How it works?

The best way to learn how something works is to use it. As one international manufacturer says, “Just do it!”  The objective of this example is to show you how the program works.

Joe, a 33-year old man, and his wife have one child. His company recently transferred him to San Diego. Joe has not been able to decide whether he should buy or rent. Below are some additional details that will help us decide what advice to give Joe.

- Joe’s gross income is $60,000 a year. His wife stays home with the children.

- His wife wants to purchase a small home that is selling for $255,000

- With the loan they have selected, there is a $25,000 down payment and closing costs of approximately        $3,000. The mortgage would be $230,000.

- Based on Joe’s current credit score he is able to get a 6.5% interest rate.

- Home insurance and maintenance should each cost about $400 a year.

- The state property tax in California is 1.5%.

- Over time, the equity of most homes will grow dramatically in California. However recent statistics indicate that sometimes the market becomes stagnant and prices remain the same or go down.

- Finally, Joe expects to stay in California between three and five years.

Looking at expenses on an annual basis, Joe wonders if paying $1,050 a month for an apartment would be less expensive than buying a $255,000 home.

Sound familiar? Well, this situation is perfect for our Quadrant method and our Data Worksheet will assist Joe in his real estate decision.

With this in mind, let’s go to the first step in the process: Market Growth.