The Accunet Mortgage & Realty Show 4-27-25

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 also the majorityowner of ANet Mortgage, where
my individual NMLS ID number is2 5 9 6 1 0. Here today, again
with my son David, thepresident of ANet Mortgage, and
his individual N ML S ID numberis 3 2 8 8 4 7. If you have a
question or a comment, you cancall or text us on the Siding

(00:57):
Unlimited talk and text line ,which is 8 5 5 6 1 6 1 6 20.
You can also get a podcast oftoday's show wherever you
normally get your podcasts. So, uh, David , um, kind of
generally good news , uh,mortgage rates are, are back
down a little bit. Uh , we cantalk about that. Um, but the ,
the headline that I wanted tograb , uh, that was came out I
think last Thursday, was theNational Association of

(01:20):
Realtors , uh, announced theirMarch existing home sales
report. Um, and , and kind ofthe headline that got repeated
was that home sales slipped 6%in March, and what they were
focusing on is the differencebetween February and March. And
that is a bit unusual. And then, um, the seasonally adjusted,

(01:42):
what, what the NationalAssociation of Realtors do is
they take the monthly number ofsales and they turn it to turn
it into an annualized number ofhome sales. Then they also
seasonally adjusted. And sothat came out to 4.02 million
homes on a seasonally adjustedannual basis. And one
enterprising news outlet didtheir research and said, you

(02:03):
know, that's the worst that itwas since 2009, the worst March
since 2009. Uh, by the way,compared to March of the year
before Nationwide, again , um,home sales were off just 2.4%.
So if it's the worst since2009, it's not worse by much.
How do you think that comparesDavid to our local market in

(02:25):
southeastern Wisconsin? Uh ,

Speaker 3 (02:26):
It doesn't , uh, it doesn't compare at all. It's
like describing the weather inNaples compared to the weather
in Wisconsin. One does notinfluence the other. Maybe only
if you wanna live in one placecompared to the other. But
it's, as soon as you saidnation or home sales were down,
I I was immediately like where

Speaker 1 (02:46):
Right. Nationwide down 6% from February to March.
Okay. The number for the fivecounty Milwaukee metro area,
March home sales compared toFebruary, we're up ready 20%
not down. Six, we're up20. Yeah . That's quite a
difference. However, in allfairness, if you look at this
March versus a year ago March,we're down 7% compared to the

(03:09):
national, which is only down2.4. So, you know, and by the
way, that amounts to I think 89fewer home sales Wait Milwaukee

Speaker 3 (03:17):
Metro area . But this is where I stand on my
chair and I'm like, well down ,but I'm not looking in me one
at 800,000 and , uh, you know,west Dallas at two 50. Correct.

Speaker 1 (03:29):
It's all about the micro market . Yeah. In which
you're shopping also from thenational headlines. You know,
if you're, if you're readingthat and thinking, oh, this
must apply to where I'mshopping. Inventory of
properties for sale nationwidenow stands at a four months.
That's where you take the 1.3million homes that are listed
for sale by realtors and divideit by the number of sales in

(03:51):
March. You come up with a fourmonth supply, which is balanced
in the rule of thumb book. Uh,by the way, that inventory is
up 20% from a year ago when itstood at 3.2 months in
southeastern Wisconsin. In thefive county metro area, there
are 3070 single family detachedand condos on the market listed

(04:12):
by realtors. And if you dividethat by March home sales, we
have a 2.7 month supply, whichis still a seller's market.

Speaker 3 (04:19):
Yep .

Speaker 1 (04:20):
Okay . Still a seller's market. One last
nugget from that , um, mediansales price was 403,700
nationwide. That's up 2.7% insoutheastern Wisconsin March.
Home sales , our prices medianprice was up 7% from a year ago
and comes in at $338,000. Sothere you have it. We are not

(04:41):
like the, like the nationalaverage. Whoa . All real estate
is local

Speaker 3 (04:45):
And , and, and specific, not just local. But
even I have, and I'll shareperhaps some stories later in
the show, dad, I would almosttell you that every house is a
market unto itself for supplyand demand. Of course the
supply is one, but the demand,well, does this house, is it

(05:05):
nicely redone? Yeah. Does itneed a lot of work and buyers
are presenting or, or bringingthe economics of a particular
home to bear based upon howmuch foot traffic is coming
through that house and how manyoffers a seller is or is not
entertaining. If I, maybe if Iever wrote a book, I could
title it every house is its ownmarket or something like that

(05:29):
mm-hmm . Thatmicro markets are even too big
sometimes.

Speaker 1 (05:32):
Sure, sure. And that's influenced by like what
you just said, the , uh,condition of the house, the
location, and where they chooseto price it coming out of the
gate. Right. I think there's ,uh, a lot of agents, listing
agents out there that kind oflist a little bit on the low
side in order to , um, gain alot of interest in a lot of
offers and then it gets kind ofup makes for

Speaker 3 (05:51):
A good story.

Speaker 1 (05:52):
Exactly. And, you know, I think it's a , a
successful , uh, technique.
Alright. Do you want to comeback and tell us about a
specific story that has thatuh,

Speaker 3 (06:00):
I do. So I, I, it's kind of two stories talking
about each other. One, I had aclient interested in a home in
a Milwaukee County suburb , uh,that they didn't even get the
chance to walk through 'causeit was so busy. But the , and
the other story is, well, dad,I got a message that two of my
clients were both interested inthe same house. Ooh , nice .

(06:21):
And that interesting element aswell. And it speaks to supply
and demand. We'll get into allthat after this first break.
You are listening to the AcuateMortgage and Realty Show on a
six 20 WTMJ

Speaker 2 (06:37):
Home buying advice from the guys who know it best.
This is the ACU Net Mortgageand Realty Show with Brian
Wicker on WTMJ.

Speaker 3 (06:45):
Welcome back to the Acuate Mortgage and Realty
Show. I am David the younger,taller, more handsome of the
wicked men, at least for now.
Uh , and over there is Brianthe wiser of all wicked men.
Uh, dad, my clients getting outthere and doing the thing just
like a lot of a connectclients. Good. And as , um,

(07:08):
April has been , um, a lot ofwhiplash , uh, for the bond
market and rates.

Speaker 1 (07:16):
And how much do your buyers are pay attention to
that? Well,

Speaker 3 (07:20):
C come are you just , are you Ed McMahon? Come on.
Yeah . I'm Ed McMahon . Theanswer is not at all that we ,
um, have been on the tariffrollercoaster and I have
received no calls or textssaying I'm out, I'm in, I'm out
again, I'm back in. Right .
Right . Clients, they have thereal life reasons of why they

(07:42):
wanna get out there and do thething called buy the house and
, but we'll

Speaker 1 (07:45):
Take the win , right. That things have calmed
down . Well, of course. Andcome back , uh, you know, in ,
in, in, in our direction. And ,and just to say it out loud, on
a $250,000 30 year fixed ratewith a 25% down payment and all
the other right stuff , uh,we're able to offer here a
6.875 interest rate and we caneven pay or closing costs,

(08:07):
which in Wisconsin would makeyour closing costs only a
thousand bucks, including anappraisal if we need one. Boom.
And so then the , um, a PR is6.899. We could also offer
6.375, which has a 6.55 a PR.
And that's because that comeswith $5,700 of loan cost .
You're paying points to getthat lower rate or 6 9 9 , uh,

(08:29):
with an a PR of 6 9 9. And thathas guess how much in the loan
cost ? Zero. Zero. So there areyour options , uh, as of the
end of , uh, the week. Alright, back to your story.

Speaker 3 (08:38):
Well, so this, some folks might think that real
estate happens on the weekends.
It also happens during the weekof , I got a text from an agent
who I really enjoy working withon Monday at five o'clock.
Okay. Hey, my clients areconsidering this home. Could
you check to see if we get anappraisal waiver after this

(08:58):
price? Or going above? Do

Speaker 1 (09:01):
You have that person? Well , uh, well
educated,

Speaker 3 (09:03):
Well I think, I think Tim and I talked about
this last week, dad, but

Speaker 1 (09:06):
Yes, you did. If,

Speaker 3 (09:08):
If you are , if you're a buyer out there
looking, stare into the depthsof the eyes of your real estate
agent and ask, are you, or willyou call or text my lender to
see if we get an appraisalwaiver on this home that I'm
considering? Well just,

Speaker 1 (09:24):
Just switch to ACU net and we

Speaker 3 (09:26):
Take care of just Well , but is , but
that's the whole point. I, it ,I work and AED loan consultants
work as a team with your realestate agent that when you are
considering a home, you'relike, wow, we are gonna draft
an offer and here , here areprices we're considering down
payments we're considering.
Wouldn't you want to alsosprinkle in waving , not

(09:48):
needing an appraisal? Literallynobody walks through the house
if the, if the underwritingsoftware gives you the thumbs
up on value. Boy, if I was aseller, I would want that. And
if I was a buyer, I would wantto give that to a seller in
order to do that. Your agent oryou needs to be texting David,

(10:09):
Tim, anyone here at the ACU netteam? Can you check in on this
for me?

Speaker 1 (10:14):
Yeah . What's the minimum down payment nowadays ,
uh, to possibly obtain anappraisal waiver ? That

Speaker 3 (10:18):
The, the technical answer to that is it can be as
low as 3%. What the , thepublished appraisal waiver can
be as low as 3% that you can goon Fannie Mae's website. That
is what it is. In reality, outin the wild, we have seen it
usually takes about a 10% downpayment or more. Okay . Okay .

(10:39):
To get that appraisal. Well,I'm just telling you what the
public know , all it's publicinfo, it can be that low, but
in reality we have really onlyseen it with as low as 10%. As
your down payment increases,that appraisal waiver
likelihood also increases. Ihave seen for the same price,
for example, $500,000 house.

(11:01):
Oh, I get the appraisal waiverat a 30% down payment, but not
at 20.

Speaker 1 (11:05):
Oh, okay.
Interesting. We've seen ,alright , so there's

Speaker 3 (11:06):
Variation as well.

Speaker 1 (11:07):
Mm-hmm . Okay. Now do you have some
buyers, David, though, wholike, no .

Speaker 3 (11:12):
I , I ,

Speaker 1 (11:13):
I wanna know what an appraiser thinks the value is.
I need that psychologicalcomfort that somebody else
believes the same thing I do. I

Speaker 3 (11:21):
I have not had clients ask me for that. I
think I can think of one inmany, many years of you and I
talking about this. I think youhad one client decline to use
the appraisal waiver. Yeah. Butmy talk track is why do you
care what a stranger thinksthis house is worth? Correct.
Yeah . If it's worth it to youand the seller says, yes, let's

(11:45):
get to the altar and get thisthing hitched. Right.

Speaker 1 (11:48):
Although actually I had one buyer's agent last year
say , oh no, I don't believe inthat. I think we need to to get
an appraisal. I'm like , okay,well we didn't get the
appraisal waiver anyway , so itwas a moot point. But I was a
little bit surprised at that.
No , I think my clients deservea independent, don't forget
folks, the appraiser gets acopy of the contract so they
know exactly what you paid,which what you agreed
to pay. So , uh,

Speaker 3 (12:09):
I had a , to that exact point, dad, I had a
client, they're buying a housefor six 15. The appraisal
report came in this week at six17. What do you know? I walked
over to Cora's desk here on ourteam. I was like, amazing Cora.
How they came up with thatnumber six 17. It's almost as
if they had the contract whenthey were putting together

(12:29):
their report. So, so I wannajust describe a little bit of
the competitiveness for thisclient , uh, as well as other
stories from the latest andgreatest of the front lines of
mortgage lending and realestate here on the ACU Net
Mortgage and Realty Show. Thisis six 20 WTMJ getting

Speaker 2 (12:47):
You into the home of your dreams. Here's more of the
ACU Net Mortgage and RealtyShow with Brian Wicker on WTMJ.

Speaker 3 (12:56):
This is the ACU Net Mortgage and Realty Show. I'm
David Wicker. That's BrianWicker over there. Dad , I am
describing to you the art ofthe sequence for helping our
buyer get ready to gettingready, be the most competitive
that they can be when a in aparticular home pops up. And

(13:19):
what's uh , uh, kind of asidebar. You know, we help lots
of clients get ready to, I I'vealmost described myself. I'm
like a , um, engagement ringjeweler, right? Oh yeah. Okay.
You , um, I think I , I think Iwanna get out there and , and
meet some houses and Great,well, your preapproval letter
is like an engagement ring and, uh, I , I'd like to get you

(13:42):
that engagement ring so thatyou can go on some dates with
some houses. Hmm . Okay . Andthen a client says, oh my gosh,
David, I just met this house. Ithink it might be the one, you
know, can you help me dry,clean my shirt so that it looks
nice? Sure . So that when Ipropose they're really ready to
say yes. I you want to presentyourself the best that you can

(14:05):
as a buyer Of course. So thatthe seller feels safe. That you
are safe and strong just like afiance who doesn't want someone
to love Right . As both safeand strong. Nobody wanted weak
and wild.

Speaker 1 (14:16):
So , well maybe somebody, but go on . Somebody
does. Yeah.

Speaker 3 (14:18):
With leather. But my client had their , with their
agent who had referred them tome. It is our natural for, for
the agents that I really likeworking with, it is common. If
not , uh, the protocol for themto message me, Hey, we are
going to go see this home. Canyou run , you know, even before

(14:41):
you walk through the house, canyou check to see if we got an
appraisal waiver

Speaker 1 (14:46):
And at what value

Speaker 3 (14:47):
And at what value? I usually always start at the
list price. 'cause you know, I, the seller probably wants
that number , uh, to beginwith. Well, yeah. Talking more
than that. Yeah. Well, and if Iget that appre , if I get that
waiver at that number, we justkeep pinging the system. It's
like, well what about $10,000more? What about 10,000 more
than that? What about more thanthat? So the property that my

(15:10):
client , uh, was interested in,I, I had to remind myself, dad,
I had to poke myself about thepsychology of the list price.
Right. Because it is listed for$500,000.

Speaker 1 (15:25):
Okay.

Speaker 3 (15:25):
I kept, and my clients are strong. They're ,
they're , they could put asmuch as a $200,000 down
payment. Oh , nice. So superstrong running through the
software. Right. List price is500. Do you wanna guess, how
high did the underwritingsoftware say, I believe you on
value?

Speaker 1 (15:45):
I'll go with five 50, 10% higher.

Speaker 3 (15:48):
600,000. Whoa . I ran the house listed at 500 for
a purchase price as much as600,000 with a great down
payment. Okay . And theunderwriting software said,
sounds good.

Speaker 1 (16:02):
Sounds good. Nice .

Speaker 3 (16:03):
I I, I had like a, like any buyer out there on the
house hunt, I had to step backand be like, well no David,
it's not that this house islisted at 500. That was only
the starting point. Right. Itcould be as much as 600. Well,
or the software says it is thathigh.

Speaker 1 (16:25):
Software says. And so what did they decide to
write their offer

Speaker 3 (16:27):
At? I am waiting to hear back. I don't know. Isn't
that the , the psychology ofall of this though? Like it
would even take me David, a lotto untether from that list
price Sure . And be like ,well, the computer says 600.
I'd be like, ah ,

Speaker 1 (16:45):
Ah , I can't believe that. Right. Really? Yeah. Uh ,
what if it, you know, maybe goup in , in , in between, you
know?

Speaker 3 (16:51):
Right. Exactly.

Speaker 1 (16:53):
Practically or something and say, oh , okay,
but I don't need an appraisal.
So that's, that is comfort asyou said. That is certainty,
which is what it's all about.

Speaker 3 (17:00):
So I'm, I'll wait to hear back , uh, to see what
price my clients decided towrite at and if they were
winners. But having thatelement of, it's more the
knowledge dad. It's as a buyer,if you can know that this is
the price , uh, it allows youto then understand, well, if

(17:23):
the seller says yes to thisprice, and I know that the
appraisal will come in at thisprice, then I can have
confidence now that this iswhat my monthly payment will
be. Sure. This is how muchmoney will leave my checking
account in order to get to theclosing table. I oftentimes
though need to share withclients that this appraisal
waiver cements how much downpayment you'll need to make.

(17:50):
Oftentimes when an appraisalgets done, we tell clients, I
understand your financingcontingency says you are
capable of making a 20% downpayment. You could put as
little, you could put far lessthan that if you qualify. And
if you would like to find somebalance between down payment
and mortgage amount.

Speaker 1 (18:08):
Lemme say it back to you . Go ahead . If we , if we
get the appraisal waiver with a25% down payment, you can't
then come back and say, oh ,I'd really like to put 10%
down.

Speaker 3 (18:16):
Well, because what that means is if you, let's
make it even smaller than that.
If it , if the appraisal waiveronly sticks at 25% and you
wanna change the down paymentto 24.7% mm-hmm .

Speaker 1 (18:30):
And it doesn't

Speaker 3 (18:30):
Go with that , and the software says, oh , get an
appraisal. You are, you need tostick to, to continue to
utilize and leverage thatwaiver. You gotta be ready to
commit to that down payment.
Alright .

Speaker 1 (18:42):
Worth

Speaker 3 (18:43):
Talking about.

Speaker 1 (18:44):
Okay. Yeah, absolutely. Um, I, I've got a ,
a story about some , uh, followup story on some Illinois , uh,
customers , uh, looking to buya home. I'm sure you've got a
couple more stories too. Yes .
I also got some interesting ,uh, demographic information on
what the makeup of buyers andsellers was in 2024. We'll get
to all that, but right now it'stime to turn it over to the

(19:04):
WTMJ Breaking News Center.

Speaker 2 (19:08):
Don't break the fact to get into a house. Back to
the ACU Net Mortgage and RealtyShow with Brian Wicker on WTMJ.

Speaker 1 (19:15):
Thanks for hanging out with us today. I'm Brian
Wicker , uh, licensed realestate broker and majority
owner vacuum mortgage. That'sDavid Wicker over there, the
president of mortgage. And so ,uh, David, a couple weeks ago I
mentioned this , uh, couplelooking to buy a home in the
suburban Chicago area. And atthe time , uh, they were, this
was a word of mouth for sale byowner that was not on the

(19:39):
market yet. They were preparingto put it out there on Zillow
as a for sale by owner. And sothey got their buyer's agent
involved and , uh, had 'emapproach the seller. And so
there were these verbalnegotiations. Um, and at first
it was like, yeah , we thinkwe're gonna go out there on the
market in the low sevenhundreds. And, and um , and ,
and , and then also , uh, whatwe want to do is, you know,

(20:04):
give you, give us your offer.
So they made them, they madeour buyers say the number
first. And so they came 50grand over. And at first the
talk track was great, we'regonna accept your offer, but
until you give us the actualloan commitment, you know,
which means the appraisal'sgotta be done and the
inspection, you know, for theirown sake , uh, we wanna keep

(20:24):
marketing the property and ifwe get a better offer, we can
bump you until such time as yougive us the actual loan
commitment.

Speaker 3 (20:31):
Hey, if , if you've got the leverage, then why
wouldn't you ask for that asthe seller? Right.

Speaker 1 (20:37):
But so somehow then they negotiated that out of the
deal in exchange for saying,we'll pay you 50 grand over
what you thought you were gonnaask and we'll take the lumps
for wherever the appraisalcomes in. Fine. Okay , fine.
And , and so the, the antidoteto that was going to be , uh,
if it came in low, we were justgonna give them some , a little

(20:59):
sprinkling of private mortgageinsurance for not having a 20%
down. That would've changedtheir payment by 50 bucks. So
we had a , to

Speaker 3 (21:05):
Bring no additional money to

Speaker 1 (21:06):
Closing . No additional money to closing.
Yeah . And that worked , youknow, pretty much as low as the
, uh, you know, original askingprice. And they were quite
confident it would come inabove that. Yeah . So, great.
Uh , but the step number one,before we go and get the
appraisal, so we did not get anappraisal waiver on this house.
Okay . And , uh, so step onewas for them to do the
inspection. Now keep in mindthey had already had one failed

(21:30):
transaction , uh, in Januarydue to inspection. So, great.
The inspection's going well,I'm told. Well then all of a
sudden they find something thatI had never heard of before.
And this house is , I guess isabout 60 years old. It had a
partial slab basement , uh,underneath the powder room. And
so the heating and duct workwas encased in concrete. And it

(21:51):
turns out that it was, the ductwork was made out of a material
called trans , which I'd neverheard of before. Okay . Uh ,
but they, they informed me thatI Googled it , uh, that it's a
concrete mixture that's made upof like between 10 to 15%
asbestos Hmm . Commonly used inthat era. Yeah . Remember I
said this house is about 60years old. And so they did
their research and they foundout that, oh, you know what,

(22:13):
transient has an expected lifeexpectancy of about 30 to 50
years before it starts to break

Speaker 3 (22:18):
Down. We past that.
Yeah.

Speaker 1 (22:19):
Past that. And then , um, also if it gets wet, then
that can cause it to break downfaster. And they're going like
, oh , this is beneath thepowder room.

Speaker 3 (22:29):
Go ahead. Wait. But is it, did it is, I mean, is
there a picture of it now? Isit in okay shape or it's
untouched and fine. I , i , I

Speaker 1 (22:37):
Didn't get that deep into the conversation because
by the time I, you know, got inthe loop, I'll jump to the end
of the story. They decided tocancel the transaction. Okay.
And , and , and say, yeah, youknow what? Because it's the
powder room and it's encasedand there's this water issue,
and we're beyond the lifeexpectancy. What, what I don't

(23:00):
know is, is there some kind ofa remedy? Like could you, is
there somebody that could comein and seal

Speaker 3 (23:06):
Jackhammer it out with a guy with a hazmat suit
on?

Speaker 1 (23:09):
Well , that, that would be really expensive, I
would imagine. But my thoughtwas, you know, could you do
some sort of a ceiling , uh, aseal, seal this stuff, you
know, with some plastic coatingor who knows what Oh, to make
sure that it never, you know,the as pestos never makes it
out , but, you know, for theirpersonal reasons, they decided
it's a risk we don't wannatake. Now keep in mind, in

(23:31):
Illinois it's the exactopposite of Wisconsin. In the
real estate contract inWisconsin, you have to give the
inspection to the seller, andthen the seller has a
obligation. And if they don'tchoose to do this, the real
estate agent, if they're aware,has to do this to disclose any
material adverse facts that youknow about the property

Speaker 3 (23:49):
To the next buyer.

Speaker 1 (23:51):
Yeah. To all buyers.
All future buyers. Well, inIllinois, it's the exact
opposite. It says, do not givethe seller the inspection
report . I ,

Speaker 3 (23:59):
I wanna be blind and unaware. I

Speaker 1 (24:02):
Don't tell me . So, you know, now the sellers do
know what the problem was'cause they backed out. But
it'll be, and I have no idea ifthe sellers are gonna disclose,
you know, this potential issue.
And I'll bet that there's somebuyer out there that will say,
well , you know, okay, youknow, it's not loose now, you
know, the , the I'll take thechance or I'll I'll deal with
it later. Hmm . But , um,unfortunately, you know,

(24:25):
they're going back out, youknow, on the market and gonna

Speaker 3 (24:28):
Find , well I guess that's my, you know, my
question is, is it a moredirect path to try to scope out
how much would it cost toremedy this versus get back out
there And you , you know, when,when you decide to scuttle the
current deal implicitly you arehoping I can find the same or
better home for the same orbetter price and not have to

(24:52):
deal with this. And it's like,well, does that exist? Like if
you're, if you're looking inWauwatosa and you're still
looking at Wauwatosa , it'slike most of the homes are just
about the same age. So I don'tknow if you're going to skip
necessarily the same issues ifthe housing stock is all nearly
the same age. You're you'rehoping that's not a strategy
though.

Speaker 1 (25:11):
Yeah. Yep . Alright . You got a story first to come
back to? I

Speaker 3 (25:14):
Do. I have two. Uh , we'll do flip a coin , uh,
after we come back. Uh , morestories on helping home buyers
do the thing, move in, not justwrite offers. You are listening
to the ACU Net Mortgage andRealty Show on AM six 20 WTMJ.

Speaker 2 (25:30):
Important home buying questions and answers
you can count on. This is theACU Net Mortgage and Realty
Show with Brian Wicker on WTMJ.

Speaker 3 (25:39):
Welcome back to the ACU Net Mortgage and Realty
Show. Okay, dad , uh, flip acoin, proverbial coin , uh, I
have one client who is, who isasking me , uh, how much more
would I need to put down toavoid PMI? Okay . And the
conversation that ensued there.
My other client, yeah. Maybe Iwill ask my dad for a $250,000

(26:04):
gift so that I can make thedown payment and not have a
home sale contingency.

Speaker 1 (26:09):
Whoa . Uh , I'll go with the second one. Okay .
Asking the parent for a$250,000 gift, that's a big
gift.

Speaker 3 (26:14):
It is a big gift. So my client currently owns a home
and they're thinking like, likea lot of people, we want more
space. Boy, these youngchildren turn into teenagers
and they want more room, I needmore room away from them, or
they need more space. So let'stry to get a bigger house. Of

(26:35):
course, in consultation withtheir real estate agent, it's
like I can write you twopre-approval letters. One that
is contingent upon the sale ofyour home, which upon that sale
extinguishes the monthlypayment of the mortgage, and of
course the property taxes andthe homeowner's insurance on
that old home. And then I canwrite you a second pre-approval

(26:57):
letter that is not contingenton the sale of your old home.

Speaker 1 (27:02):
I can tell you the one I'd wanna see if I was a
seller. . Wow . I'lltake door number two. Yes . I
wanna , I don't wanna bebeholden to you being able to
sell your house. That is prettymuch a deal killer in today's
market.

Speaker 3 (27:14):
Well, and especially for any competitive , um,
reasonably nice home that aseller might be considering
more than one offer. This isjust us reporting from the
front lines of real estate.
Generally those offers go rightto the bottom.

Speaker 1 (27:29):
Yeah . Okay. So you go down the second of, I wanna
make it not contingent, but letme guess. They're short on down
payment or is there they can'treally afford both payments or
what's

Speaker 3 (27:39):
The deal ? It's the both payments thing. Right?
It's, it's not that eitherpayment by itself is
unreasonable on the old houseor the new house. It's just
that mortgage underwriters arelike, I wanna make sure that
you can afford both, at leaston paper, even if you can't
unload your old house. Right.
And so my client, I I thinksometimes in mortgage lending

(28:04):
we benefit from, let me say thepreposterous, let me just
describe to you Right. Becausemy client doesn't really wanna
make this would end up beinglike half down on the new
house.

Speaker 1 (28:16):
Okay. And is that necessary to get the payment on
the new house to a level?
Correct. Where they can affordboth properties at the same
time. Okay .

Speaker 3 (28:24):
'cause the payment on the old house is what it is.
If we're gonna fit in the boxto qualify you, we need to keep
pushing down the payment on thenew house in order to get that
payment low enough. I was like,you're not just putting 20%
down or 25% down, we gotta helpyou put half down.

Speaker 1 (28:43):
And do they have a lot of equity in their old
house that uh , they

Speaker 3 (28:47):
Do, but that's stealing from Peter to pay Paul
well ,

Speaker 1 (28:50):
Right. Right, right, right . I I understand if we
put more debt on that house,that doesn't really solve the
problem. So that money's gottacome from an outside source.

Speaker 3 (28:58):
And, and in my conversation with my client,
it's like, here is, and Ididn't know this when I
proposed Right. I kind of feltlike I was delivering like a,
I'm pretty sure crazy . There'seither no way you either can or
want to. He's like, I can helpyou write an offer on this new
house, not contingent on thesale of your old home that

(29:18):
would require to , for you tomake a 50% down payment. And my
client went, Hmm . Okay. Lemmesee if I'll call my dad.

Speaker 1 (29:28):
Well, David, what about the gift tax limit, which
I forget what it is or thegift, the , the gift limit this
year. Was it 19,500 orsomething? Won't, won't dad or
the son have to pay someginormous gift tax?

Speaker 3 (29:40):
Uh , I sometimes, when I'm trying to be a little
half facetious with clients, Iwas like, are your parents
worth more than $28 million?
Yeah.

Speaker 1 (29:49):
No.

Speaker 3 (29:49):
101 out of 100 clients say no. And then I say,
okay, I'm not a taxprofessional, but there will be
no tax consequence to them. Ifyour dad gives you $250,000 as
a gift check with your taxadvisor for the down payment on
this new home, please call Pauls Wicker cousin, cousin Paul,

(30:10):
or any tax advisor to confirm.
But we have both read theirs.gov website and we know
smart tax people who validateain't no gift tax. You know
what, if you've got more than$28 million, what are you
calling me for? But that's just, yeah , there you go.

Speaker 1 (30:26):
No, but yeah , so , so the idea is that you can
give more than the annual giftlimit according to the irs.gov
or your tax professionalbecause there's this lifetime
exemption. And so if you dogive more than the , uh, annual
limit, you just gotta fill outa form and tell the government,
Hey, I I I went over the limit,put this towards my lifetime
gift exemption limit. All right.

Speaker 3 (30:45):
So go on. And then well, what my client may do,
okay, dad is on board to givethe giant gift to help get them
into the new home. When myclient sells their old house.
Yeah. They are free to dowhatever they want with that
money. They

Speaker 1 (31:02):
Can re-gift it back to the dad, some of it, all of
it,

Speaker 3 (31:05):
Whatever . Well , they could take 'em on a really
nice cruise if they wanted to.
Yeah. But that it's aboutputting the game plan together
for the new one. All right . Iwanna talk about this PMI one
'cause I'm just gonna , I'mgonna get you going on this
Alright . With my other client.
You are listening to the AcuateMortgage and Realty Show on AM
six 20 WTMJ.

Speaker 2 (31:24):
Find a place to call home without the headache. This
is the Acuate Mortgage andRealty Show with Brian Wicker
on WTMJ.

Speaker 3 (31:32):
This is the last segment of today's Acuate
Mortgage and Realty show. AndDad, this is , this is the
mortgage bankers segment iswhat? It's all right . I had a
client, they are currentlymaking a 13% down payment is
what they Okay.

Speaker 1 (31:48):
13%.

Speaker 3 (31:49):
They have awesome credit. And their monthly
private mortgage insurance PMIis gonna cost them $58 per
month.

Speaker 1 (32:00):
Okay.

Speaker 3 (32:01):
For that 13% down payment and the loan amount
that they're borrowing, theypose the question to me, Hey,
how much more money would need, would we need to bring to the
closing table in order to getto 20%? And having reached that
20% threshold, you are nolonger required on a
conventional loan to haveprivate mortgage insurance.

(32:22):
Right.

Speaker 1 (32:22):
So 7% of the sales price is how many dollars?

Speaker 3 (32:25):
The answer to that is 23,000 more dollars for them
that would lower their monthlypayment principal and interest
by $147 a month and remove themonthly PMI, which is 58 bucks
a month.

Speaker 1 (32:39):
So the total payment reduction is how much?

Speaker 3 (32:41):
$205.

Speaker 1 (32:43):
Okay. So should you fork over 23 grand to lighten
your monthly payment by $205?
Okay.

Speaker 3 (32:51):
The mortgage bankers here on the Academic Mortgage
and Realty Show would say no,please don't. But in real life,
if that's what makes my clientmore comfortable, of course I'm
gonna say Sounds good. Sure.

Speaker 1 (33:05):
Yeah. Here's the fact and then I'm sure you did
the break even on that.

Speaker 3 (33:09):
Yes. Which, which is

Speaker 1 (33:11):
Nine was about 109.3 years. Yeah. Takes you 9.3
years of saving $205 to replacethat 23 grand that you were
gonna I part

Speaker 3 (33:22):
With. But, and see having owned a home and
improved a home moving in isonly the beginning. It's not
just the $23,000 you're, youknow, fiddling with should we
put it toward the down paymentor not? It is also, well, what
else could those funds be usedfor? Are , are there any home

(33:44):
projects? Is there a reallyugly carpeting that you need to
swap out ?

Speaker 1 (33:48):
Is there's something you , you need to improve?
Spend money . Right ? Yeah .

Speaker 3 (33:50):
Is , yeah. Is there siding on the house that you
think are , how's about this?
Do you think you might need toreplace the windows at any time
in the near future

Speaker 1 (33:57):
Depending on how old the house is or , or the roof
or what have you? Hey , did youthink about having them just
put 2% more down so they get tothe magic 15%? Which yes .
Makes the PMI even a littleless expensive. It kind

Speaker 3 (34:08):
Of though was an old school . PMI is evil even
though I don't understand whatit is or how much it costs.

Speaker 1 (34:18):
Yeah. Okay.

Speaker 3 (34:19):
And let me to defend my friends and private mortgage
insurance. PMI is the greatestinvention in the history of
home ownership and is a toolthat can be used if you wish to
both u understand it and wieldit. My clients wanted to go
down the path of what made themfeel most comfortable. Here's

(34:39):
the other kicker though, too,dad. This was gonna be gift
money. So it's not their 23,000bucks. Oh , it's grandma's

Speaker 1 (34:48):
Somebody else's.
Okay. Hey .

Speaker 3 (34:49):
Which makes it even easier, I think, to be like,
sure, we'll yeah, we'll usegrandma's money

Speaker 1 (34:55):
To , we're take this money and yeah, we're gonna
save $200 . So , so it's reallya gift from grandma, which she
would not, would she give themthe gift even if they didn't
use it towards the downpayment?

Speaker 3 (35:04):
Ah , that would be, that's a separate conversation.

Speaker 1 (35:06):
Yeah. Yeah. Who knows?

Speaker 3 (35:08):
But as is always the case, our job is to, let's
quantify what this is, sharewith you a break even as you
noted and then client, you tellme 'cause you're the one who
has to sleep in the house andfeel comfortable with life
month. Have

Speaker 1 (35:23):
They decided?

Speaker 3 (35:24):
They have Not yet.
They're still thinking about it,

Speaker 1 (35:27):
So . Okay. But they've , they are armed with
the facts. Yes . And do theyhave a house under contract or
not? They

Speaker 3 (35:31):
Are, they are closing at the end like
Memorial Day. So

Speaker 1 (35:34):
We're okay . So yeah ,

Speaker 3 (35:35):
We're clear to close, man. We're gonna

Speaker 1 (35:36):
Be sitting around for most of May, just counting
down the days. Fantastic.
Alright , well thanks for thosegreat stories, David. Of
course. Hey , that's all thetime we have for today's show.
We would love to help you, yourloved one, your friend, your
coworker , uh, get in positionto , uh, buy a home and make
you the most competitive buyeryou can possibly be. All you've
gotta do , uh, to get startedwith that is click on the blue

(35:58):
[e-mail]. You'vebeen listening to the Anette
Mortgage and Realty Show on AMsix 20 WTMJ.

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