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 0:21

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 Anette Mortgage and Realty Show. I'm Brian Wicker, licensed real estate broker with ANet Realty Advisors, and also the majority owner of ANet Mortgage, where my NMLS ID number is 2 5 9 6 1 0. I'm here again today along with my son David, who's the president of ANet Mortgage, where his individual NMLS ID number is 3 2 8 8 4 7. Uh, if you've got a question or a comment, you can call or text us on the , uh, citing unlimited talk and text line, which is 8 5 5 6 1 6 1 6 20. You can also grab a podcast of today's show wherever you normally get your podcast. So David, it was a momentous week for mortgage rates this last week, and , uh, we had a couple things happen. We had the monthly jobs report on Friday, which is always a potential mortgage interest rate mover, but I'm gonna say that the headline grabber or the real , um, catalyst for mortgage interest rates going down this week was , uh, all the tariff talk and the injury to the stock market. Do you agree or disagree with that?

Speaker 3 1:41

I think, I think it was gyration and people are still , uh, markets are still digesting. How's about a lot of ingestion of that, but

Speaker 1 1:51

Ingestion or indigestion

Speaker 3 1:53

Both in that case? Yeah. Well, and, and then even on Friday, as is always the case, the headline is the number of jobs created and then as the , as everyone unpacks the report at, you know, 7:31 AM it's all the details that follow, particularly, I , I don't , I was trying to figure out how to say this. The participation rate Yeah. Um , increased at , but which diminished the actual increase in the unemployment rate. I think it, it unemployment rate came in at 4.1, but only because , uh, the participation rate, would it be shrank? It would otherwise have been an unemployment rate of 4.3, but because there was less participation, it, it, you know, made the unemployment rate look less much ,

Speaker 1 2:45

A little better. Yeah, less bad. Yeah . Well, and, and so let's just remind everybody, the reason we care about the monthly jobs report is , uh, the way that we're gonna get interest rates to come down is if either the labor market weakens or the economy in general weakens or , and or we continue to see inflation , uh, come down. And so in this case, the , uh, monthly number of new jobs was 151,000 over and against an expectation of 170. So a little weaker than expected. Not in a major way. Still robust . Robust , yeah. Yeah, exactly. As a number . Still , still a robust, yeah, as a raw number. Um, and then they did revise down January's number of jobs created by 18,000 jobs. Um, another kind of , um, anti inflationary thing if you look at it is that the average work week shrank , uh, down to 34.1 hours in February. And that was the lowest number since March of 2010. That's a little bit of shock . Shocking. So, you know, an indication of some softness. And then you and I were talking , uh, before the show. The other thing that you can measure is the , uh, U six unemployment rate. So that's the actual number of people unemployed plus those marginally attached to the labor force and those who are working part-time but would prefer full-time work. And that number jumped up to 8% in February from 7.5 , uh, in January. And that's the highest , uh, reading since October of 2021 during the pandemic. Yeah. So, you know, o overall it was a interest rate friendly report, but didn't really cause any major movement. Um, when, when it comes to reporting where interest rates actually are for the week , uh, the Mortgage Bankers Association reported a 6.73 average 30 year fixed conforming rate. And , uh, that came though with , uh, the borrower paying 0.6% in points. Uh, that's with at least 20% down. Uh, Freddie Mac reported a 6.63 average rate , uh, last week without specifying any points or lender charges. And , uh, mortgage Daily News was reporting a 6.75 30 year fixed rate. Um, you know, if you had all the right stuff. Um, David, we ended the week at low overhead Accu 'cause I actually had somebody ask me, well, what's the lowest rate you can provide? And you know what, we could , we could do 5.99% on a 30 year fixed rate. Which plan ? Yes. Again , that's on a $250,000 loan amount. That's assuming you're buying a house. You got great credit putting 25% down. Uh, the total loan cost on that would be about $7,600. However, 'cause you'd be paying points to buy down that rate. Uh, you could also get , uh, the a PR on that, by the way, is 6.24. Uh, we could also deliver a 6.625 rate, so a little lower than the MBA average , uh, and without any points. So the a PR and that is 6.64, or we could have offered a 6.875 , uh, with no points and accurate could have afforded to pay all $1,541 of loan costs , uh, for that particular scenario. So rates are better , uh, than they were the week before. And that's certainly helpful and certainly allows some people to maybe refinance, but not so fantastically better that it's gonna force or encourage a lot of people to , um, list their homes for sale.

Speaker 3 6:18

Yeah.

Speaker 1 6:19

Alright.

Speaker 3 6:19

All good.

Speaker 1 6:21

When we come back? Yeah. What are you gonna say? No,

Speaker 3 6:23

I'm looking forward. 'cause you've got February , uh, home sales in your back pocket, and I want to hear what people actually did out in the real world. Okay.

Speaker 1 6:31

We can cover that in the next segment. You are listening to the Acuate Mortgage and Realty Show on Wisconsin's radio station. AM six 20 WTMJ

Speaker 2 6:42

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

Speaker 1 6:51

Welcome back and thanks for joining us today. I'm Brian Wicker, the elder. That's David Wicker over there, the younger, taller , more handsome of the wicker men. So , uh, David , uh, February is now a closed chapter in , uh, 2025, and they've got the numbers from the multiple listing service. So these are foreclosed purchase transactions in February, facilitate facilitated by a member of the National Association of Realtors in the five county metropolitan Milwaukee area. Uh, the number of transactions closed single family detached condos was 930, and that's 59 fewer sales compared to February of 2024. A 6% drop.

Speaker 3 7:32

Okay .

Speaker 1 7:33

Uh , oddly it's also 13 fewer sales than what we saw in January. That's kind of unusual. Um, a median sales price, however, was up a whopping $49,000 from a year earlier. We got back to 335,000 for the median sales price , um, which is a 17% increase over the year earlier and also right there at the 2024 , uh, year long median sales price number. Okay . And I was thinking about, boy, that's a big leap, you know, in one month or, you know, from a year over year. Yeah . And maybe it's because it's a relatively smaller number of homes that sold at 930 where , or , or you just think that,

Speaker 3 8:21

I think ultimately we'll smooth it over over many months. Right. And, and try not to hang our hat on any one particular month, but a , a matrice of many months.

Speaker 1 8:33

So , uh, cash sales represented 24% of closed sales in February according to the MLS data, which is exactly the same as it was in January. Uh, to give you a reminder , uh, in January, 32% of buyers paid more than asking, what do you want to hazard a guess at the percentage over asking that occurred in February

Speaker 3 8:55

35. 35%.

Speaker 1 8:57

35. The answer is 42% , uh, which fits the overall pattern, but is a little stronger than February of 2024 when it's sat at 39%. And remember, the seasonal trend is that we would generally expect that percentage of buyers paying over asking to hit about half , uh, when it comes to March sales. And then generally it gets up to about in the low sixties as we get into the heat of the spring and summer buying market. By the way, 22% of February buyers paid $10,000 or more over asking, and that's , uh, higher than the 18% who paid 10 grand or more in February of 2024. In terms of how long did it take people to sell their house? And I, I looked this up, this is supposed to be the number of days between when the listing went active and when the listing agent coded the listing as pending, which isn't the same as closed

Speaker 3 9:57

Wait, and also not the same thing as marking it with a little c contingent either.

Speaker 1 10:03

Uh , I'm not sure about that, but maybe you're right. 'cause contingent goes on there right away. I've got an offer.

Speaker 3 10:08

I know, but like, I think the, I think the state of the art is, you know, congratulate. You go live on Thursday, you get an accepted offer on Sunday evening, you market CII think you're not, not, I , I don't wanna say supposed to. I think the sequence would be you market pending upon receipt of loan commitment.

Speaker 1 10:26

I think that's the way it's supposed to be done. But I bet there's some variations , uh, yeah . On how <laugh> how that gets coded ,

Speaker 3 10:32

How and when that's marked.

Speaker 1 10:33

Yeah, that's right. Um, so there you have it. So sales are a little softer. I don't know, was that because of colder weather in January, was it? Yeah , I I don't think anybody really knows. It's not that big of a variation. No. Uh , over on the listing side of things, which is what home buyers care about , uh, February brought us 1,327 new listings. And when you compare that to the 930 closed sales, well gosh, inventory is growing by almost 400 homes. So that's what you like to see coming into the spring market. However, that is 50 fewer than February of 2024 and also 52 fewer than what came on the market in January. Again, a little bit weird because February's a shorter month. I , you know , I'm not sure. Um, so those are your, your , uh, trends in the realm of , uh, existing home sales . What are you generally seeing with your home shoppers out there, David, in terms of multiple offers? And ,

Speaker 3 11:36

Uh, well, I'll tell you one apocryphal story. Uh , there was a listing out in one of the Western suburbs that as always , uh, my client, unfortunately did not win. The home was listed in the mid threes and there were double digit offers and , uh, likely went for above four. So a , a wild a either a purposeful under on the list price. Wait ,

Speaker 1 12:03

Were they like listed in the mid thirties or three hundreds or in the high 300?

Speaker 3 12:08

High 300. How's about the high three hundreds, but still to get above four and probably well past four, I think we just continued to see good homes are gonna go quick. And the ones that need a little love or are, you know , uh, a little tough , uh, might or maybe

Speaker 1 12:24

Overpriced

Speaker 3 12:25

Or maybe overpriced. Uh, but when the , when the fresh meat comes on the market, man, 'cause you know, this is technology. When a new home gets listed or goes active, that fits your criteria. Everybody sees it within 12 minutes of going live. Yeah . Bang . So when you, this isn't, there's no delay in that regard. So the good ones get mopped up and the other ones, you know, sit there.

Speaker 1 12:50

Alright, when we come back, I want to tell you about a call that I got from a listing agent this past week. You are listening to the Accu Mortgage and Realty Show on AM six 20 WTMJ,

Speaker 3 13:01

Getting

Speaker 2 13:02

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

Speaker 1 13:10

Welcome back and thanks for hanging out with us on , uh, today's edition of the Academic Mortgage and Realty Show. So David , uh, my cell phone rang, I think it was on Wednesday of last week, and of course I answered it . So it was a 2 6 2 number. And , uh, it was a seasoned , uh, listing agent who was calling , um, because she had , um, just gotten word from the buyer's agent on a listing that she had, that they were not gonna be getting the , um, uh, loan commitment letter on time. Hmm . Uh , the , uh, the , you know, it was the day of the loan commitment and she , she's calling to follow up on , it's like, well, you know , uh, we're not gonna be able to deliver that because the , uh, buyers , uh, have not sold their house yet. What they had not sold their house yet. And, and so she was , um, calling to ask, well, how can't you approve them without the sale of their home? And so this is concerning and I acknowledged her concern that yeah, this is kind of a problem. She also shared that the , she recalled the preapproval letter made no mention of a sale of home , um, requirement on the pre-approval letter. Yeah. And also , uh, though that the , the buyer had written the offer without a sale of home contingency. So after she, you know, cathart got all this information, bad information shared, I asked for the home buyer's , um, name and also the property address. And lo and behold, we were not the lender. She had gotten us because a couple of transactions going on. One , one of them , we are the lender. And this one, thank goodness we were not. But it brings up the really important caution. Then we talked a little bit

Speaker 3 15:03

Wait, wait , wait. You wanna name names? Come on. Let's you wanna No . On this other one. Okay.

Speaker 1 15:09

No, no . Well, it turned , it looked, it sounded by the name. She said that it was a credit union 'cause it was something cu and it wasn't one of the big ones around here. But clearly then she kind of dug that up while we were on the phone. And, you know, a couple of problems. One, that preapproval letter was silent as to whether or not this buyer owned another residence and whether or not they needed to sell it to qualify. Yeah. So in kind of talking this through with her, I'm like, yeah, when you're looking at a preapproval letter, you gotta be kind of looking to see how, how does it match up , uh, with that offer. And so if , if it had been an accurate mortgage pre-approval letter, you know, we clearly state on our letter whether or not this person owns any other real estate. And if they do, whether this pre-approval requires the sale of it. Well,

Speaker 3 16:04

I , I would say 'cause silence doesn't really make anybody feel good. Right. It's confirm you this buyer owns no other real estate or confirm they own real estate, but do not need to sell to close on this transaction. Like Right . Say it be explicit rather than silent.

Speaker 1 16:25

So, you know, that's my recommend for any listing agent, you know, and frankly a buyer's agent too. Just doing your due diligence. You know, if you're a listing agent and you get an offer that's not contingent on the sale of property, I would think it would be prudent to ask the buyer agent who's submitting the offer, do these people own other real estate? You know, and then you'd also be looking at the preapproval letter. And I think if I was the listing agent, I would call the lender if it was silent on that important fact. Oh yeah. Um, you know, and ask, Hey , um, does this home shopper need to sell their home to qualify? Uh, because silence is not golden in this particular instance. And then of course, once you found the letter, you know, and I said, well read the language. They hadn't verified the buyer's income or down payment either. You know, it just said, Hey, based on your excellent credit and the information you provided us about your income and down payment, we're good to go. But we still have to verify your income and down payment. I can't tell you how many pre-approval letters are exactly like that. Yeah . Out there in the market. So that's why we like our rock solid guaranteed pre-approval. 'cause we verify everything and then we're explicit. We even go so far as to , um, put the property taxes on our pre-approval letter because you know what, that's a big part of the , uh, home buyers principal interest, taxes and insurance payment for which they have to qualify. And if, you know, you issued the pre-approval letter assuming $4,000 of annual property taxes, and now they're writing an offer on a property with 6,000, do they qualify for that?

Speaker 3 18:04

Well, and I , I'll, I'll double down. You don't, you as a buyer, why do you want to create any amount of doubt for a seller if you, oh man, they got $4,000 on the pre-approval. Well, but our property taxes of the house we're trying to sell are six. Like you just said. Oh man, can these buyers, you know, swing that difference? Mm . Uncertainty, doubt, consternation, heartburn. None of the things you want to give to a seller when you're trying to get them to say yes to you.

Speaker 1 18:37

Especially in our somewhat still tight inventory. No , actually tight inventory. Southeastern Wisconsin market. Alright, when we come back, David, you're gonna tell us about , uh, somebody who kind of assumed that they could buy without selling. Yeah . And let's hear how that turned out. Uh , right now it's time to turn it over to the WTMJ Breaking News Center.

Speaker 2 18:59

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

Speaker 3 19:06

Welcome back to the Accu Net Mortgage and Realty Show. I'm David, that's Brian over there. Uh, dad, I got a call from a repeat client this week who , uh, is looking for their next house as their kids keep getting , uh, bigger. They own a home right now , uh, but they're looking for more space. 'cause kids , uh, get bigger and then they have more stuff and need more space as time goes by at least until they leave. And then you're like, maybe I need less space. Yeah. But so as is always the case, and as I highlight to our clients and many of our , uh, referral partners, like I get it. Like nobody really wants the mortgage. A mortgage is just the thing that helps you achieve your actual goal, which is the property. Yeah . And the mortgage is kind of just, it's the fuel, it's the gas in the car. What you want is the car. No one was like Yeah. And you know that, you know, the gas I'm gonna put in my Mercedes. Yeah . You don't really talk about that. So my client in a, I don't wanna say frenetic way, but in a, oh my gosh, we're driving to this house. We saw online type of tone. Okay . Went to go see this house and concurrently was keeping me updated about this. Now not emergency level , you know, home shopping experience. Yeah.

Speaker 1 20:32

But it's one notch less than Yeah . Emergency. Just spontaneous. How's

Speaker 3 20:38

That spontaneous? It's not, it's not the er, it's just the urgent care room.

Speaker 1 20:42

Okay. Okay.

Speaker 3 20:43

So they went through the house, loved it . Uh, I was, you know, going about my day and they ended up just writing the offer and did not carve out the minutes to connect with me about the mortgage plan to go along with their home purchase until after they'd already clicked to send their offer to the seller.

Speaker 1 21:07

So they sent in the offer without a preapproval letter as far as we know

Speaker 3 21:12

That , uh, that is correct.

Speaker 1 21:13

Okay.

Speaker 3 21:14

So, so then in the , uh, twilight of the day, we get around to actually having the conversation of, okay, so we need, because timelines matter in this home acquisition , this new home, my client owns their current home. Yeah . They have a mortgage payment and the property taxes and homeowner's insurance on that. What they hope is soon to be old home. If you have an old home at the same time that you are closing on the purchase of the new home. I don't, underwriting doesn't care how hot the market is in where you will Yeah . I'm gonna selling , I'm

Speaker 1 21:56

Gonna sell in a week. Yeah . You haven't sold it yet , sir.

Speaker 3 22:00

As, as they're , as they're eight agent , uh, noted to me, man, you, you could try to sell a crack den in this neighborhood and it would go quickly. Yeah.

Speaker 1 22:10

Great.

Speaker 3 22:11

Because that is how hungry buyers are. I'm like, I get it. But if underwriting, it's actually two things, right? Dad, it's on the day that you are presenting the offer to the seller. If you're trying to say, this is not contingent on the sale of my home. That needs to be true.

Speaker 1 22:30

And did they , did this person , uh, click that bo or did not click the box to say they were

Speaker 3 22:36

Silent?

Speaker 1 22:36

Okay. They, they stayed , did what this other buyer did that we talked about earlier in the show. Yes. They did not include a home sale contingency, but they didn't, they kind of assumed that they didn't need to sell

Speaker 3 22:48

Their home . Well , David, I mean it'll all, it'll all work out. And, and you know what, in real life it will, maybe it

Speaker 1 22:54

Would. Yeah.

Speaker 3 22:55

Right. I, we would all have every expectation that it would work out. But when you're presenting that offer, you don't want to rope a dope the seller on. Well, you know, actually, now that it's real I'll, you know, I , I'll get around to selling it. So, so what

Speaker 1 23:13

Was the actual, did you have a chance to crunch the numbers and, and discover whether this per buyer or client could buy without selling?

Speaker 3 23:23

Well, and so one of the ways that I frame this debt , so the home that they were considering, the new home was as much as $500,000 for the new house. Okay . I, they wanted to be able to borrow about 400 from acuate to do that.

Speaker 1 23:41

Where were they gonna get the a hundred thousand dollars down payment from?

Speaker 3 23:44

They had that in savings.

Speaker 1 23:46

Oh God bless 'em .

Speaker 3 23:47

So, but the, the limit, because I have to count the payment on the old house, the most amount of mortgage, I would say all that was left over in their budget for the new mortgage would limit that I could only lend them 300,000 for the new house. I could lend them some, but I couldn't get them all the way there because of the other payments in their life. If they still own that old house. Well, plus

Speaker 1 24:18

Don't forget car loans and leases, student loans, that sort of thing all goes into the formula as well.

Speaker 3 24:23

So, so the but the moral of the story is the seller of this property ended up picking a different buyer. Okay . So, and in a way where it was moot point as to the status of their old home. They remain on the house hunt. But the moral of the story is let's reduce surprises. 'cause there was no reason for there to be a surprise about what the math is. We just have to find the time to do the , um, the unsurprising. Yeah. Before you go and see a house. That,

Speaker 1 24:53

That reminds me of another email that I got on Friday. Let's talk about that when we come back. You are listening to the AC Mortgage and Realty Show on AM six 20 WTMJ.

Speaker 2 25:04

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

Speaker 1 25:14

Back. And , uh, kind of got a theme going here of , you know, hey, buying a house and my next house before I sell my old one. And so I got an email on Friday from a past client , um, and , and it was something like this, Hey, I hope you're doing well. Uh, we're going to be looking for our next home in the Chicago area and , uh, we're shopping around for, for rates and we don't wanna sell our existing home first. What's your lowest rate that you can offer?

Speaker 3 25:47

Can I, can I try to come up with a medical equivalent of this? Like, Hey, I need triple bypass surgery. You know, what's your sharpest scalpel? It's like, that's not really what we're talking about. Let's talk about the surgery.

Speaker 1 26:01

Yeah. And , and , and so, you know, I emailed back and we haven't connected yet, but my email was, Hey, that's great. Uh, to answer your question directly, you know, on a $450,000 loan with a 25% down payment and all the other Right. Stuff, you know, great credit, we could actually do 5.99 and with an a PR of 6.24. But, you know, there's a lot more that needs to go into the analysis. You know, like, can you afford both house payments at the same time as you were talking about? And , uh, you know, other things like, and where are you gonna come up with a down payment? You know, because , and god bless people, they just think that it's all gonna work out. But, you know, I guess that's what we get paid for is figuring out the details. And so that is yet to be revealed . What's gonna happen? You got something similar.

Speaker 3 26:55

It's, yeah, because it's funny 'cause I have a , an agent who have worked a number of clients and, and it's, you're alluding to, especially on the cash funds you're alluding to, you know, Hey, I got all this equity kind of tied up in my soon to be old house. Can I use it? Is it stuck? How do we get at some of that using perhaps a bridge loan to remove it from the house? So that is , it is actually useful to you. I had a , an , uh, agent this past week connect me with one of their family members and her advice to her family member was Sell your current home. 'cause it's in a hot market cash that check, like, congratulations, you got all the proceeds from the sale of your home and then get out and look for your next house. That, that ultimately they would be limited, right? If , if, if you're trying to go from old to new, oh, well you can only get to a $400,000 house because of your liquid funds available to you

Speaker 1 27:59

And the debt burden on the old home perhaps.

Speaker 3 28:01

Right . And the debt burden. But if you, if you do the Texas two step sell, then go look, you can get to that next notch of home. Yeah . Because nobody wants to go from small starter home to medium starter home when they're really trying to get to forever home, which is a whole other level.

Speaker 1 28:21

Right. They just have to solve another problem, which is where are they gonna live? You know, after they

Speaker 3 28:27

Home Grandma in-laws, in-laws are available. Okay . Grandma is Eddie

Speaker 1 28:30

Okay that that is the , uh, best hotel in the world?

Speaker 3 28:35

Well, I don't know about best it's available. It comes with its own , uh, you know, l list, but yes. Well, you could just as easily go rent. Right. Or, you know, try to find some kinda , well ,

Speaker 1 28:45

It can be hard to do month to month rentals. You know, you might have to sign up for six months or whatever. You know, you could also try to extend your closing and say, Hey, I I wanna be able to live in my house, you know, for 60 days. Yep . Af after we close, which is kind of the maximum if the people buying or trying to claim it's their , uh, primary residence, they have to occupy it within 60 days. But that could give you a little extra time , uh, to shop just in case you get lucky. Although, let's say this about , uh, selling your, your existing home. Um, you can be excused from the monthly payment on your old home if we can provide a loan commitment letter free of conditions from the buyer of your old home. That is a way that, but that's an awfully high bar and usually comes pretty close to the selling base . But

Speaker 3 29:37

If you, but, but you know, the , the, to your, to your story, you then could go, oh, awesome. I have the loan commitment to sell my home. I now can on paper ignore that payment

Speaker 1 29:51

Payment. But you can't use the money.

Speaker 3 29:53

Well, exactly. It's like, well , uh, but I, maybe I still need the cash funds on my next house. You'd be, you'd be spinning a lot of plates hoping that you can catch 'em all in the sequence that you need. Right. So it's possible you're just taking on the, you know, risk.

Speaker 1 30:12

Well, and you gotta get that seller to believe you can do it. You know, if, if you're writing your offer that way, you know, with the sale of home contingency, which is super rare in this marketplace. David, I you were talking , uh, off the air in between the breaks . I think you've got another story about a way to , um, overcome the previous houses mortgage payment and taxes and insurance. Yes. When it comes to , uh, qualifying for that next home, let's touch on that when we come back. You are listening to the Academic Mortgage and Realty Show on AM six 20 WTMJ.

Speaker 2 30:49

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

Speaker 3 30:57

Welcome back to this last segment of the ACU Net Mortgage and Realty Show. I am David the younger Wicker, that's Brian the wiser of the wicker men dad. Uh , we're, we've been in business for 26 years and so we got a lot of repeat customers. And, and so I took one of those calls from a past customer of mine this week who I had helped purchase a two unit home two years ago.

Speaker 1 31:25

Oh , the old duplex.

Speaker 3 31:26

He is now , uh, keen to go find his next home, which is going to be a single family home. So as we have highlighted throughout today's show, he wants to on purpose, retain the , uh, duplex that he has. He would like to put tenants in those units and ca

Speaker 1 31:49

Well he's got one tenant presumably already, right?

Speaker 3 31:52

He actually , he hadn't, he's been , uh, bringing this home , um, kind of up to snuff. Oh, okay. And so the payment on that duplex is $2,000 a month. So as, as the calculus goes for our mortgage underwriting, we have to include that $2,000 in his overall monthly budget. Treat it basically like a car loan. 'cause it's real, the money he is , it costs him for the mortgage on the old home is real. The tool that we have reached for is available to our clients is to offset the cost of that mortgage payment with a new lease on one or both of the units for his old soon to be old duplex.

Speaker 1 32:42

That is fantastic because it sounds to me like he's got an empty unit right now. He does. You know, and what could he fetch for rent? Does he think? So

Speaker 3 32:52

It's about a thousand dollars a unit. So he, he shared with me. He actually just took, so, so the key elements are you would need a signed lease. Yep . You would need the security deposit and you would need the first month's rent. So for my client, they got that $2,000 mortgage payment. He put a new tenant in his upper unit in February. Fantastic. I said send me the lease, the security deposit and the first month's rent. And , and effectively that cuts his, you know, carry carrying cost in half. Right . Because we just net it out. If he then also can put a tenant in his lower unit, the timing could be interesting. Right. 'cause he's a little tricky. Yeah . He's living there. It's possible. Uh ,

Speaker 1 33:45

Yeah, because how do you get somebody to pay that first month's rent before they can occupy? That's kind of a tall order. Can you make it work with just the one unit?

Speaker 3 33:54

We can , we can make it work. But, but just to say what's he could, you know, move out, I suppose and live elsewhere if he , this is all about sharing with our clients. Here's what's possible and then just you tell me how bad you want it and, and we will share how to get it done. If it theoretically, if he then leased out his lower unit, took the security deposit and the first month's rent. Yeah . We could zero out the cost of that mortgage with the offsetting rents.

Speaker 1 34:28

Cool. Yeah .

Speaker 3 34:30

Bringing him up for the next house.

Speaker 1 34:32

I like that story. Especially since he just got a tenant in there. So you got a Sure thing. It's Yeah , it's a , it's a , yeah. It's, it's not, oh, and by the way, the tenant cannot be a relative or someone, you know, you can't like, oh yeah, this other person with the last name just signed the lease or, you know, my parents signed these . That's not allowed. Yeah. No , it's gotta be a arms length , real thought , arms length transaction. Alright, so to recap what we talked about on today's show , um, mortgage rates are better than they have been the last few months actually. And , uh, we've got , uh, people that are out there shopping, but it's still a tight market in southeastern Wisconsin.

Speaker 3 35:13

It takes, it takes planning. That's, that's the moral of the story, right? Plan, whether it's first or the next.

Speaker 1 35:19

Yep . And , and , and , and you want to have a complete plan so that you're not , um, scrambling or making promises that you really can't keep when you're writing offers. We would love to be on your team, folks, if you or someone you know is out there , uh, about to start the process or already ended up shopping for a home, please, please click on the blue button and let the team at ACU nett get you ready and a hundred percent confident with a rock solid guaranteed pre-approval. That's all the time we have for today's show. Thanks for tuning in. You've been listening to the ANet Mortgage and Realty Show on Wisconsin's radio station. AM six 20 WTMJ.

Speaker 4 35:58

The proceeding was a paid program. Advice and opinions expressed during the Accu Net Mortgage and Realty Show are solely that of the hosts or guests of Accu Net Mortgage and Accu Net Realty Advisors and not WTMJ Radio or Good Karma Brands. Milwaukee, LLC.