The Accunet Mortgage & Realty Show 3-16-25

Episode Transcript

Speaker 1 (00:00):
The following program. The ENT , mortgage and
Realty Show is paid for in fullby ENT mortgage, LLC and equal
housing lender consumeraccess.org number 2 5 5 3 6 8.
The advice and opinionsexpressed during the Academic
Mortgage and Realty Show aresolely that at the hosts and
guests of ENT mortgage, LLC,and not WTMJ or Good Karma
Brands.

Speaker 2 (00:20):
Welcome to the Accu Net Mortgage and Realty Show,
getting you inside informationon buying, selling, and
financing your home with expertadvice from Accu Net Mortgage
and Realty. And now, here'sBrian and David Wickers.

Speaker 1 (00:34):
Welcome to the Accu Mortgage and Realty Show. I'm
Brian Wicker, licensed realEstate broker with ANet Realty
Advisors, and , uh, also themajority owner of ANet
Mortgage, where my N ML s IDnumber is 2 5 9 6 1 0. I'm here
again today as usual, alongwith my son David Wicker, who's
the president of NT Mortgage,where his individual NMLS ID is

(00:55):
3 2 8 8 4 7. Well, David, wehad a busy economic , uh, uh,
Newsweek this last week. Yes .
And , uh, let's just quicklygrind through that and tell
folks where mortgage rates cameout at the end of all of this
stuff. Uh, we had two inflationreports. The consumer price
index number came out, Ibelieve it was on Wednesday.

(01:17):
Mm-hmm . And howdid that come out , uh, versus
expectations, David?

Speaker 3 (01:22):
Uh, my so expectation for month over
month was 0.3%, and thatactually arrived at 0.2%.
That's actually for both CoreCPI and headline month over
month CPI. So haa , you know,we, we were bracing for what it

(01:43):
was, and it came in a littlebit better. Not a lot better,
but it's better than the otherdirection.

Speaker 1 (01:48):
And the reason we care about inflation is because
, uh, inflation is the enemy oflong-term rates like mortgage
rates. And , uh, also becausethe Federal Reserve wants to
see that number get down closerto 2% the year on an annual
basis. The year over year , uh,CPI number, consumer price
index was 2.8%. Uh, so itstarts with a two, but , uh,

(02:13):
not, you know, still got a waysto go. Um , then we got the
producer price index onThursday. That's inflation at
the wholesale level that camein at zero , uh, from month to
month, which was a lot betterthan the expectation was for a
0.3% increase. But , uh, yearover year, I believe the number
was three point up, 3.2% ininflation at the wholesale

(02:37):
level. But again, that wasbetter than expectations.
Normally, that would've beengood for rates, but we kind of
got a yawn. Right. Why did weget a yawn?

Speaker 3 (02:46):
Uh , well, 'cause I think there's still a lot of ,
um, un unknowns. Can I just saythe other, just proof that
there are so many crosscurrentsthat come to influence the bond
market. I was reading this weekthat German debt ceiling
negotiations were factoring into some bond market

(03:10):
participants. Whoa . 'cause youknow, hey, is Germany going to
raise their debt ceiling, arethey not? So it's like that,
that was nowhere on my personalradar. And so, and I, and it's
nowhere on the radar of homeshoppers either. But these are
all the things, these are allthe things that can , that can
go into the recipe of, youknow, what are rates doing.

(03:33):
It's not just one thing. It's awhole cauldron of data.

Speaker 1 (03:38):
And , uh, the other interesting thing that came out
on Friday was the University ofMichigan Consumer Sentiment
Index. And , uh, that fell to a29 month low for the month of
March. The reading was 58 downfrom a reading of 65 in
February. But catch this, Idon't know if you saw this,
David, a year ago, thatsentiment index in March of

(04:01):
2024 was 79. So , uh, that's a27% decline in consumer
sentiment from a year earlier.
And, you know, guess what?
They're citing tariffs and ,uh, fear of inflation, a couple
of other nuggets there. Cons .
They measure consumerexpectation of what's inflation
gonna be, you know, what areprices gonna be like a year

(04:22):
from now? And according to thatUniversity of Michigan survey,
consumers are thinking priceswill be 4.9% higher a year from
now. That's ,

Speaker 3 (04:31):
I mean, for everything. Well, for as like,
for both the price of beer,gas, and, yeah .

Speaker 1 (04:38):
Uh , eggs.

Speaker 3 (04:39):
Eggs,

Speaker 1 (04:40):
Yeah. Everything.
Uh, and , and , uh, and catchthis, that's the highest
expectation reading for a yearforward since November of 22
when inflation was actuallyhigh. Yeah, you're hitting your
head.

Speaker 3 (04:52):
No, it's just, it's because the American economy,
70% of the American economy isall of us spending money. And
so almost wildly how we feelthen implies what we spend. And
it's just, it's,

Speaker 1 (05:10):
It's a circle.

Speaker 3 (05:11):
Well, right? Oh, I think prices a year from now
will be this. And so thatimpacts how I behave today. And
then it will also influencewhat the world looks like a
year from now. It's just thiscircuitous , uh, approach.

Speaker 1 (05:24):
Okay. So the , the other thing that I think is
influencing some people , uh,you know, and , and also
interest rates is the beating,mostly the beating that the
stock market has taken the lastcouple of weeks. Yeah. That's
been generally helpful formortgage rates because when
investors sell stocks, thenthey got money and they go,
let's put it in something safelike US treasuries or, or

(05:47):
mortgage backed securities. Andso that's probably been the ,
um, biggest influencer onmortgage rates . When we come
back from this first break, Iwanna tell a story about some
clients who we helped buy ahome last year, and now I just
locked them into a 5.8 7 5 15year fixed, oh , with super low
closing costs . And kind of gothrough that whole thought

(06:09):
process and got other storiesthat tie into the whole
mentality of , uh, differentpeople in the marketplace. Rice
. Now, do you have some storiesto share this week, David?

Speaker 3 (06:19):
Active people, people are doing the thing,
getting out there and buying ahouse so that, like your
client, we can refinance themin chapter two and chapter
three as they continue to ownthat home. I'm looking forward
to hearing that story. You arelistening to the NT Mortgage
and Realty Show on AM six 20WTMJ

Speaker 2 (06:38):
Home buying advice from the guys who know it best.
This is the ACU Net Mortgageand Realty Show with Brian
Wicker on WTMJ.

Speaker 1 (06:47):
Welcome back and thanks for tuning into this
week's show. I'm Brian theElder. That's David the younger
over there. So David , um, Iwas looking through my list of
clients who we helped last yearand , uh, came across a couple
that we helped purchase a hometheir next home. They were
already homeowners and theybought in June of last year,

(07:08):
one rates were up a little bit.
And so we used the tool calledthe Temporary Buydown , uh,
where it is a 30 year fixedrate loan that has a long-term
interest rate in their case of7.5%. But for the first year,
for the first 12 payments ofthe loan , uh, acuate took
money from selling their loanon the secondary market. And we

(07:32):
put that money into a paymentsubsidy account so that for
these first 12 months of thatloan, they were paying at an
effective rate of six and ahalf . And the difference was a
$349 per month savings. Nice.
And the thought process was,Hey, you know what? Sometime in
the next year, rates shouldcome down. And so at that time

(07:54):
we'll grab a lower rate beforeyour payment resets to that
long-term rate of 7.5%, whichwas gonna happen in August.
Well , so

Speaker 3 (08:04):
Go ahead , sorry .
But on that temporary buydown,when it's the right tool for
the job you gave them, 'cause Ithink you're about to tell me
that they're refinancing nowbefore that first year ran out.
Right. If they , if they usedthat whole year though, that's
a $3,600 headstart in Oh yeah.

(08:24):
Savings compared to if theyjust took, you know, the

Speaker 1 (08:29):
More like 4,200 more , more like 4,200 . Oh , okay.
because it's 3 49 amonth.

Speaker 3 (08:34):
Yeah. Do you wanna keep $4,200 in your pocket for
the first year that you ownthis house? Yeah . Ev every
homeowner says, yes, thank you.
Please tell me more. But anyway, so, but you, you reached out
to them 'cause they didn't,they didn't need all 12 months
it sounds like.

Speaker 1 (08:52):
Well, and here's the other cool thing. That money
that is sitting in the , uh,payment subsidy account, even
though we're gonna pay off thatloan early, they still get that
money.

Speaker 3 (09:03):
Okay.

Speaker 1 (09:03):
They still get the $349 times four. So what is
that about? Uh , $1,300? What'sgonna happen when we pay off
that loan is the money in thatpayment subsidy account is
gonna get subtracted from theprincipal balance. That's how
they're gonna get the moneyback. Um, and , and so they had
had a home that they owned ,uh, and we did a bridge loan on

(09:26):
it to help 'em buy their newhome last year. Okay . That
home subsequently sold. Theygot a bunch of money even after
paying off their existing firstmortgage in the bridge loan.
And so they did do a principalreduction on their current
loan. And so now as we're, youknow, engaging in conversation
last week, they're like, yeah,you know what I'm thinking
about paying down the principalbalance even more. Okay. And

(09:50):
then them starting to shoot himsome numbers and he's like, and
you know what? I think I'mgonna go, we're interested in
looking at a 15 year fixed

Speaker 3 (09:57):
Wait

Speaker 1 (09:58):
The third year.

Speaker 3 (09:58):
Go ahead . Before , before the 15 you had to hold
back. It is, it is in ournature when a client says we
can't help it 'cause we'remortgage bankers, Hey, I'm
thinking about paying down theprinciple balance of my current
mortgage. And then Brian andDavid both think to ourselves,
well, why is there, there'snothing else. And you must have

(10:20):
being the, being the goodsteward that you are, you're
like, however you would like tohave your mortgage, I'm happy
to help you. I would imaginethough , in your mind you were
like, really? There's nothingelse. You wanna use this money
for nothing? There

Speaker 1 (10:33):
Was, there was kind of a psychological numbers
like, if I do this, then I canget my payment under 4,000,
including my taxes. Well, thatwas the other interesting
thing. Uh, the , the propertytaxes went up fairly
significantly , uh, you know,when they got the bill in 2024
compared to what we wereescrowing for. Yeah. And folks,

(10:54):
when that happens , um, themortgage servicer actually
advances the shortfall , uh,outta Yeah .

Speaker 3 (11:02):
If your , if your property taxes go from 4,000 to
6,000, yeah . They'll send outthe $6,000 bill and then
they'll say to you, thehomeowner, Hey, we floated you
the $2,000 difference. You needto, we need to make up for that
this monthly. Yeah. We need tomake up for that.

Speaker 1 (11:18):
And it's about in April when, when , uh, most
mortgage servicers do theirescrow analysis on Wisconsin
loans. And so I was justeducating 'em and saying, Hey,
you're gonna have thiscomeuppance on your property
tax escrow account anyway . Soby doing the refinance, we're
gonna take care of all that in, uh, one fell swoop. Now, as
it turns out, as we startedbending the numbers, so like,

(11:40):
Hey, you know what? Wait ,

Speaker 3 (11:41):
Wait, wait. So you, so you just, you were like,
sounds good. You wanna make theprinciple reduction. It's just
as is always the case. Like ifa client invites us to, let's
talk about paying down yourbalance or not. But it sounds
like for them they had thatbogey and so you were like,
sounds good. Let's make thathappen for you.

Speaker 1 (12:00):
No, no, no. I , I said, well, let me , let me
give you some information. Isaid for, for every , uh,
remember now we got 'em a 5.875, uh, 30, a 15 year fixed. And
in their particularcircumstances, 'cause they have
a lot of equity and excellentcredit , uh, the total loan
cost to do that one last weekwas $112. That's right.

(12:21):
. Wow. Well , for onething, we don't need an
appraisal. The Freddie Maccomputer system gave us an
appraisal waiver and uh , sothat's nice. That saves us $475
right there. And , uh, hey, youknow what? I see we're running
up against the clock here. Oh .
When we come back, we'll justfinish off on, hey, what is the
math for , uh, paying downextra principle when it comes

(12:43):
to recouping that expense?
We'll cover that right afterthis. You are listening to the
Academic Mortgage and RealtyShow on Wisconsin's radio
station AM six 20 WTMJ

Speaker 2 (12:54):
Getting you into the home of your dreams. Here's
more of the ACU Mortgage andRealty Show with Brian Wicker
on WTMJ. Welcome

Speaker 1 (13:02):
Back. Uh , David, we were just talking about , uh,
some clients , uh, who I washelping this last week
refinance from their 30 yearfixed rate with a temporary buy
down into a new 15 year fixedrate loan. And the reason that
they're interested in doingthat is , uh, they can afford
it now. Uh , you know, twoincomes and good incomes , uh,

(13:23):
and their payment's not gonnago out that much , uh, by
switching to the 15 year fixed.
And the discussion was turningto, well, should I pay down the
principal balance by, you know,you name it, 10 grand? Uh, and
the math that I shared withthem is that for every thousand
dollars that they put downtowards the principal , uh, it
changes their payment by $8 and37 cents a month. So there's

(13:47):
lots of different ways to lookat numbers, but one way I think
most people can get their mindeasily around is, Hey, how many
months of lower monthlypayments would it take me to
recoup that thousand dollarsthat I just wrote a check for?
Yes. And the answer is 119meaning 10 years. Yes . Just

(14:09):
one month. Shy of 10 years.
It's even longer. If you'relooking at a 30 year fixed rate
loan, it takes like 13 and ahalf years to get the money
back. Now, surely if you borrowmore money, you will pay more
interest. There's no doubtabout that. Uh, but then, then
he said, you know what, I'mlooking for a financial
planner. 'cause what's reallyon his mind is he's sitting on

(14:31):
some cash, I , I didn't ask himexactly how much, but maybe
like 25 to $40,000. Okay . Andhe's kinda like, what should I
do with this money? I could putit towards my principal
balance. Okay. But he's gotthree young kids under the age
of five. And so I threw outthere, I said, you know, I'm

(14:52):
not a financial advisor, butyou should talk to your
financial advisor. Yeah.
Because maybe you could putthat money, some of it, all of
it into a 5 29 college savingsplan. Right. 'cause nobody ever
saved too much for their kids'college education. Yes. And so
you could put that in there.
And then it's my understandingthat the money grows tax free .

(15:13):
You know, and these kids areyoung, so it's a long time for
that to grow. Um , and as longas you take it out for , uh,
educational purposes , uh, downthe road. So, so we are going
down the road of don't bringany money to closing right now.
Yeah . And he can change hismind. Oh, the other thing we
looked at is do you wanna do a5.5% 15 year fix with some

(15:35):
closing costs and a little bitto buy down the rate to that
level? Uh, it would take fouryears of lower monthly payments
to recoup the extra upfrontcost of getting the five and a
half rate . So still an option.
Go ahead.

Speaker 3 (15:50):
The the other benefit is by trading in their
old 30 year fixed for a new 15year fixed, I would imagine
that the interest savingsbetween those two is a hundreds
of thousands of dollars benefitto them, which kind of feels

(16:11):
like eating your mortgagevegetables. Yeah. But it is
such a big number that you,like every month that he makes
that payment. Now sure. It's alittle bit higher 'cause it a
15 year, you're putting thesame amount of money into a
shorter amount of time, so thepayment's gonna be more Yeah .
But the amount of savings, justnot paying the interest is he's

(16:34):
gonna high five himself everymonth for being like, good job
by us for not, you know,incurring the cost of the
borrowed money as much.

Speaker 1 (16:41):
Correct. Yeah. The , the portion that you're putting
towards principal, that's whythe payment is higher on a 15
year fix , is 'cause you'rebeing forced or you're
willingly putting that muchmore money towards principal.
Not very many people. I , Imean, I can think of maybe one
person , uh, that I've helpedbuy a home with a 15 year fixed
, uh, mortgage. Well, it's a ,I would say when most people

(17:02):
buy, they're doing the 30 yearfixed, then when they come to
refi later on Go

Speaker 3 (17:06):
Ahead. I , I think, I think but that's, it's sounds
like the story of your client,right? They moved in, they got
comfortable, the dust settled.
Yep . And then, and then whenthey felt like they had their
own personal track record thatthen made them comfortable to
take on this 15 year fixedhigher payment. 'cause Yeah,
it's kind of , especially ifyour new next home is the most

(17:29):
amount of money you've everborrowed. Yeah . And then
you're like, oh my God, we'regonna take on a 15 year. That
is a lot of times one step toomany. But if you take it in a
progression, it makes arrivingto that 15 year a lot more
palatable. Eventually. Notsuddenly.

Speaker 1 (17:50):
O one of the interesting things you shared
in our conversation was, youknow what? We had a five and a
half percent mortgage on our,on our home, on our former
home. And so it'd be great toget back to that. So that
totally an emotional orpsychological thing of, you
know, it'd be great to get thatfive and a half , but you know,
from a math standpoint and hemight still change his mind and
go with the five point a halfpercent. Yeah. Yeah . Right.

(18:12):
Because it's a sure thing, youknow, so, so anyway, lots, lots
of different options and um ,it was great, great to have a
thoughtful conversation.

Speaker 3 (18:21):
That's exactly it.
It's like there , this is whywe consult. We're not just
interest rate regurgitators.
It's let's talk about what thepoint of this plan is overall.

Speaker 1 (18:33):
Alright . So , uh, I've got more stories, but
let's go to one of yourstories. You wanna quickly
tease what that one's gonna be.

Speaker 3 (18:39):
Uh, my teasing story is I talked to a client, young
guy wants to buy a house. Andmy metaphor was, you can win
this mortgage basketball gameby one point or you can win it
by 11 points. Let me tell youwhat I meant by that metaphor
after this break. But right nowit's time to turn it over to
the WTMJ Breaking News Center.

Speaker 2 (19:00):
Don't break the bank to get into a house. Back to
the ACU Net Mortgage and RealtyShow with Brian Wicker on WTMJ.

Speaker 3 (19:08):
Welcome back to the ACU Net Mortgage and Realty
Show. Thanks for hanging outwith us. I'm David, that's
Brian over there. Dad. I was ,uh, connected with a , uh,
young guy this week who has agreat job working for one of
the big four accounting firmsand wants to buy a place
downtown because of course youdo. That's what you wanna do

(19:31):
when you've got a job , uh, anddoing well for yourself. His
timeline though, was on hismind because currently he
makes, just for the sake ofconversation, he makes about
$60,000 a year with his , withhis current role here in March.

Speaker 1 (19:48):
Okay.

Speaker 3 (19:49):
I believe it has been communicated to him or he
has an expectation that comeJune, his income will jump from
60,000 to $80,000. Okay. So aso a healthy bump you pay , he
already knows what his monthlypayment maximum is. That makes

(20:10):
him most comfortable. That'sprobably about $2,500 a month.
Ooh ,

Speaker 1 (20:16):
That's a lot.

Speaker 3 (20:18):
It is a lot. But you kind of, but when you, that's
his absolute maximum. But whenyou factor in property taxes
and HOA dues, it's for theright place. Uh, it that could
be a possibility for him.

Speaker 1 (20:31):
I'm thinking that would be quite a stretch on a
$60,000 income though.

Speaker 3 (20:34):
Well, so part of the math that he's thinking of is a
payment that approaches thatmaximum is going to feel a lot
more comfortable comesummertime. Yeah . When he has
the pay increase. What I sharedwith him though was mortgage

(20:56):
lending is like basketball, youonly need to win by one. That
there is no, that mortgagelending is yes or no black or
white. Either you qualify oryou don't. For the monthly
payment on paper with hiscurrent salary, he can close on

(21:18):
the new home with that monthlypayment. But it but to your, I
see your eyebrows as apercentage of his income right
now. That's a, that's a a bigchunk.

Speaker 1 (21:30):
Yeah. It's half isn't it?

Speaker 3 (21:33):
Well, it's less than half. 'cause otherwise I would
,

Speaker 1 (21:35):
It's gotta be less than half 49 49 is the limit.
Okay. Well,

Speaker 3 (21:38):
Well, right. But he knows he's in a career field
where he knows that his incomeis going to continue to grow as
his, as his responsibilitiesalso grow at his job. So I just
shared with him that like forthe right house, if it pops up
here in March and April, youcan win that mortgage game by

(22:01):
one point. It's not gonna, as,as anybody who watches the
bucks you winning by onedoesn't feel good. It feels
down to the wire. I always likeit when they win by 11 or 21.
Yeah. So, but, so, but for thishouse, for the right house, he
can win by one here in Marchand April if he waits until

(22:25):
June , he still has the monthlypayment preference that he has.
It's just in real life he willwin the mortgage game by 11
points in my extended metaphor.

Speaker 1 (22:35):
Okay.

Speaker 3 (22:36):
But he, it kind of melted his mind a little bit
that like Yeah, I can help youtoday if you want. Is it gonna
feel particularly comfortable?
No. But part of buying a houseis not just for who you are
today, but who you will becomebecause he's gonna get this
raise in June. I would expectthat maybe then at the first of
the year , he is probably gonnahave another pay bump and maybe

(22:58):
as his responsibilities growover the next 12 to 24 months
at his job, if he freezes intime, the monthly payment on
this house Yeah . It's going tocontinue to become a smaller
and smaller slice of hisincome.

Speaker 1 (23:15):
So yeah . I I just, you'll have to be very careful,
you know, when you're, as youknow, when you're cutting it
that close Yep . To the maximumpayment as to what exactly are
the property taxes on thisplace and what exactly are the
HOA dues. Yes . Because thosetwo things, I mean , don't
forget about the insurance now.
That's not much on a condo, butit's not just a principle and

(23:36):
interest. It's still something.
It all counts. Um, so , um,speaking of things that are
influencing or on , on theminds of , uh, buyers these
days, I've got a couple ofstories to share. Okay . Um ,
uh, one is about a , uh, fellowwho I know, an acquaintance,
I'll call him Florida resident,looking to buy a investment

(23:58):
condo in Wisconsin. And thenanother guy who I talked to,
this is my Florida connection,part of the show who just sold
his , um, house in Naples. Andthis is gonna go to the , uh,
idea that all real estate islocal. It is not the same in
Florida or in Naples, Floridaas it is in southeastern

(24:20):
Wisconsin. Yeah . We'll coverthose , uh, stories when we
come back. You're listening tothe Academic Mortgage and
Realty Show on AM six 20 WTMJ.

Speaker 2 (24:28):
Important home buying questions and answers
you can count on. This is theACU Mortgage and Realty Show
with Brian Wicker on WTMJ.
Welcome

Speaker 1 (24:38):
Back and thanks for tuning in today. Uh, David, I
got a call, I think it was lastMonday from an acquaintance who
is now a Florida residence . Iknew him from Wisconsin. Um ,
and he said, Hey, I just got anaccepted offer on a condo in ,
uh, Waukesha County and uh ,the purchase price. Um , I

(24:59):
think it was right around$300,000 and it was a cash
offer , uh, with uh , nocontingencies. Okay . Now that
he got the accepted offer ,he's thinking, ah , boy, maybe
I didn't really wanna pay cash.
Good thinking I said, said themortgage guy. Yeah. Did well

Speaker 3 (25:15):
Yeah, of course .
Otherwise he wouldn't havecalled you on Monday. Exactly.
But Right . Uh , a lot of timesin the condo specific form, a
buyer can check off a, and bythe way, I'd like to review the
condo documents. Was that alsowaived in his offer?

Speaker 1 (25:33):
I never got the offer Oh. On this, in this
particular case. Uh, but uh,the path we started to go down
was, okay, well, you know, doyou own your home in Florida?
Your primary residence? Yeah.
And I'm thinking maybe I shouldborrow against that. Okay. So
we started going down thatpath. Uh, the drawback of
borrowing money in Florida isthat title fees are more

(25:56):
expensive. Uh, and there's alsoa mortgage tax , uh, because
Florida doesn't have a stateincome tax. So they think of
other ways to collect taxes.
Yes . And that's one of 'em .
So the closing costs arerelatively high , uh, in
Florida. But the other benefitwould be we could lend him a
hundred percent of the purchaseprice. Okay . Yeah . Because no

(26:18):
cap on that. If he wanted toborrow on the , uh, condo that
he's looking to buy for aninvestment property, you really
gotta put 25% down. Okay. Butthat's still better than
putting a hundred percent down.
Yes. And , and so as we werekind of wrapping up that
initial conversation, I saidthe other thing I think, 'cause
then he came up with the ideaof delayed financing or maybe

(26:41):
I'll just pay cash and thenI'll come back and get a
mortgage on one of theproperties later. And I said ,
uh, here's a tip. Talk to yourfinancial advisor about what
the tax consequences might beif you liquidated $300,000 out
of your brokerage accountbroker . Yeah . And the answer

(27:03):
that he came up with the nextday when we talked was, Hey, I
found out that um, I'd have topay 20% of capital
gains. Yeah . So 60 grand. SoI'd have to take out, you know
, 360 in order to pay for the300. So that all of a sudden

(27:23):
became very unappealing. Butthis now goes to the mind of,
hmm , you know, this guy's aretirement age. Oh , oh by the
way. He was also thinking, youknow what, I get some private
note income, private noteincome. And I said, okay, we
can do that. But we would needto get a copy of the note to

(27:46):
make sure you know what theterms are and what you're
getting in monthly payments.
And then we have to show thatyou've received those payments
for 12 months by showing thatthe money came into your bank
account . What bank account arethey go into my checking
account and I'm thinking thatis gonna be a Pandora's box to
get 12 months worth ofanybody's bank statements.

(28:07):
There are gonna be other thingsthat happen in that account
that's gonna make that superpainful. So I pretty quickly
convinced them we should useIRA income. Yeah . But anyway,
none of that became importantbecause when I talked to them
the next day, I think that wason Tuesday, he shared, you know
what? I'm just getting reallyconcerned , uh, about this

(28:29):
whole transaction and I thinkI'd like to get out of it. To
which I asked him, yeah, goahead. You or you . Well,

Speaker 3 (28:37):
Like what was the impetus of, of

Speaker 1 (28:39):
That feeling acquiring

Speaker 3 (28:40):
This pro ? No, acquiring this property in the
first place.

Speaker 1 (28:43):
He had a relative who was gonna live in it. So it
was gonna be kind of a, youknow, I'm gonna rent it to a
relative kind of a thing. I'mgonna do a good deed and have a
relative rent it. Okay. Sothat, that was the impetus. Uh,
and so with the really terribleweek that the stock market was
having, that's what wasweighing on this. Okay . Uh ,

(29:07):
home buyer's mind. Yeah . It'slike maybe, you know, I don't
wanna do this at all 'cause thestock market's getting beat up
and you know, whether I have toput in 300 grand or just the
25%, which is 75 grand, maybe Idon't wanna do it. Well the
problem was he had written acash offer with no inspection.
There's really no get out . Andso I explained, well, you know

(29:32):
for sure, I bet you theseller's gonna wanna keep your
$5,000 of earnest money. And uh, sure enough, the next day on
Wednesday , uh, he let me knowthat he was able to get out of
the contract for just $10,000total. Yep . And that made him
feel great. So there's a , uh,story about how the stock

(29:53):
market is influencing somebuyers. Like, yeah, you know
what, I'm out. And I thinkthat's even more the case , uh,
in Florida. Let's come back andI bet you've got another story
to tell. I also have that storyabout the Florida seller. We'll
cover that when we come back.
You are listening to theAccurate Mortgage and Realty
Show on AM six 20 WTMJ.

Speaker 2 (30:16):
Find a place to call home without the headache. This
is the ACU at Mortgage andRealty Show with Brian Wicker
on WTMJ.

Speaker 1 (30:24):
Thanks again for hanging out with us today. And
uh , David, thanks for lettingme go with a couple of stories.
I appreciate , uh, the leash onthat. So I had mentioned at the
top of the show, I was talkingto an acquaintance , uh, who
just sold their home a secondhome in Naples, Florida. And
what was interesting about thatis they had had an accepted

(30:46):
offer last spring, but thatdeal fell through. And , uh,
what he shared with me was a,that this year's sales price
was 15% lower than the offerthat they had gotten last
spring

Speaker 3 (31:03):
For those, is this like a $400,000 house or an
$800,000 house? I ,

Speaker 1 (31:08):
I'm not sure, but I'm gonna say a million's. I'm
gonna say a million .

Speaker 3 (31:13):
So that's for , for every, for everyone who's
holding onto their calculatorat home, a 15% discount on a
million dollar house is$150,000 haircut.

Speaker 1 (31:22):
That's right. That's right. And and the other
interesting stat that he sharedwas that last year when they
were on the market, there were11 , uh, similar units in their
development. You know, 'causein Naples you have all these
gated communities and somemight have a thousand doors,
others might have 2000. So inthis rather large development,
there were 11 similar unitsthat they were competing with.

(31:46):
Today there are 41 competingunits. . So, so the,
this is just, you know, the,the reality that Southwest
Florida is not the same assoutheastern Wisconsin. Right.
Where last week you told astory about, you know, some
property in Waukesha County inthe meat of the market getting

(32:07):
multiple offers all overasking, and

Speaker 3 (32:10):
I mean this is a apocryphal a little bit, but
Jason Hanson, director ofoperations at AC at mortgage,
he had a neighbor that , and helives out in the western
suburbs of Milwaukee. He wasdescribing it was like a parade
outside that home of hungrybuyers eager to get into a home
that was listed for sale in hisneighborhood. So ,

Speaker 1 (32:31):
Okay, so this is like an open house where it was
Okay , people are lined up.

Speaker 3 (32:36):
Yes.

Speaker 1 (32:37):
Because , you know, listings are scarce. That is
not the case in, in southwestFlorida. Uh , another friend of
mine , uh, said that the luxurymarket in the , let's say the
two and a half million and up ,uh, in the old Naples area ,
uh, there's a two and a halfyear supply of homes for sales.
Wow . So that is a, a differentkind of a market. Now, on the

(33:00):
other end of the spectrum , uh,helped a first time home buyer
get an accepted offer. Uh, thislast week she had started her
home search a year ago. Mm-hmm . And , uh,
didn't succeed , uh, had toresign. Her lease was coming
off the lease now and is like,Hey , uh, I'm make , I'm
getting back out there. And hercomment was, from hers
perspective, there was moreinventory and , uh, a little

(33:23):
better condition than what shewas seeing.

Speaker 3 (33:26):
For anyone who's on a lease, by the way, I think
the, the when do, when should Iget going on a pre-approval
game plan is maybe a hundred ,uh, let's say a hundred days
before you'd have to move out.
That would give you some timeto get pre-approved, get out
there and look for a coupleproperties, hopefully get the

(33:48):
accepted offer and close andallow for a , a not rushed
transition. Um , you could getready before that, but if
you're a hundred days out fromthe end of your lease, that's
probably prime time that yougotta start thinking about that
again.

Speaker 1 (34:03):
Good, good, good.
Uh, bit of advice. Um, and ,and so in this particular case,
they had some, you know, okay,looking at this place, didn't
get that one. And now , uh, wehad discussed a year ago the
idea of offer intentionallyoffering more than the asking
price and then telling thebuyer, Hey, I'll, let's just
say this. I'll still pay you$315,000. Even if the house

(34:24):
appraises for three 10, that'scalled appraisal gap. And in
her case, she wouldn't have tobring a nickel Moore to
closing. It would only changethe cost of her PMI and it
would've gone up by $25 a monthif, if the worst case were to
happen. So she was comfortablewith that, baked that into her
offer. And then the other thingthat we , uh, discussed and she
deployed in her offer with herseasoned agent , uh, was a

(34:47):
$5,000 wiggle room on theinspection saying, Hey, if I
come up with inspection items,I will pay the first $5,000.
And so even though she wasoffering 15% down, by the way,
and so even though she didn'thave the full 20% down that a
lot of sellers are looking for,she was close enough. And then
she was offering that appraisalgap, which on our ACU net rock

(35:11):
solid guaranteed preapprovalletter said you can still buy
the house at three 15 even ifit appraises for three 10. So
everything was lined upperfectly and she got the
accepted offer. Hooray. That'swhat it takes. It takes a
little bit more to win in , uh,Southeastern Wisconsin these
days. Alright, well, if you ora loved one or a friend or

(35:32):
neighbor would like helpbecoming a homeowner, or hey,
rates are down , uh, you know,they're pretty good. If you
bought a home in the last yearand you wanna take a look at
refinancing, we think we dothat better than anybody else
too. All you gotta do to getstarted with your rock solid
guaranteed pre-approval that'llhelp put you in the winner
circle is click on that [e-mail]. That's
A-C-C-U-N-E t.com. That's allwe have for today's show, will

(35:55):
see again here next week.
You've been listening to theAcademic Mortgage and Realty
Show on Wisconsin's radiostation AM six 20 WTMJ. The

Speaker 4 (36:04):
Proceeding was a paid program. Advice and
opinions expressed during theAccu Net Mortgage and Realty
Show are solely that of thehost or guests of academic
mortgage and Academic Realtyadvisors and not WTMJ Radio or
Good Karma Brands. Milwaukee,LLC.