The Accunet Mortgage and Realty Show
The Accunet Mortgage & Realty Show 5-26-24
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, Memorial Day Weekend edition. I'm Brian Wicker, licensed real estate broker with Academic Realty Advisors and the majority owner of Academic Mortgage, where my individual NMLS ID number is 2 5 9 6 1 oh . And I'm here today, again, along with my son David, who is one of a's senior loan consultants and also our Chief Client Experience Officer. And his 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. David, I don't know if you know this, I think you do. I made my public speaking debut on Memorial Day and about 1965 Oh yeah . Saying the Pledge of Allegiance at the town of Lake Memorial Day Parade, where my grandfather, your great-grandfather was the , uh, parade marshal . So Frank V. Frank V for Frank V . So there you go. Frank V, Frank V. Vaughn, same , uh, middle name as , uh, as you. Okay. So , uh, with that little bit of trivia , uh, off to the side, you know, Memorial Day is , is , is about people gave their lives. It's not the same as Veterans Day, so No. Yeah . Uh , you know, a somber holiday and, and , uh, and , and our , our hearts go out to all those , uh, military families who have lost loved ones in the line of duty. So , um, and, and you know, one of the benefits though, that veterans who who are alive get to take advantage of is the great VA loan. And we do offer those , um, eligible for people that are both in reserves and, and active duty. Alright, so , uh, news headlines this last week, David , uh, I was actually on WBBM in Chicago , uh, talking about these two headlines , uh, that came outta the news. Uh, one was the breathless headline about new home sales tank in April as prices and interest rates rise. And they're quoting this , uh, census data, which is highly subject to revision, but basically new home , uh, pr um , sales dip , like 7.5% from a year ago, and 4.7% from March, to which we say here in Wisconsin. Who cares?
Speaker 2:Okay.
Speaker 1:Yeah, I was gonna say where <laugh> ? Yeah. The , the , the new construction that that article talks about is kind of the mass new construction that you might see in , uh, Florida or Colorado. You know, where you see big builders like Lennar and Pulte and, you know, building huge subdivisions. Yeah. The lion's share of new construction in southeastern Wisconsin is custom. And I don't think those folks are missing a beat. So that's one headline. So you can ignore that folks. The other one has to do with , uh, home sales. So this was CNN's headline. First time home buyers get squeezed last month as prices hit record high in April, and they're talking about home sales being down 1.9%. Well, guess what? That's a national number. And you may or may not recall, we already covered this a couple of weeks ago. Home sales in the five county metropolitan area, Milwaukee metropolitan area in April were actually up 11% compared to a year ago. So remember , all real estate is local. And , uh, the other headline that came along with, or Nugget that came along with that headline in the story was that , um, inventory is up like 30% compared to last year. Is that what you're experiencing in your home buyers are experiencing? No, no,
Speaker 3:No , no .
Speaker 1:Not here. So just remember when you read national headlines, you gotta ask the question, what's really happening where I am living or where I'm shopping for a home? And it is true, I'd say that maybe in the higher price ranges, inventory is a little softer. Right? That's always gonna be true just 'cause you have less people that can afford that. But if you're talking the meat and potatoes, David, you told me, I dunno if we mentioned this on the show last week, you had a buyer not come in first place against how many offers in Franklin
Speaker 3:Thir 30 other offers.
Speaker 1:30 offers. And was that the one that also had 150 showings? Yes.
Speaker 3:Yeah . A hundred . Yep .
Speaker 1:What , what's your biggest tip , uh, for people that are shopping or they wanna buy, let's say in that meat of the market? What , what was the listing price on that house? Was it four 50 or something? Yeah,
Speaker 3:Call it like between 300 and 500. I call just a , a version of what you said, dad. It's not just that there's not a national market, like there are micro markets , like what's smaller than nano markets because for my, for these people, for these people shopping, I called the home that they were looking at a first weekend home man listing goes out or delayed on Tuesday, open house Thursday, open house Friday. Yeah. We're accepting offers all the way, you know, please write the contract good through Sunday at midnight or Monday at noon. And, and it's when those new homes, you know, get populated on the MLS, it's like throwing red meat into a pool of starving sharks. 'cause everybody, everybody sees it. Everybody wants to go see it. And that is a micromarket when you're looking at a first weekend home, holy buckets is that competitive? So , but then , but then I have clients who are looking at, you know, second weekend homes or third weekend homes, right? And those sellers suddenly become a lot more interested in anybody, you as a buyer walking through their house on that second or third weekend.
Speaker 1:Yep . Alright , well I got a couple of stories to share, but let's start out with one of yours. After we come back from this first break, what's it gonna be about?
Speaker 3:This is a classic. It's almost as if this client was made in a laboratory for Brian. 'cause it's all about selling the old condo, moving to the new condo. How do we get the income square? What do they want to do with the proceeds when they sell the old condo? All of that. After this first break, you're listening to the ACU Mortgage and Realty Show on AM six 20 WTMJ
Speaker 2:Home buying advice from the guys who know it best. This is the Acue Mortgage and Realty Show with Brian Wicker on WTMJ.
Speaker 1:Welcome back and thanks for spending part of your Sunday with us or tuning us in on your podcast download. So David, you've got a story to share about somebody who wants to , uh, move from one place to another. Hey, tail as old as time. That's about by the way, two thirds to 70% of the market are move up buyers. So what do you have for us?
Speaker 3:So these folks , uh, years ago had sold their home , uh, in the suburbs, the home that they had raised their kids and they like cool kids themselves, moved and bought a condo downtown, living that downtown life. Yeah. And now the next chapter in the book, they have an accepted offer on a new condo out in Waukesha County. Okay . And I would like to give , um, praise to the building community in southeastern Wisconsin because this builder smartly is a little in the weeds, but they're doing these side by side , um, condos. Yeah . So, and by doing that, and they're doing them in phases, which makes them lendable for your regular residential mortgage lender like ACU net . Yeah.
Speaker 1:You're , so , your 30 year fixed rate, you want the good stuff, the 30 year fixed rate. There are all kinds of rules that come along with new construction condos, like the percentage that have to be , uh, sold and closed and all kinds of rigamarole. So this developer is doing them, how big are the phases? Two at a time. Four at a time.
Speaker 3:They're doing them literally each structure is two units, side by side condos. So each structure is its own phase. Oh . And when that, and when that, like, you know, when you and your neighbor each have a roof and can walk in and live there, that's lendable.
Speaker 1:There you go. Alright . So that's one thing. What's thing number two about this?
Speaker 3:So thing number two, this was , and this was a referral from their real estate agent. 'cause there's a lot of moving parts, you know, so they , because it all actually comes down to timing. They are listing their old condo, their soon to be old condo here at the month end of May. And their accepted offer for the new place is the end of July. But I think as we've talked many times before, it, we take the prudent approach where I want to set up the game plan for the new house Yeah. Independent of whatever happens, timing, proceeds, whatever with the old house.
Speaker 1:Sure. Because chances are that old house is gonna sell and close before this
Speaker 3:New one. It might, but it might, but it might not.
Speaker 1:Well, right. Or what if something comes off the rails? You know, you don't want to count on that. We want to have a hundred percent certainty that we can close without having to sell the old place. So what's that game plan look like?
Speaker 3:So by, by making a plan that would include they then dad need to be able to afford both mortgage payments, the mortgage payment on the old house and the mortgage payment on the new house. I'm gonna say in perpetuity or per, per the underwriting analysis.
Speaker 1:Yeah . And can I just add one other little detail to that? Yeah. Uh , we can only excuse the payment on the departing residence if we have a loan commitment letter , uh, from that buyer or if it's a cash offer and all contingencies have been satisfied. Yeah. Uh , then we can excuse that old payment. But that doesn't usually happen until late in the process. So again, you don't wanna count on that. Um, are we gonna need to help them extract some equity from the old home as well?
Speaker 3:Y yes. But let me, my, my first puzzle piece was, well, can I also just say they're , they're selling a condo as well and who knows what the, you know, management of their old condo has been. So that's not a foregone conclusion. Even if it's a nice condo. Yeah. Whomever the buyer might be, it doesn't necessarily mean that they can get financing. Again, another reason to set up the game plan, irrespective of
Speaker 1:Yes. That's
Speaker 3:What happens with the old house. Okay. So, hey, we need the income to swing both payments. Old house, new house . I of course reached for one of my favorite tools in the mortgage toolbox for those over 59 and a half . I said, do you have a retirement account
Speaker 1:Specifically an ira.
Speaker 3:An ira
Speaker 1:Our favorite kind, not a 401k
Speaker 3:An ira . It's
Speaker 1:Gonna be a little gnarly, but an IRA is our friend.
Speaker 3:And they said, well yeah, we have a rollover. IRA, you know, that's with our financial advisor Bob. I was like, awesome. Here's the amazing thing we can do in mortgage lending. We can take. So their answer was they had $600,000 in this IRA
Speaker 1:Nice
Speaker 3:Good job. I , with your financial advisor's help and getting a letter from them we're , we can take that $600,000 and divide by 36 months, not 37, not 35, 36. Yep . 'cause a , 'cause a bureaucrat in DC decided 36 was the magic number.
Speaker 1:Yeah. That was the magic number.
Speaker 3:And I can put on your mortgage application $16,000 a month in income. Like you're drawn W2 wages working a skyscraper job at Kohl's corporate.
Speaker 1:Yeah, yeah, yeah. That's our favorite most election . And you don't have to, maybe they don't need that much. You know, maybe they only need $10,000 a month to qualify for both payments at the same time. And then , then that pile would last for 60 months. So the rule is the pile from which you're gonna be taking that money , um, only has to last for 36 months by calculation.
Speaker 3:So that, so that was the first part of the puzzle. Let me give you the rest of the story. 'cause then we pivoted the conversation to, and so what do you want to use for down payment? Let's get into that after this break. You are listening to the Accu Mortgage and Realty Show on the biggest stick in the state AM six 20 WTMJ getting you
Speaker 2:Into the home of your dreams. Here's more of the Accu Net Mortgage and Realty Show with Brian Wicker on wg
Speaker 1:Mj, welcome back and thanks again for tuning into today's show. I'm Brian the older, and that's David the younger, taller, more handsome of the wicker men. And uh, David, you're sharing with us a story where we're using one of our favorite tools, which is IRA income. And this can only be done , uh, for folks that are 59 and a half and older. And so what we do, as you explained, is we set up for them to start taking monthly distributions. My question for you is , uh, after they take the first one, do they have to continue taking those IRA distributions, David, or, or do they have a choice?
Speaker 3:Uh, I'm gonna say that there is no follow up inquiry as to the continuation of that income after you buy the house. Right .
Speaker 1:There you go. Because a lot of people like to delay taking money outta their IRA because when you start doing that, if it's a regular i a you gotta pay income tax. Yeah . Just another fun fact. I know from talking to financial advisors, you can also put the money back in if you do it within 60 days and not even pay any tax on that first withdrawal.
Speaker 3:Please consult with your tax professional. That's right. Sincerely. That's right . You consult with Brian and David. So having solved, you know , the income puzzle, we then pivoted to a conversation about the down payment and dad, they, they've got, or they will have a ton of proceeds from the sale of their old condo when it closes. Okay . And so my first thought, or you know, one of the tools that I first reached for was, hey, do we set up a second mortgage on the old condo Yeah . To pull some of that equity out so that we can use it. 'cause right now it's stuck in , in the condo. Yep . Right. It's unusable. And so the only way to be able to use it is to borrow or sell. Yeah . And I had proposed that idea and our income game plan could have sustained, you know, I think I gave my clients some gray hair when I was like, yeah, if we do this you'll have three mortgages. Three
Speaker 1:Mortgages. Yeah. Two on your old house and one on the new one. But don't worry,
Speaker 3:I didn't hear the gulp. Yeah . I mean maybe I did implicitly. Yeah .
Speaker 1:Right . But
Speaker 3:They then shared with me that they have a cash account of north of like $150,000, which is more than enough for the down payment that they have in mind
Speaker 1:Because we want to get to 25% down payment. Right. On the new condo
Speaker 3:I shared the, you get better pricing when you do 25% down, they are likely to actually choose 20% down because that makes them more comfortable for total funds needed. Okay . And they are not indifferent to the rate and cost difference. But also , let me, let me talk more about that because they have this cash account that they're going to deplete.
Speaker 1:Yeah. Right, right. But they don't wanna really deplete it all the way. Right.
Speaker 3:Not all the way. Yeah . I mean Yeah , because they don't know when, hey, when will old condo sell. Yeah . But then it becomes this age old question. Okay, now congratulations you have sold the old condo and they're gonna walk away with like $350,000. Yeah. And they're gonna be sitting there at the kitchen table being like, well honey, what should we do with this money?
Speaker 1:Yeah. We got all this cash now.
Speaker 3:Well, and there's, there's at least three buckets, right. They could replenish their cash account that they had used. Mm-Hmm . <affirmative> for their down payment on the new place. They could pay their new mortgage balance down if they wished, or they could hand some or all of that money to their financial advisor.
Speaker 1:Yeah.
Speaker 3:And and for them the answer is gonna be probably a combination of all three.
Speaker 1:Yeah. Some of each. Right. And, and so if they wanna pay down their mortgage balance, we can help them navigate that. And then for, it's only $250 if you pay down your principle balance by a chunk, I think the minimum is five grand and you can have the servicer recast or recalculate your monthly payment based on the paid down principle balance. So that's an option.
Speaker 3:Well and then, you know, it was as if I was quoting from the gospel of Brian, it was like, or you know, and if you pay down the mortgage, you are getting a guaranteed return on your money Yeah. For what you pay down or , or you can hand it to your financial advisor if they feel like they have a plan to get you a return greater than the cost of the borrowed money. And I , and I also said, dad, I said, there's no rush. Like you can sell your old condo and put it in your checking account and like you can just look at it. Right. You can just sit with it for a while . There's no immediate like, unless I guess you feel like you're gonna go like spend it gambling on the NBA finals, but like you can just look at it Right, right . For some amount of time.
Speaker 1:Alright, so , uh, I've, I've got a similar story. I've got somebody actually that closed on Friday on their bridge loan because they did want to and need to extract equity from their old house , uh, to buy the new one. And so let's, let's just talk about that , uh, a little bit more. And then I think you've got a couple other stories as well. I do . But right now it's time to turn it over to the WTMJ Breaking News Center.
Speaker 2:Don't break the bank to get into a house, back to the ACU Mortgage and Realty Show with Brian Wicker on WTMJ. Welcome
Speaker 1:Back to the ACU Mortgage and Realty Show. And , uh, we're talking about helping people get from one place to another. And so , um, these clients that I , I want to just share this story about 'cause it's similar and speaks to how we go about, you know , solving the puzzle of how to get from place A to place b uh, they , uh, wanna buy a place in Washington County , um, bigger suburban home and they wanna do that before they sell their home in Wauwatosa. Right. They want to have a , a leisurely transition. And so , um, one they do like, like your clients David, they have some cash, but let's get to , um, over 20% down so that we can avoid private mortgage insurance out of the gate. And so we're giving them , uh, we got 'em approved for a $90,000 bridge loan , uh, which is basically a home equity line of credit that everybody knows you're gonna pay off in a short little while. And , uh, by putting that in second lien position , um, we're able to really hold down the closing costs. Uh, they , the total closing costs because we got an automated valuation, an AVM on their existing home , uh, no appraisal was needed. And I think the total loan costs were about , uh, 750 bucks.
Speaker 3:Just for , for the listening audience. A VM automated valuation, I would call that like a computer appraisal. Yeah,
Speaker 1:Yeah. Yep . It's just kind of saying, Hey, based on everything we know, kinda like a estimate right. When you go on exactly. On Zillow and you try to see what your neighbor's house is worth. Um, so, so they closed on that loan on Friday, the 31st of May. And the reason they had to do that is it's refinancing your primary residence and you have to be given by federal law three days to change your mind before you can actually get the money. So , uh, they're gonna be able to access the money on , um, Thursday, I believe it would be, or no, actually as soon as Wednesday. Uh , but they don't have to have it until Friday when they close on their new house. And, but it was interesting 'cause I was doing the math and sending, sending this couple an email to say, okay, how much do you wanna draw now? And and it was very similar to your situation where the real question was what do you wanna leave in your bank account? I know you got a hundred grand in there now, but you don't wanna drain that all the way down to zero. Right? Right . And , and so I did the math for them and in their particular case they decided the right amount to draw , um, on the, on the bridge loan is 45,000. And, and then they still have another 45 grand available to them, you know, if they wanted to, but they, they basically wanted to keep 20,000 of their cash in their banking account. 'cause you really don't want to draw that down to the nubs. So you know that that's the kind of puzzle solving that your friends at Academic mortgage due , um, every day . Well , um,
Speaker 3:It's not , it's not just puzzle solving dad , it's real life stuff. Right. Because I'm sure, I mean they, it sounds like are they getting closer to putting the for sale sign in the yard for their old home or is that still out in front of them ways ? I think
Speaker 1:It's still out in front of them a couple of weeks. Okay . Right . They , they didn't wanna, you know, rush, rush that a little bit. Now also on Friday I got an email from the past customer that owns a side-by-side, a two-family, otherwise, you know, a duplex call, which you will. And the question was, Hey, we saw this other duplex for sale , uh, for three 50. Can we buy it without selling? Well in their particular case , uh, you know, a couple things come into play. Uh, the minimum down payment when you buy a two unit if it's owner occupied is 5%. Yeah . And, and one of the nuggets that they shared was, oh, this particular duplex that looks really nice that they wanna buy it has long-term tenants in in it. And so one of my questions back to them was, well, if they have leases, you need to be able to occupy within 60 days of owning, of buying a property in order to call it owner occupied. And so if you have people that have tenants in there that have more than 60 days left on their leases, you can't break those leases. Uh , is that your understanding as well?
Speaker 3:Yes. Or or the lease reads, I can unilaterally push you out of this house if I sell the
Speaker 1:Property. Right. So the devil would be in the details. Yeah. You know, and then the other thing is this is a mother and daughter situation and so they live in each of their two units now that they own. So neither of 'em is rented. 'cause the other question is, could I use rental income? I think we could rent those, you know, for at least 1200. And the answer is, well you'd have to have a lease signed
Speaker 3:On the soon to be old
Speaker 1:On your departing. Yeah . Yes . On your departing duplex. So the answer is no. Plus they only had $10,000. Well no ,
Speaker 3:Your answer was yes with you complete A, B , C .
Speaker 1:Right.
Speaker 3:X, Y, Z which
Speaker 1:Which is a bridge. It's gonna be a bridge too far there . They , there is an example of where somebody is going to have to sell , uh, before they buy because otherwise it's, it's, it , they have too much debt . There's an example. Although , you know what I could do, David, you know what I didn't turn on yet because now I'm just thinking of this now. The mother is retirement age, so I gotta go back and see if we could find some , uh, IRA income. Okay. Yeah . Okay . Somehow I didn't think of that when I was emailing him on, on Friday. Alright, when we come back, what do you wanna talk about? David? You got something else?
Speaker 3:I got a call this week. Um, the World of commission is going to, I'm gonna say air quote change come August. And so I got
Speaker 1:Real Estate commission, real
Speaker 3:Estate , commiss Estate Commission , commiss, commiss . Yes. I got not the first and not the last question about how that can be structured in the contract and then how that flows to the mortgage documents. Let's dive into that just a little bit for our listeners after this break. You're listening to the <inaudible> Mortgage and Realty Show on AM six 20 WTMJ.
Speaker 2:Important home buying questions and answers you can count on. This is the ACU Net Mortgage and Realty Show with Brian Wicker on WTMJ. Welcome
Speaker 1:Back to today's show. And most people have read, and, and this has died down now, but about a month or six weeks ago, there are lots of headlines about how the real estate world is gonna change because the National Association of Realtors entered into a large settlement to get out of a class action lawsuit. And the basic idea is that , um, the listing agent can no longer through the multiple listing service offer compensation to cooperating brokers. They can still offer comp compensation, David, they just can't do it through the MLS. Uh, but um, you know, this is a big change, right? Yeah . 'cause it used to always just say right in the M-L-S-L-S listing for every house, Hey, this is how much I, the listing broker am willing to pay another broker who brings me a buyer can't do that anymore. So how is that manifesting itself , uh, with, with some of your real estate agents that you're working with?
Speaker 3:And so this conversation, this is ultimately what is gonna turn into a private , um, listing. But both buyer and seller have representation and they are negotiating and educating , um, all parties about how to go about , um, because these agents, they don't, they're not gonna work for free. Right . And they are bringing skills and expertise to the transaction and it's about, okay, well, and how do we itemize how everyone gets paid? The question that I got was, Hey David, is there a limit as to what can be written for the, the technical term is interested party contributions? Mm-Hmm . <affirmative> , IPC, which includes people like the seller. I mean, it can also include people like the builder or the list or the agents. And my answer was because the seller was objecting to like, oh, I don't wanna pay a commission to your buyer's agent. I'll just give you a , I'll just give you a seller credit.
Speaker 1:Okay.
Speaker 3:To which both the buyer's agent and I were just like, well call it whatever you want. If it's, you know, money that's not going to the seller for selling the home, call it a credit, call it a commission. It's all, it's like a Henry Ford. You can have it in charcoal. Midnight or black. Black , right . You call it . It's all the same.
Speaker 1:But, but I , I thought I I just saw like in the last couple of weeks, if, if the commission being paid to the buyer's agent is reasonable and customary ODing to local customs, Fannie Mae and Freddie Mac are excluding that from the interested party contributions.
Speaker 3:Y yes . And, and but the additional detail that I shared with this agent was there are limits and there's a grid that you can find online that depends on two elements. One, the contract price and two, the percentage of the down payment that the buyer is making. Yeah. So if you're making less than a 10% down payment, so let's use a $200,000 contract price. Okay . If you're putting less than 10% down, you have a 3% cap. Okay. So that's 6,000 bucks. Yeah . That's as much credit as the seller can give. If you make less than 25% down payment, it's a 6% cap. That's a lot. That's , that's 12,000 bucks. And then if you make greater than 25% down payment, the seller could give you up to a 9% credit, which is $18,000. Which is plenty to soak up, you know? 'cause what what ultimately what's down payment ? What happen , what's
Speaker 1:Payment , what's her down payment in this case?
Speaker 3:40%. Huh ? Okay. Because what what would happen is if, if the seller says, no , I'm not gonna pay your buyer's agent directly, but here's a giant credit come . Yeah, yeah. Our buyer's gonna be like, cool, I'm gonna then take that money and pay it to my buyer's agent to represent me.
Speaker 1:So we're just kind of changing which side of the closing statement ledger. Yeah .
Speaker 3:It's the buyer agent . It's like, it's all gonna , in this con in this example is like, is all going the same place?
Speaker 1:Do it's the same number or it is gonna end up being the same number? And and what did these particular people decide that the buyer's agent is going to earn? Don't know yet. Did they decide yet? Okay. Don't know yet. So all we're doing folks in this, you know, it is a lot of form over substance. This change. Uh ,
Speaker 3:It's , well it's going to be a point of negotiation. Negotiation. That's what it's gonna become. It's that buyer's agent , um, representation. And the cost of it is about to fall into the SA in my opinion, is about to fall into the same bucket of points of negotiation. Just like inspection, appraisal and financing contingencies. Yeah. I , you know, who is paying, who's representation and how much is about to become a point of conversation.
Speaker 1:Unless, lemme just point out, unless a real estate brokerage a and real estate brokerage b work out an agreement outside of the multiple listing service. 'cause remember that's the only prohibition where the listing brokerage is still gonna compensate , um, the buyer's agent. That's still allowed. It just can't be done through the MLS. But I think you're right. We are gonna see it more showing up on the buyer side of the closing ledger and then getting a credit from the seller. Is that what you're thinking?
Speaker 3:Or , or not? But yes. Or ,
Speaker 1:Or not. Or you might have to pay for it by yourself. Okay. Yeah . Alright . When we come back, I , I've got another story, but do you have something you wanna tell about? Yeah , we'll flip the point . I've got the, alright , I got a cart before the horse story. Alright , we'll do that when we come back. You are listening to the Academic Mortgage and Realty Show on Wisconsin's radio station 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 thanks again for tuning into today's show. So David, I've got , uh, a client who I helped refinance a couple years ago in , uh, Illinois. And she has had her , uh, son and daughter-in-Law, living with her for I think over a year with her grandson, which is awesome. And now the son wants to buy the house, the mom's house, and mom's gonna buy a town home . Awesome. Cool . And so this combines a a lot of themes. Uh , unfortunately the , the son ended up not going with us at Accu for his purchase of his mother's home. Hmm . Um, but I did give him a great idea, which is, hey, you can get a gift of equity from your mom. Yeah . And it can be , um, more than $16,000. 'cause that's everybody's first, you know, thought is, oh , I can't give over the annual gift limit, see your tax advisor. But that's, that's a fallacy. And , um, so, so he's going with this other lender, but the deal is, in her case, she needs to sell before she can buy. And so I get a call on, I think it was Thursday, Hey, we wanna write an offer , uh, on this certain town home . And I had already been in contact with her real estate agent , uh, because the, the , the precipitating event was, I just found out that my son's gonna be buying my home on May 31st. Oh , we're gonna close on May 31st. So it's a week and a day before that. Right?
Speaker 3:Yeah . I said , said great is today May 31st, but go on.
Speaker 1:Right. But Oh , it's , it's a sure thing. Okay. 'cause they, they got, they heard from their lender that they're closing on the 31st. Hmm . So we, I put together the rock solid guaranteed approval, pre-approval. She is gonna need to take some IRA distribution, but that's no problem. We know who the financial advisor is, done many transactions with them. Um, but my pre-approval letter says it is subject to the proceeds of 135 grand on the sale of her house. But that , that's supposed to happen on the 31st, but
Speaker 3:Oh, so you det you , you kind of tried to water down, like Yeah , it's not just like you need it, but like it is scheduled.
Speaker 1:That's right. And I kind of put it in the boilerplate language. I didn't like highlight it and bold it. And, and so this , uh, buyer's agent did mention to the listing agent and they wisely, the listing agent wisely said, could you show me at least a pre-approval letter from your son? Or better yet, a loan commitment letter. Yeah. And guess what? They hadn't even done the appraisal yet. They hadn't even done the appraisal yet. Okay. And were a week and a day before they're allegedly closing. So I'm like, I think we kind of jumped the gun here. I think we probably jumped the gun.
Speaker 3:Not , no, wait, not we not , not you not Brian. No,
Speaker 1:No, I was just going on what they said. Oh, hey, they got the closing schedule . Well, you know, who, who knows what really happened? That would've never happened had we been doing the financing. Of course. No,
Speaker 3:I man, you're much more level head . You're , you're much more cool and calm about like, let me, let me tell you the way in which we can pull this out together. And then for them to, we're competitive people. We like to help people succeed, but we also like to succeed. Well that's right . And for them to, to go someplace else. And was did you have, I believe the term is reta , is that what you felt? Oh , <laugh> .
Speaker 1:Yeah . See , yeah , I told you that wasn't a good idea. Okay . Um , but , but you know, the other thing was on that property that they had to withdraw the offer on. I did not get an appraisal waiver on Friday. Uh , they're writing another offer even though, you know , 'cause the appraisal did get done on this last Friday. The appraiser came to the house, but, and the lender says we really are gonna close on the 31st, so they , she finds an even nicer place. And so she's writing an offer on that. And then we got the magic words, no appraisal required, no appraisal required. So we put, and she's putting like 50% down. Okay . So we put together that rock solid pre-approval with those magic words, which I am really hoping she gets this one under contract. And then she know , hopefully during the attorney review period, which is about five days in Illinois, they , her house will actually close and, and we'll have a happily ever after . I guess I'll let you know next week if that all comes to fruition. Yeah . Yeah. Uh , in the meantime, folks, we'd love to help you or your loved ones whether you're buying your first home. We kind of had a lot of move up by our stories this week, but we are helping first time home buyers every week. Remember we got the special first time Wisconsin home buyer money , uh, that's available. Is that about six and a quarter these days? I think
Speaker 3:6.125%
Speaker 1:Years . Oh 6.125. The a PR vary depending on how expensive your PMI is. 'cause most first time home buyers put down less than 20%. So your a PR might be 6.6 due to the PMI. That's a smoking hot deal. And , uh, hey, we're , we're just here to help and we love what we do. Thanks again for tuning into today's show. You've been listening to the Academic Mortgage and Realty Show on Wisconsin's radio station. 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.