The Accunet Mortgage and Realty Show
The Accunet Mortgage & Realty Show 6-30-24
The following program. The Academic Mortgage and Realty Show is paid for in full by academic 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 , uh, the licensed real estate broker with Academic Realty Advisors and also majority owner of Academic Mortgage, where my individual NMLS ID number is 2 5 9 6 1 0. I'm here this morning along with my son David Wicker, who is one of our senior sales senior loan consultants. We don't sell anything. We advise , uh, senior loan consultants and also our Chief Client Experience Officer. And David's individual NMLS ID number is 3 2 8 8 4 7. If you've got a question or a comment, you can always call or text us on the WTMJ talk and text line, which is 8 5 5 6 1 6 1 6 20. So, David , uh, on Friday, we got like the most important number that comes out every month relative to the Federal Reserve. And , uh, what is that said number that comes out once a month?
Speaker 3:It's, what's funny about the way you characterize that is it's the most important number to the Federal Reserve. So that is the PCE, the personal consumption expenditure. And if our listeners have a puzzled look on their face, I know why. It's because this measurement of inflation is not the same headliner as CPI Consumer Price Index or even the jobs report, which is not itself a direct measure of inflation, but hey, if people have jobs, they spend money. And if that money is chasing too few things, it drives up the cost of stuff. So we got this PCE number, which is the Federal Reserve's favorite way , preferred p preferred way to measure inflation. We got two numbers actually a month over month and a year over year. The month over month, dad was 0.1%.
Speaker 1:What? That's like next to zero.
Speaker 3:I mean, I , if you got any closer, you'd have to be at zero, right? So, and 0.1, hey, if you extrapolate that over a whole year 0.1 times 12 months , that means inflation might be at 1.2 if we take that month over month number,
Speaker 1:Okay?
Speaker 3:Um , but, but year over year was 2.6. 'cause they really do measure, you know, hey, last May of 23 to May of 24. So maybe the answer is somewhere in the middle.
Speaker 1:Yeah, I've heard smart economists say they kind of are looking maybe at the last three months or last six months,
Speaker 3:Kind of , this is why you can call it artisanal inflation measurement. 'cause you can kind of measure it however you want.
Speaker 1:The Federal Reserve wants inflation to get back down to 2%, which is about where it was, or is actually a little lower than that prior to the Covid pandemic. And so that is the reason why they've jacked up short-term interest rates , uh, that banks charge each other. That's the only interest rate that they have control over. But that has affected the prime rate, which is the index used for all home equity lines of credit and most credit cards that's sitting at 8.5% right now, which is really high compared to what used to be a three point a half , uh, during the pandemic. And then of course, everything moves in sympathy. That's why mortgage rates are high. So bottom line is we got the number and it was exactly at expectations. We also got a little , uh, couple of other numbers on Friday. Uh, we got the , um, consumer spending, right, that , that increased 0.2% that was a little weaker than the forecast of 0.3 on a month to month basis. And personal income rose a half a percent on the month or 6% annualized, and that was stronger than what had been expected. Put it all in the blender and rates kind of stayed the same. So , uh, on a 30 year fixed rate , uh, mortgage news daily, which guess what puts out a rate every day , uh, is at 7.05, your friends at academic mortgage on a 25% down , uh, payment with excellent credit on the median sales price in the southeastern Wisconsin area of 346,000. We would've been at 6 9 9. And the a PR on that would've been 7.05. So rates are kind of stuck right around seven. But you know what? It's better than being stuck around seven and a half .
Speaker 3:Well, wait, you just, just to like, you know, shine this as best I can. I that I think you just said income continues to grow. So maybe if, if rates remain, you know, flat, that 6.99% continues to become more and more affordable for clients as their incomes continue to grow.
Speaker 1:Well, and remember , uh, maybe you didn't listen to last week's show because Tim, Tim was taking your place and we had the latest forecast from Fannie Mae , um, for the rest of the year, they're expecting the 30 year fixed rate to slowly drift down towards about 6.6 by the end of , uh, 2024, and then continue to go down a 10th of a percent every quarter just in 2025. Yeah, you're wrinkle in your nose there.
Speaker 3:Yeah , just don't ask them what they thought three months ago or six months ago, or 12 months ago.
Speaker 1:At one point at the beginning of the year, Fannie Mae was predicting the 30 year fixed rate would be down to 5.8 by the end of 2024. So I remember economists are never wrong. They're either early or late. And so , um, what ,
Speaker 3:What , what a career, if you can get one. Yeah.
Speaker 1:Alright, couple of headlines , uh, that I picked out of the internet. Uh , one was America's How a Frozen Housing Market is Warping the Economy. That was Friday in the Wall Street Journal. Uh, another one was Housing Market remains Stuck until at least 2026. And that came to us from , uh, bank of America , uh, which had an interesting number, a couple of interesting numbers in it. Let's get to that when we come back. You are listening to the Aced Mortgage and Realty Show on AM six 20 WTMJ
Speaker 2:Home buying advice from the guys who know it best. This is the Accu Mortgage and Realty Show with Brian Wicker on WTMJ.
Speaker 1:Welcome back and thanks again for tuning in today just talking about , uh, some headlines , uh, from news on the housing market. Uh, and the one I wanted to drill down on, 'cause I thought it had some interesting facts in it, was one, based on an opinion from Bank of America's economics department. And they're saying that it's gonna take until at least 2026 for the housing market to kind of get closer back to normal. And what I liked about that , uh, article is that a cool chart of existing home sales. And , uh, if you go back to before the pandemic, and this is kind of mind blowing , may of 2019 was the most recent May before the Covid pandemic. Uh, that is five years ago. Oh yeah. Half a decade. And at that point , um, annualized home sales across the , uh, United States for existing homes was about 5.5 million. Uh, during the height of the covid lockdown in May of 2020, the annualized pace of home sales, single family detachment condos in America dropped down to 4.1. You want to guess where we were in May of 2024? May this year, somewhere in between? No, we're back to the 4.1. Really? Okay. Yeah. So , uh, from a unit count , uh, nationwide, that's about a 25% drop, okay. From, from the old normal. And of course, the , the reasons are well documented now, right? People aren't willing to list their homes , uh, because they've got really low mortgage rates. Now, thank goodness, that's not true of everybody. Yeah, sales are only off 25%. They're not off 50%, but that's still a pretty big, you know, drop in the market. Uh, and you know what, we're pretty similar here in southeastern Wisconsin. I did look that number up. And in terms of number of listings , um, I'm sorry, number of sales in May of 2024, we were shy by 23.4%. So a little bit better, a little less of a drop. Uh, and also though, this is kind of shocking, when you let five years accumulate, the median sales price is up $105,000. Oh , let's just call it, it was , uh, two thirty nine and now it's , uh, 3 44. So that's a 44% increase in the median sales price. My point is that, oh , and by the way, I should also say this, listings are down 27% in southeastern Wisconsin , uh, in the five county area. Back in May of , uh, 2019, we had almost 3,100 listings come on the market , uh, this past May twenty two hundred and twenty five. So it almost a 28% drop on listings. You got a comment on that there, David.
Speaker 3:You know, even speaking broadly in our own backyard, it it, it sets aside the micro market that any particular buyer with their smart buyer's agent is looking at. And even with call it 25% less to look at. I've got clients winning, winning and, and , and there are homes available to win. But you're , you know, my favorite , uh, example is , uh, describing homes by days on market, or as I call them, first weekend, second weekend, third weekend,
Speaker 1:Right?
Speaker 3:And the, the opportunity, and I've got clients looking at all, I've got some clients, and we've talked about them before, they're only looking at first weekend homes. To them it feels like it's a 50% drop in, you know, available listings, right ? 'cause there's just not enough. Well, but if you're looking at second or third weekend listings, maybe they need a little love little paint, little this and that.
Speaker 1:Even maybe they were priced too high
Speaker 3:That well, so, and that's an , that's another element too. I tell clients that when you decide to win, you can, but until you're willing to engage the market as it is right now, you're , you know, you can't hope for a return. Despite what Bank of America might say, Hey, maybe things come 2026, return to what they were in 2019. I think most folks want to continue to live their life, and you must engage the market as it is.
Speaker 1:That's good advice. Yeah. It is what it is. Well,
Speaker 3:'cause 'cause as you just proved, oh, you wanna wait two more years? Mm . Home values ain't coming down in the next two years and they're , it ain't coming down anytime soon. Now ,
Speaker 1:Now they may in some markets, right? We were already seeing that's, that's why we always try to remind ourselves and everybody who's listening, there ain't no one US housing market. No. There are some markets that are soft , uh, Florida being one of 'em , where marketing times are, are, you know , stretching out to like a hundred days in some markets in Florida. Um, so it is all about supply and demand. I was talking on Friday with , um, a longtime real estate broker about what he's seeing in market conditions on the ground. Let's compare his notes to ours when we come back. You are listening to the Academic Mortgage and Realty Show on Wisconsin's radio station, WTMJ getting
Speaker 2:You into the home of your dreams. Here's more of the ACU Net Mortgage and Realty Show with Brian Wicker on WTMJ.
Speaker 1:Thanks again for tuning in today. I'm Brian Wicker, the , uh, older, that's David Wicker, the younger over there. And I was talking to David Doen of our , uh, good realtor friends and who also happens to be an attorney. And he was saying that , uh, some of his buyers who had been on a , uh, um, kind of on hold, let's say the last several weeks, yeah, they're starting to come back because they're noticing that some listings are sitting on the market longer. So these would be your second weekend or third weekend listings. Yeah. And his other comment is from just what he's seeing right from his microcosm of the world. He says , uh, some of these people are asking ridiculous prices for their homes . So remember folks all listing prices are a made up number, you know, and , and what does a listing agent do when they come for a listing appointment? They come and they show you as the seller, Hey, here are the homes that are the most similar to yours in size, bedroom, bathroom count, style, quality, whatever, geography. Right? Mm-Hmm. <affirmative> . And here's what they sold for. And so then here's how I think, oh, then, then I think all real estate agents do this. They also tell you, and here's the current competition, you know, maybe here are the listings that are like your home , uh, that have accepted offers. Well , here where they're
Speaker 3:Right. Oh, I'm on my phone and I'm scrolling past your listing. And then you know your neighbor and who's got the prettier house because Correct. Hold it up.
Speaker 1:Well, and and I, I had gotten that advice from a good realtor friend of mine when we sold in Brookfield, I don't know , 20 years ago from 12 , 15 years ago maybe. Yeah . It sounded like , and that's when the market wasn't so good. Uh , it was like, take a look at your competition.
Speaker 3:Yeah.
Speaker 1:Who are you when you hit the market? Who are you gonna be competing against when you're
Speaker 3:Walking around Summerfest thinking, you're looking good. Well look around and see who else looks good that night. That's right. Yeah . There you go.
Speaker 1:Yeah . See what the competition is like. And um, so , so he had had a particular , uh, listing appointment and he went and presented the evidence and said, I think that this is what your house will compound at . And remember that's what appraisers do as well. Yeah. Is they use closed sales , um, and , and they say, here are the most similar closed sales. And, and they make little adjustments. 'cause no two houses are exactly alike. And then they, maybe they put more weight on one comparable than another. Or they say, I really putting most weight on comps to one and two and I'm ignoring number three. Whatever. They come up with a value. Well, this guy took the listing agent's suggested number and added 50 grand to it. I did not ask him what the price was. So I don't know if that's 10% or 20%, but 50 grand's a big number. Yeah. And the listing proceeded to sit and didn't get, I don't know if you know, go ahead.
Speaker 3:It's okay. It's okay if it sits right. All it takes is one. So maybe you went frothy to start because he had the , um, fortitude to be willing to wait test
Speaker 1:The market.
Speaker 3:Well , well , yeah. Hey, toss out. Pay me a billion dollars for my house. Nobody Okay, nobody . 50% off.
Speaker 1:I'll come, I'll come down. Yeah . I'm more of the , I'd rather be realistic and let the market bid it up. That would be my personal style
Speaker 3:There. There's no bid up, there's no bid up, there's no discount. There's, what is it worth? Well,
Speaker 1:But it's what, the more people, I think the more people you have interested in buying your home, I do think that pushes up the price or that's certainly what, what we see. And I've got a story to go along with that in uh , okay . After we come back after this next break. But ,
Speaker 3:Um, but dad, you're saying, okay, I weighed 200 pounds. Well, did I used to weigh one 70 or did I used to weigh 300? It's like, it's it's still the same number.
Speaker 1:Well, but this is more of a attractiveness or supply and demand thing. So the , the punchline of this story is after getting no action, they reduced the price. 30 grand. Mm-Hmm. <affirmative> . So not all the way down to where he thought it was. And they did get an offer, but I believe he told me, if I'm recalling my, my , uh, stories correctly that this offer now, in other words, doing the math, it's 20 grand where over where the listing agent thought it would comp out at , has an appraisal contingency. You know, it says, Hey, you know, I , I want the house to appraise out at , at this number. Yeah . In order to continue through with the sale. So, you know, we've been talking about appraisal contingencies a lot and there's basically three flavors. You wanna say something already ?
Speaker 3:I just wanna say if that guy, okay, he got 20,000 over the, his recommended list price, even if it appraises, you know, a little light that still might be above what he would've started at for a list price. So it could, you know, how you arrive to what that guy's final number might be. Whether it gets bid up or bid down it, the , the path almost doesn't matter when it comes to the final number. It's just the story that goes along with how you got to the final number.
Speaker 1:I think there's some human psychology to , you know, well , of course the bidding war when you , when you're standing there and you , and you're at an auction, you know, if you will. And other people are going, oh , I'll pay this much. You know, know people tend to get caught up in that , uh, psychology and they, and they will bid a little bit more. Alright , so when we come back, I got a story to share of somebody who made an offer , uh, last weekend , uh, kind of quickly. And , and , and, and the story involves a key component is the appraisal contingency and what the choice was that they and their agent made. Uh, we'll get to that right after we hand it over to the WTMJ Breaking News Center. Don't
Speaker 2:Break the bank to get into a house. Back to the Accu Net Mortgage and Realty Show with Brian Wicker on WTMJ.
Speaker 1:Welcome back and thanks again for tuning in to today's , uh, show. Uh, we're, we're talking about, you know, is , is the market in southeastern Wisconsin , um, softening at all? Or , you know, compared to the national headlines? And, you know, I guess it , it depends, as you were saying, David, are you looking at a second or third weekend home that it's been on the market that
Speaker 3:Would make for a short radio show? No. See you next week.
Speaker 1:Okay. See you next week, <laugh>. Alright , so, so I had some past clients , uh, click on the blue button over last weekend. Uh, and , and it kind of came about abruptly. They, they , uh, had sold their , uh, longtime primary residence in Wisconsin. Uh, bought a place in , um, south Southern , uh, Florida, which is now their primary residence. But like a lot of Wisconsinites, they still spend their summers up here in Wisconsin. 'cause guess what? It is really hot. <laugh> and yeah , south Florida in the summer. Uh, and , and so they're up here and now they're renting a home and they're not liking it. Okay? So they're like, we wanna buy a house, which will be a second home for them. And they're looking like in the 300,000 price range. They just want a small house. A ranch doesn't have to be great. They'll fix it up. And sure enough, one comes on the market. They had set up a search using a proprietary , um, uh, real estate broker's searching platform. And , uh, it pops up on their search and they go, okay, we wanna go see it. Uh, they click on the button to go see it with this brokerage firm's agent and they end up writing an offer. I think they wrote the offer on Saturday, then they clicked on the blue button on Sunday, and I didn't get a copy of the offer until Monday when I had already found out that they didn't get the offer. So here , here were the parameters. Let's say the house was listed for 300. They offered something like three 10 with an escalator clause up to three 30. Do you want to quickly explain the escalator clause in Wisconsin? David?
Speaker 3:Uh, I would like to pay you three 10. If you show me a bonafide competitive offer from not your brother-in-Law, but you know, somebody else, I will beat that other offer by a dollar or whatever dollar amount up to a certain cap. So these folks said, I'll pay you three 10, but show me someone else who wants to buy your house. I'll, I'll bid them all the way up to three 30 .
Speaker 1:Yeah, I am . So if somebody came in there at let's say three 20, you know, then they're saying, I'll pay you 3 21. If they had a one, one , I'll beat you by a thousand bucks. So, and, and they only wanted to borrow like half $150,000. But two problems that I kind of Monday morning quarterback this , um, when they came into my office on Monday was , uh, a , they didn't have a pre-approval letter. 'cause this was kind of , you know, they didn't reach out to me on Saturday prior to submitting the offer. Uh, they reached out on Sunday. And secondly, the agent who drafted the offer said that , uh, marked the box that said it , the house has to appraise out at the agreed upon price. So let's say that they had escalated all the way to three 30 . The offer was written so that it had, the appraiser appraisal had to come in at three 30 . And if it didn't, the buyers could cancel the deal. How does that make you feel as a seller?
Speaker 3:Uh , that would, that would sync that offer. Lower on my, you know, if they had multiple offers, boy, that would suddenly slide into the third, fourth, fifth slot of ones that I was considering.
Speaker 1:Absolutely. 'cause hey, I thought it was worth 300. You're willing to pay me 10% more. Oh, as long as it appraises out. So here's a really bad, sad part of the story. Uh, on Monday, once, you know, the game was over, but I still put the address for this , uh, property through , uh, Freddie Mac automated underwriting system at a value of three 40. 'cause they had somehow found out that that's what the , um, seller had accepted, got an appraisal waiver, full appraisal waiver, no appraisal needed. So had the timing been a little different on this and not so last minute, my advice to them would have been knowing that we did not need an appraisal. Mm-Hmm. <affirmative> . And once, you know, again, chicken before the egg, I didn't have all their income information I did on Monday. 'cause they brought it all into the office. They're not uploaders . They're drop offers . Drop it off at the office, which is fine. And, you know, once I had all that information, I was rock solid on their income. I, I knew exactly where the money was gonna come from for their down payment. And they knew we didn't need an appraisal. I would've said to them in their buyer's agent , why don't you write a cash offer? Sure . With no appraisal contingency, they were already waiving the inspection contingency. Um, and , and so they could have done that because remember in the state of Wisconsin, even when you write a cash offer, it says write in the offer to purchase that you're still allowed to get a mortgage. And that the seller will cooperate and allow the lender's appraiser to come into the property. You just can't use lack of financing or a low appraisal to wiggle out of the deal. And so, you know, unfortunately that opportunity , uh, slipped through their fingers 'cause they accepted this other offer.
Speaker 3:There , there is no substitute for putting your hand on a hot stove. 'cause I promise you, the next kick at the can on this one, they're going to be like, Brian, can you reach for every tool in your toolbox? Because
Speaker 1:Let got the hand Yeah . Thing . So , and we talked about this the next time, let me tell you why I wouldn't advise him to write a cash offer unless we get another appraisal waiver on the next property. Let's talk about that when we come back. You are listening to the Accident Mortgage and Realty Show on Wisconsin's radio station. AM six 20 WTMJ. Important
Speaker 2:Home buying questions and answers you can count on. This is the Accu Mortgage and Realty Show with Brian Wicker on WTMJ.
Speaker 1:Thanks again for tuning in today. Uh , I'm Brian Wicker, a licensed real estate broker and also the owner of Accu Mortgage, along with son David Wicker, one of our senior loan consultants at Accu Mortgage. And David was just telling about a , a couple that missed out on an opportunity to purchase a home even though they wanted to ultimately finance about half of it. Uh, because on that particular home, when I put it through our automated ordering systems, I got a complete appraisal waiver. Uh, and I had already verified their income and down payment. Uh, I would be comfortable suggesting that they, in that circumstance, write a cash offer with no appraisal contingency. And they had already decided to waive the inspection contingency. But what if on the next house we don't get an appraisal waiver? Uh , but they're willing, you know, let's say the next house comes is listed at 300, they say, okay, we're willing to pay , uh, three 40 for it, even if it appraises as low as two 90. So they might give $50,000 of appraisal gap , uh, in their minds or if they wrote with a appraisal gap contingency. But why, why would I be nervous of saying, well, hey then if you're gonna be that flexible, why don't you just write a cash offer?
Speaker 3:Well , what could snake 'em ? It's a measurement of risk, right? Because even if you're supplying the gap and a huge one, like you just described $50,000, it's like, well, if the appraiser walks through and there's a hole in the roof, your friendly lender's gonna be like, fix that hole in the roof before I lend you any money. And if they wrote contingent on, you know, nothing to do with financing, they have to show up with the suitcase of money and it won't be mortgage money. It's gonna be their money.
Speaker 1:Yeah . Or , or negotiate their way out of it by paying the , the seller some cash to break up. And the one I'm always worried about is something in the basement. Uh , and in fact, one of your , uh, fellow loan consultants has a transaction going on in Illinois right now where the buyer wrote with a financing contingency, but not a home inspection. So our appraiser comes through the house, notices some wet areas or formerly wet areas in the basement and flags that, which then causes us to say, well now we need a basement expert to come in here Yeah. And tell us if there's an active leak or is this, you know, what's the , what's going on here? And the seller is , you know, pitching a fit because well , you didn't have an inspection contingency. Well, okay. Right . This is yeah, you're right. But this is related to the financing. So in the case of my clients, if they were to go , um, without an appraisal contingency, and then the appraiser flags something on the appraisal like moisture in the basement , uh, that has to be investigated and it kind of ends up cratering the deal or well
Speaker 3:Cratering the financing in your
Speaker 1:Cratering the financing. Right. They're they're in a pickle then. So, so if they don't get,
Speaker 3:But it's, it's about risk. I mean, it
Speaker 1:Is . Yeah. Maybe, maybe they've been through it and the basement looks dry as a bone and they're willing to take that risk. So Yeah, I guess maybe
Speaker 3:They're willing to liquidate the retirement to get to the house.
Speaker 1:No, no. 'cause let's talk , well, let's talk about
Speaker 3:That . They could, I'm just saying for the right house, I mean, you know, Hey, it's only taxes <laugh> . Hey, no, taxes aren't, they're just a thing. They're not the boogeyman for the right house for these folks. If it's worth it, well,
Speaker 1:Okay, let
Speaker 3:You can't take it with you .
Speaker 1:Let's, let's talk about that though, because I think a lot of people, and, and I was Can I,
Speaker 3:Sorry, go ahead . Before we, and Yes, let's talk about that. I, okay. If it was Brian or David writing an offer on a house and we still wanted to borrow money to do that, I would, I, David would only write with a financing contingency because, because implicit in that are the two other elements, inspection and appraisal. Okay. Implicit, Hey, if there's a hole in the roof, I won't get financing. That is an implicit inspection contingency. Same with a , same with, hey, if I wanna borrow a hundred thousand dollars, well there's an implicit minimum value in order for me to borrow a hundred thousand dollars. So I don't need to check the appraisal contingency.
Speaker 1:Well, and that's the thing we should point out to all sellers , uh, and listing agents should know this obviously is, you know, if you get an offer from somebody that has a pre-approval of 5% down and no appraisal contingency, there's still a value at which the property needs to appraise. Right . In order for that financing to be possible. Yes. Uh, and there's, you know, it depends on the circumstances. That's why academic mortgage , uh, is extremely passionate when people are willing to either wave or write with appraisal gaps that we verified that they can still perform. Exactly. You know, if that worst case scenario comes through, I'll tell you , you know, I was mentioning, I was talking to this other , um, agent kind of friend of ours who we do some business with, and he's working with some other lender that's using a big bank for their pre-approval. Yeah. I'll probably switch to , to accu it , uh, you know, when it really comes time. But I'm , I just said I bet that, I bet that , uh, pre-approval letters pretty flimsy. Oh God. Yeah. Yeah. Did , did They haven't verified the income. They haven't verified the down payment, let alone, oh , and by the way, these people were writing with $10,000 appraisal gap. Yeah. And so I was like, did they verify that, that they could either still get the same loan amount? No. Yeah , of course not. The devil's in the details. Alright, when we come back , uh, I've got another story and you've got one too, where people are considering using IRA money for down payment. We'll talk about that right after this. You're listening to the Academic Mortgage and Realty Show on AM six 20
Speaker 2:W-T-M-J-W-T-M-J-W 2 77 CV N-W-K-T-I-H-V two Milwaukee from the Annex Wealth Management Studios. This is News Radio , W-T-M-J-A Good Karma Brand Station. Find a place to call home without the headache. This is the ACU Net Mortgage and Realty Show with Brian Wicker on WTMJ.
Speaker 1:Welcome back. And , uh, while I was in the office on Friday, David, a couple nice things. Uh, got to meet a couple happy buyers. One of 'em was , uh, Brother-in-Law, Tim's , uh, client and , uh, who's relocating from , uh, Denver back to Oconomowoc Ha despite rates being higher, I , I don't remember if they were a homeowner in, I think they might have been a homeowner in , uh, the Denver area, but moving back to Wisconsin where she's from, and this is the one where , uh, the seller countered and said, oh, you, you got this really big bank pre-approval here. Yeah. I'm gonna up you a little bit on the price and I also want you to get a pre-approval for me from a local lender. And the real estate agent said, you gotta talk to my guy Tim over at , uh, academic mortgage. And we got her all fixed up. Yeah, I
Speaker 3:That is common. I have, I have agents who are like, oh, you write an offer with a pre-approval from a big bank. I won't even look at it.
Speaker 1:Well, and you know, those big banks make a lot of , make a lot of loans certainly on a national basis. But I think, you know, in fact, I'm thinking about putting together like a checklist for agents and sellers to consider because it's like, Hey, is the loan consultants' cell phone number on the letter? Like , can I call anytime ? Yes. You know , did they verify not just the credit, but did they verify the income and the down payment if there's appraisal gap , is that, has that been verified that the buyer can either cover it with cash or still afford the same mortgage , uh, even if the appraisal comes in low ? Oh, guess what? Those are all things we do , uh, with ad acuate in our rock solid pre-approval process. Um, and then, you know, our favorite thing, of course, if we do get the appraisal waiver, we put that right on the appraisal, on the pre-approval letter saying no appraisal required. Or sometimes we get someone in between where it's just no appraised value
Speaker 3:Required. I mean, and, and then when I call the listing agent and I say, okay, do you see where it says no appraisal needed? It literally means no human is going to walk through the house. The value at this price accepted not, not something that will be reviewed or negotiated or questioned if you, and just to be clear to terms on that,
Speaker 1:Yeah. The next best thing is, is the tweener, which is , hey, I believe the value, but we still want a data checker to come through the house and make sure it does have three bedrooms and two baths. And I guess in that case, if they did see a wet spot in the basement, that could get questioned as well. So if, if the property is not in great condition, there's a small
Speaker 3:Risk there . I literally, I had a client over the weekend so that in between , I said, I get a value waiver at this number. So a human still has to walk through the house to confirm it's not falling apart, but there's no judgment on value. The computer says, yes, this house is worth X
Speaker 1:And that's what we're all about. Right? That's what sellers want. Sellers want certainty. Uh , listing agents want certainty. That's why everybody would love to get a cash offer with no home inspection. And you know, oh, no appraisal. Go
Speaker 3:Ahead. Do you know , uh, 'cause we were talking about cash earlier. Again, if it was David selling my house and someone wrote me a cash offer, I would consider countering and striking the you can get financing element so that they're compelled as an option so that they're compelled to bring a suitcase of their money.
Speaker 1:Yeah. And you know what's interesting? 'cause we do business in more than one state. Uh, in, in Illinois, they actually have pre-printed language as to, Hey, this is a cash offer.
Speaker 3:Isn't that true in Florida too? Uh, maybe.
Speaker 1:But uh, in, in, in , um, in Illinois it's like, Hey, this is a cash offer, but I'm gonna get a mortgage and then there's another box. You can check that, no , I'm really bringing a suitcase full of cash. Which,
Speaker 3:Which if you're getting a cash offer, like rera them , right? That would be, that would be my element as a , if I was selling, you know , great. It depends ,
Speaker 1:Hey, it depends on the circumstances. I , I just had a friend of mine , uh, get an offer a week ago , um, and a higher priced house in Waukesha County over a million dollars. And it was a cash offer and they showed 'em that they had the money and , uh, in that particular case, because this, that particular home wasn't fully updated and they didn't have any other offers, it's like, you don't re-up 'em . Oh, you
Speaker 3:Just say for sure if you only got one offer. Yeah, yeah, yeah. Don't, don't risk that one . But if you've got that's four or five,
Speaker 1:Yeah. That's,
Speaker 3:You know, because again, as a seller, you're trying to button down the risk
Speaker 1:That's right. And get to the, get to the closing table with , uh, no fuss and no muss . Well, you know what, we're gonna have to , uh, delay until next week our conversation about using IRA , uh, funds as down payment because we got a situation possible with , uh, that. But for now, that's all the time we have. Folks, thanks again for tuning in today. You've been listening to the Academic Mortgage and Realty Show on Wisconsin's radio station AM six 20 WTMJ. The Academic Mortgage and Realty Show is paid for in full by accident 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 of the hosts and guests of academic mortgage, LLC and not WTMJ or Good Karma Brands.