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A New House – Risks and Benefits

In: Business and Management

Submitted By ladie7up
Words 320
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A New House Readiness

Purchasing a home can be a big step in anyone’s life; I can have its advantages and its disadvantages. There are many options an individual would need to think about when investing in a home. The principles that would help would help with decision- making would be Face Trade-offs (Mankiw, 2007) The Cos of Something is What You Give Up to Get it (Make, 2007) Decision-making when buying a home the principle People Face Trade-offs will help with the final decision. With making the decision this means that individual will be trading off one goal against another goal. (Mankiw, 2007) In the process of buying or investing in a new home as a first time buyer will have to sacrifice a lot, such as going out of town to visit family and friends or giving up special activities.
Furthermore they will have to spend quite a bit of money when purchasing a home. This is the only way they will be able to save money it to sacrifice other things they like. There are different things an individual purchasing will need the money for such as taxes and mortgage and home owner’s insurance. Also the buyer would have to put in time and effort when searching for the home, not to mention the lender. If that person(s) understand the value of trade-offs and understand the cost that is available they will be able to make some high-quality decision. Cost also plays a big part in purchasing and or shopping for a home. Marginal decision making can help explain some other puzzling economic phenomena (Mankiw, 2007) for an example why is renting sometime cheaper and buying a home cost so much? Marginal benefit is bases on that extra unit of goods and the reason in which a person is willing to pay much more for his or her new home.

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