BUSN 380 DEVRY WEEK 5 YOU DECIDE
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<strong>BUSN</strong> <strong>380</strong> <strong>DEVRY</strong> <strong>WEEK</strong> 5 <strong>YOU</strong> <strong>DECIDE</strong><br />
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<strong>BUSN</strong> <strong>380</strong> DeVry Week 5 You Decide<br />
<strong>BUSN</strong><strong>380</strong><br />
<strong>BUSN</strong> <strong>380</strong> DeVry Week 5 You Decide<br />
Scenario Summary<br />
After a number of years of planning, you have made the decision to evaluate the potential purchase of a<br />
home. The goal of the assignment is to compare two homes based on demographics, and also to analyze<br />
a number of additional factors related to the home-buying process and ongoing possession.<br />
Your Assignment<br />
You will first need to research the housing market and compare the values of two similar homes in two<br />
different areas. The two homes must be extremely similar in structure size, land size, year built, and<br />
additions such as swimming pools or barns. Then, based upon your findings, you will select one of the<br />
homes to purchase, calculate a monthly payment on the mortgage note, compare this information with<br />
what you can potentially afford, and address additional questions related to home ownership.<br />
KEY PLAYERS<br />
.1em; font-weight: normal;”> ScenarioYour RoleKey PlayersAssignmentYou Decide<br />
Scenario<br />
After a number of years of planning, you have made the decision to evaluate the potential purchase of a<br />
home. The goal of the assignment is to compare two homes based upon on demographics, and to also<br />
analyze a number of additional factors related to the home buying process and ongoing possession.<br />
Your Role
You will first need to research the housing market and compare the values of two similar homes in two<br />
House #1 House #2<br />
1. Go to the following website:<br />
.realtor.com/”>http://www.realtor.com/.<br />
2. Enter a ZIP code.<br />
3. Chose Homes for Sale.<br />
4. Enter your price range (the minimum and maximum<br />
amount you want to spend).<br />
5. Enter the specifications (number of bedrooms and<br />
number of baths).<br />
6. Hit Search.<br />
7. Find a home that you like or would consider.<br />
8. Go to the U.S. Census website:<br />
.census.gov/”>http://www.census.gov.<br />
9. Click on the American Factfinder tab on the left of the<br />
screen.<br />
10. Under the Fact Access to Information title, enter the ZIP<br />
code of the house you found.<br />
11. You will get lots of data on demographics like age,<br />
gender, family size, education, income, and crime rates.<br />
12. Find out the price per square foot for the house you<br />
found.<br />
The goal now is to find a very similar house (age, lot size, square<br />
footage, number of rooms, and number of bathrooms).<br />
Repeat Steps 1 through 12.<br />
In Step 2, pick another ZIP code 20+ miles away from the first ZIP<br />
code you picked for the first house.<br />
In Step 5, pick the same specification and choose a house that was<br />
built in the same year or so as the first house. Also, try your best to<br />
find a house that has the same lot size and square footage as the<br />
first house.<br />
different areas. The two homes must be extremely similar in structure size, land size, year built, and<br />
additions like a swimming pool or a barn. Then, based upon your findings, you will select one of the<br />
homes to purchase, calculate a monthly payment on the mortgage note, compare this information with<br />
what you can potentially afford, and address additional questions related to home ownership.<br />
Key Players<br />
Michael JosephReal Estate AgentBethany SmithMortgage LenderTimothy BaxterCurrent<br />
Homeowner/Seller Mary ThompsonCondominium Association, President<br />
Assignment<br />
Given the scenario, your role and the information provided by the key players involved, it is time for you to<br />
make a decision.<br />
If you are finished reviewing this scenario, close this window and return to this week’s You Decide item, in<br />
your course window, to complete the activity for this scenario.<br />
You can return and review this scenario again at any time.<br />
<strong>YOU</strong> <strong>DECIDE</strong> Activity or Assignment<br />
Assignment
Construct a table showing a comparison of data (including location, square footage, total price, price per<br />
square foot, and specifications), for both houses and then write a 3–4-page paper detailing the following:<br />
1. What is the logic for choosing your two ZIP codes? Is the selection based upon work location,<br />
family location, good schools, and so on?<br />
2. What is the logic behind choosing the size and specifications of each house?<br />
3. Compare the total price of the two homes.<br />
4. Compare the price per square foot for each house.<br />
5. Compare the demographic data (referring to the location and ZIP code) of each house. Based<br />
upon these data, try to explain the similarities and differences in pricing for each home.<br />
6. Select the home that you will purchase and explain the reasoning behind your selection. Assume<br />
that at least a 20% down payment is required. How much money would you need to have saved?<br />
After the down payment, what would be the purchase price of the home?<br />
7. Assume the following:<br />
Closing costs (including all potential loan origination, title, and closing fees) are $3,500.<br />
You have been approved for a 30-year fixed-rate mortgage note at a rate of 5.0%. Calculate the<br />
monthly payment for this loan. (It is recommended that you show your calculation.)<br />
1. Using your textbook readings this week as a resource, and based upon your monthly gross<br />
income and current additional debt payments, perform the calculations below (it is recommended<br />
that you show your calculations).<br />
<br />
<br />
<br />
Your affordable monthly mortgage payment (assume your lender uses a guideline of 33% for<br />
monthly gross income or 38% if you have other debt payment obligations)<br />
Your affordable mortgage amount (meaning the amount that can be financed; assume the loan<br />
terms under #7b)<br />
Your affordable home purchase price (assume a 20% down payment). Compare these<br />
calculations to the previous data under #6 and #7. What are your conclusions? Discuss your<br />
findings, including any surprises!<br />
When purchasing a home, what additional considerations must you take into account? Discuss the<br />
parties that will be involved, what type of documentation will be required, home inspection requirements,<br />
any additional financing options that you would evaluate, and so on<br />
Present a general summary regarding home ownership. What are the advantages and disadvantages of<br />
home ownership, and how does your personal choice fit into your overall personal financial plan?<br />
Grading Rubric<br />
Category<br />
Points Description<br />
Home Research and A comparison of the two homes identified is presented in detail<br />
20<br />
Comparisons<br />
through the completion of the table and a discussion (#1–5)<br />
Home Selection and<br />
Home selection decision; calculation of the mortgage payment (#<br />
Mortgage Payment 20<br />
6 and #7)<br />
Calculation<br />
Home Affordability 15 Calculate, discuss, and compare home affordability (#8).<br />
Home Purchasing<br />
Considerations<br />
15 Discuss home purchasing considerations (#9).
Home Ownership<br />
Summary<br />
Formatting and<br />
Grammar<br />
20 Present a general summary related to home ownership (#10).<br />
10<br />
Total 100<br />
Points will be deducted for poor grammar, spelling, or writing<br />
style. Any external sources must be cited. References must be<br />
cited in two places: within the body of your paper and on a<br />
separate reference list. Please follow required APA guidelines,<br />
as well as guidelines regarding plagiarism.<br />
A quality paper will meet or exceed all of the above<br />
requirements.