2.1 Choosing a Place To Live Unit 2

When choosing a place to live you should consider the following about the location:  Region  Community  Neighborhood  Site  Specific house

The Region  Specific part of the world, country, or state in which you live  Reasons for choosing a region include: –Climate –Family –Job

Community  Region is divided into communities  Community may be large city, small village, or rural area

Neighborhood  Communities are divided into neighborhoods  Neighborhoods are a group of houses and people  Buildings in a neighborhood are usually similar in age, design, and cost

Site  A location within a neighborhood is called a site or lot  A site is the piece of land on which the dwelling is built  Each site has its own size, shape, contour and soil type

Zones Within The Site  Public zone  Service zone  Private zone

Public Zone  Part of the site that can be seen from the street or road  Usually in the front of the house

Service Zone  Part of the site that is used for necessary activities  Includes sidewalks, driveways, and storage areas  Service area should be directly connected to the indoor service area, which includes the kitchen and laundry area

Private Zone  Part of the site hidden from public view  Provides space for recreation and relaxation

Types of Housing  House – any building that serves as living quarters for one or more families  Home – any place a person lives

Multifamily Houses  Structure that provides housing for more than one living unit  Each living unit has its own distinct living quarters  Less costly than single-family houses  Duplexes are two homes attached

Condominium  Buyer owns the living space but shares the parking areas, recreational facilities, hallways, and lobbies with all owners

Single-Family Houses  one living-unit  Rented or owned  Attached and freestanding

Attached Houses  Designed for one living unit but share a common wall with the houses on each side  Example: townhouses

Freestanding houses  Single-family houses that stand alone  Factory-built: housing constructed in a plant and moved to a site, low cost and faster completion time  Site-built house: built on a lot, piece by piece on a foundation

Modular Housing  Factory-built  The walls, floors, ceilings, and roof panels are combined in boxes  Windows, doors, plumbing, and wiring also included  All pieces put together at building site

Manufactured/Mobile  Completely built in factory  Built on wheels and rolled to the housing site

Kit House  Shipped to the site in as a finished shell from the factory.  Interior is completed according to the buyer’s wishes once arrives at the building site  Cheapest of all the factory built homes

Housing for Older people  Retirement plans affect housing choices  Example: If a couple chooses to travel when they retire, they may want a home with little maintenance and upkeep

 As people age and are unable to move easily they need housing that has easy cleanup and requires little maintenance  Universal design may be a choice –Making houses easier for everyone to use

Universal Design Example  Add a no-step entrance with a wider doorway and non-slip floors  Universal design can help everybody, not just the elderly

Housing for People with Disabilities  Fair Housing Act – forbids discrimination in housing and requires multi-units to be accessible to people with disabilities  Must have accessible entrances, wider doors, and easier installation of grab bars around toilets and bathtubs

2.2 Renting Vs. Buying

Renting  1/3 of people rent  Rent is usually paid monthly  Before you move into a rental property you must pay a security deposit – this insures the owner against financial loss caused by the renter –Usually the amount of 1-months rent –Returned when you move out if you did not cause damage to the rental unit

Advantages of Renting  Free to move when you want  Don’t have to worry about buying or selling  No maintenance or home improvement costs

Before renting you should check the following:  Laundry facilities  Building lobby  Entrance, exit, and halls  Bathrooms (does plumbing work, hot water)  Kitchen (make sure appliances are working)  Air conditioning and heating (does it work)  Wiring (should be 3 outlets per room, switches work)

 Lighting  Windows (broken, drafts around the windows)  Floors (clean and free of nicks)  Ceilings (water stains)  Walls (cracks)  Soundproofing (can you hear neighbors?)  Telephone (phone jacks installed)

 Television (antenna/cable television hookup)  Storage space (large enough closets/enough cabinets)  Outdoor play space (is their any outdoor areas/decks/etc.)

Rental Agreements  Can rent month-to-month or year by year  Must sign a lease –Legal document spelling out the conditions under which the renter rents the property –Lists rights and responsibilities of the owner (lessor) and the renter (lessee)

A Lease should include:  Address and apartment number  Date signed  Signatures of lessee and lessor  Date to move in and length of lease  Cost of rent and when it is due  When the lease will renew (is it automatic?)  Who’s in charge of specific responsibilities such as cutting grass, shoveling snow, repairing

 “ entry” clause which allows the lessor to enter the apartment with notice or in an emergency  Who is responsible for water, electricity, gas  Security deposit amount and what must be done to receive it back when leaving  Clause that says the final inspection of the property will be made in the lessee’s presence  Lease can’t be changed without written approval by the lessor and lessee  If the apartment can be sublet  Pet clause

Assigning/Subletting a Lease  If you have signed a lease, but you want to move out early you have three options: –Continue paying rent until the lease expires –Assign the lease –Sublet the lease

Assigning a Lease  Transfer the entire lease to someone else  After this is done you are no longer responsible for the rental property or any damage done to the property

Subletting a Lease  Transfer part of the rental property to someone else  Both you and the person you sublet to are responsible for the property and any damage that may occur  Both assigning/subletting costs extra money

Breach of Contract  If the lessor or lessee is unable to fulfill the rental agreement they are in breach of contract  If you are in breach of contract you may be sued

Eviction  If a lessee does not abide by the rental agreement they may be evicted –This is a legal procedure that forces a lessee to leave the property before the rental agreement expires –You must receive a warning before being evicted

Advantages to Buying a Home  Freedom because know can’t be evicted  Make own decisions about maintenance and improvements  Value of a home tends to increase  Tax deductions for taxes and interest paid on a home

Disadvantages to Buying a Home  Strain on finances to make monthly payments  Additional expenses such as property taxes, insurance, utilities, maintenance  Possibility of foreclosure (legal process of having home taken away) if can’t make monthly payments  Can’t move as easily  Have to do and pay for maintenance

How much can I afford to pay?  Must assess your income, the size of your savings account, and your debts  Estimate what you can afford –Gross income X 2.5 –Gross income is your income before taxes and deductions are taken out

How big of a loan can I take out?  To qualify for a loan must meet to guidelines –Housing-to-income ratio  Housing costs = 28% or less gross income  Housing costs include monthly payment, property tax, insurance, utilities, repairs, maintenance

–Debt-to-income ratio  Housing costs + debts = 36% or less gross income  Remember you must also pay a down payment –This is money paid before taking out a loan –Usually 5% - 20% of the cost of the house

What if I choose to build?  If you build a home you must do the following: –Choose a building site –Choose a house plan that will fit the site –Select a contractor –Obtain money to pay for house (loan)

Buying Homes  Buying new = move in quickly, no repairs will be needed  Buying pre-owned –Cost less –May need some work – be sure to inspect foundation, roof, for insect damage, etc. –Have house inspected –Have house appraised – tells you how much the home/property is worth

Where can I look for a home?  Real estate firm – they will charge a commission –5%-10% of selling price  Newspapers  Word of mouth  “for sale” signs  Shopping guides

Steps in Buying a House  Agreement of Sale: states where property is located, purchase price, amount of down payment, when can move in  Earnest money – money paid to show you are interested –When deal goes through this money is applied to your loan

 Abstract of title – reveals the true legal owner of property  Survey – land will be surveyed so you know how much is yours  Secure a mortgage – take out a loan (usually years)  Closing costs – fees/charges for settling the legal/financial matters of a home (survey, etc) –Can be thousands

 Title and deed –Title – proof of the right to own the property –Deed – legal document showing that the title is transferred from one person to another  Insurance – usually required if taking out a loan

What if I took out a 30 year loan, but now I can pay more each month?  Refinance – adjust your loan payments –it may cost money to refinance –Good idea of interest rates have dropped