Speaker 1: 0:00

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: 0:20

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: 0:34

Welcome to the Accu Mortgage and Realty Show. I'm Brian Wicker, licensed real Estate broker with ANet Realty Advisors, and , uh, also the majority owner of ANet Mortgage, where my N ML s ID number is 2 5 9 6 1 0. I'm here again today as usual, along with my son David Wicker, who's the president of NT Mortgage, where his individual NMLS ID is 3 2 8 8 4 7. Well, David, we had a busy economic , uh, uh, Newsweek this last week. Yes . And , uh, let's just quickly grind through that and tell folks where mortgage rates came out at the end of all of this stuff. Uh, we had two inflation reports. The consumer price index number came out, I believe it was on Wednesday. Mm-hmm <affirmative> . And how did that come out , uh, versus expectations, David?

Speaker 3: 1:22

Uh, my so expectation for month over month was 0.3%, and that actually arrived at 0.2%. That's actually for both Core CPI and headline month over month CPI. So haa , you know, we, we were bracing for what it was, and it came in a little bit better. Not a lot better, but it's better than the other direction.

Speaker 1: 1:48

And the reason we care about inflation is because , uh, inflation is the enemy of long-term rates like mortgage rates. And , uh, also because the Federal Reserve wants to see that number get down closer to 2% the year on an annual basis. The year over year , uh, CPI number, consumer price index was 2.8%. Uh, so it starts with a two, but , uh, not, you know, still got a ways to go. Um , then we got the producer price index on Thursday. That's inflation at the wholesale level that came in at zero , uh, from month to month, which was a lot better than the expectation was for a 0.3% increase. But , uh, year over year, I believe the number was three point up, 3.2% in inflation at the wholesale level. But again, that was better than expectations. Normally, that would've been good for rates, but we kind of got a yawn. Right. Why did we get a yawn?

Speaker 3: 2:46

Uh , well, 'cause I think there's still a lot of , um, un unknowns. Can I just say the other, just proof that there are so many crosscurrents that come to influence the bond market. I was reading this week that German debt ceiling negotiations were factoring in to some bond market participants. Whoa . 'cause you know, hey, is Germany going to raise their debt ceiling, are they not? So it's like that, that was nowhere on my personal radar. And so, and I, and it's nowhere on the radar of home shoppers either. But these are all the things, these are all the things that can , that can go into the recipe of, you know, what are rates doing. It's not just one thing. It's a whole cauldron of data.

Speaker 1: 3:38

And , uh, the other interesting thing that came out on Friday was the University of Michigan Consumer Sentiment Index. And , uh, that fell to a 29 month low for the month of March. The reading was 58 down from a reading of 65 in February. But catch this, I don't know if you saw this, David, a year ago, that sentiment index in March of 2024 was 79. So , uh, that's a 27% decline in consumer sentiment from a year earlier. And, you know, guess what? They're citing tariffs and , uh, fear of inflation, a couple of other nuggets there. Cons . They measure consumer expectation of what's inflation gonna be, you know, what are prices gonna be like a year from now? And according to that University of Michigan survey, consumers are thinking prices will be 4.9% higher a year from now. That's ,

Speaker 3: 4:31

I mean, for everything. Well, for as like, for both the price of beer, gas, and, yeah .

Speaker 1: 4:38

Uh , eggs.

Speaker 3: 4:39

Eggs,

Speaker 1: 4:40

Yeah. Everything. Uh, and , and , uh, and catch this, that's the highest expectation reading for a year forward since November of 22 when inflation was actually high. Yeah, you're hitting your head.

Speaker 3: 4:52

No, it's just, it's because the American economy, 70% of the American economy is all of us spending money. And so almost wildly how we feel then implies what we spend. And it's just, it's,

Speaker 1: 5:10

It's a circle.

Speaker 3: 5:11

Well, right? Oh, I think prices a year from now will be this. And so that impacts how I behave today. And then it will also influence what the world looks like a year from now. It's just this circuitous , uh, approach.

Speaker 1: 5:24

Okay. So the , the other thing that I think is influencing some people , uh, you know, and , and also interest rates is the beating, mostly the beating that the stock market has taken the last couple of weeks. Yeah. That's been generally helpful for mortgage rates because when investors sell stocks, then they got money and they go, let's put it in something safe like US treasuries or, or mortgage backed securities. And so that's probably been the , um, biggest influencer on mortgage rates . When we come back from this first break, I wanna tell a story about some clients who we helped buy a home last year, and now I just locked them into a 5.8 7 5 15 year fixed, oh , with super low closing costs . And kind of go through that whole thought process and got other stories that tie into the whole mentality of , uh, different people in the marketplace. Rice . Now, do you have some stories to share this week, David?

Speaker 3: 6:19

Active people, people are doing the thing, getting out there and buying a house so that, like your client, we can refinance them in chapter two and chapter three as they continue to own that home. I'm looking forward to hearing that story. You are listening to the NT Mortgage and Realty Show on AM six 20 WTMJ

Speaker 2: 6:38

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: 6:47

Welcome back and thanks for tuning into this week's show. I'm Brian the Elder. That's David the younger over there. So David , um, I was looking through my list of clients who we helped last year and , uh, came across a couple that we helped purchase a home their next home. They were already homeowners and they bought in June of last year, one rates were up a little bit. And so we used the tool called the Temporary Buydown , uh, where it is a 30 year fixed rate loan that has a long-term interest rate in their case of 7.5%. But for the first year, for the first 12 payments of the loan , uh, acuate took money from selling their loan on the secondary market. And we put that money into a payment subsidy account so that for these first 12 months of that loan, they were paying at an effective rate of six and a half . And the difference was a $349 per month savings. Nice. And the thought process was, Hey, you know what? Sometime in the next year, rates should come down. And so at that time we'll grab a lower rate before your payment resets to that long-term rate of 7.5%, which was gonna happen in August. Well , so

Speaker 3: 8:04

Go ahead , sorry . But on that temporary buydown, when it's the right tool for the job you gave them, 'cause I think you're about to tell me that they're refinancing now before that first year ran out. Right. If they , if they used that whole year though, that's a $3,600 headstart in Oh yeah. Savings compared to if they just took, you know, the

Speaker 1: 8:29

More like 4,200 more , more like 4,200 . Oh , okay. <laugh> because it's 3 49 a month.

Speaker 3: 8:34

Yeah. Do you wanna keep $4,200 in your pocket for the first year that you own this house? Yeah . Ev every homeowner says, yes, thank you. Please tell me more. But anyway , so, but you, you reached out to them 'cause they didn't, they didn't need all 12 months it sounds like.

Speaker 1: 8:52

Well, and here's the other cool thing. That money that is sitting in the , uh, payment subsidy account, even though we're gonna pay off that loan early, they still get that money.

Speaker 3: 9:03

Okay.

Speaker 1: 9:03

They still get the $349 times four. So what is that about? Uh , $1,300? What's gonna happen when we pay off that loan is the money in that payment subsidy account is gonna get subtracted from the principal balance. That's how they're gonna get the money back. Um, and , and so they had had a home that they owned , uh, and we did a bridge loan on it to help 'em buy their new home last year. Okay . That home subsequently sold. They got a bunch of money even after paying off their existing first mortgage in the bridge loan. And so they did do a principal reduction on their current loan. And so now as we're, you know, engaging in conversation last week, they're like, yeah, you know what I'm thinking about paying down the principal balance even more. Okay. And then them starting to shoot him some numbers and he's like, and you know what? I think I'm gonna go, we're interested in looking at a 15 year fixed

Speaker 3: 9:57

Wait

Speaker 1: 9:58

The third year.

Speaker 3: 9:58

Go ahead . Before , before the 15 you had to hold back. It is, it is in our nature when a client says we can't help it 'cause we're mortgage bankers, Hey, I'm thinking about paying down the principle balance of my current mortgage. And then Brian and David both think to ourselves, well, why is there, there's nothing else. And you must have being the, being the good steward that you are, you're like, however you would like to have your mortgage, I'm happy to help you. I would imagine though , in your mind you were like, really? There's nothing else. You wanna use this money for nothing? There

Speaker 1: 10:33

Was, there was kind of a psychological numbers like, if I do this, then I can get my payment under 4,000, including my taxes. Well, that was the other interesting thing. Uh, the , the property taxes went up fairly significantly , uh, you know, when they got the bill in 2024 compared to what we were escrowing for. Yeah. And folks, when that happens , um, the mortgage servicer actually advances the shortfall , uh, outta Yeah .

Speaker 3: 11:02

If your , if your property taxes go from 4,000 to 6,000, yeah . They'll send out the $6,000 bill and then they'll say to you, the homeowner, Hey, we floated you the $2,000 difference. You need to, we need to make up for that this monthly. Yeah. We need to make up for that.

Speaker 1: 11:18

And it's about in April when, when , uh, most mortgage servicers do their escrow analysis on Wisconsin loans. And so I was just educating 'em and saying, Hey, you're gonna have this comeuppance on your property tax escrow account anyway . So by doing the refinance, we're gonna take care of all that in , uh, one fell swoop. Now, as it turns out, as we started bending the numbers, so like, Hey, you know what? Wait ,

Speaker 3: 11:41

Wait, wait. So you, so you just, you were like, sounds good. You wanna make the principle reduction. It's just as is always the case. Like if a client invites us to, let's talk about paying down your balance or not. But it sounds like for them they had that bogey and so you were like, sounds good. Let's make that happen for you.

Speaker 1: 12:00

No, no, no. I , I said, well, let me , let me give you some information. I said for, for every , uh, remember now we got 'em a 5.875 , uh, 30, a 15 year fixed. And in their particular circumstances, 'cause they have a lot of equity and excellent credit , uh, the total loan cost to do that one last week was $112. That's right. <laugh>. Wow. Well , for one thing, we don't need an appraisal. The Freddie Mac computer system gave us an appraisal waiver and uh , so that's nice. That saves us $475 right there. And , uh, hey, you know what? I see we're running up against the clock here. Oh . When we come back, we'll just finish off on, hey, what is the math for , uh, paying down extra principle when it comes to recouping that expense? We'll cover that right after this. You are listening to the Academic Mortgage and Realty Show on Wisconsin's radio station AM six 20 WTMJ

Speaker 2: 12:54

Getting you into the home of your dreams. Here's more of the ACU Mortgage and Realty Show with Brian Wicker on WTMJ. Welcome

Speaker 1: 13:02

Back. Uh , David, we were just talking about , uh, some clients , uh, who I was helping this last week refinance from their 30 year fixed rate with a temporary buy down into a new 15 year fixed rate loan. And the reason that they're interested in doing that is , uh, they can afford it now. Uh , you know, two incomes and good incomes , uh, and their payment's not gonna go out that much , uh, by switching to the 15 year fixed. And the discussion was turning to, well, should I pay down the principal balance by, you know, you name it, 10 grand? Uh, and the math that I shared with them is that for every thousand dollars that they put down towards the principal , uh, it changes their payment by $8 and 37 cents a month. So there's lots of different ways to look at numbers, but one way I think most people can get their mind easily around is, Hey, how many months of lower monthly payments would it take me to recoup that thousand dollars that I just wrote a check for? Yes. And the answer is 119 meaning 10 years. Yes . Just one month. Shy of 10 years. It's even longer. If you're looking at a 30 year fixed rate loan, it takes like 13 and a half years to get the money back. Now, surely if you borrow more money, you will pay more interest. There's no doubt about that. Uh, but then, then he said, you know what, I'm looking for a financial planner. 'cause what's really on his mind is he's sitting on some cash, I , I didn't ask him exactly how much, but maybe like 25 to $40,000. Okay . And he's kinda like, what should I do with this money? I could put it towards my principal balance. Okay. But he's got three young kids under the age of five. And so I threw out there, I said, you know, I'm not a financial advisor, but you should talk to your financial advisor. Yeah. Because maybe you could put that money, some of it, all of it into a 5 29 college savings plan. Right. 'cause nobody ever saved too much for their kids' college education. Yes. And so you could put that in there. And then it's my understanding that the money grows tax free . You know, and these kids are young, so it's a long time for that to grow. Um , and as long as you take it out for , uh, educational purposes , uh, down the road. So, so we are going down the road of don't bring any money to closing right now. Yeah . And he can change his mind. Oh, the other thing we looked at is do you wanna do a 5.5% 15 year fix with some closing costs and a little bit to buy down the rate to that level? Uh, it would take four years of lower monthly payments to recoup the extra upfront cost of getting the five and a half rate . So still an option. Go ahead.

Speaker 3: 15:50

The the other benefit is by trading in their old 30 year fixed for a new 15 year fixed, I would imagine that the interest savings between those two is a hundreds of thousands of dollars benefit to them, which kind of feels like eating your mortgage vegetables. Yeah. But it is such a big number that you, like every month that he makes that payment. Now sure. It's a little bit higher 'cause it a 15 year, you're putting the same amount of money into a shorter amount of time, so the payment's gonna be more Yeah . But the amount of savings, just not paying the interest is he's gonna high five himself every month for being like, good job by us for not, you know, incurring the cost of the borrowed money as much.

Speaker 1: 16:41

Correct. Yeah. The , the portion that you're putting towards principal, that's why the payment is higher on a 15 year fix , is 'cause you're being forced or you're willingly putting that much more money towards principal. Not very many people. I , I mean, I can think of maybe one person , uh, that I've helped buy a home with a 15 year fixed , uh, mortgage. Well, it's a , I would say when most people buy, they're doing the 30 year fixed, then when they come to refi later on Go

Speaker 3: 17:06

Ahead. I , I think, I think but that's, it's sounds like the story of your client, right? They moved in, they got comfortable, the dust settled. Yep . And then, and then when they felt like they had their own personal track record that then made them comfortable to take on this 15 year fixed higher payment. 'cause Yeah, it's kind of , especially if your new next home is the most amount of money you've ever borrowed. Yeah . And then you're like, oh my God, we're gonna take on a 15 year. That is a lot of times one step too many. But if you take it in a progression, it makes arriving to that 15 year a lot more palatable. Eventually. Not suddenly.

Speaker 1: 17:50

O one of the interesting things you shared in our conversation was, you know what? We had a five and a half percent mortgage on our, on our home, on our former home. And so it'd be great to get back to that. So that totally an emotional or psychological thing of, you know, it'd be great to get that five and a half , but you know, from a math standpoint and he might still change his mind and go with the five point a half percent. Yeah. Yeah . Right. Because it's a sure thing, you know, so, so anyway, lots, lots of different options and um , it was great, great to have a thoughtful conversation.

Speaker 3: 18:21

That's exactly it. It's like there , this is why we consult. We're not just interest rate regurgitators. It's let's talk about what the point of this plan is overall.

Speaker 1: 18:33

Alright . So , uh, I've got more stories, but let's go to one of your stories. You wanna quickly tease what that one's gonna be.

Speaker 3: 18:39

Uh, my teasing story is I talked to a client, young guy wants to buy a house. And my metaphor was, you can win this mortgage basketball game by one point or you can win it by 11 points. Let me tell you what I meant by that metaphor after this break. But right now it's time to turn it over to the WTMJ Breaking News Center.

Speaker 2: 19:00

Don't break the bank to get into a house. Back to the ACU Net Mortgage and Realty Show with Brian Wicker on WTMJ.

Speaker 3: 19:08

Welcome back to the ACU Net Mortgage and Realty Show. Thanks for hanging out with us. I'm David, that's Brian over there. Dad. I was , uh, connected with a , uh, young guy this week who has a great job working for one of the big four accounting firms and wants to buy a place downtown because of course you do. That's what you wanna do when you've got a job , uh, and doing well for yourself. His timeline though, was on his mind because currently he makes, just for the sake of conversation, he makes about $60,000 a year with his , with his current role here in March.

Speaker 1: 19:48

Okay.

Speaker 3: 19:49

I believe it has been communicated to him or he has an expectation that come June, his income will jump from 60,000 to $80,000. Okay. So a so a healthy bump you pay , he already knows what his monthly payment maximum is. That makes him most comfortable. That's probably about $2,500 a month. Ooh ,

Speaker 1: 20:16

That's a lot.

Speaker 3: 20:18

It is a lot. But you kind of, but when you, that's his absolute maximum. But when you factor in property taxes and HOA dues, it's for the right place. Uh, it that could be a possibility for him.

Speaker 1: 20:31

I'm thinking that would be quite a stretch on a $60,000 income though.

Speaker 3: 20:34

Well, so part of the math that he's thinking of is a payment that approaches that maximum is going to feel a lot more comfortable come summertime. Yeah . When he has the pay increase. What I shared with him though was mortgage lending is like basketball, you only need to win by one. That there is no, that mortgage lending is yes or no black or white. Either you qualify or you don't. For the monthly payment on paper with his current salary, he can close on the new home with that monthly payment. But it but to your, I see your eyebrows as a percentage of his income right now. That's a, that's a a big chunk.

Speaker 1: 21:30

Yeah. It's half isn't it?

Speaker 3: 21:33

Well, it's less than half. 'cause otherwise I would ,

Speaker 1: 21:35

It's gotta be less than half 49 49 is the limit. Okay. Well,

Speaker 3: 21:38

Well, right. But he knows he's in a career field where he knows that his income is going to continue to grow as his, as his responsibilities also grow at his job. So I just shared with him that like for the right house, if it pops up here in March and April, you can win that mortgage game by one point. It's not gonna, as, as anybody who watches the bucks you winning by one doesn't feel good. It feels down to the wire. I always like it when they win by 11 or 21. Yeah. So, but, so, but for this house, for the right house, he can win by one here in March and April if he waits until June , he still has the monthly payment preference that he has. It's just in real life he will win the mortgage game by 11 points in my extended metaphor.

Speaker 1: 22:35

Okay.

Speaker 3: 22:36

But he, it kind of melted his mind a little bit that like Yeah, I can help you today if you want. Is it gonna feel particularly comfortable? No. But part of buying a house is not just for who you are today, but who you will become because he's gonna get this raise in June. I would expect that maybe then at the first of the year , he is probably gonna have another pay bump and maybe as his responsibilities grow over the next 12 to 24 months at his job, if he freezes in time, the monthly payment on this house Yeah . It's going to continue to become a smaller and smaller slice of his income.

Speaker 1: 23:15

So yeah . I I just, you'll have to be very careful, you know, when you're, as you know, when you're cutting it that close Yep . To the maximum payment as to what exactly are the property taxes on this place and what exactly are the HOA dues. Yes . Because those two things, I mean , don't forget about the insurance now. That's not much on a condo, but it's not just a principle and interest. It's still something. It all counts. Um, so , um, speaking of things that are influencing or on , on the minds of , uh, buyers these days, I've got a couple of stories to share. Okay . Um , uh, one is about a , uh, fellow who I know, an acquaintance, I'll call him Florida resident, looking to buy a investment condo in Wisconsin. And then another guy who I talked to, this is my Florida connection, part of the show who just sold his , um, house in Naples. And this is gonna go to the , uh, idea that all real estate is local. It is not the same in Florida or in Naples, Florida as it is in southeastern Wisconsin. Yeah . We'll cover those , uh, stories when we come back. You're listening to the Academic Mortgage and Realty Show on AM six 20 WTMJ.

Speaker 2: 24:28

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

Speaker 1: 24:38

Back and thanks for tuning in today. Uh, David, I got a call, I think it was last Monday from an acquaintance who is now a Florida residence . I knew him from Wisconsin. Um , and he said, Hey, I just got an accepted offer on a condo in , uh, Waukesha County and uh , the purchase price. Um , I think it was right around $300,000 and it was a cash offer , uh, with uh , no contingencies. Okay . Now that he got the accepted offer , he's thinking, ah , boy, maybe I didn't really wanna pay cash. Good thinking I said, said the mortgage guy. Yeah. Did well

Speaker 3: 25:15

Yeah, of course . Otherwise he wouldn't have called you on Monday. Exactly. But Right . Uh , a lot of times in the condo specific form, a buyer can check off a, and by the way, I'd like to review the condo documents. Was that also waived in his offer?

Speaker 1: 25:33

I never got the offer Oh. On this, in this particular case. Uh, but uh, the path we started to go down was, okay, well, you know, do you own your home in Florida? Your primary residence? Yeah. And I'm thinking maybe I should borrow against that. Okay. So we started going down that path. Uh, the drawback of borrowing money in Florida is that title fees are more expensive. Uh, and there's also a mortgage tax , uh, because Florida doesn't have a state income tax. So they think of other ways to collect taxes. Yes . And that's one of 'em . So the closing costs are relatively high , uh, in Florida. But the other benefit would be we could lend him a hundred percent of the purchase price. Okay . Yeah . Because no cap on that. If he wanted to borrow on the , uh, condo that he's looking to buy for an investment property, you really gotta put 25% down. Okay. But that's still better than putting a hundred percent down. Yes. And , and so as we were kind of wrapping up that initial conversation, I said the other thing I think, 'cause then he came up with the idea of delayed financing or maybe I'll just pay cash and then I'll come back and get a mortgage on one of the properties later. And I said , uh, here's a tip. Talk to your financial advisor about what the tax consequences might be if you liquidated $300,000 out of your brokerage account broker . Yeah . And the answer that he came up with the next day when we talked was, Hey, I found out that um, I'd have to pay 20% <laugh> of capital gains. Yeah . So 60 grand. So I'd have to take out, you know , 360 in order to pay for the 300. So that all of a sudden became very unappealing. But this now goes to the mind of, hmm , you know, this guy's a retirement age. Oh , oh by the way. He was also thinking, you know what, I get some private note income, private note income. And I said, okay, we can do that. But we would need to get a copy of the note to make sure you know what the terms are and what you're getting in monthly payments. And then we have to show that you've received those payments for 12 months by showing that the money came into your bank account . What bank account are they go into my checking account and I'm thinking that is gonna be a Pandora's box to get 12 months worth of anybody's bank statements. There are gonna be other things that happen in that account that's gonna make that super painful. So I pretty quickly convinced them we should use IRA income. Yeah . But anyway, none of that became important because when I talked to them the next day, I think that was on Tuesday, he shared, you know what? I'm just getting really concerned , uh, about this whole transaction and I think I'd like to get out of it. To which I asked him, yeah, go ahead. You or you . Well,

Speaker 3: 28:37

Like what was the impetus of, of

Speaker 1: 28:39

That feeling acquiring

Speaker 3: 28:40

This pro ? No, acquiring this property in the first place.

Speaker 1: 28:43

He had a relative who was gonna live in it. So it was gonna be kind of a, you know, I'm gonna rent it to a relative kind of a thing. I'm gonna do a good deed and have a relative rent it. Okay. So that, that was the impetus. Uh, and so with the really terrible week that the stock market was having, that's what was weighing on this. Okay . Uh , home buyer's mind. Yeah . It's like maybe, you know, I don't wanna do this at all 'cause the stock market's getting beat up and you know, whether I have to put in 300 grand or just the 25%, which is 75 grand, maybe I don't wanna do it. Well the problem was he had written a cash offer with no inspection. There's really no get out . And so I explained, well, you know for sure, I bet you the seller's gonna wanna keep your $5,000 of earnest money. And uh , sure enough, the next day on Wednesday , uh, he let me know that he was able to get out of the contract for just $10,000 total. Yep . And that made him feel great. So there's a , uh, story about how the stock market is influencing some buyers. Like, yeah, you know what, I'm out. And I think that's even more the case , uh, in Florida. Let's come back and I bet you've got another story to tell. I also have that story about the Florida seller. We'll cover that when we come back. You are listening to the Accurate Mortgage and Realty Show on AM six 20 WTMJ.

Speaker 2: 30:16

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

Speaker 1: 30:24

Thanks again for hanging out with us today. And uh , David, thanks for letting me go with a couple of stories. I appreciate , uh, the leash on that. So I had mentioned at the top of the show, I was talking to an acquaintance , uh, who just sold their home a second home in Naples, Florida. And what was interesting about that is they had had an accepted offer last spring, but that deal fell through. And , uh, what he shared with me was a, that this year's sales price was 15% lower than the offer that they had gotten last spring

Speaker 3: 31:03

For those, is this like a $400,000 house or an $800,000 house? I ,

Speaker 1: 31:08

I'm not sure, but I'm gonna say a million's. I'm gonna say a million .

Speaker 3: 31:13

So that's for , for every, for everyone who's holding onto their calculator at home, a 15% discount on a million dollar house is $150,000 haircut.

Speaker 1: 31:22

That's right. That's right. And and the other interesting stat that he shared was that last year when they were on the market, there were 11 , uh, similar units in their development. You know, 'cause in Naples you have all these gated communities and some might have a thousand doors, others might have 2000. So in this rather large development, there were 11 similar units that they were competing with. Today there are 41 competing units. <laugh> . So, so the, this is just, you know, the, the reality that Southwest Florida is not the same as southeastern Wisconsin. Right. Where last week you told a story about, you know, some property in Waukesha County in the meat of the market getting multiple offers all over asking, and

Speaker 3: 32:10

I mean this is a apocryphal a little bit, but Jason Hanson, director of operations at AC at mortgage, he had a neighbor that , and he lives out in the western suburbs of Milwaukee. He was describing it was like a parade outside that home of hungry buyers eager to get into a home that was listed for sale in his neighborhood. So ,

Speaker 1: 32:31

Okay, so this is like an open house where it was Okay , people are lined up.

Speaker 3: 32:36

Yes.

Speaker 1: 32:37

Because , you know, listings are scarce. That is not the case in, in southwest Florida. Uh , another friend of mine , uh, said that the luxury market in the , let's say the two and a half million and up , uh, in the old Naples area , uh, there's a two and a half year supply of homes for sales. Wow . So that is a, a different kind of a market. Now, on the other end of the spectrum , uh, helped a first time home buyer get an accepted offer. Uh, this last week she had started her home search a year ago. Mm-hmm <affirmative> . And , uh, didn't succeed , uh, had to resign. Her lease was coming off the lease now and is like, Hey , uh, I'm make , I'm getting back out there. And her comment was, from hers perspective, there was more inventory and , uh, a little better condition than what she was seeing.

Speaker 3: 33:26

For anyone who's on a lease, by the way, I think the, the when do, when should I get going on a pre-approval game plan is maybe a hundred , uh, let's say a hundred days before you'd have to move out. That would give you some time to get pre-approved, get out there and look for a couple properties, hopefully get the accepted offer and close and allow for a , a not rushed transition. Um , you could get ready before that, but if you're a hundred days out from the end of your lease, that's probably prime time that you gotta start thinking about that again.

Speaker 1: 34:03

Good, good, good. Uh, bit of advice. Um, and , and so in this particular case, they had some, you know, okay, looking at this place, didn't get that one. And now , uh, we had discussed a year ago the idea of offer intentionally offering more than the asking price and then telling the buyer, Hey, I'll, let's just say this. I'll still pay you $315,000. Even if the house appraises for three 10, that's called appraisal gap. And in her case, she wouldn't have to bring a nickel Moore to closing. It would only change the cost of her PMI and it would've gone up by $25 a month if, if the worst case were to happen. So she was comfortable with that, baked that into her offer. And then the other thing that we , uh, discussed and she deployed in her offer with her seasoned agent , uh, was a $5,000 wiggle room on the inspection saying, Hey, if I come up with inspection items, I will pay the first $5,000. And so even though she was offering 15% down, by the way, and so even though she didn't have the full 20% down that a lot of sellers are looking for, she was close enough. And then she was offering that appraisal gap, which on our ACU net rock solid guaranteed preapproval letter said you can still buy the house at three 15 even if it appraises for three 10. So everything was lined up perfectly and she got the accepted offer. Hooray. That's what it takes. It takes a little bit more to win in , uh, Southeastern Wisconsin these days. Alright, well, if you or a loved one or a friend or neighbor would like help becoming a homeowner, or hey, rates are down , uh, you know, they're pretty good. If you bought a home in the last year and you wanna take a look at refinancing, we think we do that better than anybody else too. All you gotta do to get started with your rock solid guaranteed pre-approval that'll help put you in the winner circle is click on that blue button@acunet.com. That's A-C-C-U-N-E t.com. That's all we have for today's show, will see again here next week. You've been listening to the Academic Mortgage and Realty Show on Wisconsin's radio station AM six 20 WTMJ. The

Speaker 4: 36:04

Proceeding was a paid program. Advice and opinions expressed during the Accu Net Mortgage and Realty Show are solely that of the host or guests of academic mortgage and Academic Realty advisors and not WTMJ Radio or Good Karma Brands. Milwaukee, LLC.