Tune in as Brian Wickert (president and owner of Accunet Mortgage) and David Wickert (Accunet loan consultant and manager) answer questions about the Wisconsin housing market and share tips for homebuyers and sellers alike.
This week on the Accunet Radio Show:
On the Easter 2019 edition, Brian and David share client updates, answer audience questions and tell you what NOT to do when you’re buying a house.
This week’s highlights
- Since there haven’t been any economic scares, rates continue to climb bit-by-bit.
- Tax returns are out, and people aren’t happy. But contrary to popular belief, a small tax return doesn’t mean a small paycheck — in fact, this year, it means the exact opposite.
- With Accunet’s help, a client was able to save $12,000 on their new condo. Tune in to the show to find out how!
Today’s rate roundup:
At Accunet, we don’t just take your order; we walk you through all your options.
Client update: Denial of purchase transaction
This week, we saw something pretty rare: A denial of purchase transaction that had nothing to do with a bad appraisal or home inspection. Why then? Because the buyer didn’t obtain a Rock Solid Guarantee right off the bat, and documentation matters!
The gnarly issue, in this case, was income. This client, who used to be a business owner, recently gave up his business and handed his clients to his son. Note: He didn’t hand HIS BUSINESS to his son – just his clients. He then went to work at his son’s business as an employee.
After we got all his documentation together, we noticed something funny. All his pay deposits were nice, smooth numbers. Not the decimals you almost always see on a paycheck. And to boot, the deposits were irregular.
Tip: When borrowing, your lender won’t care about your last house — it’s all about documenting your financial world according to RIGHT NOW.
Like we’ve said on previous shows, Fannie and Freddie are fine with turbulent income as long as you’ve had it for longer than two years. Unfortunately, this client hadn’t. He gets paid when the company gets paid, which isn’t always steady.
So, we couldn’t approve his loan, despite the fact that he had already made an offer and was expecting to close by May.
Moral of the story: Even if you think your situation is completely normal, you just don’t have the knowledge and resources mortgage lenders do. Save yourself the stress. Get a Rock-Solid Preapproval.
Client update: When someone “forgets” to mention structural damage
One of our clients is closing on their home this Friday. On Thursday, we received an amendment to the original contract that was signed the weekend before (so, we could’ve received the amendment on the 14th). The amendment stated:
“Seller agrees to have basement work done, per structural engineer’s report April 5.”
Of course, no one thought to tell us, the mortgage lender, this! This is a common, unfortunate mistake (and we cover it in our blog post, “Offer to purchase contracts: 7 common misunderstandings“).
Please, when writing an amendment, keep in mind that when we read something, we can’t un-read it. Only write your amendment with regards to a price reduction. If you reference a report, or a specific issue, we are obligated to ask for more information, and it will very likely slow down the closing process.
Imagine it like this: You’re about to give a professional basketball player a new contract. Then, you find out they have a broken leg. Guess what? That contract will probably need to be revisited. This is the mortgage equivalent of that.
Can’t you do an escrow holdback in these situations?
Since the delay in repairs isn’t weather-related, the situation is not eligible for an escrow holdback. The repairs will need to be made before closing, or mortgage lenders won’t touch it.
Call-in question #1:
“I’m selling my 15-year-old house for $500,000, which is close to the asking price. The house is structurally great, but there are some cosmetic issues I’m sure the buyer isn’t aware of (spots on the carpet, broken shades, broken icemaker). I feel guilty about this. Should I give the buyer a check at closing to compensate?”
Well, this depends on if the buyer was given a condition report, if there was a home inspection and if the buyer has already walked through the home. The bottom line: Never do anything outside of the contract.
Here’s what we recommend, without knowing the specifics:
- Add an amendment to the contract
- Offer a closing cost credit
- Do not give him a check at closing.
Call-in question #2:
“Where can I find out how many houses there are for sale in a particular price range, and when the average selling time for that price range is? In particular, I’m looking at a $700,000 home in Slinger, Wisconsin.”
Any real estate agent can look the information up in the Multiple Listings Service. Although we predict that, in that range and area, maybe only one or two homes are currently for sale.