Buying a Home

What to Keep in Mind When Going from Renter to Homeowner

It's not uncommon for renters to one day go from a renter to a homeowner. While it may seem very similar, especially if you've been renting a home, there are some things to keep in mind.

Renting is certainly not the same as own. The mortgage doesn't translate directly to your rent in a perfect ratio. Instead, you have to think about other expenses, as well. Here's a look at some of the things to keep in mind as you go from a renter to an owner.

More Upfront Costs

When you rent, you pay a security deposit or maybe you pay first and last month's rent up front. As you become a homeowner, you will find out there are other fees you have to deal with. It starts with a down payment, usually 10% or 20% of the selling price, but it can be as low as 3%. Then, it moves on to the closing costs, which will another 1% to 3% of the selling price. Sometimes, the seller will cover closing, but you still have to think about the title insurance, home inspection, appraisal, insurance escrow and much more.

The Mortgage Payment isn't your Only Monthly Bill

Sure, you may have paid utilities at a home you rented, but you didn't have to pay for the homeowners insurance and the property taxes. These can be rolled into your mortgage payment, but they can also be separate bills. Either way, you need to account for these expenses when going from a renter to a homeowner.

No More Free Maintenance

When something breaks, you don't get to call a landlord and let them deal with it. It's now your issue. You have to fix it or have it fixed. This is where building an emergency fund becomes important before you become a homeowner.

You can't Leave Your Neighbors

When you rent, you may be able to leave the neighborhood for a new one after a year or less. Owning your home means...

Top Strategies to Win Your Madison, WI Bidding War

The Madison real estate market is hot for sellers right now and buyers are finding themselves trapped in huge bidding wars. Some properties have had as many as a dozen or more offers after just one open house. It can be hard to deal with losing out on the bidding war over and over again.

It's just the start of the hot summer real estate season and you need to be prepared if you're shopping for a home in the Madison area. Whether you're looking in Fitchburg, Downtown or in Monona, there are several homes, but many more buyers. Expect a bidding war and use the following strategies to give yourself the best chance to win.

Have a Plan

You need a plan for shopping and bidding on the home of your dreams in Madison. This plan starts with a pre-approval from a lender. If you don't have one of these, you better have a suitcase full of cash to pay for the home (or at least have it sitting in the bank). You have to go into the bidding war armed and your pre-approval is your best weapon.

Hesitation is Costly

You cannot hesitate in the current market. You have to make an offer as soon as you're interested and you cannot wait. IF you hesitate to act, you could lose out as another offer could already become accepted before you even had a chance.

Hire a Good Agent

The right local real estate agent will make a huge difference. Not only will they be able to negotiate on your behalf, but they will also know exactly how to deal with bidding wars. You'll get good advice about whether or not to up your offer or even make an offer in the first place. Hire a good agent and you'll be well on your way to winning a bidding war soon.

Make the First Offer Clean

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Millennials Love Madison & The Midwest

Madison, along with other cities in the Midwest have started to attract a large number of millennial homebuyers. The affordability and large number of amenities are two of the main reasons this area of the county has become popular for millennials. While retirees may be looking to escape to a  warmer climate, younger generations love Madison because of the many things it has to offer, especially the five awesome lakes.

In addition, millennials tend to enjoy college towns. Madison is at the top of the list for college towns followed by Omaha, Minneapolis, Columbus and Des Moines. These areas tend to be very popular for millennial homebuyers throughout the Midwestern area of the United States.

More than Lakes and Universities

Madison, Wisconsin isn't just a city with universities and lakes, however. Millennials love these two cool features, but, they also love the zoo, Monona Terrace, the farmer's markets, Olbrich Gardens, the incredible trails and the many other attractions found throughout. Of course, there are plenty of sports to both play and watch and the restaurants are rather amazing, too. In fact, Madison has been named as a top foodie destination in the past, which lines up with what millennials seek.

With 2017 expected to see about one-third of the homebuyers from the millennial generation, it shouldn't be surprising they are flocking to Madison and other Midwestern cities. Many are returning to their alma mater...

Serious Buyers Don't Wait for Open Houses

The market is heating up and you cannot wait any longer. Competition in Madison has become heavy and if you wait for an open house, you might have to go back to the drawing board.

New listings are hitting the market and drawing a large amount of interest very fast. If you or your buyer's agent discover a new listing you like, don't wait for an open house to view it. Instead, schedule your showing as soon as possible.

First in Line isn't Enough

Being the first one to view the home may help, but it's not enough. You have to be ready to buy. Before you start your home search, make sure:

  • You have a pre-approval letter
  • Your down payment is ready
  • You know your budget
  • You have a list of needs and wants for your next home
  • You have a skilled agent to provide advice

Going into a home showing ready to buy is the only way to gain an edge when the market is so hot. Right now, you're likely to face stiff competition in Madison, Wisconsin. Preparation will make your position at the front of the line even stronger.

Open House Canceled!

Have you seen this headline lately? Many buyers have been burned by showing up to a canceled open house or counting on it without realizing the property has already gone into "pending" status.

If you delay on a home you're interested in, you may receive a notification of a cancelled open house. Homes are selling fast in Madison and you just cannot afford to delay.

Working with a Top Real Estate Team

One of the best ways to ensure you...

5 Top Tips For First-Time Home Buyers in Madison

One of the largest and most exciting purchases you will ever make is a home. The first time you go through this process, it can be rather stressful. However, with the right Realtor and a few tips, you can take the stress out of the process and enjoy the excitement.

Here are 5 tips all first-time home buyers should consider.

Consider All The Expenses

Often, first-time home buyers look at how the mortgage payment will compare to their current rental payment. However, owning a home requires maintenance, homeowner's insurance, mortgage insurance and other expenses. The utilities may be different, as well. Take the time to consider how these expenses will change your monthly budget before you start home shopping.

Think About More Than Just Today

Do you plan to grow your family? Is it possible you will have to care for an elderly parent? Could your job have you relocating soon?

There are many things to consider before you purchase a home in Madison, Wisconsin for the first time. If you plan to grow your family, you may want a larger home now, even though you won't need all the bedrooms for a few years.

It's also important to consider the school district, the traffic and the other factors around the home before you start shopping. All of these factors come into play if you end up needing to sell your home, as well.

Get Pre-Approved

It's much easier to submit a winning offer when you've been pre-approved by a lender. You may need to compete with other buyers as the real estate market in Madison starts to heat up and a pre-approval letter will help. In addition, you'll understand what you can actually afford by getting pre-approved.

Save As Much As Possible For A Down Payment

Putting 20% down is...

Is it Time to Find Your Dream Home?

Are you feeling cramped in your current home? Or perhaps you have too much space now that you're kids are off to school. Whatever situation you find yourself in we can help! We have experience in both upgrading and downsizing your current home. Watch Josh's latest Real Estate News video and then give the professionals a call! 608-620-4234

Ready to take the next steps? If you're wanting to sell or looking to buy, we're ready to help you with all your real estate needs. Contact us by giving us a call at 608-620-4234 or visit our website.

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Top 4 Deal Killers for Homebuyers

Falling in love is exhilarating. It can also be a bit scary, especially when a home has captured your heart. What if something goes wrong and you end up not spending the rest of your life with this stack of brick and mortar you're lusting after?

No matter how careful you are, some deal killers are unavoidable. Others, however, are preventable, so pay heed if you hope to keep your deal alive.

1. Don't Mess with Your Mortgage Preapproval

A common reason for a real estate deal to fall apart is that many homebuyers don't fully understand the mortgage process. Sure, you may get a loan preapproval, but don't think for one minute that this guarantees you will get the loan. It doesn't.

Here's what happens after you receive your preapproval letter and decide to move forward with the purchase. The lender will start your file, give you a list of paperwork required, order an appraisal and credit reports, verify your employment and income, and more.

The file is then sent to the processor who will review all of your information as well as the appraisal. He or she will then put together a package of all pertinent information to be sent to the underwriter.

The underwriter is the person who ultimately determines whether or not you are an acceptable credit risk. He or she will assess your ability to repay the loan, your credit, and the collateral used to secure the mortgage - in this case the collateral is the home. Then, just before funding the loan, the underwriter will perform what is known as a "soft pull" of your credit information to see if anything has changed.

This is the point where many borrowers run afoul. If you hope to keep your purchase alive, don't do anything - from application to closing - that might change your financial picture and sabotage your final approval. This means no shopping on credit for appliances, furniture or anything else. Don't switch jobs, fall behind on your bills, co-sign a loan for anyone, or in any way reduce...

4 Myths of Buying vs. Renting

According to a recent report by Harvard University’s Joint Center for Housing Studies, the past 15 years have seen a drastic shift in how Americans approach renting and owning. More people are renting, while fewer are buying houses. In fact, the average annual growth number for renters is now approaching the peak number for homebuying reached in 2006, just before the housing market crash.

The reasons for such explosive rental growth are numerous: lingering effects from the economic collapse in 2008, the revitalization of many urban cores, Baby Boomers aging out of their houses, and high rates of student loan debt among Millennials. Many millennial renters are postponing “next-steps” like marriage or starting a family, and still see home ownership as out of reach.

But should they? Maybe not. We at ABODO know a little something about renting, and have broken down four of the most common myths about buying a house versus renting an apartment.

MYTH #1: Ownership Is More Expensive

Not always — at least month by month. As demand for rental properties has grown, so have rents. In fact, in 2015 rents nationwide rose 4.6%, the largest increase in almost 10 years. According to a recent study, it’s cheaper to buy a house than rent it in 42 states. The overall price tag might give you sticker shock, but more often than not, a monthly mortgage payment will be comparable (or less) than rent, and at least you’ll be gaining equity. Plus, mortgage interest payments are tax-deductible. This handy calculator from the New York Times can tell you if homeownership might actually be a good financial move.

MYTH #2: Your Savings Will Be Depleted, Forever

You might think that after a downpayment, and mortgage payments, and furnishing, and repairs, and maintenance, and property taxes… saving money is a lost cause. But think of it this way: Every mortgage payment that pays down principal and...

Attention New Homeowners!

purchased a home in the last 18 months? You have the opportunity to participate in a home buyer focus group for the Wisconsin Realtors Association. If you are interested in setting aside 2 hours for a little extra money sign up!


The next focus group is being held Wednesday, May 18th from 4PM - 6PM and each participant will be paid $75 cash! The purpose of this focus group is to conduct research regarding buying trends and practices of recent homebuyers. If you're interested please fill out this short questionnaire to determine your eligibility. You will then be contacted with more details after it's completed.


Questions or concerns? Contact Lynn Wood at 608-280-7511

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Buying Your First Home

Join us for Home Buying 101!

In this fast paced spring real estate market the process of buying your first home may seem daunting. If you feel overwhelmed at the thought of the home buying process, attend our Home Buying 101 seminar through Connect Madison for Young Professionals week! Learn valuable information and feel confident about buying your next home.

We will be answering questions like, should you get pre approved first or find your realtor first? How do closing costs work? What happens when you find a home you like? And so much more!

What: Home Buying 101
When: April 28th 5:30PM - 7:30PM
Where: Ganser Company — 1906 W Beltline Hwy
Register Here!

We can't wait to see you there!

Ths event is over, but you can find out about buying your first home here.

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Deciding When the Time is Right to Upsize Your Home

By Aaron Martin
Josh Lavik & Associates

It’s usually pretty clear when a family has outgrown their home. There may be telltale signs like a line to use the shower in the morning, an office space crammed into the corner of a bedroom, or arguments about what to watch on TV.

But it’s not as easy to decide when the time is right to upsize your home. First, you have to consider the needs of your family, both now and in the future. Then you have to monitor market conditions to ensure that you can afford everything your family needs in a new home, and to make sure you can get a good sale price on your current home.

In the 1960s, the median home size in the U.S. was 1,500 square feet. Today, the median size of homes has grown to 2,200 square feet, the American Housing Survey reports. The transition to larger homes reflects changes in family dynamics, work-home life balance, and other changing lifestyle patterns over the last 50 years. Simply put, smaller homes built in decades past may not fit the needs of today’s growing families.

What do larger homes offer that smaller homes may not? The most common amenities found in today’s larger homes include offices, laundry rooms, standalone dining rooms, large master bedrooms, multiple bathrooms and multiple living rooms, the National Association of Home Builders reports (http://www.nahb.org/). Those amenities can make a big difference, too. For example, nearly 25% of adults report that they do some or all of their work at home, and a dedicated home office can help boost productivity. Multiple rooms for dining and entertainment make it easier to host family and friends. Laundry rooms and walk-in food pantries make everyday tasks more convenient. So, purchasing a larger home has plenty of benefits — but there may also...

This Property is a Short Sale and Subject to Bank Approval

If you've been searching homes for sale in the Madison area, then you have probably come across some property that said, "This property is a short sale and subject to bank approval" Have you ever seen this before?

Basically, this means that the current list price is LESS than what the owner owes on their mortgage. In order for a sale to take place, either the seller needs to come up with the money that they are short, or the current mortgage holder (bank) needs to approve taking less than what is owed.

The biggest thing to know about a short sale is that they are not "short" on timing or easy to do. From a buyer's perspective, on a regular transaction you submit an offer and then the seller makes a decision to accept, reject, or counter. This might take a day or two. With a short sale, you will still need to get the seller to approve. Then you need to have the current mortgage holder to approve. Then there is an approval from the loss mitigation department. Then you will ultimately need final approval from the investor of the mortgage (usually Fannie Mae or Freddie Mac). As you can see it's not a simple one step process. On the other hand, if you're willing to be patient, then sometimes you can get a good deal.

From the seller's perspective, this is a "pre-foreclosure" stage and they are usually trying to do a short sale rather than go through a bankruptcy or foreclosure. Often times this is due to some financial difficulty (loss of job, divorce, etc) and can be emotionally challenging.

From the bank's perspective, they are in the business of making loans and risk management. As you can imagine, if they made a loan of $200,000, they want to get paid back $200,000 plus interest. If they can’t get paid, their remedy is to foreclose, which is expensive, time consuming, and puts them in the business of taking...

Advanced Map Based Home Search

Easily search for homes and condos for sale throughout the Madison area by using this easy map search function.

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When is the best time to buy a house?

This past month I had a conversation with someone that was deciding whether or not now was the right time to purchase a home. I thought sharing my perspective on when is the right time might be worthwhile for my readers. Let's call him Gary (though that's not his actual name).

Gary is a bright young man with a good job out on the east coast. He has been recently recruited by one of the top companies in Madison and planning to move here this spring. He has spent a number of years as a renter throughout college and graduate school. However, moving to Madison for this new job, he wrestled with the idea of buying his first home. Gary shared with me, "I'm not sure if I want to buy or keep renting. I'm a little concerned that the market might keep going down." Now Gary is a very smart guy (probably much smarter than me) and he wanted my help to decide whether he should buy now or keep renting.

As I learned more about his situation, it seemed to me that now might be a good time to purchase. Here's why:

Tax credits available

In case you haven't heard, the federal government is offering a tax credit for first time home buyers of $8,000. First-time buyer is defined as not owning a home for at least the past three years. There is also a $6,500 tax credit for existing homeowners that decide to purchase a new principle residence. For both of these tax credits, one must be under contract by April 30th, 2010, with an offer pending to close no later than June 30, 2010. Please note, I'm not advocating purchasing a home solely because the government is offering a tax credit, but if you were on the fence about buying then this might be a little "boost" to entice you to purchase now rather than later.

Good Job with Stable Growing Company

Another thing in Gary's favor are that his job is fairly secure with a stable and growing company. As many economists will agree, one of the primary economic drivers of any community is stable jobs. Take Detroit...

Are you considering a move up?

If you’ve been considering a move into a more expensive home, then moving up in a down market might be a good option for you. Imagine that your current home valued at $300,000 declines in value by 5% and is now worth only $285,000. If there is another home valued at $500,000, and it also declines in value 5%, then it would now be worth only $475,000. Even though you may have “lost” $15,000 on your current home, a home that you could “move up” into will have lost $25,000. During this “move up” you have essentially gained $10,000 by the overall decline in the market.

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I'm just looking...not really ready to buy...

Last week I got a call from my friend named Jenna. She has a good solid job at an educational facility. She had been renting for a number of years with a few roommates. She started to get a little curious about buying a home only recently with the $8,000 first time homebuyer tax credit and extremely low interest rates. However, she thought originally of waiting for another year so that she could save up a little more money. Then all of a sudden her curiosity got the best of her because a nice condo came up for sale in her neighborhood.

As of the 4th quarter in 2008 there were 1902 condos for sale in Dane county and based on the rate of sale there are 26.8 months of inventory. Clearly a number of options are available for the discriminating condo buyer. But this particular condo that piqued her interest was in a neighborhood that she really likes. And the price was listed below the recent tax assessment. And she really liked the layout. And she really liked the neutral color scheme. And there are 3 bedrooms so she could have at least one roommate to assist with the monthly payments.

Here's a person who is "not really looking" but just happened to become interested with a combination of factors: tax credit, low interest rates, nice neighborhood, good layout, and plenty of space. In fact, when she first called me she said that she's not really interested and, "doesn't want to waste my time." I have to chuckle a little bit because this is basically my job. I help people buy and sell real estate. The step before buying and selling is to start looking. In fact, last fall I helped a couple to purchase a home on Lake Kegonsa. They were, "just looking" for nearly two years. Then all of a sudden this house came along with a number of factors that they couldn't walk away from and they decided to buy.

My goal as a Realtor is to become your source of real estate information. I'm not here to sell people a home that's not a good fit. Rather, I'm here to help people work through the process. The time...

Attn: First Time Home Buyers - $8,000 Tax Credit

2009 First Time Home Buyer Credit of $8,000

The table below is a brief review of the New 2009 First-Time Homebuyer tax credit. To learn more about how the $8,000 First Time Homebuyer tax credit can benefit you in the purchase of your personal residence contact me or call 608-234-1523.

FIRST-TIME HOMEBUYER TAX CREDIT

EFFECTIVE FOR PURCHASES
JANUARY 1, 2009 AND BEFORE DECEMBER 1, 2009

Amount of Credit - Lesser of 10 percent of cost of home or $8000

Eligible Property - Any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence.

Refundable - Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of tax credit refunded to purchaser.

Income Limit - Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000).

First-time Homebuyer Only - Yes. Purchaser (and purchaser's spouse) may not have owned a principal residence in 3 years previous to purchase.

Revenue Bond Financing - Purchasers who utilize revenue bond financing can use credit.

Repayment - No repayment for purchases on or after January 1, 2009 and before December 1, 2009

Recapture - If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009.

Termination - December 1, 2009
Effective Date - January 1, 2009

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How to negotiate the best deal on your next house

As the real estate market continues to shift, it seems like most people I talk to keep asking where all the good deals are these days. I would say, it depends. One guy I know told me about a house in Michigan that was $370,000 a year ago, now it's for sale for only $270,000. I suppose if you want to move to Michigan, you could get a good deal near the Chrysler, GM, or Ford plants. However, in the Madison area, the job market is relatively stable, which in turn helps to stabilize the real estate market.

Okay, you might be asking, "Come on Josh, what about the good deals on a house in the Madison area?" Some investors that I deal with, prefer to search for foreclosures and other fixer upper properties. However, keep in mind that just because a property is a fixer upper, does not necessarily mean that it's a good deal. In fact, there are other investors that seek out only homes in good condition because there tends to be less maintenance cost when renting the property. This may also be a wise move with concerns over rising material costs for rehabilitation.

If a foreclosure or fixer upper is for you, there can be some good bargains out there. I helped someone buy a condo in Sun Prairie this year that was in the process of foreclosure. The condo needed a lot of work, but was priced accordingly; about $40,000 below nearby comparable sales. Another couple I helped purchase a house on Lake Kegonsa for nearly $100,000 LESS than the current assessed value. How did I find all these "deals"?

Overall the best "deal" comes from truly identifying your objectives as a home buyer and knowing the market. In both of these cases we spent considerable time looking at various properties that were for sale in the Madison area. Occasionally we found a couple that were a good "deal" but it was too late because they were already under contract with another buyer....

Buy a campus rental and get $60,000 FREE

I'm working right now with a gentleman who's looking for a house to purchase for his kids while they are attending the University of Wisconsin in Madison. It seems like a reasonably good idea. Invest now and in a few years sell for a little profit rather than pay the landlord for 5 years (let's be honest, there are a lot of kids that don't finish a 4 year degree in 4 years). Then if the kids decide to stay in the Madison area afterwards they will already have their housing needs taken care. I think this is a tremendously good idea. The only better idea might have been to purchase a house when the kids were born, put it on a 15 year amortization schedule, then when they are ready for college they would have a house free and clear to pay for school.

The city of Madison is also in favor of owner occupied housing in some student housing rental areas. In fact, if you buy a home in the Bassett Neighborhood, the city will even give you $60,000. Wow, that's incredible. And I hear people say, "I can't afford to buy because I don't have a down payment." Would you like $60,000? There is of course a little bit of catch. The borrowers must occupy the property as their principal residence for 10 years in order to forgive 100% of the $60,000 "loan". Why would the city do this? "This pilot program will help convert downtown housing back to owner occupancy and it will help protect downtown's historic building stock," said Mayor Dave Cieslewicz. "If it works as predicted we will look to expand it in the future."

If you've ever driven through this neighborhood you would notice an interesting dichotomy. There are many older (70+ years old), run down, single family homes that are typically rented by college students. Then very close by there is a bustling of new construction activity. Metropolitan Place, Nolan Shore, and Capitol West are a handful of very large brand new beautiful condominium complexes. I think it will be interesting to see what continues to happen on this part of the Isthmus as downtown redevelopment continues....