Week One- A New House-Readiness-Jason Miller
The principle of economics which states; People Face Trade-offs, plays a major role in the decision of buying a new home. A person, or persons, buying a new home, needs to evaluate the new costs related to owning this new home. How will they make it work; what costs have to be given up to accommodate for this new costs. The new home buyer will have to evaluate, if they need to face tradeoffs, for this new expenditure, or if they have enough income to purchase, without facing certain tradeoffs. For example, a couple may have to sell their boat, to free up the boat payment, insurance, up-keep, gas, and dock fees to make room for their new mortgage or down payment.
Given monetary items up as sacrifice to purchase a home is a trade off many people make to own their own home; in that, monetary sacrifices are not the only items a home owner needs to make. “The cost of something is what you give up to get it” which can also be non-monetary items. Home owners will also have to give up portions of their free time and activities to acquire and maintain this new home. For example, a new home will need up-keep, cleaning, decorating, and furnishing which all require someone’s time. The homeowner will not only need to evaluate, if he or she is able to face enough tradeoffs to purchase, but he or she will need to know if they will be able to give enough of themselves to own a home.
Markets are usually a good way to organize economic activity. In that, watching the housing market in the area, in which you want to buy, is very smart. Knowing how the neighborhood is building, researching if the market has peeked or is still on the rise, and watching the areas general economic base of the city, are all issues to watch before buying. This is a one of the principles of economics that can quickly affect the profit of this investment.