Monday, November 23, 2020

T-Minus 218 Days: Analyzing the house choices

 We recently went house hunting in Florida. To pay for that, we are now in a two week quarantine. Luckily, we are able to work from home during this time, but, we are stuck living in just the bedroom and the office. When we aren't working, we are pouring through all the house material we brought home from Florida. We have easily spent 25 hours pouring through the data.

I developed a spreadsheet to keep track of our research and I'll share some of that with you along with some sample data.


The first part of the tracker has the builder name, model, the community where it is built, the city, and the base price. Next are six features that were important to us so we decided to track it: the square foot of the house, whether the first floor has a certain configuration we are interested in, what floor the master is on, the floor for the laundry, the floor for the office, and the lot size. Finally, an area for some notes.


As I continue to scroll to the right, I capture some of the financials: the monthly HOA feeds, CDD fees, Capital Contribution cost, the cost of the lot, the required down payment, the present discount being offered, and a budget for upgrades. There are two kinds of upgrades: structural (like adding a lanai, a bedroom, 3 car garage, or another bedroom) and the other is upgrades to things like cupboards, carpets, and door knobs. The structural items are, of course, very expensive. The point is important: the base prices are very misleading because they might strip down the base model to attract you to take a look, and then make up the difference with all the upgrades.


As I continue to scroll to the right, I get into some more financials. All the white columns are formulas, so, I don't have to enter anything into them: The total cost of the house, the downpayment (20%), property taxes/mo, insurance cost per month, closing costs, the amount of the house loan, what the house payment will be, the cost of the house appraisal for the bank, total of the pre-paid amounts, and the amount of cash needed at closing. Next are two more calculated columns that are colored green: The total amount of cash needed and the monthly payments. I also have a "cost per square foot" column (not shown). 

Some of these numbers are estimates (like the home insurance) but I believe everything is realistic.

We are collecting the data for 14 houses (of the two dozen we selected) to help us make a financial decision (per month and total cash), the things we care about, and location.  This will help us to make a data driven decision. The data driven decision won't be the final decision because we can override based on any reason we want, but, it should help to narrow down our decision.


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