% down payment. Okay. Uh , excellent job. No home to sell and great credit and wrote a competitive offer. Uh, the list price was in the low two hundreds and they probably ended up writing 10 15 over that list price.
Speaker 1:Okay. So five , five ish percent. Five to six or 7% over the asking price.
Speaker 3:Exactly. Which, if you ever wanted validation that the house is worth it , tell the nine people who lost. Like that's clearly, you know, what you're willing to pay for it is probably closer to reality for what the house is worth, not just the list price. Yeah . Yeah . And as we do at Acuate Mortgage, I'm on the phone with the listing agent being like , oh , two week closing. I mean, you could call me the two week king two week these last couple days. Wow. But two weeks. Well , it's because, you know, we we're , we're ready. Right. We've , our buyers are, we've got their down payment documented, we've got their income ready to go. It's
Speaker 1:Just a matter of getting the appraisal. Do we need an appraisal on this one?
Speaker 3:This one, we , uh, in recent months and years, Fannie Mae and Freddie Mac have rolled out what's called A-P-D-R-A property data report, which is, it's not a full appraisal, but it's not an appraisal waiver. It's kind of in the middle. And what's nice about that PDR you are not, the value is not up for , um, analysis by the appraiser. So
Speaker 1:The appraiser, the appraiser does not say, and I think this house is worth this many dollars. Correct.
Speaker 3:They're rather worth the software. The software says, I believe you on value, but I'd like someone to walk through the house to make sure it's not, you know, dilapidated and fallen apart on the inside. Sure. So that level of comfort, so great down payment , uh, a little relief, you know, because the seller, I didn't dive into the listings and maybe how they came up with their list price. Okay . But hey , maybe it's just, maybe it's a little at the top end of what that market can justify.
Speaker 1:Okay .
Speaker 3:If you got the full appraisal and, you know, hey sellers, they want every dollar that they can get reasonably.
Speaker 1:And maybe, maybe it's an old enough house. I think you , you , in your notes that you sent me, it's in, is it in Milwaukee County? It's maybe it's an older home. Yeah. And so maybe the Fannie Freddie software says, oh , I know how old this house is, <laugh> , uh, you know, let , let's make sure it's not, you know, like you said, dilapidated and you know , the roof's not caving in
Speaker 3:The one example, just to get in the weeds on this is, is to confirm that the details that the software thinks it knows about the house are actually still true in real life. Like, hey, in our, in our software, we've identified this home as three bedrooms. Well, what if the seller crazily knocked down a wall and combine two bedrooms together? And it's actually just two bedrooms now two bedrooms
Speaker 1:You need What about bathrooms? Yeah. Square footage. Exactly .
Speaker 3:Um, so our client got , uh, the accepted offer. Interesting twist though. Our client does not have a credit score. What ? And that, and that is, okay, so we, a year ago we had access to credit. They had 800 credit. Then if you don't use your, he doesn't have a car loan. Right. You don't use your credit muscle. The three bureaus stop calculating a credit score for you. So I can't predict
Speaker 1:Your future if you have no recent past is what they're saying.
Speaker 3:But in this special circumstance, he has trade lines , you know, credit cards that just haven't been used. So when you run him through the , uh, approval software, you get the thumbs up, but then you have to use alternative credit. I'm literally using his 12 months of we energy bills and 12 months of spectrum bills to prove, look, he pays his bills on time.
Speaker 1:He knows how to pay time . Wow . David, you, I I didn't know we could do a loan without a credit score. Yeah.
Speaker 3:But it's, it's important because he only had , doesn't have a credit score because he's like so good at not owing money.
Speaker 1:Right, right. It's not like he has a checkered passed or something like that.
Speaker 3:Exactly.
Speaker 1:Okay. Well that, that's a great story. Anything else to add to that or are we ready to
Speaker 3:Two weeks by the , by the time we do our next show, they're gonna be homeowners. The
Speaker 1:Uh, by the way, the fastest we can close is eight days by regulation. Yeah. Alright. When we come back, I've got a story, David, about a home seller who wants to be a home buyer in Illinois who wants to sell her existing home to her son. The old uh hmm . Family deal. I've got a lot of meat on that bone . We'll cover that right after we turn it over to the WTMJ Breaking News Center.
Speaker 2:Don't break the bank to get into a house. Back to the Accu Net Mortgage and Realty Show with Brian Wicker on WTMJ. Welcome
Speaker 1:Back to today's edition of the Academic Mortgage and Realty Show. I'm Brian Wicker, the , uh, majority owner of Academic mortgage. And that's my son David over there. Our Chief Client Experience Officer and senior loan consultant. David, I got a call on, I think it was Tuesday , uh, from a past client that we had refinanced twice who lives in northern Illinois. And , uh, she's since retired and , uh, now has had her son and girlfriend and grandchild living with them for the last two years. It was supposed to be one year, and then I think it turned into two. And now the plan is for the son and and girlfriend to purchase , um, her home. And then , uh, she wants to go downsize and buy a town home for maybe a hundred thousand less or 75,000 less still nearby. So that's the game plan. So she's calling me up to be pre-approved.
Speaker 3:Living with you has been fun. I'd like to now not live with you.
Speaker 1:Well, you know, I I , what have you, you know, who knows, but , uh, and she did, I think she did kinda say that. Yeah. They , they , the kids now were in a hurry for her to , to get out even though they <laugh> living there for two years' still here . Yeah . So two things. Thing number one is she was thinking, you know what, I , I googled it, I did it on Redfin and the fair market value of my home seems to be about 3 37, 330 7,000, but I'm gonna give you a discount and sell to you for three 10. You know, maybe it needs a little deferred maintenance and I wanna give you a good deal. So put a pin in that. Right. We know that there's opportunity there, which I did start to explain to her, I did end up then I said, can I please talk to your son and explain to him how it's better for him if we set the purchase price at the fair market value Yes. Of 3 37. Yes. And then you just gift him the $27,000 of equity. Okay. So what's the number one question that arises if, if , uh, a person hears, oh, my mom is gonna gift me $27,000.
Speaker 3:This is appropriate ahead of tax day on Monday here. Isn't the IRS gonna come and lack , gouge my eyes out because I gave too much money to somebody else as a gift?
Speaker 1:Yeah . Or you're gonna guide gouge my mother's eyes out, you know, isn't there some sort of a limit? And the answer is, the 2024 annual gift exclusion limit is $18,000. And so if you multiply that by two two , that's 36 . Yeah . So we can escape that way. Um, uh, and , and okay, so we kind of got over that hurdle and, and what it's gonna do is lower their closing costs by about at least a thousand dollars. Okay. Because we're gonna take 'em from putting 25% down to 25% down. And the more down payment you have, the better the pricing is. Yep . Uh, but wait, there's more. The son had been talking to several lenders and was told that since it's a family transaction, it could be arranged so that mom could go out and shop for her town home , get an accepted offer on that smaller, let's say $240,000 property and then both transactions could close on the same day, the sale of her existing home to the sun and her purchase of the town home . Easy peasy. What's the matter with that? Uh , game plan ? I
Speaker 3:Mean, it , I mean it could , but when she writes the offer on the next, her next town home , ethically, she would need to say, by the way, I can only buy your, my new house if at 10:00 AM I sell my house to my son and I scoot across the office. 11:00 AM to buy your new house. Correct.
Speaker 1:So the offer to purchase would have to be marked with my offer is contingent upon the sale of my house, at which point the seller stops listening and doesn't want to know. But yeah, I'm selling it to my son and, you know, he, it's all gonna work out. And , uh, I mean, you know,
Speaker 3:Come on. It's all situational if it's a seller who's, you know, dying for any fish on the hook.
Speaker 1:Okay. But here's the problem. She tells me that in the suburb where she wants to , uh, buy. Yeah . It's slim picket . So I said, well, why don't we get your buyer's agent on the phone? So we did that. I think it was on Thursday, did a little conference call. Uh, her name is Andrea. And I said, Andrea, so you know, this is where we are.
Speaker 3:<laugh> .
Speaker 1:I , I was thinking that it would be a lot better for , uh, my client to sell to her son and have the money in her bank account before she writes any offer so that I can say in my rock solid guaranteed preapproval. This is not contingent upon the sale of the home. Right. She's got all the money. We verified it, we verified her income, which by the way, I called her financial advisor and got her IRA statements because there's our fill in the blank money that we need to qualify her in addition to her social security. I can give you a rock solid guaranteed pre-approval or , uh, buyer's agent Andrea, or do you think it's okay to write offers contingent on the sale of the home? She said, oh my God, do not write offers contingent on the sale of your home. Yeah . You will never get your offer accepted. She said, I do a lot of listings. And that's the first thing. So she testified as expected
Speaker 3:Unprompted, well, unprompted right. With , with , with , with prompt. But , um, un un coached. Un coached . Thank you. Yeah .
Speaker 1:Yeah. So now I'm, I'm working on the sun to, you know, try to get him to see the light that, hey, you know what we gotta do is we gotta consummate this deal. And he had all kinds of objections. I got a little bit more to tell about his view of the world when we come back. You are listening to the Accu Mortgage and Realty Show on Wisconsin's radio station AM six 20 WTMJ.
Speaker 2:Important home buying questions and answers you can count on. This is the ACU Net Mortgage and Realty show with Brian Wickett on WTMJ gave
Speaker 1:It before that last break. I was talking about a client in Illinois wanting to sell her existing home to her son and his girlfriend so that she could downsize. And we got all the elements going here. One is, well a , they , they didn't know it, but they needed a quarterback for both transactions and to help 'em figure out, you know, the whole process of Oh yeah. You know, what comes first and be because not knowing any better. The son had been talking to some lenders who suggested, well we can just make both transactions close on the same day and dad is not a good idea. 'cause Mom will you , you can. Yeah you can, you can.
Speaker 3:But a seller for mom's new house would have to be like, cool. Sounds good. Right . Which is
Speaker 1:Unlikely . Yeah , sounds good. I trust you. Yeah . Right. And , and so the better the , the way to put mom in a better position is to say, let's sell the house. So guess what nobody had done until I came along. Computed how much
Speaker 3:Can the son do it?
Speaker 1:No. Well that's one thing. 'cause it turns out he hasn't really been pre-approved by anybody. He saved up almost 20% down on the three 10 purchase price. Yeah. But , um, the, the other part, nobody had calculated, well how much is mom gonna net from the sale of her house? Sure. And in Illinois there are certain things, and Illinois is weird. They still haven't paid their 2023 tax bill <laugh>. So, so if we close at the end of May, which is not that far away, normally a seller would say, okay, well I gotta pay for 2023 and I gotta pay for the first five months of 2020 fours. Uh, property taxes, that's 11 grand. That's 11 grand on this house. Okay . Did you think about that? No. Okay. Now there's a , a state of Illinois transfer tax taxes are about $1,500. Normally the seller pays for that. Do you think about that? No. Okay. What about the um, uh, title insurance? You know, we do a lot of for sale by owner stuff in Wisconsin. Yeah . We don't do that much for sale by owner in Illinois. And so I actually reached out, got a name of an attorney. So first thing in Illinois you always have to use an attorney. It's the full employment of attorneys act that they got down there. Can't just do it with an agent or a title company. Gotta have an attorney. Yeah . So my one question was, can we just have one attorney or do they have to have two? Good answer. They only need one. He charges $750 for , for sale by owner. But then it comes up, she's lived there for like 23 years. So does she really need to pay for an owner's policy? And we've refinanced her twice. So just like in a lot of Florida situations, I had a loan close in Florida on Wednesday where because of the high price of title insurance in Florida, my buyer opted not to buy an owner's policy but instead rely on the research and coverage of the lender's policy, which is for a lower amount. So you're taking a calculated risk that there's not some terrible title problem out there. Well , that would exceed the amount of your mortgage.
Speaker 3:Can we just, I wanna say that again. An owner's policy is for the full value of the property. Right? The purchase price , the lender's policy is only for, and how much do you owe at the time? Mm-Hmm . You're buying this house,
Speaker 1:Which is less and it only protects the lender. It only protects the lender. But your theory if you decide not to go with an owner's policy is that whatever the problem, that problem there isn't any. But if ever one came up, it won't be a problem that's larger than my loan amount. Okay . Because the title company has to fix the problem, but only up to the level of the mortgage amount. So we'll see about that aspect. But the bottom line is, you know, I fired off an email on Friday morning , uh, and I haven't heard back yet saying, Hey, here's my calculation. And by the way, it's within $180 of each other, whether you , uh, sell it at 3 37 with a $27,000 gift of equity, or you sell it at three 10 without, and the only difference is the transfer tax and the title insurance costs . That's what the differences are. But the devil is in the details and you know these people, you know
Speaker 3:Well 'cause Right . 'cause I mean she's a grandma. She's just like, you know , I'm gonna sell it to my son. That's
Speaker 1:She . But , but yeah, exactly. But she just doesn't know what she doesn't know. Luckily she got me involved and I got it kind of , I can see the whole field, right? I'm like Jordan Love, I can see the whole field and I know where to throw the ball to score touchdown
Speaker 3:Jordan
Speaker 1:Loves , but the sun , sorry , the sun is thinking about , uh, where am I gonna get the best deal from the mortgage? You know? So I'm talking to four mortgage lenders and it's like, you need more than an ordinary mortgage lender. You need somebody who can figure out things like it's better to pay more. So bottom line, if he goes with us, we're gonna the agent , uh, 'cause I facilitated this call with a real estate agent. I said she offered to do a comparative market analysis, which is gonna happen this week. I think on Tuesday we're gonna start with the purchase price based on her comparative market analysis. Yeah . And then , then we're gonna get an appraisal. 'cause we have to have a signed offer in order to get an appraisal. So then if the sun hopefully picks us, we'll get the appraisal done. And when it comes back, we'll just set the purchase price at the appraisal, whether it's higher or lower. Maybe it's gonna come back at 3 45. 'cause then we could do some creative things like, 'cause guess what? The payment's a little high, a little higher than they'd like. So if the , if the price comes in higher than the 3 37, maybe we can have mom fund a temporary buy down account. Okay . To temporarily lower their payment, you know, while we wait for rates to come down. Because just like in Wisconsin, it's cheap to refi in Illinois. Alright , so we're here to help folks. We, we can see the whole field. Uh, David, why we come back? You've got another story. Which one do you want to tell? You're just full of stories this week,
Speaker 3:Dad. The story that I want to tell when we come back for our last segment is the question that I got and I'll pose it to you and we will as a cliffhanger. David, can you do loan commitment in two days? I'll give you all of my answers when we come back. You are listening to the ACU Net Mortgage and Realty Show on AM six 20 WTMJ. Find
Speaker 4:A place to call home without the headache. This is
Speaker 3:The
Speaker 2:ACU Net Mortgage and Realty Show with Brian Wicker on WTMJ.
Speaker 1:Welcome back. And so , uh, before that last break, David, you posed the cliffhanger. Would I say yes to an agent who asked if we could issue a loan commitment in two days after the accepted offer? And uh , I guess my first question is do we need an appraisal?
Speaker 3:Yes. These clients are putting 5% down and with a limited down payment like that, you will not get the appraisal waiver through the underwriting software.
Speaker 1:Correct. Is technically in a purchase. Can you put as little as 10% down and still get the appraisal waiver?
Speaker 3:I've seen it at 10%. It's hard though.
Speaker 1:Okay. It's hard. Right. Alright . And then , um, are they first time home buyers?
Speaker 3:Yes.
Speaker 1:Okay. So they have a little wiggle room. And then, do you know, were they , um, writing with an appraisal contingency at the offer price? Or do you not know that?
Speaker 3:I don't know, but I think they were. Yes.
Speaker 1:And had we verified their income and down payment
Speaker 3:We did. They were rocks out . They're ready to go. So , so go ahead. What I was gonna say was, can I write you a loan commitment in two days? Yes. Should, should we be writing a loan commitment in two days? That is a much, that is a greater debate. Well,
Speaker 1:Because that loan commitment that we would be writing would be conditioned upon an acceptable appraisal ,
Speaker 3:Uh , and title insurance
Speaker 1:And conditioned to the property
Speaker 3:And homeowner's insurance. Like there's so many because we probably even the homeowner's insurance, like what if you can't get a policy on the house because of its current state or because it's, is it called Yeah , ru dial and tube. Is that the old school ?
Speaker 1:Uh , no tube and , uh,
Speaker 3:Tube and knob. Tube and
Speaker 1:Wire tube . Knob and tube. Knob and tube. Okay. Yeah, there's something like that. Were they having a home inspection?
Speaker 3:I don't believe so, but I don't know for sure.
Speaker 1:Okay. 'cause there's another danger. So yeah, it would seem like, yeah, sure.
Speaker 3:Because once you deliver the loan commitment, you as the buyer don't have a contractual way to get outta your deal.
Speaker 1:Well, only if you had it covered in another manner. So let's say that the only condition on our property or on our um, commitment letter was the appraisal. Uh, that's, that's not great because it doesn't say, and the appraisal has to be acceptable. 'cause remember folks we've said a couple of times on the show appraisals come back and they get graded by Fannie and Freddy's automated underwriting system on a scale of one to five, one being super safe , five being we think the appraiser was high when they did it. Yeah . And , and so what if we got a , an appraisal back at the offer price but it had a five rating which throws it into review and then we ultimately can't do the loan because we don't think the value's there on upon review. Well now you're uh, outta luck, right? Because you waived your financing contingency. So not at , did you say not advisable
Speaker 3:Not advisable, right. It's like, can we do it? Yes. But you know, let's, can we have more conversation around what is it that you're trying to tell or I I , I was even , uh, I was texting and talking to Brother-in-Law, Tim over last weekend talking this through and, and he and I got around to talking about the listing agent looking at this, right? Like listing agents. I know a lot of them , they're savvy people and I don't think if you put on a , in a contract and I'll have loan commitment in two days, I think most listing agents would be like, I don't believe you. Or like, what is gonna be on this loan commit is the words loan commitment might be on there, but they're , they're gonna be expecting funny business almost. Mm-Hmm. <affirmative> be like, really two days.
Speaker 1:But remember, any conditions on the commitment letter don't matter once you deliver it. That's like the risk that the buyer is taking. 'cause they have said, I'm good with my loan. I'm willing to accept all the risks of the conditions that my lender wrote on there, which are gonna be evidence of homeowners insurance or the debt to income ratios. Uh, particularly tight on the , the
Speaker 3:Salon . Totally . They were totally fine. Yeah. They they could fine , they could afford the house. Yeah.
Speaker 1:Well because that would be another thing. You know, homeowner's insurance is more expensive than people think these days. Yeah . With all the claims that we've had in southeastern Wisconsin, homeowner's insurance premiums are up. So if you've got a , a tight , uh, affordability situation that could tip it over the tip it over the edge, so, you know, yes. It's, it's a, it's a , uh, tough market and you want to impress , um, sellers by writing smart offers, I would've rather put in some appraisal wiggle room.
Speaker 3:Well, or , and, and had the conversation advanced . Some of what I would've said is like, if a seller's gonna say yes to your offer with a two day loan commitment, are they really that nervous? If we can get like eight days or 10 days? Like, is that, is that gap in days really the dec Oh, I was gonna accept your offer but now I'm not going to because you wanted six extra calendar days to get me clean loan commitment. I don't think you were in the running then otherwise. Yeah.
Speaker 1:If that's what, and here's the other thing that they're , they're gonna think of is , uh, okay, if the financing blows up and this person defaults on the contract, oh , you know, oh great. I get to keep their earnest money. How much is that? A thousand dollars or 2000 much ? 'cause they don't have enough money to go after 'em , probably to make it worth their while. Alright , so there you go. That's the latest from the front lines of home buying and mortgage lending , uh, that we know of. Thanks for tuning in today. You've been listening to the Accu Mortgage and Realty Show on AM six 20 WTMJ. The proceeding was a paid program. Advice and opinions expressed during the Accu Mortgage and Realty Show are solely that of the host or guests of Accu Mortgage and Acuate Realty Advisors and not WTMJ Radio or Good Karma Brands. Milwaukee, LLC.