The Accunet Mortgage and Realty Show
The Accunet Mortgage & Realty Show 5-5-24
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 licensed real estate broker with Academic Realty Advisors, and also the majority owner of Academic Mortgage, where my individual NMLS ID number is 2 5 9 6 1 0. And I'm here today, again with my son David, who's one of our senior loan consultants at Academic Mortgage. Also on our Chief Client Experience Officer. His individual NMLS ID number is 3 2 8 8 4 7. If you've got a question or 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, we finally got a little bit of favorable interest rate , uh, reporting news that help rates come down a little bit. What, what's the scoop?
Speaker 3:Friday, the first Friday of every month, the Bureau of Labor Statistics puts out their non-farm payrolls, which, hey, it was April, no May 3rd. How many jobs did the American economy create in April, 2024? The forecast, which someone someday will have to explain to me how the forecast, like, do they just like call a bunch of economists and like just puree all their numbers into a blender and like come up with a forecast?
Speaker 1:That's exactly what they do. Okay . The Wall Street Journal, or somebody calls around, they got a list and they ask all these different economists whose job it is to predict the future. How many of new jobs do you think there'll be this month? And they all give their answer. And then that's what they publish as the ,
Speaker 3:What's the weather gonna be? Partly sunny,
Speaker 1:Partly sunny. That's right. Mild, yeah. Alright , so what was the prediction? The
Speaker 3:Estimate was, so the forecast? Yeah. So the , uh, for reference the previous in the month of March, we, the American economy added over 300,000 new jobs. That's a lot. The four . Yeah, that is a ton. The forecast for the month of April was 243,000. And the actual number came in at a, you know, perfectly good. 175,000 new jobs, 1 75, which is ,
Speaker 1:Which is still a lot, but because it was a
Speaker 3:Lot, which is a ton. Yeah , that's what that was my first thought. It was like, let's, all this is all relative, right? Like there are, I think back to the , uh, great recession, like the idea of adding 175,000 new jobs would've been a dream for Ben Bernanke when he was fed chair .
Speaker 1:Absolutely. And I was watching CNBC on Friday morning. Yeah . You know, and they always have this panel of economists that talk about, well, it's the job. And one guy said it perfectly. He said, if we had this kind of a jobs report from now until the end of time, which was 175,000 new jobs, and then the unemployment rate, which has gotten from a different survey of households was 3.9. Was that at expectation or a little worse?
Speaker 3:Expectation was 3.8.
Speaker 1:Okay. So , so he said, if we had this for the rest of our born days, we would be smiling ear to ear .
Speaker 3:Ear to ear . Um , sure.
Speaker 1:The other component that was favorable for rates was what the , um, job , uh, the , uh, cost of employment. What was that called? It was a little
Speaker 3:Oh , the average earnings.
Speaker 1:Yeah. Average hourly earnings were not as hot.
Speaker 3:Yeah. It came in at 0.2 versus a forecast of 0.3 . And just for everyone, you know, economists and the Federal Reserve, they don't just look at the 0.2 . If you take that out annualized, it's 2.4 , which hey is closer and closer to 2%, which is the Fed's magic number. And earnings is a huge component of what influences inflation. 'cause you gotta pay people to make the things. And if you have to pay people more to make the things for people to buy, then you have to charge more for your widgets.
Speaker 1:Yep . So all in all, this was a report that the interest rate markets went, whew , this is cool. And stocks also went up because it's like , oh man, maybe, maybe we're getting closer to what the Fed wants , uh, which is stable employment. Yeah . What do you say, David? Well ,
Speaker 3:I was , so if we, if we turn to real life dad, how many clients do you think called me then midday on Friday and said, David saw the mediocre ish jobs report. We're back in the house hunt now. Right?
Speaker 1:Absolute not. We're
Speaker 3:Zero clients.
Speaker 1:And, you know, and the other headline I saw is , you know, mortgage rate's lowest in , uh, three weeks. Yeah, that's true. But it's
Speaker 3:Like, honey, now that our payment is $72 less per month, we really should get out this Saturday gonna and Sunday and go see houses
Speaker 1:In terms of what it really meant in mortgage Land. Uh, if you were a person buying a $320,000 house in southeastern Wisconsin or Illinois and you were putting 25% down, it means that the cost of getting the 6.99 trophy rate went down by about a thousand dollars , uh, on a mortgage amount of $240,000. That's , uh, you know, 25% down and all the other Right. Stuff. Yeah. So that's better than a sharp stick in the eye.
Speaker 3:Well, of course.
Speaker 1:But yeah, it's , and and we like it because it's going in the right direction. So , uh, so your point is that the , uh, and we said this in the past, shows the interest rates aren't really influencing , um, people's behavior when it comes to buying , uh, a home. It's, it's other things like what , like what other things, David , do you have
Speaker 3:An I was gonna say, there's only one thing , uh, that has driven people to decide to buy a new house. And that is babies. And after we're the line of babies, it is the only reason babies. Uh, and so I want to share a story of a client referral that I got this week. That this person would be the perfect candidate dad for someone who would decide not to move because of what rates are. Sure. But let me tell you why they are deciding to move. Let me get into that after this first break. You're listening to the Aate Mortgage and Realty Show on a 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 the Acuate Mortgage and Realty Show. And , uh, David, right before that break, you were saying that babies were the reason that people , um, buy homes and give up their low interest rates. But I want to have a second , uh, related , uh, grandchildren. Well, okay . They're also may not babies. Someone's babies. Yeah. They're somebody's babies. But then sometimes grandparents decide to give up their great rate or something like that to get, move to move and get closer to their children's children. But
Speaker 3:I haven't, I haven't had to phrase it like this, but grandparents are a great example. It's like, you know, grandpa and I, we thought about moving closer to watch you grow up, but we just couldn't give up our 3% mortgage to come see you. You know, as you were young , more often young , it's go to go to more
Speaker 1:Little league games. Yeah. Soccer games stand out in the
Speaker 3:Cold freezeman . Sorry , I picked my rate over you.
Speaker 1:Yeah . You know , you gotta pick something. All right . So what's your story? You've got somebody who is about to give up their trophy rate.
Speaker 3:Yeah. Uh, so this referral from their real estate agent, and , uh, I spoke with the husband who's a finance guy, like an accountant type, you know, grinded down the penny type. Yeah , yeah, yeah. And they are about to list their home for sale, I think probably before Memorial Day weekend. Okay. And just because I'm curious, I ask like, hey, yeah. What is driving you to want to find your next place? And it was as simple as, my kids are in middle school now and are bigger and need more space compared to when we bought this home six years ago and we have a dog and we need more yard. And so kids dog . And so there was, there was this throwaway sentence in our conversation of like, yeah, I'm , I'm really bummed that I'm gonna have to give up my 3% rate. And then we pivoted back to the real life part of the conversation of, so how can I do this, David?
Speaker 1:Yeah. And, and now, so he owns a home. Yes . So , uh, does, is he gonna try to buy before he sells?
Speaker 3:That would be their preference. You know, for them it really depends . They're on the path where they're listing the home for sale. I , I think in consultation with the real estate agent, it's like, we wanna get this thing on the market right when school ends. Okay. Uh , for the prospective buyers who might be interested in their home. So they don't have the next home in mind. I think if they could wave a magic wand, they would like to only move once. And that's where my analysis began. Because it all depends. It , it all comes down to the house itself. Right. The new house. The new
Speaker 1:House. Yeah.
Speaker 3:It's like for, for the right house, you're always willing to do more to make it happen than for the Mm . The house that doesn't, you know, impress you Yeah . Doesn't
Speaker 1:Quite trip your trigger. Yeah,
Speaker 3:Exactly. And so we, you know, we started with like, okay, let's just pretend that this dream new home, you know, falls from the sky appeared . Yeah . Appears, how could we make that happen? Which is two factors, right? Dad, I mean, there's three legs of the stool. There's credit income and down payment credit, 800 credit, like total rockstar, perfect income. They have the income where they qualify for having two payments up to a certain point. Of
Speaker 1:Course there's a more limit for most people. I can only stand so much monthly payment pain .
Speaker 3:And then the third element is for them, it's down payment. And most of their , uh, available funds is tied up in the equity in their home.
Speaker 1:Okay . So what about a bridgeland to help extract that equity?
Speaker 3:Well, and so that's, that's where it's this give and take where it's like, yes, they have sufficient equity where they could take that out of the soon to be old home to use it. But the monthly payment that would go along with that bridge loan would diminish ah , their purchasing power. How much the purchasing power on the new home
Speaker 1:I got , I got another nomination. Yes . Is there a bank of mom and dad open your by then ,
Speaker 3:Come on. Exactly. So what I first, I , I described it to the client. I was like, I'm gonna reverse engineer this for you because what I'm gonna declare, as you like to say, we're qualifying our clients, not necessarily for the home itself, but for the monthly payment. Yeah.
Speaker 1:That they , what's the most you can stand exactly when you add together your new home and your old home carrying costs , which by the way, we can exclude the old payment once you get to the point that your , uh, offer that you have is free of contingencies. So if they were far enough along in the sale of their home process where they made it through the appraisal contingency and they have a loan commitment in hand, and there are no other contingencies on the sale of their home, we do not have to count the PITI , the principal interest taxes and insurance on that old home. But that's usually later in the process. So much later. So we're kind of stuck with that monthly , uh, carrying cost . But you still have to come up with the equity or the down payment. Right. Where's it gonna come from?
Speaker 3:Well, but let me, 'cause what I want to detail is, I, I declared to my client the most amount of money that you, that your monthly payment budget can swing is $500,000.
Speaker 1:Oh, you turned that into a purchase. Oh, that's a mortgage amount.
Speaker 3:That's the biggest mortgage amount. Because then as you alluded to, I said, okay, so you've got some savings and hey, are there grandparents maybe lurking around anywhere who might be able to help with more down payment? Let me give you the rest of that story. 'cause this is , this is all about like, let's reach for every tool we've got. Right.
Speaker 1:And I've got a corollary to your story. Okay . After you're done with your story, we'll get to both of those when we come back. Plus we've got the MLS numbers for home sales in April. All that stick around, you are listening to the AC Mortgage and Realty show on AM six 20 WTMJ
Speaker 3:Getting
Speaker 2:You into the home of your dreams. Here's more of the Accu Mortgage and Realty show with Brian . We on w wtmj
Speaker 3:Welcome back to the Accu Mortgage and Realty Show. I'm David the younger, that's Brian the wiser dad. Uh , detailing a client, Hey , trying to get from their current house to their new house. They've got the income where they can, at the nanosecond where they're buying the new house, they can afford, according to mortgage underwriting, they can have two payments. Okay . You know , the mortgage payment on the old house, mortgage payment on the new house. But what I'm mindful of is it is about the budget for the new house. Right. You , you don't want to be, you don't want to necessarily make a parallel move. You know, if you're, if you're thinking about buying your next house, you probably maybe want a little bit more bigger,
Speaker 1:Better. Well, in this case, you , you just told us earlier that they want it bigger, right . 'cause their middle school kids are larger and they have a dog and they need more room. So they have their criteria for the house. So you got 'em cranked up for a maximum payment, which does assume some level of property taxes. Yes.
Speaker 3:And which
Speaker 1:Is insurance .
Speaker 3:But go ahead. I I , I always tell my clients it's like, I'm gonna say a half a million dollars, but you really need to loop me in. Right. Because if the property tax bill is enormous that choose away at how much mortgage money I can lend you . Yeah.
Speaker 1:Don't, don't you just point 'em to our super duper online calculator where they can cook their overpayment on any house in the world and
Speaker 3:Both, but like any, yes, I can push you into the Amazon, but like, hey, let me also go with you. Of course I'm gonna give you a map in case you get lost, but I'm gonna go along with you. So for , I was able to declare, hey, the most amount of mortgage money I can get you is 500,000. Then it was like he said, yeah, you know what? I think my, I think mom and dad, his, the grandparents I'm gonna call them probably would be willing to pitch in to help with down payment. Okay . And so what I told him was this is about assembling the Lego parts. It's like, okay, I can show up with half a million dollars, half a million
Speaker 1:Mortgage million .
Speaker 3:Yeah. If grandma and grandpa can give a gift for a hundred thousand, hey, your house hunt budget is $600,000.
Speaker 1:Wait, what if he, does he have any savings of his own you can put on the pile?
Speaker 3:Exactly. Well, yes. And ultimately mom and dad , grandma and grandpa were willing to show up with one 50 and he had another 50 that he also had savings himself. And so that we were able to make their budget the size that they wanted to get into that bigger house.
Speaker 1:But , but David, what about all the gift tax the grandparents are gonna have to pay on that $150,000 gift.
Speaker 3:As always, please , uh, consult with, you know, cousin Paul s Wicker , uh, whomever that might be in your life for tax advice. But there ain't none. There ain't no gift tax.
Speaker 1:Right . You gotta file a form and your next tax return, if you give more than the annual limit check again , check with the IRS or your tax advisor that tells 'em, Hey, I just gave over the $18,000 per person gift exclusion for 2024. And so please keep track against the, what is it right now? 21 million a person or 12 , 12 , 12 million. You mean per person? Yeah. Yeah. And keep track of that. So when I die, you know, you can tax me then . Alright . So No, no problem there. Yeah . Are you gonna have to have a conversation with grandma and grandpa? Are they already kept to that?
Speaker 3:No , they're ready to go. I , uh, I I they might be out looking right now at houses. Uh , so we'll see. I , you know, once you , once you hand someone the magic wand to go look for a house, suddenly, you know, they get hungry to go find that next place. My ,
Speaker 1:Uh , my corollary to that is I've been working with a couple that's , um, selling in osa and as you would expect , um, got an offer on the first weekend, got an offer 10% over their asking price. Cool. Which is a lot. And uh, and so then I think, you know, the , the , the text that I got was, Hey, we're going to look at this house and that house, you know, how are we looking on, on money? And so I was the guy, it was actually an email, so I had to email him back and say, just because you have an offer doesn't mean you're in a great place to write an offer on the Illinois house for the same reason as your client. Yeah. Where are you gonna come up with a down payment? You know? 'cause your equity,
Speaker 3:Well , there's a big difference between I'm gonna get the money versus I have the money.
Speaker 1:Exactly. Or , or I was explaining and I explained to him in an email on Friday until you have, and so they sent me the offer on their wauwatosa home. Yeah. And , and he said, well, yeah, look at the appraisal contingency is , uh, gonna be over on the 14th. Okay. But there's also a financing contingency deadline. Yeah. That doesn't have to be met until May 21st. So until we have in hand, you know, the letter from that buyer's lender saying, here's your commitment letter and there are no contingencies on it. I still gotta count that payment on your existing home. Yes . And you don't qualify. They don't qualify for both.
Speaker 3:Yeah. What if your buyer , uh, gets injured driving to the closing Yeah . And they have to take a leave from work and then suddenly you can't use that income. They don't call . Right . That's real life stuff.
Speaker 1:But, but here's the other thing that they did is they shrewdly negotiated a two month free rent back . Yeah. So even though , so they've got time, right? Yeah . After they actually have , have the money in hand to go out and get something under contract. But I just think they got a little overexcited and thought, oh, we now we can go out and write it off . Nope . Pump the brakes . Well , no,
Speaker 3:You can't. You can write the
Speaker 1:Offer. You can Well, but it's gonna be contingent still on the sale of their home because they can't afford both payments at the same time. So the devil is in the details, folks. Yeah . And we are the exorcists. We , uh, exercise the of the details , devil outta the details, details <laugh> , and come up with a working game plan. Hey, when we come back after the news , um, let's talk about , uh, the numbers for April Home sales in southeastern Wisconsin. I got those. But right now it's time to hand it over to the WTMJ Breaking News Center.
Speaker 2:Don't break the bank to get into a house. Back to the ACU Net Mortgage and Realty Show with Brian Wicker on WTMJ. Welcome
Speaker 1:Back and thanks for listening to today's show. I'm Brian Wicker, the elder. That's David Wicker, the younger, more handsome, taller , uh, wicker man. And , uh, so David, you know, you read the national headlines and um, you know, inventory is going up. And then you also read some things about, you know, home prices are softening. Well, that may be true in parts of, of the nation, right? Like in Florida , uh, one of the news news articles I read , uh, like in , um, Cape Coral, which is the sister city to Fort Myers in southwest Florida, it's like, yeah, 51% of the listings had a reduction in price. That's a lot. And , uh, but but that's one market, right? It's like that's not true , uh, for southeastern Wisconsin. That , you know, that's a different kettle of fish. And so , uh, I've got the April numbers for , uh, southeastern Wisconsin, the five county metro area. And , uh, these are just transactions facilitated by a member of the National Association of Realtors in reported through the multiple listing service data, which by the way, is actually copyrighted by Financial Business Systems Inc. And I am a member of the , uh, MLS and the Association of Realtors. Well, David and April, 1300 88 condo sales went to the closing table. And , uh, that is 102 more than April of last year. That's an 8% increase. And if you wanna compare it to March , uh, we're actually up 156 units in April. So that would be the, you know, seasonal aspect of real estate in Wisconsin. Mm-Hmm . <affirmative> sales do increase as we come outta winter and into spring. Median sales price was 331,000 bucks. That's 21,000 American dollars higher, a 7% increase from the year earlier. The other good news is that new listings were up 106 units to 1,862. So again, look at that. Just seasonal trend, more listings, 1,862 versus sales 1388. So it does feel like, you know, if you're out there shopping, oh, there's more to pick from. Um, and uh , that's a 6% increase over April of 2023. But remember what we always say when you're looking at comparisons compared to what? Mm-Hmm. <affirmative> . So if we wanna look at the most recent non covid April, which would be what year?
Speaker 3:20 19, 5 years ago.
Speaker 1:Yeah. Sales are 24% lower. 435 fewer sales occurred this April compared to April, 2019. And listings are down by 34% or 941 fewer listings came on the market this April compared to pre covid April. That's a big, big difference. So, and we we're not back to normal. It's the new normal. Right? It's the new normal of, of tight inventory. Now I like to track what percentage of listings are selling for over asking the month of April. Do you want , I didn't share this with you before we came on the air, so do you wanna hank or a guess percentage?
Speaker 3:Uh, 60%.
Speaker 1:Wow . You're
Speaker 3:A good guesser. Is it $1? $1 over and
Speaker 1:Yeah. Yeah. Anything over? Uh , and the answer is 59%. So we're gonna give you that , uh, rounding error that happens to be exactly the same as last April. It's like Mm-Hmm . <affirmative> , you know, reading a book. And if you look at the trend line, then that should go up to 64 or let's call it the mid, mid sixties for May, June and July if this year is like last year. And then I also like to track what percentage of sales in April went for more than 10 grand over asking you want to hanker a guess. So out of the 60%, 40% you bang, you nailed it. Exactly 40%. And that compares to 39% last year. So we're just like on repeat , uh, from last year, there's not enough supply. Well, and look at my, my seller who's, you know, selling in TOSA and buying in , um, Northern Illinois. Yeah. You know, they're , they got 10% over asking now their house. You looked it up online is beautiful.
Speaker 3:Wait, but dad, what is the house? What is their Wawa home worth?
Speaker 1:Oh , well what people will pay for it. But now they do have an appraisal contingency. Yes . They do have an appraisal contingency. And , and so now it is, what can the appraiser justify looking at at least three recently com You know , uh, closed sales. Go ahead.
Speaker 3:Wait, wait. If you are going to use someone else's money to show up at the closing table. Oh yeah. They get to have an opinion about the value of the home. Correct . The home, your client's home in Wallatosa is worth the number on the contract. Whether or not a third party lender and appraiser can justify it is a second element. Yes. One that you'll need to navigate to get to the closing table. I'm just, this is my obligatory, you know what the house is worth what you pay for it.
Speaker 1:Well, and , and don't forget that, you know, the listing price is just a made up number. So may maybe their agent in OSA kind of priced it on the lean side, you know, in order to , uh, incite relative to the, you know, bidding war that ensued. Now these folks, I saw the offer, again, we did not pre-approve these particular buyers, but they did offer $10,000 of appraisal wiggle room. Okay . But, you know, it'll be interesting to see , uh, what materializes on that. And again, in their particular story, they have a relative that's willing to help 'em out with just like yours, with a gift for down payment on the new house in Illinois. Mm-Hmm . <affirmative> . But again, I'm reminding them , unless they're willing to give you a hundred percent of the purchase price on your home in Illinois, we still need to get rid of the payment on your old home by allowing enough time for your offer to become contingency free that you received as the seller of that home. Alright, when we come back, David, you've got another story to share with us.
Speaker 3:Yeah. I wanna talk about financing contingency. 'cause there's your client on their appraisal gap that they wrote. And I've got another client debating 5% down, 20% down. And I got into the weeds on that more. Uh , for that story. After this break, you are listening to the Accu 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:Thanks for hanging out with us here on Sunday morning. I'm David, that's Brian . Uh , dad, you know, we're all about the artistry of helping our clients win and prepare and offer that is as strong as they can possibly be. Agreed . There's, there's this half, it's like, can we line up, can we manufacture the mortgage widget? Yeah. But just 'cause I can pre-approve you to borrow a half a million dollars, then you must go forth out into the world and get someone to say yes to you.
Speaker 1:And I'm gonna say that the biggest thing that sellers like to see is a bigger down payment. So you, before the break said this buyer that you're working with was debating between 5% down and 20% down. And I'm just gonna raise my hand and say, I know what I'd like to see as a seller. Yeah. 20%, 20 or more 50% would be better.
Speaker 3:A hundred percent would be the best.
Speaker 1:A hundred percent. That's called a cash offer. Okay. So how did you counsel this , uh, buyer and their agent?
Speaker 3:Well, first I said I'm gonna write you two pre-approval letters 'cause I'm not gonna run out of electrons. So let me, at least I'm gonna give you both versions, but then let's talk about this. 'cause like as you said, more is better and stronger when it comes to down payment. Yeah. They, these clients can, and I have documented that they have sufficient funds where they can put even more than 20% down. And what I highlighted in the WB 11 standard form, the residential offers ,
Speaker 1:That's Wisconsin, Wisconsin offered a purchase form. Yeah.
Speaker 3:Is that the wording and the financing commitment contingency is financing selected shall be in an amount of not less than X dollars. And what I highlighted was the financing contingency does not say, and you must, you gotta show up with a loan commitment and mortgage that matches this financing contingency. No, no, no, no, no.
Speaker 1:Well, and the sentence before that says you gotta produce a loan commitment letter within X number of days. Mm-Hmm. <affirmative> in , in , in a minimum of this dollar amount
Speaker 3:Yes .
Speaker 1:Over this many years at this interest rate. Yes . With this monthly payment. Yes . That those are the real details. So, so who was , uh, who was concerned about perhaps writing the offer? I'm sure you coached them to say, let's use the , uh, pre-approval letter and write the offer with 20% down. Of course, but then you're free to go with less money down.
Speaker 3:I , as I like to say, the seller doesn't care whose money is in the bag when you show up at closing and what percentage of whose money is in the bag.
Speaker 1:Yeah. Well , as a matter of fact, the corollary that might help a questioning real estate agent have the light bulb go on, is can a, can a uh , buyer who writes a cash offer go out and get a mortgage? You bet they can . They can. It says so Right in the WB 11 . And so an extension of that logic is, hey, if you've got an offer in there with 20% down, you got a pre-approval to back it up that says we verified the assets and they could put down 20%. Doesn't mean they have to. Nope . They can come in and put 5% down or if they qualify 3% down, they just can't use a denial letter that says, I couldn't approve you for your 5% down mortgage. Yes. To get out of the contract that they wrote with 20% down, that will not work. Correct. Is that an easy way to say it?
Speaker 3:Yeah. The the contingencies are , are all about how will we break up? Not how will we keep moving forward.
Speaker 1:Right, right. Well, and just, just like you don't, if you have an inspection contingency and things go wrong, you don't have to throw in the towel. No . Right . You can say, well, you know , yeah , there were defects. I'm just gonna still go ahead. You had the right to throw in the towel and cancel the deal, but you don't have to, you know, if you have issues that come up, what else you got
Speaker 3:Quick? Uh, I got a call from a different agent who was considering multiple offers for their client on their listing. And many of the offers did not have an appraisal contingency. But what I highlighted for the listing agent was, if there's a financing contingency, there is always a implicit minimum value. A quick example, if you say, Hey, I'll buy your house, but I need to borrow a hundred thousand dollars to do it, the home needs to appraise at a number greater than the amount that you wanna borrow. Otherwise I can't, I can't lend you more money than the home appraises for.
Speaker 1:Correct. And there's some minimum down payment , uh, for every loan program except a couple. Mm-Hmm . <affirmative> like with a , with a, our special first time home buyer program, you can literally buy with zero down or go to the VA loan. But most, most loans, the , the , on a conventional 30 year fixed rate loan, you gotta put down 5%. Yeah . You know, and so , so there is an implied So you helped her calculate what those were?
Speaker 3:Absolutely. And because it was, each of the contracts they were reviewing was a different loan amount in the financing contingency, which then to be able to turn around and tell their sellers, if you say yes to this, the min yes, they're not gonna come at us on the appraised value, but it still needs to come in at some number that is reasonable. Yeah . For them to borrow the money. These are the details . Personally , like you said, I
Speaker 1:I would rather have a, I would rather have it spelled out, you know, if I was a seller. Hey, when we come back, I got a couple other nuggets that I forgot to mention about the , um, uh, MLS numbers for the month of April plus. I bet I got something else in my back pocket. And so do you David, you are listening to the NT Mortgage and Realty Show on Wisconsin's radio station. Six 20 WTMJ.
Speaker 2: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:Welcome back to the Acuate Mortgage and Realty Show. So David, one thing I forgot to mention when we were talking about the sales numbers in southeastern Wisconsin is the speed of the sale or the velocity of the market. You know, we were talking about, hey, 59% of people are paying over asking, well, how fast are home selling too? That's a, a measure of strength. And so , um, I'm gonna give you three choices. Uh , Germantown, Wauwatosa or West Bend , which was the fastest selling market in April.
Speaker 3:I feel like you're trying to double zag me. So I'm gonna say Wauwatosa , even though I think you're trying to throw me off the scent.
Speaker 1:I am. Uh , so West Alice , and these are for , um, municipalities that had at least 10 , uh, closed sales . Yeah. Uh, so , uh, west Alice came in at , uh, uh, or no, I said West Penn , 15 days average continuous days on market. Wauwatosa nine, surprising Germantown, just six, along with my hometown Muskego. Others in the , uh, single digit category are Glendale. And , uh, at seven days, Greendale, St . Francis and Whitefish Bay also at nine days , uh, just like Wawa . So sound like hotcakes folks. And we don't see that really changing regardless of what , uh, uh, interest rates are.
Speaker 3:I I, I have had to coach some clients though that we talk about submarkets all the time, dad. Yeah. The one element I wish we could add to all of this MLS data is like a, a prettiness score to the home. Oh my God. Because is like, is this a first weekend home, a second weekend home, or a third weekend home? Because if it's a first weekend home, it's gonna be like your client Wauwatosa , it's gonna be over list . Brutal competition and just like throwing money at the seller. Yeah.
Speaker 1:Yeah. Who is willing to just go crazy? The craziest.
Speaker 3:Yeah. But if, like, if you're shopping in a second weekend home market or a third weekend home market, you know, you might not have to be so competitive if that house is about to go through its third Sunday sitting there hoping somebody walks through.
Speaker 1:Correct. 'cause that means it was mispriced or there's a little something, you know, not right above
Speaker 3:Little hair in that ointment.
Speaker 1:Well, maybe it's a little, you know, uglier. It's not all done . Age Woody. The one for my client is perfect. Yes. Because the, the , the man in the family is really handy and they've redone everything. I mean, it is, you couldn't ask for anything. You , you move in, you don't have to do anything for 20 years. No. You know, and , and that has got a lot of attractiveness, but Dad,
Speaker 3:I heard that rates have come down, so like that's gonna solve all my problems, right?
Speaker 1:Not exactly. No , no . Um, the other thing though, speaking of interest rates, Fannie Mae came out , uh, a little more than a week ago with their latest forecast on interest rates. And so they're a little low right now. Uh, we are in the second quarter, and so they were forecasting that the average 30 year fixed rate would be 6.7. You know, I just said earlier that we could do 6.99 , uh, and that would have an a PR of 7.08 because you would be paying still three quarters of a point or interest upfront to get that trophy rate. So they may still be a little high on that, but then their other number, they see it's still coming down, you know , let's say 0.3% by the end of the year. So maybe, maybe it will be their number 6.4. I think they're a little Mm , lagging, optimistic. Yeah. Yeah, a little optimistic. But who knows? There's a lot that can happen between now and then. The, the whole point is folks now is still a better time to buy than in June or July when we would expect that 64% of homes will go for over asking instead of just 59%. And we'd love to help you. All you gotta do is click on that blue button@anet.com to get started and David or one of his other colleagues will take great care of you. That's all we have for today. That's all, that's all the time we have for today's show. Thanks for tuning in. You've been listening to the AC Mortgage and Realty Show on AM six 20 WTMJ. The 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.