Speaker 1: 0:00

The following program, the ENT , mortgage and Realty Show is paid for in full by ENT mortgage, LLC and equal housing lender consumer access.org number 2 5 5 3 6 8. The advice and opinions expressed during the Academic Mortgage and Realty Show are solely that at the hosts and guests of ENT mortgage, LLC, and not WTMJ or Good Karma Brands.

Speaker 2: 0:20

Welcome to the Accu Net Mortgage and Realty Show, getting you inside information on buying, selling, and financing your home with expert advice from Accu Net Mortgage and Realty. And now here's Brian and David Wickers.

Speaker 1: 0:34

Welcome to the Aced Mortgage and Realty Show. I'm the aforementioned Brian Wicker licensed real estate broker with Accu Realty Advisors and also the majority owner of Accu Mortgage, where my individual NMLS ID number is 2 5 9 6 1 0. And I'm here again today along with my son David Wicker, who is one of ENT mortgage's, senior loan consultants, also our Chief client Experience officer, and his individual N ML S ID number is 3 2 8 8 4 7. If you got a question or a comment, you can call or text us on the WTMJ talk and text line, which is 8 5 5 6 1 6 1 6 20. And of course, you can get a podcast of today's show wherever you normally get your podcasts. Uncle Mark was in town for July 5th, July 4th at festivities, and he gets his podcast on Spotify. So I know that we're out there. Okay . <laugh> on the Spotify. Alright, so , um, on Friday we got one of the two most important economic reports that we get each month, or actually I'm gonna say there are three, two and a half, two and a half. Um, and this was the jobs report for June, where we found out through a survey of payroll companies and large employers that the awesome United States economy created 206,000 new jobs in June against an expectation of between one 90 and 200,000. Mm-Hmm. <affirmative> , what happened, David? And if you don't have the number I got it. What happened to the , um, really hot number from May 'cause May was surprisingly strong.

Speaker 3: 2:02

Well, as is the every first Friday. Okay. Well that first Friday of June, we said, well, how many jobs do we create in the month of May? And the first cut at that number was 272,000 jobs. 2 72 . Yeah .

Speaker 1: 2:18

That exceeded expectations by quite a

Speaker 3: 2:20

Lot for sure. Then, you know, with a little more time every first Friday, the Bureau of Labor Statistics, they might do some revisions. They say, Hey, you know what, we've had a couple more weeks to digest,

Speaker 1: 2:34

Recount the

Speaker 3: 2:34

Beans, what we really think may was in this case. And they said, oh, you know how we thought in the first part of June that we created 272,000 jobs in May. Just kidding. We, we redid our math, we, we uncooked our Excel spreadsheet and we created 218,000 jobs in May, which is still,

Speaker 1: 2:57

Well almost like June's first number. Yes. Very similar.

Speaker 3: 2:59

But that revision down, I think gave markets permission to be like, whoa , look at this job market strong, not white hot . Maybe that, you know, let's put our tea leaves on the table to be like, Hey, is that I mean that the Fed might, you know, put their hand on the dial for interest rates sometime this fall. Markets are hoping. So per Friday's improvements,

Speaker 1: 3:23

Did you happen to look at the , uh, most current , uh, fed Funds futures market for September prior? I know that prior to the release of the numbers, the Fed Funds futures market had like a 70% chance of the Fed , uh, cutting rates for the first time in September. And now it's,

Speaker 3: 3:42

I can't pull it up in time . Can't pull it

Speaker 1: 3:44

Up. Okay. We'll get back to that. Uh , so overall these numbers were kind of Goldilocks, right? It's like, hey, you know , know what? We're still creating a fair number of jobs . Oh good. It's cooling down. The Federal Reserve's job is to maintain full employment. Oh, let's shut out that other number. Yeah.

Speaker 3: 4:01

5% ish Yeah. Is full employment. Full

Speaker 1: 4:04

Employment. So the unemployment rate, which is derived from a telephone survey did tick up to 4.1%. Yes . From 4%. But remember two different sets of data. One is actually collected from payroll companies and employers, the other one's a phone survey. And so 4.1% on employment is, is still very strong, you know, in terms of a oh , robust,

Speaker 3: 4:26

Typically

Speaker 1: 4:26

Strong. Awesome. And the reason that we care about , um, employment is if too many people are getting two job too many jobs or there's, you know, a shortage of workers that drives up wages and that adds to inflation. Remember that is the number one enemy of mortgage rates is inflation. And so if,

Speaker 3: 4:46

Can I say it just another way ? Yeah . Say it another, when , when people have jobs, they have money to spend. Yeah . And 70% of the American economy is all of us spending money

Speaker 1: 4:53

As consumers, not businesses.

Speaker 3: 4:55

Right. And that's why a strong labor market means a lot of people spending money. And when there's a lot of money chasing not enough stuff to satiate all that money that drives inflation.

Speaker 1: 5:07

That's right. Did you just happen to look up the , uh, odds of fed rate cut ? I

Speaker 3: 5:11

Did . Okay. So come September, the Chicago Mercantile Exchange Futures market gambling parlor <laugh> thinks that there's a 75% chance the Fed will cut rates

Speaker 1: 5:23

One quarter, one

Speaker 3: 5:24

Quarter of 1%, 1% come mid-September. And

Speaker 1: 5:26

Remember folks that will only affect the prime rate. Yeah . Which is , uh, you know, the index used for home equity lines or credit that's currently at 8.5%. So it's gonna go to eight and a quarter .

Speaker 3: 5:38

It's , uh, if they do, said cut is ceremonial more than material. That's right.

Speaker 1: 5:44

So don't look for mortgage rates to drop. You know, when they do that, if , if they do that. Uh, and also I saw some Fed speak , uh, fed Mayor Powell was kinda given some comments at a , at a, at a Portugal , uh, central Bankers conference. And he was kinda like saying, you know what, we are making good progress on inflation because remember last week we had their favorite measurement of inflation, the personal consumptions expenditures, and that was running at 2.6. Alright , so the bottom line, when we come back, we'll tell you where rates ended the week. And then also I wanna start talking about the changes that are coming , uh, mandatory effective date August 15th for buyers agent commissions and how those are gonna be disclosed. You are listening to the Academic Mortgage and Realty Show on a six 20 WTMJ

Speaker 2: 6:37

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

Speaker 1: 6:45

Welcome back to the Anette Mortgage and Realty Show. I'm Brian the elder. That's David the younger, taller and more handsome of the wicked , uh, men. And so David , uh, even though we , we had a favorable jobs report favorable in terms of , um, mortgage rates, we had kind of climbed up a little bit Yeah. Over the course of the last week. So now we're kind of back down. Um, if you were buying a $346,000 home , uh, and you had 25% down payment and all the other Right stuff , um,

Speaker 3: 7:18

Why 3 46 for a purchase price? Is that median

Speaker 1: 7:22

Three? Yeah, that was the median sales price. Uh, in May. And I haven't dared to look at the June numbers yet. Okay . Just 'cause it's a little too early. You know, especially with the holiday, maybe all the real estate agents haven't gotten their June wholesale data, you know, data entered Yeah . Into the MLS. Um, we could offer a 6.99% , uh, 30 or fixed rate. The a PR would be 7.07%. So kind of back to where we were. Um , and , but a lot better than where we were in April. Yeah. Uh, and even most of May. So we haven't started to see the predicted decline in mortgage rates. Uh, you know, it's gonna happen though. We just don't know. But

Speaker 3: 8:06

It's like economists, you're either later, early, or some version they're

Speaker 1: 8:10

In , right? Yes. Yes. So , um, most people that are in the market, I think to buy or sell a house are at least somewhat aware that there was a big settlement , uh, between the National Association of Realtors and a class action , uh, big class action lawsuit

Speaker 3: 8:27

In Missouri.

Speaker 1: 8:28

In Missouri. Was it in Missouri? Yeah. Okay. And so , uh, as a , as a result of that, there are some practice changes that are being implemented. And the official implementation deadline is August 17th. Um , and so in Wisconsin , uh, new forms are out for both listing contracts and buyer's agency contracts. And the mandatory use date on that is August 15th. So a couple of days prior. And I , I guess in order to understand where we're going, we have to say where we've been. And to say it , uh, simply it was kinda really easy to understand system, right? If you're gonna go sell your house with a real estate broker, the listing broker says, Hey, I'm gonna charge you some percentage of your sales price. Let's just use the number 5%. There's no set number out there. Some brokers are charging a flat fee. You hear some advertising 3 9 9, you hear a lot of reference to 6% brokers. Um, but let's just use the number 5%. And then what the listing broker would do is they would post in a private area , uh, in MLS, the multiple listing service that only real estate agents can see, they would then say, Hey, you know what? Of the , uh, commission that we're charging the seller, we're willing to pay any cooperating broker who brings us a buyer. This percentage of the sales price. And the most common number we would see in southeastern Wisconsin was 2.4. They can no longer do that. And that's part of the settlement. The complaint was that was price fixing. Why? 'cause everybody was using the same number that the

Speaker 3: 10:04

Listing agent cannot split seize their commission with the buyer's agent directly.

Speaker 1: 10:08

No, no. They can, they can still pay 'em , they just can't advertise it on the multiple listing service. So this is the confusing thing and why this is worth talking about in the new world, in , in my talking with real estate brokers and agents, some , uh, listings are gonna be business as usual. Meaning, Hey, you go to list your house with X, Y , z broker, you're gonna have a conversation as the owner seller about how do you wanna play this? Okay? And one way to do it is say, nothing changes. I'm still gonna list your house. I'm gonna charge you a 5% , uh, commission. And then, hey, I, as the listing broker, you know, then you have a discussion with the seller, how much do you wanna offer of my 5% to any agent who brings us a buyer? And if the answer is, well, what do you think, you know, would attract the most number of buyers? My guess is that the listing broker is gonna say 2.4%. Maybe they'll say 2%. And so that is still allowed. And this is really I think, a point of confusion for a lot of people. The question is, how is the listing broker going to communicate that to agents who wanna show that house? Yeah . Are they, I know that it's prohibited from reading all the articles on this. They can't take the data from the MLS and feed some other computer platform that's not allowed. Yeah . But if you were, you know , uh, David's brokerage, I think you could have your own website and show all your listings and then right out there naked to the public, you could say, you know, I'm willing to offer this percentage to any cooperating broker. You just can't do it on the MLS. Okay . The other big change coming up is that in order to show a buyer a home, the buyer's agent has to have a written buyer'ss agency agreement before they show the home. Let's cover that. When we come back and talk about who is eligible to pay the buyer's commission. We've already said it's okay for the listing , uh, broker to still do that. But who else could pay it? We'll cover that when we come back. You're listening to the Academic Mortgage and Realty Show on Wisconsin's radio station. AM six 20 WTMJ,

Speaker 3: 12:27

Getting

Speaker 2: 12:27

You into the home of your dreams. Here's more of the ACU Net Mortgage and Realty Show with Brian Weer on WTMJ.

Speaker 1: 12:35

Welcome back. And we're talking about the New World of Real Estate Commissions. Um , and we're talking about the requirements that listing brokers can no longer advertise through the MLS, how much they're willing to pay cooperating brokers. That's fact number one. Fact number two is that the buyer , uh, broker, 'cause remember, it's legally it's the brokerage firm, the company that has the relationship with the buyer. But then there's also an agent, an individual human being. The form happens to be called the Buyer's Agency Compensation Agreement. And , uh, so now you have to have a written agreement as a real estate agent before you show the buyer a particular home.

Speaker 3: 13:19

Can I, one way that I've described this to clients is a lot of though the past was written out, it felt implicit. Like, how is my buyer's agent going to get paid? How will they represent me as I walk through this house? And the future here is more making explicit. How will my agent be paid and do they actually represent me when we walk through the threshold of the home?

Speaker 1: 13:47

Well, and so the second part hasn't changed. If you sign a buyer's agency agreement, as long as they're not also the listing agent Yeah . Then they can give you advice on how much they think you should offer for this home and, and they can really be your advocate. Um, so that part hasn't changed. What's in question now is you have to write down, and this is part of the new Wisconsin Forum , and I would imagine other state forms , you have to put in something that is calculable in that section. It happens be still on the first page. How much am I gonna get paid? As your buyer's broker, it could be a flat fee. Mm-Hmm . <affirmative> not very common. It could be hourly. Hey, you know what, I'm gonna charge you a hundred dollars an hour for taking you around. Or a percentage. I think it's still gonna be most common for that to be a percentage of the sales price. But what you're uh , doing now is you're saying, Hey, let's just pretend I'm a , I was talking to one listing broker , uh, just earlier this week, and he said, I'm gonna still put 2% in there. That's what I have been doing. I'm gonna tell buyers I'm gonna charge you 2% of the sales price. Now, you may not have to pay for all of that

Speaker 3: 15:00

As the

Speaker 1: 15:01

Buyer, as the buyer directly, but, but you're signing a piece of paper that's saying you're willing to, okay. Mm-Hmm. <affirmative>. Because now when we go see a particular house, we might go and, and, you know, I'm going to call the listing broker, or I'm gonna look at their proprietary website and I'm gonna find out that they're willing to pay 2.4 just like the old days. Yeah. As the listing broker. While the one new wrinkle is the buyer's agent can only make the amount , they can't make any more than what's in the buyer's agency agreement. So if you sign a buyer's agency agreement

Speaker 3: 15:35

For two , could they , couldn't they amend the Buyer's Agency agreement?

Speaker 1: 15:38

Well, and that thought has crossed my mind and have had con conversations with other brokers like, well, okay, you're gonna go see 1, 2, 3, 4 Main Street and you find out that they're only offering 1.5% of cooperating commission. Yeah . Why not just write a new buyer's agency agreement or

Speaker 3: 15:57

Revised. Yeah.

Speaker 1: 15:58

So I I , I would imagine that some brokers are gonna do that. There is a little , uh, I read the message from the National Association of Realtors president to all of the members. 'cause I am a member of the National Association of Realtors. So like two weeks ago we sent out an email saying, don't forget, don't do anything to try to circumvent the spirit of the settlement agreement. So, you know, is that circumventing the spirit? So the the bottom line answer of who can ,

Speaker 3: 16:26

Uh , yes. If it smells like it, but go on.

Speaker 1: 16:29

So I, I think the hard part about the new rule, it , whereas in the past, you could just kind of count on this, Hey, the listing agent's gonna pay the cooperating agents' commission and it's gonna be maybe 2% or 2.4%, or maybe three. Yeah. Uh, you could kind of count on that as a reliable method. You can't do that anymore as a buyer. As a buyer, because some sellers, right, let's say I'm gonna sell a $2 million house. I might be a seller who says, you somebody who's gonna buy my $2 million house needs me to pay their commission. Pish posh . No, pay it yourself. Okay. Yeah. And , and so, you know, maybe then they're , maybe they're gonna negotiate their listing , uh, commission downward Sure. To reflect that. And they're just gonna go out on the market and say, Hey man, buyers , uh, you gotta pay your own freight on the commission. So it's this lack of kind of customer reliability that I think is gonna be harder

Speaker 3: 17:33

Unsettled. Yeah.

Speaker 1: 17:34

Yeah. Harder, harder to necess to maybe navigate. Um , so the buyer can pay the buyer's agent commission. Of course, the selling broker can pay, or the seller could pay. So another variation on this might be the seller just says, Hey, you know what? I'm gonna enjoy a lower listing commission. Maybe they negotiate for, I'm just making up numbers here. 3%. Yeah. And then they could put in the MLS. But I, as the seller, the actual human being who owns the home, I'm willing to pay 1% of the buyer's commission or 1% of closing costs and prepaid. It's just a general closing cost assistance. Mm-Hmm. <affirmative> . So it's just, it's gonna be a little more , um, non-uniform. Alright. When we come back, I've got a story from your brother-in-Law and accepted offer that actually addresses real estate commissions, but in a surprising way. We'll come back to that. But right now, it's time to turn it over to the WTMJ Breaking News Center.

Speaker 2: 18:37

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

Speaker 1: 18:44

Welcome back and thanks for either tuning in or downloading our podcast , uh, for today's chat about real estate and mortgage lending. A couple other of , uh, quick tidbits on who can pay the buyer's commission. Remember we said that the buyer can pay it. Uh, the seller themselves can offer to pay it. And if they do say, Hey, I, as the seller am willing to pay 2% of the purchase price , um, to go towards the buyer's agent commission. That is perfectly permissible. And we're getting a free haul pass from Fannie Mae, Freddie Mac, va, FHA and USDA , all the, all the alphabet. All the as . All the As . Because normally when a seller pays for some of the buyer's closing costs, we as lenders add that up, calculate it as a percentage of the sales price, and there are limits on how much an interested party can pay of the buyer's closing costs. And so we got an exemption. They said, you know, what, if sellers all of a sudden start to pay, what are local common custom customary buyer agency commissions? What's the definition of customary dad? Well, I would say in southeastern Wisconsin, it's 2.4% from all that I've ever seen. Yeah. But if all of a sudden, you know, somebody's trying to pay a 5%, you know, buyer's commission, you know, I would have to say as a lender, that's over the local customer , uh, what we've seen for the past 25 years. So , um, anyway, the good news is that we do not have to count seller paid buyer commissions towards those limits, which are fairly liberal and in this particular current market aren't really coming into play. No . Right. Because the, the for let's say a regular 30 or fixed rate loan, the limit on what a seller can pay for, if you're putting less than , um, 10% down, 10% down is 3%. Is there a 2% limit? If you're putting 3% down? I think that might be the case. No. Nope . Still three. Yep . Uh , so again, as long, if the, if the seller all all of a sudden says, Hey, I'm willing to pay for your buyer's agency commission, that dollar amount doesn't count towards that limit. You get a comment or a question?

Speaker 3: 21:05

I just, you know, we turn the page back to, so you wanna sell your house in New Berlin? Yeah. You've negotiated representation with a listing agent. Mm-Hmm. <affirmative>. And you're having the conversation with your listing agent about, it's this question. It , do you want the most number of people to come walk through this house Yeah . As possible.

Speaker 1: 21:26

Yeah. And be interested in buying

Speaker 3: 21:28

And be interested . Right . Offers stuff . Right . Then you , it would be my counsel as a listing agent to be like, then you need to participate in bringing everybody to the closing table if you want the most amount of people. If you don't, if you would like to haircut Yeah . A percentage of eligible buyers, because gosh darn it, my house is amazing. People want it. Yeah. And I don't, I don't want to kick in anything. I don't , I don't care

Speaker 1: 21:56

If I get 15 offers. Five will do.

Speaker 3: 21:58

Yes. Right. But, but that is the conversation to be had. Yep . Whereas in the past, because there was this cooperating , uh, split Yep . To , to help pay for your buyer's agent commission representation. Yeah . Yes. So that meant that 100% of buyers could walk through the door. That's right. And now, if you as a seller are saying, Mm-Hmm. I live on North Avenue and 69th Right. By cranky L'S donuts in Wauwatosa . I don't need to, you know, pitch in a very popular area. Exactly. Oh, okay. Well then it's not gonna be a hundred percent of people, and maybe you don't care, but it's gonna be 60% of buyers now walk through.

Speaker 1: 22:44

Or are some buyers gonna say, I'll just work with the listing agent. 'cause I don't want to spend the money.

Speaker 3: 22:49

And when I talk to listing agents, they say, oh , I'm not gonna do that for free. I'm not going to re co represent or have someone on my staff just, you know, out of the goodness of my heart, write up the contract for my listing agent . That's for my listing. That's ,

Speaker 1: 23:06

That's interesting. Because I don't think they have a choice. Right. If, if you sign a, you know, the scenario we're talking about here that's going around in my head is that the seller, because they think they have a hot property negotiates a lower listing commission. Yeah. And then an unrepresented buyer comes to the table. I don't think the listing agent can refuse to write that.

Speaker 3: 23:25

Well, the , the , they're not required to do it for nothing.

Speaker 1: 23:30

Okay. So they ,

Speaker 3: 23:31

I'd be happy , Brian, thanks for coming to my open house. You don't have representation. Great. I have a coworker , a teammate who would be delighted to help you. I know that . True . They , um, they don't work for free and they're gonna charge you X.

Speaker 1: 23:47

All right . So we got a little research to do on this scenario. 'cause I hadn't really thought that one all the way through prior to the , uh, today's show. Okay. But the two things on the way to the office on Friday , uh,

Speaker 3: 23:58

Come on, tell Yeah . Line this one up. Right. I , I

Speaker 1: 24:00

Heard a radio ad , uh, sponsored by the Wisconsin Realtors Association specifically, I think because of this impending deadline of the change, talking about how Yeah. You could go it a loan without a real estate agent as a buyer. And then they have all this cacophony of stress and a litany of list of things you have to worry about, you know, thinking through. But realtors take out the stress, you know, they're kind of making the case for having a buyer's agent assist you in the search and, and the main and the kind of curating of the transaction as it's going along. So they're trying to rationalize. I agree. And I think there's

Speaker 3: 24:40

A lot of value, but that costs money.

Speaker 1: 24:42

Or it should. Alright, let's , uh, pick up on this thread . 'cause I didn't get to the punchline of what happened to Oh yeah . For one of , uh, brother-in-law. Tim's , uh, buyers this last week, which I thought was insanely clever. So stay tuned for that. You're listening to the Academic Mortgage and Realty Show on a six 20 WTMJ.

Speaker 2: 24:58

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: 25:08

Back and thanks again for tuning in today or downloading our podcast. So we spent a lot of today's show talking about , uh, the upcoming changes to how real estate commissions will be paid between the buyer's agent and the listing agent. Do you had a question or a comment?

Speaker 3: 25:24

I was just gonna comment that even as we prepare for the arrival of the new world, it's going to evolve still a even after the deadline arrives. That's true. And so this is really just the top of the second inning, third inning.

Speaker 1: 25:41

Oh, to use a baseball analogy

Speaker 3: 25:42

For sure . Yeah. That like it's, well 'cause these rules are then going to meet the real world and the real world is gonna have influence on, well, what does it take to win now?

Speaker 1: 25:52

Well, and we've already talked about on the show in previous weeks, and I don't remember if you were , uh, on the show that week or Tim, but I had an anecdote of a broker where the seller said, yeah, I'm not gonna offer any cooperating commission. You know, this is like in June. Yeah. And they were starved of showings , right? Yeah. And so then they went, you know what, I think I'm gonna offer a cooperating commission. And then they, you know, got showings and got an offer. So interesting. Yes. Reality will meet , uh, the new rules, rules and inform its evolution. Okay. So Brother-in-Law, Tim , uh, helped a lot of home buyers last week get accepted offers. And we've been talking a lot about who can pay the buyer's side of the commission. Well, you know, in this tight inventory market, it's about helping the seller walk away with more money. And you usually think, well, the way I can do that is by bidding up the price. Right? I'm gonna bid up the price. Well , that's one tool that's Well, that's one tool, one lever, one lever. And uh, so in this particular,

Speaker 3: 26:58

Can, I guess, yeah,

Speaker 1: 26:59

Go ahead. Guess,

Speaker 3: 27:00

Did the buyer offer to offset some of the listing agent commission? Bingo.

Speaker 1: 27:05

Boom. Have you ever seen that before? No. That's smart. This is an innovative, I believe the figure was , uh, five grand. Hey, I, the buyer,

Speaker 3: 27:14

I have seen buyer credit back to seller, but to itemize it to be like, to offset your listing agent commission. Right. Come on.

Speaker 1: 27:23

It's, it's all money.

Speaker 3: 27:26

Whatever

Speaker 1: 27:26

You want, but call , you're not add com . Compare . What's the advantage of doing that versus bumping up the , uh, price by another five grand David?

Speaker 3: 27:33

Well, it's the direct offset of the commission, not just a percentage. You know , the seller walks away with some not all Right. Of an increased price.

Speaker 1: 27:42

Okay. But, but the other thing that comes to my mind is you're always at risk of the house appraising low or, you know, if you're bidding way above the asking price or way above the fair market value. Mm-Hmm. <affirmative> , you know, you're at risk of the appraisal coming in short. And so here's

Speaker 3: 27:57

If you feel like there's a ceiling to the , uh, appraised value. Yeah. Yeah. But you want to increase the seller's cash that they walk away with. Yeah .

Speaker 1: 28:05

Yeah. Right . So this is an appraisal risk free method of putting more money in the seller's pocket. Right. That doesn't have to get , you're

Speaker 3: 28:13

Kind of , if okay, if I was gonna go do that, I would almost type up, I don't want the seller pulling out, you know, a pen and paper to be like, oh, well and how much will we walk away with? If I was the buyer doing this, I would like type out, you know, and here's how much I would expect you to walk away with so that you're No ,

Speaker 1: 28:34

You don't have to do that. That's intuitive. I disagree. If you just say, I'm gonna offset five grand. 'cause the other thing that they did, David, is they, they waived the property tax provision .

Speaker 3: 28:45

Seen that one.

Speaker 1: 28:46

Yep . So usually, you know, if you're buying a house on June 30th, the seller shows up at the closing table and reimburses the buyer for the first half of the years of property taxes. Yeah . It's called a property tax probation. So another way to put money in the , uh, seller's pocket.

Speaker 3: 29:05

You what you do , do it in reverse. What is the, if you wanna sell your house for $300,000 and the seller wants to walk away with 300, what are all the things you could pay for as a buyer? Right . To get as close to that. And let's pretend the seller has no mortgage. Yeah . How can they walk away with the same number that's on the contract? We do this all the time with private transactions. That's right too . Like, Hey , yeah .

Speaker 1: 29:26

Family transactions.

Speaker 3: 29:27

Grandma wasn't expecting to pay the transfer tax. You know, as a seller, why don't you pay that buyer?

Speaker 1: 29:32

So there I , I'm glad you brought that up. So another common thing that sellers pay for in Wisconsin and in most jurisdictions even in Illinois, is the transfer tax, which in Wisconsin is 0.3% of the sales price. So on a 500,000 house's, $3

Speaker 3: 29:48

Per

Speaker 1: 29:48

Thousand. Yeah. 1500 bucks there. And then the other lever that , uh, uh, could be pulled on is , uh, title insurance. Yeah. That you could offer to pay for the seller's title insurance. So it's just a less , um, risky way to, to put more money in the, in the seller's pocket. I like that.

Speaker 3: 30:05

I would assume that Tim's clients got the accepted offer with this. They did ,

Speaker 1: 30:08

Yeah . Okay . They did . Yeah. Yeah . This was a successful one. So, ha hats off to whoever their buyer's agent was for coming up with that innovative idea of, Hey, I the buyer will pay for some of your listing commission. I

Speaker 3: 30:21

There off the top of my head, I don't think there would be a limit No. To if you the buyer were like, I'll pay all

Speaker 1: 30:27

Of it. That's right. You just have to have the money. And we gotta verify that as the lender.

Speaker 3: 30:32

As always . You gotta have the money. Alright .

Speaker 1: 30:34

What do you want to talk about when we come back?

Speaker 3: 30:36

I have another buyer story after this last break. You are listening to the ACU Nett Mortgage and Realty Show. On AM six 20 WTMJ.

Speaker 2: 30:43

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

Speaker 1: 30:52

Back. And di before we talk about your buyer story , uh, I wanted to just follow up . Uh , last week we talked about a client who was set to close on June 28th of last Friday of June. Mm-Hmm. <affirmative> pending removal of an oil tank. Uh oh yeah. From a buried oil tank on the property on Monday. And , uh, so if you happen to listen to last week's show, the bad news was that the oil tank was full of water, full of leaks. They did remove it, but then as they were trying to dig down to see where the leaks ended, they couldn't get to the bottom to say, oh yeah, now we hit clean soil. So they ran out of time. They had to fill up the whole thing. And so now a week later , uh, my buyer hears from the environmental license , state license tank removal company that, okay, here are the next steps , uh, about mid-July. And by the way, they were being allowed to live in the property , uh, kind of rent free . They just have to pay for the utilities and such. Mm-Hmm. <affirmative>. So they're living in this property but did not buy it. And pending the outcome of all this, you know, mitigation or cleanup of the leaky oil tank. And so the next recipe, this was kind of surprising to them and to me, okay, now we're coming back in the middle of July and we're gonna do core samples. So more than one, they're gonna drill down, they're gonna take some column of dirt, and then they gotta send that off to a lab, which takes about two weeks, hopefully. So then if, if they get that report back and it's clean, then it takes the environmental company like another two weeks to write up that report and submit it to the DNR where they'll , DNR takes between 30 and 60 days to approve the final report. More ,

Speaker 3: 32:37

More 60 than 30.

Speaker 1: 32:38

Yeah. But if it's not, there's a possibility that the core samples will show petroleum vapor, in which case then they have to like do another test. And possibly that could lead to a vapor mitigation system. Subterranean, you know, underneath, I'm like, oh my. So I mean, realistically, they may not buy this, it may take until October or possibly November depending on how bad these, you know, and, and let the record show, you know, the listing agent. Of course. Well , Brian, why can't you just close <laugh> on this property and escrow for, you know, this environmental work where it is turning out that the environmental work is like a black hole. Yeah . Of you don't know where it's gonna end. But wait, there's more. Then uh, the agents came back and said, oh, well we found a lender who would be willing to let you close and good luck, you know , escrow for all this stuff. And I'm like, you , you know , hey, if at

Speaker 3: 33:43

The low rate of 17%, who

Speaker 1: 33:46

Knows? But it's like I said, you're welcome to do that, but I don't think I would do that. 'cause on a

Speaker 3: 33:52

Personal level. Yeah, on

Speaker 1: 33:53

A personal level because

Speaker 3: 33:54

Why would you take ownership of this risk? Right.

Speaker 1: 33:57

How far, you know, down to the oil

Speaker 3: 33:59

Bill . Well , 'cause if it's so bad, if it was these buyers, I mean they're laying there, you know, and then outside is this hole in the ground thinking like maybe we don't wanna buy this house. But ,

Speaker 1: 34:09

But they , they still do at this point, but they don't really know, you know, what the ultimate fix is gonna be. Um, and and what they do do, by the way, is they, they haven't done this yet, but I didn't realize this. You dig out all the contaminated soil. Yeah . Put it in dump trucks, but then you have to take it to a special place. You just can't go into that empty field and, and dump this contaminated soil. Yeah . There are licensed contamination contaminated soil where receptacles where

Speaker 3: 34:37

Like North Dakota or something .

Speaker 1: 34:37

But you need an appointment, you know? Yeah . I'm gonna receive your three dump trucks full. Alright. In the short time we have left. Um ,

Speaker 3: 34:44

Oh my. Yeah. Well, deer buyers stop looking at the property tax bill of the house that you're looking at because the assessed value and the fair market value that the municipality are taxing you at is not tethered to what the home is actually worth. Like I'm just, I David, I am looking at my own assessed value and fair market value. There's no way I would sell my house for that . For those numbers. For that number.

Speaker 1: 35:14

Right. So, you know, municipalities have to reassess

Speaker 3: 35:19

Well , and God bless your municipalities only dinging you for that low number. 'cause if they really wanted to come at you for what you could stick the first sale sign in your yard for price wise Yeah. Your tax bill would be even higher.

Speaker 1: 35:32

I am now paying that dollar amount they caught up with me.

Speaker 3: 35:34

Okay. <laugh> your assessed value

Speaker 1: 35:36

And your , your their fair market value, I think is pretty much right on the fair , fair market value right now. Yeah. Alright, well that's all the time we have to , for today's show, folks. Uh, we would love to help you , uh, buy a home with a rock solid guaranteed pre-approval and help you figure out ways to make that buyer say yes to your offer. That's what we do every day and we love what we do. That's all the time we got for today. You've been listening to the ANet 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 ANet Mortgage and Realty Show are solely that of the host or guests of academic mortgage and ANet Realty Advisors and not WTMJ Radio or Good Karma Brands. Milwaukee, LLC.