Welcome, everyone, to Midday Magazine for this February 13th, 2024.
Have your host, James J. Mailoff here.
And it's time to let's talk real estate with our good friends from Cole Banker,
See Your Realtor. We have right now with us on the phone,
Lindsay Shider, director of business development and real estate professional.
One of our favorite people to talk to, Lindsay, how you doing?
I'm doing well, James, how are you?
Doing good. Thanks for asking. And thanks for being with us.
We love talking real estate with you all.
I learned so much on this subject. Every time we talk
and I've heard from listeners over the years that just really, really value
the local touch that we get from Cole Welbanker and appreciate you and your team
over there, Lindsay. Let's start today in a fun spot.
We're going to go over some definitions together.
Yeah, absolutely. I thought it was important for the consumer to understand some of the
terminology that we use in real estate. Of course, we as realtor use these words every day.
But sometimes for the consumer, it is not something that they're as familiar with.
So nice to get a little bit of information wrapped around that.
Yeah, Lindsay, you know, more and more people are getting into the housing,
buying homes and it's becoming more accessible for people to be able to do that.
But there are so many, I don't want to say little things. It almost feels like there's nothing
little in home buying, but things that don't always, you don't think of right away.
And then you hear these terms and you're kind of, I don't know, most adults, we get a little shy
about asking, hey, what does that mean? We just kind of nod our head and everything.
Here's an opportunity for you to understand these things kind of before or as you're going into
the process. Absolutely, absolutely. And one of the first things that we can start with is the
pre-approval. It's actually really important on both the buying and the selling side of real estate.
So you do think usually of a pre-approval of something that a buyer is really important for them.
And in the context of real estate, of course, that pre-approval is the process where a potential
homeowner goes through an evaluation of their full financial situation by a lender.
That lender is going to review that buyer's credit history, their income, other financial factors,
and they provide actually a written commitment that says, hey, you guys are good to go.
You guys are looking well to purchase a home of such value.
But what that pre-approval does is it not only helps the buyer and the agents that they're
working with understand the budget, but it also can strengthen their position in negotiations.
And it also is a tool for sellers to understand and view pre-approved buyers as someone who is
more serious, financially capable, and that's another job for us as real estate professionals to
make sure that the buyers that are getting into the homes that are for sale are serious and able to
purchase. I think a little more to it that than I think we might have assumed. So that's a good
one to hear. What about offer to purchase? That's a new one or not a new one, but that's I think new to
some people maybe. Yeah, so the offer to purchase is the name of one of the primary contracts that
we use in the real estate industry. So it's very detailed. It is a written document. Of course,
we can do a lot of things through digital signature and through email nowadays, but it is a
document that becomes the contract. It is the offer from the buyer to purchase the seller's
property. So there's details that can be negotiated. If there is anything that
after that initial offer to purchase is drafted that needs to be negotiated,
another document called a counter offer is used. And once both the buyer and the seller
have agreed and signed those final terms of what that contract looks like, it's considered
fully executed and that becomes legally binding. So that's really important for consumers
to understand that when you're throwing your signature on things, really important to understand
all of the details, all the nuts and bolts of that so that you really understand what you're
getting yourself into because it is a legally binding contract. And of course, that's another value
add as a realtor to be able to communicate what those contracts mean, explain them, and also
craft them and draft them in a way that is beneficial to you as the consumer.
And then taking it one step further is there are some times that the offer to purchase does
change during the time of an accepted offer all the way to a closing table. So then that contract,
once we have an accepted offer, it can be changed and we would use another document called an
amendment to do so. Okay. What about earnest money? So earnest money is something that kind of
happens at the front end of a transaction. It's a deposit made by the buyer to really show their
good faith in the transaction. So this sum of money is not an additional payment for the buyer.
It does come off of their down payment, but it is something that needs to be liquid enough
where that buyer can provide it, usually within five to seven days of an accepted offer.
So it is held in a trust account with either the title company or real estate brokerage
during the course of the transaction. And like I mentioned later applied towards the buyer's
down payment or the closing costs. And then if something were to happen where the deal doesn't
make it to a closing table where that deal falls through, there are details outlined right in
that offer to purchase contract that we were talking about how that earnest money may be returned
to the buyer. Or if the buyer is not leaving that contract with due cause, the seller may be
entitled to keep that earnest money. So it's not always one way or the other. It depends on what
the contract's fate and what went down in the transaction. Really good stuff there, Lindsay,
thank you. What about contingency? I think that's a term that means different things in different
fields. It does, yeah, for sure. You know, the word contingent can actually be used sometimes in
even some websites simultaneously with accepted offer. Like you'll see a property is contingent.
That means that there is an offer that has been accepted, but there are some terms that we still
have to get, you know, worked through those things. But in this case, we're talking about a specific
contingency within our offer to purchase document. So it's a condition or a requirement that needs
to be satisfied for that contract to proceed to the closing table. So some common contingencies can
be home inspections, a financing approval, sometimes a buyer needs to sell their home prior to
purchasing the next one. So there's lots of different types of contingencies, but it really is,
you know, hey, buyer and seller, we've agreed to these terms on our accepted offer. Now we have to
work through some of the nuts and bolts of inspections and contingencies to make our way towards
the closing, which is why there's a portion of time, a typical close is about 45 days for us to
get from an accepted offer to the closing table. Because there's some things that we have to do
in between. It makes sense. And I think it's also really interesting to hear some of the details,
kind of some a little bit of behind the curtain with some of this, too. That's another interesting
angle of this. You mentioned closing. So what about closing disclosure? Yeah. So when we get closer to
the time of closing, there's actually two documents. And I wish they had maybe some different names.
They don't. They have very similar names. We have one that is called a closing disclosure,
and we'll also talk about a closing statement. So the names are really similar, but they are
very different things. So a closing disclosure can also be referred to as a CD, right? Just the
abbreviation of closing disclosure. But this is on the lending side of things. So if a buyer is
taking on a mortgage and financing their purchase, this closing disclosure is a detailed document
that is provided to the borrower by the lender. It has to be delivered within three businesses
before a schedule of closing. And it's going to outline all the final terms, the cost of the loan,
I mean, everything. The loan amount to interest rate, the closing cost, any other financial details.
And this closing disclosure allows that buyer to review and compare those final terms
before we actually make it to the closing table. And this is just to ensure transparency,
accuracy, all of that kind of the other side is our closing statement. So a closing statement
is also known as a settlement statement. And this is a document that also outlines a lot of
financial details. However, it is in regard to the real estate transaction. So like we mentioned
that first one, it really all has to do with the lender and the buyer and what that picture looks
like. But on a closing statement, we are now jumping to the real estate transaction. So this
is prepared usually by a closing agent or an attorney who's involved in helping us close the
transaction. And it is a summary of all of the funds involved, including the purchase price,
the closing cost, any adjustments, expenses or credits. And we're going to be able to see both the
buyer and the seller's side of the real estate transaction. And they're both going to receive
a copy of that statement too. Make sure that everything looks good about what we agreed upon
and where we are at the end of day of how much cash that buyer needs to come to close. And then
how much money that seller is actually getting as far as proceeds from that sale.
Lindsay, we have gone over a lot of different terms here. And while it may be a lot to take in,
it's all very vital and really informative, really helpful understanding these terms.
Yeah, well, thank you. I mean, I really do think understanding these terms really can be
critical for anyone who is involved in buying or selling real estate. They are commonly used
throughout the entire process. But it's just another important reason to have a trusted real estate
professional buyer side. And, you know, so if you're looking to buy your seller home, don't forget
about the many ways an agent can be essential to that process. If there's a hurdle that pops up,
a negotiation that needs to take place, you know, even a term that feels confusing or could be
misunderstood, we are here to help every step of the way. We're speaking with Lindsay Shider,
Director of Business Development and a real estate professional, a coal banker,
CEO, realtors. I want to say a big thank you to Advantage and Belvapar Reality as well. And,
Lindsay, let's get into some national numbers now. Absolutely. So I pulled some, you know,
year end is a really good time where we have some gathering of data. And I just had some things
that I thought were interesting and I wanted to bring to our listeners today. So the national
association of realtors, when we're looking back here at the end of 2023, they discover that over
85 percent of the US metro markets witnessed a rise in home flight prices during that fourth
quarter of 2023. And so that is unique and special because we do usually see a little bit of a
decrease in activity at the end of the year, right? People get busy with the holidays.
Some places in our country have the winter where we're dealing with weather conditions.
So the fact that we were still seeing a rise in those home prices in that fourth quarter
is pretty exciting to see. We're also seeing from a census that a majority of homeowners
actually almost 70 percent are in a really good financial position in their home ownership.
There is almost 40 percent of people that have fully paid off their mortgages and then about
30 percent that have at least 50 percent of equity in their homes. So there is a really
great number of homeowners that hold a considerable amount of equity in their properties.
And that large segment can really stand to gain a lot if they choose to sell in this market.
So that's an exciting stat as well for us to consider going into 2024.
Yeah, Lindsay, anything speak out to you about these numbers, anything that stands out to you about
them. I mean, the hope from the real estate perspective is that when we see these
large numbers of homeowners in a healthy and good financial standpoint is that we hope that
there will be an increase in the number of people that pay a home prices are up.
We're able to sell for a really good amount. We have a really great amount of equity in our home
or our mortgages fully paid off. We stand to really gain from selling in this market.
So the hope in the real estate industry is that we will see an increase in inventory of homes
enter the market here in early 2024. And the kind of springboarding offer that optimism there.
What does the mortgage rate optimism, what are we kind of seeing with that?
Yeah, so that's also exciting. Obviously, we've really quite a rollercoaster of interest rates
in the mortgage world for a while here. But what we are seeing is that it's stabilizing.
So from the National Housing Survey, we are seeing that even homeowners are feeling excited
about this, that 36% of the people that responded to this survey indicated that they expect
mortgage rates to go down in the next 12 months. So there is some optimism in the consumer world.
They're also indicating that consumers have also expressed a greater confidence in their job
situation this month. So just another sign that housing may continue to improve in 2024.
What about the mortgage demand tick-ups in that kind of thing? Let's go into that a little bit.
Yeah, absolutely. So it was exciting to read that during the week of February 2nd. So just a few
weeks ago, that the mortgage bankers association was seeing an increase in mortgage application.
So basically, we have more coal buyers asking for mortgages here at the beginning of 2024.
So this activity has been strong to start this year, even compared to that final quarter of 2023.
And like I mentioned before, mortgage rates have remained stable since the beginning of the year.
And what we're seeing is that the 30 year fixed rate is averaging about 6%.
As of February 1st, it was 6.63. So we're covering right around that 6% give or take.
And so that is really exciting to see that we've kind of come back to a interest level that appears
to be more comfortable for our home buyers because now we're seeing more people apply for those loans.
And interested in purchasing. It's really good information, Lindsay. We appreciate it,
especially with how ever changing this industry is.
Absolutely. This industry is definitely constantly changing. And staying ahead of it really
requires constant learning and adapting to new ways of doing things. And that's why I'm so proud
to work for Cold Anchor. Our family of companies located in Wisconsin Rapids, Town of Rome,
and Adam's Friendship. We focus on training our agents, continuing to learn,
being forward thinkers about how we provide the best customer service to our customers and clients.
In addition to being on top of all of this data that we just discussed, whether it's nationwide
or also localized to our communities here, we just want to make sure that we are in the know
about everything and we continue to be that source of information for everyone that we work with,
whether it's a client, a community member, we want the public to look for us for all of this
latest information. So we're excited to share that. Lindsay, I know we like to go over some local
numbers. We have some Wisconsin Rapids real estate numbers. We're going to touch on as we're wrapping up.
Absolutely. So in Wisconsin Rapids things are happening. We have 32 active listings in the
greater Wisconsin Rapids area, four of which have had a recent price reduction. So we are seeing
some more inventory and hoping that some of the spring weather that we're having will also bring
an early spring market in real estate. We also have 35 properties that are under contract,
our average days on market being about 60 days. So that is having homes sit on the market.
Just a little bit longer. But what we're seeing is those excessive bidding wars have
subsided depending on the type of the property. The average sold price in January was 188
and we're still selling really close to that asking price. We're at 99 percent
for a list to sales price ratio. So selling just right below that asking price on average.
So sellers are generally in a favorable position while price homes in good condition are selling.
It's essential for sellers to remain realistic and work closely with their real estate agents
to set appropriate listing prices to really maximize interest and secure a buyer.
Lindsay, it's a really, really good information. How about the Rome area? We have a little time to
touch on that. Absolutely. We have 22 active listings in Rome and they are also selling really close
to that asking price. So we're at 97 percent for a list of sales price ratio. Being that Rome
is very seasonal. There's lots of second homes, much more traffic in the warmer months. So we are
seeing some seasonality when it comes to real estate. But with that being said, we're excited for
the interest in activity coming spring. And let's wrap up with Adam's friendship.
Absolutely. We have 13 active listings, seven properties that are under contract and our
average sold price is a whopping $392,000. This price is a little bit skewed because we only had
two sales that I was able to pull from January, both valued high. So we do have an ordinary
high ever sales price that we're kind of showing just for that one month of 2024. But what we are
seeing is that the market is stabilizing. Again, properties are selling very close to those asking
prices at 98 percent of lists. And I think sellers are understanding the shift in the market.
They're listening to their trusted real estate professionals about pricing. And pricing just,
it has an added trickiness and these markets shift and change. And so we are excited to offer
that value to our customers and clients from working with a trusted cobalt banker real estate
professional. Yeah. You know, Lindsay, in a conversation here, one of the things that has
been very clear to me is I don't know anything, even though I do. Like I've been talking with you
in JR for years. And I've learned more than I would ever know about real estate without you all.
And even still, like some of those terminology things and some of the numbers you just gave us,
I wasn't aware of in this day and age where there's so many people that want to do it themselves
or figure out things that work the ways to do things on our own. This is not that field to do that
with. This is a field where you want to go to people you trust, people that know the area,
that understand the area and that have an incredible reputation, that back the people,
because people like Lindsay and her colleagues, they are neighbors. They're people that live in
these neighborhoods that they're trying to get you a home and or help you sell your home. So
they're looking out for you just as much as you're looking out for you. There's no more and more
trusted than cobalt banker. I appreciate the time as always, Lindsay. Well, thank you, James. I
appreciate you and your understanding of what we do and talking about it each month. Thank you.
Yeah, and I got to put you on the spot a second, Lindsay. Lindsay's playing her today, everybody.
She did an amazing job. So shout out to you, Lindsay. Nice work. It's always fun working with you.
People want to follow questions or they want to know more about some of what we've talked about.
How can they reach you? Absolutely. So the best number for our Wisconsin Reffers location,
which is cobalt banker, C.W.R. Rilters, is 0-5-424-4800. Our location in the town of Rome,
which is cobalt banker advantage, is 715-325-7335. And finally, our location in Adams
Friendship, which is cobalt banker, Belvapar, is 608-339-6757. So please do remember to call
our cobalt banker family of companies. We are more than eager to assist with a free market
analysis to find out what your home is worth or to assist with any ins and outs of the market.
If you're looking to purchase a home. You're the best, Lindsay. We appreciate you. We'll talk
again next month. Thanks so much, James. We'll have more coming up for you right here. I'm
in the magazine tomorrow, right on WFHR, locally grown radio.
