Session 3: Property Search and Purchase |
Objective: Students will learn how to use online real estate platforms like Zillow to explore home listings and understand the factors involved in selecting a property.
Introduction to online real estate listings (e.g., Zillow)
Use their income profiles to search for homes.
Each student selects a property within their budget
Icebreaker
“Never Have I”: Set up a circle of chairs. The student standing in the middle of the circle calls out “Never have I ____________”. Anyone in the chairs who agrees (who has never______) will get up and try to find an empty chair. The student who was in the middle finds an empty chair. The one without a chair would go stand in the middle and the game starts again.
Introduction to Online Real Estate Listings
We're going to use a special website for looking at houses and apartments called Zillow. So, what's Zillow? It's a cool site where you can see all kinds of homes that are for sale or for rent. Plus, it has this thing called a "Zestimate" that guesses how much a home might cost. You'll use Zillow to virtually search for your dream home. You can check out different types of places like houses, condos, or townhouses. Before you start your home hunt, remember to think about how much money you can spend each month and what price range works best for you.
What is your price range? (For example: House Price: 200k to 250k). You’ll calculate this based on your annual income. For this activity, we are simply going to use 3 TIMES your annual income. If you earn 80,000 dollars per year, then your home price range should be around $240,000.
What is your annual salary from YOUR given occupation? $______________x3 =
What is your target home price range $:___________
The price of a house can be different for each person because of a few things we haven't talked about yet. This includes the downpayment and the interest rate of the loan. Do you remember what a downpayment is? It's the money you pay upfront when you buy a house, which makes your monthly payments smaller.
If you can pay more at the beginning, you might also be able to afford a bigger or more expensive house. Interest rates are also important. They affect how much you pay back each month. We used an example of 6%, but sometimes it can be as low as 3%. A lower interest rate means your monthly payments will be smaller.
HOWEVER…
Our purpose is for you to select a home, in a reasonable price range, and be able to live comfortably on your annual income. Again, we’re just going to use the 3X (3 times) your annual income rule for these exercises.
What is your home price range: $___________
What is your monthly payment approximate (you figured this out in your budget): $___________
ZILLOW VIDEO: Tutorial
Class Activity: The House Hunt:
Lets start looking for a property.
But before we do…let’s note some of our options before we start our search:
What is your home price range?___________________
Where do you want to live? ___________________________
If you don’t know, try searching in random towns or cities across the country. Where are you looking?__________________
How many bedrooms would you like or need?_______
How many bathrooms would you like or need?________
Do you want a backyard/patio (circle one): Yes No Doesn’t Matter
Find A Home
What is the address of the house?__________________________
What is the market price? $_______________________
What type of property is it? House - Townhouse - Condo
What is the square footage?____________
How many bedrooms? ______How many bathrooms?______
Look through the pictures: What do you think?
Read through the description: What do you think?
Scroll down “Estimated Market Value.”
What is the ZESTIMATE? $_____________
Look at “PRICE HISTORY.”
What was the amount of the last sale? $______________
Look at “PUBLIC TAX HISTORY.”
What were last years taxes? $_______________
Look at the “MONTHLY PAYMENT CALCULATOR.”
What is the payment? $______________
(note: these are estimates that include: the loan, insurance, and taxes)
Can you afford this payment? Yes - No
SEARCH FOR 2 MORE HOMES: You’ll find a total of 3 Properties
Which one do you like the best?
RENT COMPARED TO OWNING
Individual Activity: Rental Comparison:
In the same town and using the same search parameters, search for RENTALS. Find a rental home (apartment, house, or condo) that meets your search parameters. Are the RENTS more or less than the properties that you are looking at buying?
Class Discussion: Buy Vs. Rent
Students will share their findings on the property they are looking to Purchase.
Tell us a little about this property.
What do you really like about the property?
How do the rentals in that town compare to buying the house?
Buy Vs. Rent: Pros and Cons
What are the differences between owning a home and renting one? These are some things to consider. Think of it as a big decision you'll make in the future, kind of like choosing between buying or leasing a car.
1. Owning a Home: Your Personal Space
Pros:
Long-Term Investment: Owning a home is an investment. The money you pay builds your equity, kind of like slowly earning a piece of the house over time.
Stability: Owning a home offers stability. You're not subject to rent increases, and you don't have to move unless you decide to.
Customization: You can remodel and decorate your home however you want. It’s your personal space!
Cons:
Upfront Costs: Buying a home requires a down payment, which can be a significant amount of money.
Maintenance Responsibilities: All repairs and maintenance are up to you. This can be costly and time-consuming.
Less Flexibility: Selling a home and moving can be a lengthy and complex process, unlike ending a rental lease.
2. Renting a Home: Flexibility and Convenience
Pros:
Flexibility: Renting allows you to move with less hassle. It's ideal if you're not ready to settle in one place or want to explore different areas.
Less Responsibility: Maintenance and repairs are generally the landlord's responsibility. No need to worry about fixing a leaky roof!
Lower Initial Cost: Renting doesn’t require a large down payment, just a security deposit that's usually much less than a down payment on a house.
Cons:
No Equity Building: Rent payments go to the landlord, not towards owning a part of the property.
Rules and Restrictions: Landlords may have rules about what you can and cannot do in the property (like painting walls or having pets).
Variable Costs: Rent can increase over time, and you might have to pay more to stay in the same place.
Conclusion
So, whether you choose to own or rent in the future, both have their advantages and challenges. Owning a home is a significant investment with more responsibility but offers stability. Renting provides flexibility and less financial burden upfront but comes with its own set of limitations.
Class Activity: Group Discussion
If you were to choose between owning or renting a home in the future, which would you prefer and why? Consider factors like flexibility, investment, and personal freedom. 🏠💭🔑
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