Checkpoint: a New House – Readiness

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CheckPoint: A New House – Readiness

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XECO/212

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In this scenario we are given we have a studio apartment which is relatively cheap and easy to maintain but with a baby coming will be too small so a large place is required. Below I am going to look at all ten principles of Economics and show if and how each would affect my decision in buying a house.

Principle 1: People Face Trade-offs:

I believe in buying a house this is one of the most important principles. You have to look at tradeoffs throughout the process. The trade off over renting or buying is a big one to start with. When you rent you do not pay property taxes, you are not responsible for the up keep of the dwelling, the costs are usually cheaper, you do not need a large down payment, and you are not in debt for many years.

The next trade off once you decide to buy a house would be is this going to be a starter home or a permanent home. The reason that this is important is that with a starter home school districts would not be a factor and size may not be a factor as much. With a permanent home you need good school districts, you need it to be large enough for how big of a family you ultimately want, and you need to make sure your career will support you staying in one location for many years.

The next would be the trade off in location. You want a good school system, nice neighborhood, and convenient commute. But for nice neighborhood and good school system most times would mean you are further from where you work. Then there is cost, the best school systems have some of the highest property taxes, house cost more in nicer areas, and there are HOA fees that might come into play.

Another trade off will be size of the lot and...