AAEC 2104 Lecture Notes - Lecture 22: Termite, Title Insurance, Estate Tax In The United States
2 May 2018
School
Department
Course
Professor
Finance Notes 5-2-18
The Housing Purchase
- One of the biggest purchases for most consumers
- Not something to jump into blindly
o Know your options
o Know the costs of owning and maintaining
o Know the hassles and joys!
- Try to keep housing payments < 30% of gross
o Roughly 1 weeks gross pay
Housing Options
- Renting apartments or houses
- Buying a house
o Single-family, duplex, etc
- Condominiums
o You own the apartment unit
▪ You jointly own the land and facilities with others
- Cooperatives
o A corporation owns the building
o Residents are stockholders in the corporation
- Planned Unit Developments (PUDs)
o You own house and land, jointly own development
find more resources at oneclass.com
find more resources at oneclass.com
Buying a house – the process
- Do your homework
- Identify the house
o DIY or work w/ realtor
o Realtors add about 1.5% to purchase price
- Contact a lender to prequalify
o Determines how much of a loan you can get
o Improves bargaining position with seller
- Do more homework
o House inspection, termite inspection
o Real estate values in the area, tax assessments
- Negotiate with owners
- Sign contract
o Work with a lawyer to develop
- Closing or settlement
o Closing the deal
▪ Involves buyer, seller, lawyer, lender, realtor
o Final walk through
o Lays out the final cost and financing
▪ Purchase price, closing costs
o Write the check
Buying a house – the financials
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
One of the biggest purchases for most consumers. Not something to jump into blindly: know your options, know the costs of owning and maintaining, know the hassles and joys! Try to keep housing payments < 30% of gross: roughly 1 weeks gross pay. Buying a house: single-family, duplex, etc. Condominiums: you own the apartment (cid:498)unit(cid:499, you jointly own the land and facilities with others. Cooperatives: a corporation owns the building, residents are stockholders in the corporation. Planned unit developments (puds: you own house and land, jointly own (cid:498)development(cid:499) Identify the house: diy or work w/ realtor, realtors add about 1. 5% to purchase price. Contact a lender to (cid:498)prequalify(cid:499: determines how much of a loan you can get, improves bargaining position with seller. Do more homework: house inspection, termite inspection, real estate values in the area, tax assessments. Sign contract: work with a lawyer to develop. Closing or settlement: closing the deal.
