Assignment 1.1 Using the five step decision making process
Step 1: Define the Decision Clearly
My husband and I would like to buy a smaller house on at least 3 acres of land in the country when our last daughter graduates high school in 2 years.
Step 2: Consider all the Possible Choices
1. Sell home and purchase land with home
2. Purchase land without a home on it and build a new home
3. Rent out current home and purchase new home on land
Step 3: Gather All Relevant Information and Evaluate the Pros and Cons of Each Choice
Possible Choices | Information Needed | Pros | Cons |
Sell home and purchase new home with land | · Need to review comparable value of others homes in the neighborhood to identify what current market value is Determine sell it on my own or use a realtor Hire a realtor to help us find the home of our dreams | Move to a new location with no neighbors and fresh air Using a realtor will increase marketing Using a realtor allows us to view more properties · | Our home has dropped in value Realtor fees will make us pay to sell the house Selling on own home means increased work and it takes longer to sell a home |
Rent out current home and purchase new home | Research Property Management companies Obtain copies of rental/lease agreements Meet with accountant | Investment property Possible additional income Hire property management company to manage rental Tax write-off when rented | Upkeep on rental Wear and tear on home Securing single family renters with good credit Additional house payment/insurance Renters default on rental payments leaving me with 2 house payments |
Rent out current home and purchase new home | Research Property Management companies Obtain copies of rental/lease agreements Meet with accountant | Investment property Possible additional income Hire property management company to manage rental Tax write-off when rented | Upkeep on rental Wear and tear on home Securing single family renters with good credit Additional house payment/insurance Renters default on rental payments leaving me with 2 house payments |
Step 4: Select the Choice that seems to best meet the Needs of the Situation
The best choice for us would be to find a realtor that will help sell current home and find property with a home already on it.
· A Realtor is familiar with market trends and can help with selling home and finding new home
· Obtain more peaceful surroundings in a smaller home since children will no longer be living at home. (I can dream… can’t I?)
· No fear of having 2 payments for housing if the house doesn’t rent or the renters do not pay.
Step 5: Implementation of a plan of action and monitor the results
· Agree upon a timeline to sell existing home and buy new home
· Down size our belongings to fit in a smaller home
· Contact bank and obtain a pre-approval for home loan
· Contact realtors to interview and place current home on market
· Have home staged and de-cluttered for a speedy sale
· Schedule appointments to view available homes in the country to buy
· Close on my old home and move into my new home