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The Accunet Mortgage and Realty Show 12-15-24

• Accunet Mortgage

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Speaker 1:

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 Wicker.

Speaker 1:

Welcome to the Aced Mortgage and Realty Show. I'm Brian Wicker, licensed real estate broker with Accu Net Realty Advisors and the majority owner of Accu Mortgage, where my individual NMLS ID number is 2 5 9 6 1 0. Here again today with my son David Wicker, who's president of Accu Net Mortgage, and his individual N ML S 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 . Well, David , um, on last week's show, we were talking about how the jobs report kind of didn't hurt us, and that was, you know, one of the pillar, one of the big economic reports every month that has the opportunity to Royal Mortgage interest rates. And this past week we got the other big daddy, which is the consumer price index number, which measures inflation kind of on the broadest level. And if I'm recalling, I'm going from memory here, was 3.3% year over year .

Speaker 3:

Yes. 3.3. Yeah.

Speaker 1:

Which was

Speaker 3:

Right at expectation.

Speaker 1:

Right At expectation. And , uh, so it was kind of like ,

Speaker 3:

That was core, by the way, just to say, oh , 3.2 was core was 3.3 , that headline was 2.70

Speaker 1:

Even better. So, you know , remember the Federal Reserve is , uh, aiming to get inflation down to 2%. So it's kind of stubbornly stuck in, we're close mid tos , you know, low threes, but the , the , the interest rate kind of yawned at that number. But then for reasons unexplained kind of just faded away or kind of got a little bit

Speaker 3:

Worse. Markets remain unconvinced, right? Like we keep stepping on the inflation scale and like, awesome, we're not getting fatter, but we're not getting thinner.

Speaker 1:

And , and so, you know, last week , uh, we closed last week at 6.875 on a 30 year fixed rate with 25% equity and all the other Right stuff , uh, which had, at that time a , um, no points in a $400 credit for closing cost from good old ECU net . And this week that inched up to 6.99 <laugh> for, for no points and a $400 credit. And , uh, hold

Speaker 3:

On, let me listen. For the number of our listeners who called off the house hunt in this last week, oh wait , it was nobody.

Speaker 1:

The payment difference , uh, on a $250,000 loan , uh, between 6, 8, 7, 5, and 6 9 9 is $19 a month. Yeah . Right? So, okay. So it's not as good as last week, but it's

Speaker 3:

Doesn't feel nice.

Speaker 1:

It's still better than it was.

Speaker 3:

You wouldn't have, it's not like if rates had gone the other way. Like, honey, the payment got lower by $19 a month, let's get and do it now. Let's out

Speaker 1:

There . Right? And of course, we could have still snagged somebody a 6.625 with a 6.75 a PR . That would be if you're willing to pay like a 0.1% of interest upfront in order to get that rate . So, you know, still all the, all the menus, all , all the options are on the menu, but just slightly not as good as last week. So you're telling me, David, that uh, this has done nothing to the appetite of home buyers

Speaker 3:

And Well, I, when I, when I, when a buyer asks me, you know, Hey, where do you think rates are going? Where do you think home prices are going? What I, one version that I say is, well, if you would like the least amount of competition, you would like rates to stay where they are or uglier

Speaker 1:

Yeah.

Speaker 3:

To push other competitor , your competitors out of the market 'cause Right? Like, let's use a hyperbolic example. If rates went to 2% on Monday, everybody, I think a lot of buyers would come back and it would get competitive. Yeah. If rates went to 12 on Monday. Yeah .

Speaker 1:

There'd be very few

Speaker 3:

Buyers. Exactly. Right . So if you want your pick,

Speaker 1:

So you want to be , you want ugly. Yeah . Yeah. You want ugly. Okay. So people kinda want their cake and eat it too. Yeah, of course. Speaking of, you know, things like that , uh, I was looking online , uh, Redfin , uh, came out with their most recent , uh, look at the market. They're a large publicly traded real estate broker that has offices in many states, including here in Milwaukee. And so they look at the top 400 metropolitan statistical areas, and they come up with a home buyer demand index. And , uh, over the last four weeks, it was up 8% from a year ago. And they're saying, well , that's largely 'cause of infiltration .

Speaker 3:

The

Speaker 1:

Demand. Yeah. The demand index. They're looking at , uh,

Speaker 3:

I would call that the capitulation index. Okay . Like, I will give up as a buyer waiting for rates to come down. I wanna keep living my life, but yeah ,

Speaker 1:

Go on. Well , but , but you know, they , they , and they attributed it to, Hey , rates were lower than last year at this time. So they're not wrong, they're not wrong , uh, nationwide, and this is where we wanna always point out that , um, you know, local is different than national. And so nationwide they're reporting a four oh 0.1 month supply of homes for sale. And that's a calculation where you divide the number of active listings by the recent , uh, most recent monthly sales number. And so a four to six month supply is considered balanced. So right . From a national perspective, we're at the low end of balanced. But if you look at the five county metropolitan area where we do most of our business, there are 3012 active single family detached in condo listings right now. And so if you divide that by the number of sales in November , uh, we are at a 2.2 month supply. So we are solidly still in a seller's market. Mm-hmm <affirmative>. Uh, and then of course if you, if you drill down, no , nobody's really looking for homes in all price ranges throughout the five county area. Correct. So if you drill down to look at , uh, the folks who were talking about it at the end of last week's show who were shopping for a three bedroom , two bath minimum, you know, home in Waukesha County between four hundred and four seventy five. Yeah. Uh, there are 41 active listings of that description and , uh, over against, but , but there were 42 closed sales in November. So we have a one month supply <laugh> in that micro market .

Speaker 3:

They get eaten up quickly.

Speaker 1:

Yeah. They, they get eaten up quickly. And by the way, if you knock out the listings that already have offers, there's only 12 in that micro market that are on the market without listings. Alright. When we come back, let's talk about , uh, some real deals that we've got cooking that are instructive for our listening audience. You are listening to the Anette Mortgage and Realty Show on AM six 20 WTMJ

Speaker 2:

Home buying advice from the guys who know it best. This is the ACU Net Mortgage and Realty Show with Brian Wicker on WTMJ.

Speaker 1:

Welcome back to , uh, today's show. Thanks for hanging out with us. I'm Brian the elder. That's David , the younger of the wicked men over there. And so one other nugget, David, from the , uh, Redfin , uh, national numbers versus local is that nationwide, Redfin is seeing 24% of sales closing over asking price. Whereas in November, in the five county metro area, according to MLS data, we saw 43% of homes in condos sell over asking. So as usual, all real estate is local like politics. Alright, so you've got a story from the front lines of mortgage lending regarding an FHA loan, federal Housing Administration. Well,

Speaker 3:

Really this is a conversation of a rescue, ah , uh, for a purchase in progress. And the buyer , um, didn't like the way that it smelled perhaps how they were getting to the closing table with the ,

Speaker 1:

Not with us . This is

Speaker 3:

Not with us. We are the rescuer.

Speaker 1:

We are the rescuer. Okay. So they were going with a , you know, brand x , uh, mortgage lender

Speaker 3:

And, and as all smart buyers do, they started with a pre-approval letter. The lender that they were originally working with wrote them a pre-approval letter for an FHA loan at a purchase price up to $375,000 using FHAs minimum down payment, which is 3.5%. And

Speaker 1:

What kind of property is this, David?

Speaker 3:

Good question. This is a duplex two unit . So an

Speaker 1:

Owner occupied two unit , uh, property. And, and

Speaker 3:

I'll for, for everyone on an FHA loan, you can purchase a one up to four unit property and only put 3.5% down using an FHA loan.

Speaker 1:

So that's one of the benefits. And, and just to say it out loud , uh, FHA means it's , uh, the mortgage insurance is provided by the government Yes. By the Federal Housing Administration. And , uh, and the good news, the other good thing about an FHA loan is that your monthly mortgage insurance does not change , uh, based on your credit score. Yes. And so that's very different than a Fannie Mae or Freddie Mac 30 year fixed rate loan, which has private mortgage insurance, not government.

Speaker 3:

Well, and they include in their recipe for the cost of that PMI your credit score

Speaker 1:

Co . Correct. So that's the FHA

Speaker 3:

Does not

Speaker 1:

The big difference. In fact, I , I , I ran a number knowing we were gonna talk about this , uh, on the difference, if you were looking to borrow about $289,500, which would be 3.5% down on a $300,000 purchase , uh, you could get , uh, FHA mortgage insurance , uh, at a six 60 credit score for just $132 a month. But if you wanna put 3% down on a Fannie Mae, Freddie Mac loan, more, more $210 more per month. So, so that's one of it's a big deal. One of the benefits of FHA , uh, is that, you know, you , you're not penalized for your credit score when it comes to the monthly mortgage insurance.

Speaker 3:

I , I wanna , I'm gonna keep going on this story. You know, one of the things, when we are preparing a pre-approval letter for a buyer, we are trying to generate the strongest version of a pre-approval that we can for a home buyer . Yeah. We can generate multiple. But for this buyer, right or wrong, the perception of sellers in the marketplace is that FHA is more fussy than a preapproval that might read conventional. It would seem that in our clients' interaction with their previous lender, the only version of the preapproval letter that they could muster, figure out Yeah . Was an FHA for any loan consultant at ACU net , we would be investigating both if possible.

Speaker 1:

Okay. Yep . Although that, that's a interesting point. I would never wanna switch between FHA and conventional, you know, in that regard. So you kind of gotta make your decision, which way are we gonna go? Well,

Speaker 3:

You can, you can generate it both ways. Well , part of it is then which of these, let's just pretend I have a pre-approval letter for a duplex. Yeah. One is FHA flavor, the other is conventional flavor. You are then deciding as a buyer. Correct. Which of these tools do I want to present to the seller? But,

Speaker 1:

But what I'm saying is you wanna stick with that plan when it comes to FHA versus conventional

Speaker 3:

Upon acceptance.

Speaker 1:

No. All the way through. Because yeah , you don't want to have the FHA, you know, come back and then say, 'cause what is the reason that the sellers don't like it? And listing agents are , um, let's see, trip hazards. Well, yes, no, no chipped or peeling paint. Um ,

Speaker 3:

I think it is incumbent upon us to, here are all the tools buyer, and then they can decide which tool they want to use

Speaker 1:

Co . I would agree with that. And the pros and cons of each. Exactly. The other things are , uh, bro , no broken glass and then chipping paint. Yeah, I already said that. Okay . Chipping or peeling paint. And then the other thing is , uh, if you got three or more risers in a set of steps, you gotta have a handrail. And so, you know, that's why sellers don't like that. But why did FHA , uh, turn out not to be a viable choice in this particular case, when they came to us for the rest , well, they

Speaker 3:

Came to us because they went out and got the accepted offer using their FHA preapproval letter. Okay . From this other lender. Then the lender began to, it would seem actually investigate, well, do you qualify Oh , for this FHA loan at a 3 75 purchase price? Let me share more about how that seemed to unravel with this other lender and how we stepped in. Uh, after this break. You are listening to the Accu Net Mortgage and Realty Show on AM six 20 WTMJ, getting

Speaker 2:

You into the home of your dreams. Here's more of the Accu Net Mortgage and Realty Show with Brian Wicker on wg mj,

Speaker 3:

Welcome back to the ACU net Mortgage and Realty Show Dad , um, describing a buyer who came to us so that we might be able to rescue them from their current lender who in try to get them to the closing table on time.

Speaker 1:

So already an accepted offer. They started out FHA and then kind of discovered after they got started with Lender X that this isn't gonna work out for FHA.

Speaker 3:

Well , well, and not just that. The original preapproval letter was for a 3 75 purchase price. Okay. FHA, this buyer goes out and gets an accepted offer for a three 50 . They're thinking purchase

Speaker 1:

Price made in the shape , because I'm preapproved . Yeah .

Speaker 3:

Well, it would appear that the other lender didn't investigate. Does your income, is your income sufficient? Oh . To afford the monthly payment that you are about to take on along with your other monthly debts.

Speaker 1:

So maybe they just took the borrower's word for how much they made and they didn't do what we do on a rock solid guaranteed preapproval. Exactly . Which is actually document with case . Imagine that Case stubs and w twos or a verification of employment. Yeah. We're not gonna take your word for what you actually make. We're gonna verify that. So sellers Yeah . Beware. And, and listing agents when you're looking at a preapproval letter, yes. You would like to see the, the lender state. I have verified your credit, I have verified your income and I have verified your down payment, all of

Speaker 3:

Which are important. All

Speaker 1:

Three are important, but go on. Alright . So, so they kind of blew it on the income.

Speaker 3:

Well, they didn't just get it a little bit wrong. They got it a lot, a bit wrong when we did the math. Their , the , this borrower's income would be, the term is debt to income ratio. The ceiling for that is 50% of your gross monthly income. This borrower would be at 62%. 62. That's behind . That's not a little wrong. That's a lot wrong.

Speaker 1:

Okay.

Speaker 3:

So this other lender perhaps realizing, boy, we really got this income thing. You can't even say wrong. They just didn't do the math. Right. They're like, you know what we'll do, we will put your parents on the loan as a non-BAR, non occupying co borrow co

Speaker 1:

Borrower. That's a mouthful. But it just means, hey, you're on the loan, but you're not gonna occupy the

Speaker 3:

Property. This is, this is David's buying a house. He calls Brian and says, dad, will you co-sign for my mortgage? Okay . And Brian says, I would love to. Parents are willing, but wait, here's the thing. It's a duplex dad. Ah, on an FHA loan. If you put someone on the borrowed money who's not , who's not gonna move in? That changes the down payment requirement to what? From 3.5% to 25%.

Speaker 1:

Okay. That's a lot bigger down payment. Alright . So, so FHA kind of all of a sudden becomes very unattractive. So now we switch over to a Fannie Mae, Freddie Mac conventional.

Speaker 3:

Now we can Yeah. We pivot to a conventional loan. Uh , I think late last year, Fannie Mae and Freddie Mac , uh, made more broad. Made it a little easier to finance a duplex. Okay . A multi-unit home on a conventional loan. So this borrower qualifies to make a 5% down payment on , that's

Speaker 1:

The minimum down payment on a duplex for Fannie Mae and Freddie Max . A little bigger down payment, but that's still a lot better than

Speaker 3:

25%. Yes. And we are putting their , uh, parents on as co applicants. Okay. Uh , but, and here's the most fun part. Uh, we're gonna try to get this all wrapped up by Friday. Oh my. The 20th. Okay. And we just might, because the kicker in all this, the other lender having struck out once, struck out twice, said door number three. Would you like 7.99% with points with underwriting fees? Whereas this is actually Tim Holman's story. Sometimes host of the Academic Mortgage and Realty show, Tim was able using a seller credit that was part of this contract, ah , get our client 6.99%. Ooh . Or for those doing the math at home, an entire 1% lower Wow. With the ACU net team. So we're gunning for it for Friday for this client. We've got the appraisal ordered, we've got, we're into underwriting. We very well may get to the closing table, come this Friday with a superbly better plan than this client's original lender. Will

Speaker 1:

They maybe push it back if it's close ? Or are

Speaker 3:

They, if it were me, I I would definitely be asking that . Yeah . I would try as the buyer . But this is to your point, it's the danger is too much of a word. 'cause there's nothing overly perilous in real estate and mortgage, but just any seller who is taking a pre-approval letter at its face Yeah. Without much meat on the bone , which without , without much depth Right. Risks a slip shot job Yeah. Or

Speaker 1:

Surprise by the lender . Unwelcome, unwelcome surprises. Yes . You know, once , uh, you, you kind of get into it. So the moral of the story is , uh, yeah. Let's, let's be serious about this with home buyers and let's get you fully verified Yes. So that you as the buyer, because I mean, this is very unpleasant for the buyers as well, I'm sure. Oh yeah. Tumultuous. Yes . They think they're set and now they're not. Alright. When we come back, which of your stories do

Speaker 3:

You wanna go to ? I have , I have one. You decide either a condo story or I saved my client $1,100 on their property tax bill for their new house. You

Speaker 1:

Pick . All right . I'll pick that when we come back. But right now it's time to turn it over to the WTMJ Breaking News Center.

Speaker 3:

Don't break the

Speaker 2:

Bank to get into a house. Back to the ACU Net Mortgage and Realty Show with Brian Wicker on WTMJ.

Speaker 1:

Welcome back and thanks again for joining us. Uh , today. I'm Brian Wicker , uh, the elder. That's David Wicker, the taller, younger, more handsome of the wicker men. And so David, it's that time of year where property tax bills are just coming out. Yeah. And so when you're closing on a real estate transaction, that can matter. You said you've got a story that relates to property taxes. Tell us the tale .

Speaker 3:

Well, and this is a story about property taxes, but it's also a story about money. And for first time home buyers , I think every dollar matters, perhaps more Sure . Than any other flavor of buyer. Perhaps also because it's Christmas time . So the standard WB 11 contract Yep . Sanctioned by the state of Wisconsin. The

Speaker 1:

State of Wisconsin. Yeah . Written and approved

Speaker 3:

As collaborative line line 365 real estate taxes shall be prorated at closing based on check any of these boxes. And for my client, they checked the box in the line below at 360 6, the net general real estate taxes for the proceeding year comma , or the current year if available. Uhhuh <affirmative> . So my client closed on their new home purchase on Thursday, December 12th.

Speaker 1:

Okay.

Speaker 3:

It is exactly that weekday time of year where we're hitting refresh on the municipality website to be like, are the taxes available? Are the taxes available? Are the taxes available? Okay. So we did up the numbers. They're closing Thursday morning at 9:00 AM to be ready for that closing. We have have documentation prepared , uh, Wednesday, late in the day. What also happens late Wednesday is the new property tax bill for this house gets posted online. Okay. And it didn't just move a little bit, dad, the property taxes for this kind of nicely redone house jumped $1,200. Oh. From just $3,600 a year to $4,800 a year.

Speaker 1:

Okay. That's a , that's a , you know, 20. No , no, that's a 30 30 . Is that a 30% increase? Yeah. Yeah. 33 maybe. Yeah. That's a 33%

Speaker 3:

Increase. And so our , my clients sit down on Thursday referencing an old, now old property tax bill. Okay. And are given a check. This is what happens at closing in Wisconsin in December. You're buying a house in December. The title company will likely hand you the buyer a check to go to then turn around and pay and pay the property taxes to the municipality for, in this case, 2024.

Speaker 1:

That's if you're escrowing for taxes. Correct . Well , maybe , maybe either way. I

Speaker 3:

So that check on late Wednesday, we thought the check that the buyer

Speaker 1:

Should get, should

Speaker 3:

Get, was gonna be 30, 3600 .

Speaker 1:

Okay . But , but now we have the bill in hand

Speaker 3:

And it's $4,800. So

Speaker 1:

What'd you do?

Speaker 3:

Well, what was about to not happen was a modified increase in the proration from the seller. Right, right. Because in this

Speaker 1:

One , the seller's supposed to pay for the taxes up until the day of closing. And,

Speaker 3:

And they thought they'd be paying the bill based on last year. Oh , okay. And honestly, if they had closed on Tuesday,

Speaker 1:

Yeah, they

Speaker 3:

Would've, they would've. But now we know, 'cause it says right there in the contract or the current year, it's like, no, no, no. Sellers, your proration needs to recalibrate. Okay. To this now higher property tax bill .

Speaker 1:

So their buyer's agent steps up and says, oh, we gotta re renegotiate this. So we help

Speaker 3:

With the assist from the ACU net team. Okay. And our partners at lakefront title, because we look at the contract, the the seller side wasn't exactly

Speaker 1:

Anxious

Speaker 3:

Over investigating. Oh, is the new tax bill available? Right , right . And and in terms of timing, this is a , uh, a fun example because the dollar amount in the jump is big.

Speaker 1:

Yeah . It's not a dozen dollars. It's

Speaker 3:

Exactly. If it was a dozen dollars, it's like, welcome to owning a house. Right. But with this large, you know, increase. The, the funny way that I phrased this to our, to everybody was well , your closing's at 9:00 AM We probably need to hit refresh at 8:59 AM just to make sure on the municipality website before I walk into the closing so that we can honor. Whoa . Do we have the current year or do we not, you know, 60 seconds before you walk in. Yeah , yeah . Sign your name. And I would say if we weren't paying attention to this important detail, buyers would've had to come out of pocket for the extra, well, let's say it this way. Had they closed on Tuesday, they would have had they've been Yeah . To have shown up with the gap. 'cause we would've been referencing last year, not this year . So a lucky break for these buyers.

Speaker 1:

Yeah. So happy for the buyers, which are our clients. Yeah. Yeah . Not so happy for the sellers. It's , but it's like, that's so sad . It , it's ,

Speaker 3:

You say happy, I say contract. There you go. Because this is what everybody agreed to and they agreed to the closing date itself. The fact that the numbers got updated is , yeah. It doesn't feel nice for the seller, but that's what you agreed to. And Well , and we kind of had to, you know, do a little pointing like that's , it says , Hey sellers, I understand you don't like it, but I kind of don't care. 'cause that's Yeah . This is what the contract says.

Speaker 1:

Yeah . Very nice. Yeah . Well that's good news for them. Alright , so , um, when we come back, you've got another story , uh, about a condominium, which is , uh, one of our

Speaker 3:

Buyers who bought this place back in 2019 was now turning around and selling this condo. 'cause they'd like to go move and buy their next place. The heartburn, oh . The other end of the condo living that we allude to a lot of times when any of our buyers are considering condo. I'll get into that after this break. You're listening to the Anette Mortgage and Realty Show on AM six 20 WTMJ.

Speaker 2:

Important home buying questions and answers you can count on. This is the Accu Mortgage and Realty Show with Brian Wicker on WTMJ.

Speaker 3:

Welcome back to the Accu Mortgage and Realty Show. Uh, dad , um, this is the proof almost of a conversation that we talk about from time to time about the pleasures of condo living. Oh yeah. That it's not just about buying it, it's also about living in it and keeping it , um, in okay. Condition. Right. 'cause you're,

Speaker 1:

You're throwing in your lot. It's not like you're owning a single family home where you decide when to repair the roof or, you know, fix the foundation or whatever. It's like,

Speaker 3:

Well, and this is perhaps too in the weeds, but especially for condo associations, the insurance world to me, seems to be the hammer that is driving associations to kind of, oh , step up , get with it on repairs and whatever that need to happen because Right. If you've got a bad roof and your insurance provider for the whole association's, like, we don't like how old your roof is and we'll give you below mediocre coverage if it blows off in a storm. Right. That compels a lot of associations to like, step

Speaker 1:

It up , figure it out, get it done because they have to. Or if you're in the state of Florida , uh, I don't know if they've, you know, done anything about this. They're talking about perhaps changing it, but it's at the end of this month , uh, the new law kicks in and this all has to do with the , um, condo collapse. Yeah. In Florida. Yeah. That, okay. Uh , associations you have got to get all your repairs going. Yeah. And no ifs ands, or buts, you know, and I think if it's, if , if your condo is , uh, I'm , I should have looked this up before the segment, but th 30 years old or something like that. It's like , you gotta be on top of it. And so there's a lot

Speaker 3:

Of , or prove that it's okay.

Speaker 1:

Well right. You gotta have your engineering reports and all this kind of stuff . So it's getting serious there in Florida for condo owners. But what's the scoop on this particular ,

Speaker 3:

Uh , so for my client, we helped them buy this condo back in 2019. Hunky dory . Probably a light touch at the time in 2019 for

Speaker 1:

A condo review. Yeah.

Speaker 3:

Correct. Then our buyer living life joins the association board. Ah . This development has four structures of which there are then units, many units within the structures. Okay.

Speaker 1:

So four buildings. Uh , and there's multiple units per building. I'm , I'm tracking.

Speaker 3:

We, my client wants to sell his unit 'cause he wants to go buy a new property. Single family home, I think probably out in the suburbs. Okay. The current status that he is privy

Speaker 1:

To. Yeah. Because he's on the board is

Speaker 3:

Because he is on the board, is, boy, these all need new roofs. One of the four structures has a new roof. It's his unit.

Speaker 1:

Oh, that's good. Or his,

Speaker 3:

His building. His building. The other three don't. And he has listed his, his his unit for sale. Yeah . Unit for sale. He has a buyer and he has an accepted offer. Oh . And I get the phone call about something completely different, but he kind of brings me in that the buyer working with their local bank, boy, they're really having a tough time figuring out the financing for my buyer Yeah . To close on my house. And my rather frank diagnosis was, I think they're dead. They just don't know it yet. Oh . Or they haven't admit , they haven't admitted it to themselves. Because if a lender under the new, you know, Fannie

Speaker 1:

Mae pretty heavy hand . Yep . Yep . Of say , let's make sure condos are in good condition structurally. And, and you know,

Speaker 3:

Which is good. Like, let's just, I know it's painful. Yeah .

Speaker 1:

But like mechanicals and roofs and all that. So does the board have enough money to do the other Yep . Oh,

Speaker 3:

And they have an, even, even rendered the special assessment to the occupants.

Speaker 1:

They didn't raise the money to fix the other three,

Speaker 3:

I think they did in our client's building. I think they did get everybody for a special assessment. 'cause they put the new roof on. I don't believe the association has gone to building two, building three, building four to ask everybody, please pitch in so we can put on a new roof . Oh boy . And, and this is what I shared with our, our client who is the seller, was like, I am willing to bet that this buyer won't be able to a a and furthermore, you'll be humored by this. The buyer is putting a 70% down payment Oh my . On this.

Speaker 1:

Okay. But unit , but still they're ,

Speaker 3:

It doesn't matter. Yeah. Yeah . You know, I should say Fannie Mae and Freddie Mac aren't differentiating as to the , um, down payment with regard to the health and safety of the building itself. Of the

Speaker 1:

Building

Speaker 3:

Itself. If it , if it collapses, doesn't matter what your loan

Speaker 1:

To value is. Yeah . This , this isn't a collapse . I know . Just wanna make sure that, you know, the whole thing is healthy and that there aren't, you know, surprises.

Speaker 3:

My , the moral of the story for me is a blind eye doesn't fix what needs to get done, especially as you're a seller.

Speaker 1:

Alright. When we come back , uh, let's just do a quick review as we're coming up to the end of the year. Yeah . What it is that we can do at Academic Mortgage, what we're doing every day to help buyers get in that best possible position , uh, when they're in a competitive , uh, market situation. Our competitive offer situation. You are listening to the Academic Mortgage and Realty Show on AM six 20 WTMJ.

Speaker 2:

Find a place to call home without the headache. This is the ACU Net Mortgage and Realty Show with Brian Wicker on WTMJ.

Speaker 1:

Welcome back. And , uh, in this last segment of our show today, just wanted to recap what we're doing every day to help our buyers get in the best possible position to win. Because we've, in a , in a lot of the markets where our buyers are shopping, especially this time of year when inventory is a little tight, it can still be competitive. Right? Not , yeah . Not a lot for

Speaker 3:

Sale, especially for nice houses.

Speaker 1:

Yeah. Yep . That's right. The nice houses always seem to attract more than one offer. Well, you know, so the best thing you can do if you've got the means, is to write it as a cash offer even though you're getting a mortgage. Right. Of course . That's perfectly okay. The , the Wisconsin offer to purchase accommodates that and says, Hey Mr. Seller, you gotta let the buyer'ss lender get an appraisal in there, even if it's a cash offer. Yeah. Okay. Um, and by the way, 21% of offers in November and Southeastern Wisconsin were cash offers. So, you know, most people it works don't have that , uh, luxury. Yeah . Uh, so let's say, you know, you have to write with a financing contingency. The next best thing I think we can do is to say, Hey, let's look at the most you could possibly put down Yes. You know, I know

Speaker 3:

Strength is best.

Speaker 1:

Right. Because, you know, a hundred percent down payment is a cash offer. So Yes. You know, can we get to 50% that that's better. Right. And I can guarantee you that

Speaker 3:

It's an implicit, it , I, I've begun to call it, it's the spouse rule. What's the easy way late at night that you can look at your spouse and be like, well honey, but this person's putting half down. Right. That's easy to

Speaker 1:

Remember. That's, that's a , that's a strength. And so, you know, 20% down is important in people's, in seller's mind threshold. Yeah. It's like, oh, they got a substantial down payment. All other things being equal. Yeah. You know, that 20% down is gonna be to 5% or a 3% or 0% down. Yeah . It just looks more , uh, uh, fragile. So, you know, let's say that we, you know, you have money in your bank account and you're comfortable putting 10% down, but we say, Hey, you know what? You've got this IRA money over here that we can verify. Yeah. And you could use it if you wanted to. Yes. But you aren't compelled to. Let's verify that though. As long as we verify it. Yeah. We can then write that rock solid guaranteed pre-approval letter and say we have verified that you have sufficient assets to put 20% down. Yes. You don't have to.

Speaker 3:

I am capable. Do I want to? But you're no

Speaker 1:

Capable. Yes. And that's, you know, that's probably the smartest thing we can do is help people realize, you know, bigger is better. Doesn't keep you from putting 10% down in my example, but let's put your best foot forward and show the biggest down payment possible. Um, the next cool thing that we do is, hey, you're about to write an offer on 1, 2, 3, 4 Maple Avenue. Mm-hmm <affirmative> . Let's put that through the Fannie Mae, Freddie Mac underwriting software. Yes. And see if that nice computer system will grant us some appraisal relief. Yes. Our favorite thing is when it comes back and says no appraisal is required. Yes. Because then we can put that in bold, highlighted in yellow. Yeah. Yeah.

Speaker 3:

And it requires a certain price. It is not a blanket waiver, but given that you are writing a contract at a specific number, we can run that through the software to match, to be like, if the seller says yes to this number, let us declare no appraisal

Speaker 1:

Needed , no appraisals needed. Yeah. That is very comforting to sellers. 'cause that's a big unknown, right. If you're writing your offering and you're saying, Hey, I'll buy your house for 400,000. I know it's listed at three 90 . It ,

Speaker 3:

It helps meet the smell test right. With a seller. Honey, they're offering us x Well, but can they really pay us this much? Will it appraise for this much to be able to provide comfort that it's not only that can I offer you this number, but I can show up and pay you it too . Because

Speaker 1:

The other alternative is, you know, if you check on the appraisal contingency box, yeah, I'll pay you 10 grand, 20 grand over asking, but it's gotta appraise out for that number. Ah . Now that's a , that's a wild card that, you know, you don't control. So that's helpful. Sometimes though, we don't get the appraisal waiver. Many times we don't get the appraisal waiver, but we can still do the math and show both our buyer before they do this and then we can put it on the preapproval letter that, hey, you know what, you can still afford this financing for which you're pre-approved. Even if the appraisal comes in, fill in the blank. $10,000 lower than the agreed upon offer. Yes . $15,000 lower. That is a lot of comfort , uh, to the seller as well, because the bar is not so you

Speaker 3:

Can deliver what you said you would as a buyer in price from the very

Speaker 1:

Beginning. That's right. So those are the types of things that we like to , uh, help our buyers understand as options. And then put that in writing , uh, when it's time to put that offer in. Yeah. Alright. That's all the time we have for today's show. Thanks for tuning in folks. If you or a loved one or a friend or neighbor coworker needs help in the home buying process or refinancing for that matter, all you gotta do is click on that blue button@anette.com. We'll see you back here. Same time next week. You've been listening to the Anette Mortgage and Realty Show on AM six 20 WTMJ. The

Speaker 4:

Proceeding was a paid program. Advice and opinions expressed during the ACU Net Mortgage and Realty Show are solely that of the host or guests of Anette Mortgage and ANet Realty Advisors and not WTMJ Radio or Good Karma Brands. Milwaukee, LLC.