On Purchasing a House in the USA - Research Paper Example

Due Research report Research report on purchasing a house in USA Table of contents I. Submittal letter - - - - - - - - - - 2 Purchasing a house through various purchasing options in the United States of America - 2 II. Executive summary - - - - - - - - - 3 A. Identification of topic and problem B. Recommendations made by the National Association of RELATORS - - - 4 C. Major findings - - - - - - - - - - 5 D. Conclusions - - - - - - - - - - 5 III. Purchasing a house through various purchasing options in the United States of America 6 A. Introduction - - - - - - - - - - 6 B. Determining the reasons why potential homeowners make wrong decisions - - 6 C. Scope of analysis - - - - - - - - - - 6 D. Purpose of the study - - - - - - - - - 7 E. Definitions - - - - - - - - - - 7 a) Methodology - - - - - - - - - - - 7 b) Secondary data - - - - - - - - - - 7 c) Primary data - - - - - - - - - - - 8 d) Site selection - - - - - - - - - - - 8 e) The sample - - - - - - - - - - - 8 f) Interview technique - - - - - - - - - - 8 g) Statistics - - - - - - - - - - - 9 F. What we learned in the process of interviewing the homeowners and potential homeowners 9 G. Why the figures were are shown in the table - - - - - - 10 H. Summary - - - - - - - - - - - 10 I. Conclusions - - - - - - - - - - 11 J. Recommendations - - - - - - - - - - 12 IV. Works Cited - - - - - - - - - - 13 List of tables and chats Chat 1.1 - - - - - - - - - - - 9 Table 1.1 - - - - - - - - - - - 10 I. Submittal letter Prepared by Name: Address: June 7th, 2014 To: Address: June 7th, 2014 Purchasing a house through various purchasing options in the United States of America This report is composed as a result of the many discussions we have had concerning you desire to buy a home in the United States of America. We have convened a series of meetings and discussions to channel a way forward on how to go about a research proposal that included the writing of a research proposal and conducting the actual research in the field to identify the various types of purchase options homebuyers use to acquire properties. That aside, I presented a research proposal which was unilaterally accepted by you. This was followed by your approval to involve the National Association of RELATORS to assist in providing primary data for the purposes of the research study. By June 20th, the secondary research and presentation of the research proposal was completed, and the project was headed for the next steps that included conducting interviews on the respondents chosen for the purposes of this study before documenting and analyzing the data obtained. Following your approval to conduct the research amongst residents of Beverly, the National Association of RELATORS was instrumental in providing the primary data for homebuyers who used various purchase methods to buy their homes. You also approved the proposal to conduct interviews on residents of Beverly, who had recently used one of the investigated purchase options to acquire property and those who had the intention to purchase a home in due time and were having one of the options in mind. The purchase options that were investigated for the purposes of this study include mortgage financing, lease purchase, FHA loans, VA loans and purchase in cash. After the data analysis, the project required a PowerPoint presentation of the report progress which was completed by the 26th of June this year. It is worth mentioning that the primary data was gotten from the certified website of the National Association of RELATORS. This was because the company had been assisting homebuyers in making decisive decisions on what purchase options best suits their circumstances. In the process, the company documented the number of buyers who used various purchase options. As a result, the project was able to obtain dependable data that played a significant role in the completion of this research project. In addition to that, I should not go without mentioning the fact that the respondents chosen for the purposes of this study were corporative and for this reason the project was able to obtain the intended results. My research revealed that it was imperative for potential homeowners to conduct substantive research on all the available purchase options in order to identify the options that best suits their financial capabilities. Additionally, this is important because it makes homebuyers contented with the choices they make after purchasing their homes. A detailed evaluation of the available purchase options drove me into concluding that mortgage financing was not only the most used option for purchasing property, but also one of the most convenient purchase options amongst all the options reviewed for the purposes of this study. You should note that the supporting details of this declaration are attached in the report. As a roundup, I wish to express my gratitude for your undivided assistance, corporation and guidance ever since the inception of this project to this juncture. I wish to inform you that my researchers and I have been delighted all the way from the inception of the project because the manner in which you have treated us and how you have been helpful. We have surely enjoyed working with you for the purposes of completing this research project. Kindly feel free to contact me at any time for further clarifications on any part of this report that doesn’t sound as clear as it ought to be. II. Executive summary A. Identification of topic and problem Since the research proposal highlighted the National Association of RELATORS as the single most important company from which primary data would be obtained, so much information was obtained from the company. For instance, the National Association of RELATORS played an imperative role in giving detailed information concerning the various property purchase options available in the United States of America. They included: a) Mortgage financing b) Lease purchase c) FHA loans d) The VA loans e) Purchase in cash The mortgage financing option is a loan given to potential homeowners to assist them in acquiring property. This loan is normally repaid in installments which are regular payments paid according to the agreement in the contract. This type of purchasing option is given to individuals who are credit-worthy. This is an implication that the loaners always clear candidates of this loan on grounds of their credit-worthiness. Lease purchase option, on the other hand, is an agreement between a potential homeowner and his her landlord. This purchase option is preferred by individuals who fail to meet the requirements of mortgage financing because of a number of reasons. The landlord agrees to lease the property to his tenant for a period before the tenant buys the property at an agreed price (Patton 295). The FHA and VA loans are insured by Federal Housing Administration and Veteran Administration of USA respectively. Both these loans are meant for individuals who are credit-unworthy. These are people who would ordinarily fail to meet the requirements for either mortgages or leases. Most people settle for these purchase options because of their bankruptcy or unemployment. The purchase in cash option is meant for those who have enough money for purchasing a property with a single transaction. Such people normally make an entire payment for the property at once (Hampshire 143). There were a number of recommendations provided by the National Association of RELATORS as measures aimed at helping potential homeowners in making conclusive decisions regarding the home purchase options that best suit their financial capacities. The association gave the following recommendations: B. Recommendations made by the National Association of RELATORS a) One ought to seek guidance from a qualified and certified real estate agency on the available home purchase options. b) Potential homeowners need to give correct information regarding their financial capacities to the real estate agencies they consult. This is important in the right advice to the potential homeowners concerning the purchase options that would be best for them. c) Real estate agencies where potential homeowners seek guidance from should provide truthful information without discrimination and favoritism. It is only through this that homeowners are able to get the best deal that conforms to their capabilities (Nichole 172). d) It is important for potential homeowners to make independent judgment after getting all the information regarding different property purchasing options. It is not wise for real estate agencies to make decisions for their clients. This is because this undermines the aspect of independence that ought to prevail during the consultation between a potential homeowner and real estate agency. e) Potential homeowners need to seek guidance from real estate agencies that operate in regions where they intend to purchase the homes. Most real estate agencies are only conversant with regions in which they operate and not those that fall outside their areas of jurisdiction. It is because of this that homeowners need not seek assistance from strangers. f) Potential homeowners who intent to purchase homes by paying full amount need to seek advice as well. They are susceptible to fraudulent transactions and must consult with real estate agencies in order to avoid falling victims of fraudulent people. On most occasions, such clients assume that they should do things on their own, but instead they end up losing their investments (Patton 224). The intention of this project was to carry out extensive research with the aim of identifying and detailing the various ways through which a person can buy a house. A number of aspects were considered during the research. Also considered during the research were the available options that one can use to purchase a home. They included Mortgage financing, Lease purchase, FHA loans, VA loans and Purchase in cash. The other factors that were explored for the purposes of this study include: a) What are the various options through which a potential homeowner can use to purchase a home? b) What kind of people settles for each purchasing option? c) What are the various determinants that compel potential homeowners to settle for each home purchasing option? d) What is the impact for making wrong purchasing options while buying a house? e) What other factors can be considered while trying to identify the best home purchasing option? C. Major findings My research revealed that quite a number of homeowners and potential homeowners in Beverly prefer mortgage financing as a mode of acquiring property. This finding was championed by a number of factors including the fact that most residents of Beverly are employed. Employment puts a person in a position to repay loans in regular frequencies. It is for this reason that such employees are able to meet the requirements of mortgage financing. Another important revelation of this study is the fact that homeowners who buy their homes by paying the full amount and those that purchase through leasing are not as many as those who use the mortgage financing option (Lanier, Alison, & Jef 59). Additionally, the research revealed that both VA and FHA loans are not popular in the United States of America. D. Conclusions This report comprises of conclusions and recommendations. These conclusions and recommendations came as a result of the data gathered and analyzed during the research. In addition to that, the recommendations made and conclusions drawn were as a result of the primary data obtained from the National Association of RELATORS. E. Purchasing a house through various purchasing options in the United States of America A. Introduction USA comprises of a number of states and other smaller cities; all of which are populated with people. The fact that people occupy these regions makes it mandatory to have homes that the inhabitants live in. As a result, there are quite a number of home purchasing options available in the USA that allow people of different capabilities and needs to acquire property. The ignorance that comes with purchasing homes on most occasions gives a dire need for a proper explanation of the available options that one can use to purchase property. People tend to make mistakes while purchasing their homes merely because of ignorance. They are always unaware of the available options that one may choose to purchase property. Out of this ignorance, they settle for options that do not conform to their financial capacities and individual needs (Nichole 142). The concern that most people make wrong decisions when purchasing their homes compelled my team and me to conduct a far-reaching research on the available home purchase options and identify their various requirements. It is during this research that the five options that may be used when buying property were identified. They included Mortgage financing, Lease purchase, FHA loans, VA loans and Purchase in cash. Also identified during the research were the various factors that influence potential homeowners to settle for a particular option and not another (Patton 54. Owing to the difficulty of conducting the research in the whole of USA, the team decided to conduct the research on Beverly alone. This acted as a sample region from where primary and secondary data were collected. The National Association of RELATORS played an imperative role in providing primary data and offering necessary training to the team on how to collect data related to home purchasing options from respondents in the field. However, data documentation, analysis and interpretation were done by the team (Nichole 72). B. Determining the reasons why potential homeowners make wrong decisions The research problem of the study conducted was to determine the reasons why potential homeowners make wrong purchasing decisions while buying homes. This was championed by the fact that quite a number of homeowners regret having made certain decisions regarding the purchase of their homes. They fall victims of unforeseen circumstances that should be avoided when the right protocols for buying homes are followed to the latter. C. Scope of analysis A number of factors were analyzed for the purposes of this study. They included: a) What are the various options through which a potential homeowner can use to purchase a home? b) What kind of people settles for each purchasing option? c) What are the various determinants that compel potential homeowners to settle for each home purchasing option? d) What is the impact for making wrong purchasing options while buying a house? e) What other factors can be considered while trying to identify the best home purchasing option? D. Purpose of the study The purpose of the study was brought about after ascertaining the fact that most potential homeowners make wrong decisions while purchasing their homes. Its purpose was therefore to determine the various options that could be used to purchase a property in the United States of America. Additionally, providing detailed information regarding the options was part of the purpose of this study. This research was, therefore, intended to assist potential homeowners like the instructor to make wise decisions while purchasing their homes. E. Definitions It is important to define some keywords that formed the basis of this research. The single most important word for this study was homeowner. A homeowner can be defined as a person who purchases a home for the purposes of making it his or her own through any of the many purchasing options available. For this reason, a potential homeowner is one who intends to own a home in the near future. It is worth noting that these homeowners can either be natives or mere residents of Beverly. This is because they both fit as homeowners of Beverly. Other important words that need definition in this study are VA and FHA loans. VA is an acronym of Veteran Administration whereas FHA is an acronym of Federal Housing Administration. Therefore, the VA loan and FHA loan are guaranteed by Veteran Administration and the Federal Housing Administration respectively. a) Methodology This study needed data of the number of homeowners who chose each purchasing options. In order to meet this obligation, the researchers had to find both primary and secondary data. Primary data was obtained from the National Association of RELATORS while secondary data was collected from the field. The secondary data was obtained from interviewing both potential and current homeowners of Beverly, who used various methods to acquire their property. b) Secondary data Secondary data was to be obtained from documented from a previous study or could have been obtained from documentation made by a company that dealt with issues related to the study (Denscombe 43). It was for this reason the researchers settled for National Association of RELATORS as a secondary source of secondary data. The data was obtained from the official offices of National Association of RELATORS. It is also fundamental to note that the company was instrumental in providing interview guides a checklist to the researchers. Owing to the difficulty in ascertaining the interview questions that would best meet the purposes of this study the National Association of RELATORS played a pivotal role in assisting in the formulation of the questions. The company officials were very helpful when it came to coming up with the interview questions. In addition to that, the officials were also instrumental in giving advice on how to conduct an interview and how to decide on target respondents. c) Primary data The primary data needed for this study were collected from the field. The data were acquired from the potential and current homeowners of Beverly, who used either of the home purchase options investigated in the research. The respondents of this research were all residents of Beverly. This is an implication that the researchers did not go beyond the boundaries of Beverly for the purposes of collecting data. d) Site selection After comprehensive research and consultation, the researchers decided to settle on Beverly as the site where the research would be conducted. It was the most reliable site for the research because it is more of a residential place as opposed to a commercial place. Despite the fact that there are commercial buildings in Beverly, the residential places in this region are more as compared to the commercial premises. It is for this reason that Beverly was the best place to conduct this research. e) The sample It is imperative to mention that purposive quota sampling was used as the sampling technique for the research. The respondents of the research project were potential who had the intention of making use of one of the options to purchase a house (Patton 253). Additionally, other respondents were homeowners who had purchased their homes using one of the existing options. There were a total of one hundred respondents chosen for the purposes of the research project. Finding the respondents was not a difficult task because of the considerably small scope of the project (Denscombe 43). A recent research had indicated that the conditions for qualifying for a mortgage loan and other forms of financing changed since the past decade. These changes drew a number of borderlines for the samples or respondents of the research. For instance, the researchers had to investigate and identify homes that were purchased not more than five years ago. Subsequently, another research revealed that most potential homeowners are aged between thirty and forty-five years. For this reason, it was simple for the researchers to identify the respondents of the research. f) Interview technique The interviews were conducted by two college students who were trained by the National Association of RELATORS. They had to get the training from the company operatives in order to have substantive knowledge on what questions they need to ask during the interviews and what kind of respondents are best suited for the research. The process of interviewing the respondents took a period of two days (Denscombe 33). This happened because of the relatively large number of respondents and only two interviewers chosen for the purposes of the research. Interviewers had clear instructions from the National Association of RELATORS to approach homeowners in their homes and not their places of work. The notion that people rest while in their houses compelled the team to assume that the respondents will not be willing to participate in the interviews while at work. This is perhaps because of being committed as the workplace. Conversely, the respondents were more likely to corporate during the interview when approached at their homes (Patton 314). The National Association of RELATORS also instructed the researchers to greet the respondents before explaining their purpose of visit and stating categorically that their identities would not be revealed in the research. It is only after the respondent had agreed to the terms of the research that the researchers would engage them further by asking interview questions. The respondents were never to be coaxed into being part of the research. g) Statistics A recent research done by the National Association of RELATORS revealed that a large number of homeowners go for the mortgage financing option as a way of paying for their homes. This number is followed by those who settle for the lease purchase option which is in turn followed closely by the homeowners who purchase their homes in cash in a one-time payment. The research also revealed that both the VA and FHA loans are not popular in Beverly. This is an insinuation that the residents of this town do not prefer choosing either FHA or VA loans as their preferred modes of acquiring property. F. Chat 1.1 (Patton 309) G. What we learned in the process of interviewing the homeowners and potential homeowners Out of the 100 respondents chosen for the purposes of this research, 50 were homeowners, and the other 50 were potential homeowners. The potential homeowners were those with the aim of buying a house within the next three months while homeowners were those who had bought homes not more than five years before the research. Out of the 100 respondents, 67 were male while 33 were female. One ought to note that the respondents interviewed during the research were the ones responsible for paying for their homes and neither their spouses nor any other member of the family. The data obtained from the field verified the primary data that was gotten from the National Association of RELATORS. Since the number of the respondents was 100, the data obtained could easily be presented as a percentage. Just like it was revealed by the data obtained from the National Association of RELATORS, the data collected from the field showed that a good number of homeowners go for the mortgage financing option as a way of paying for their homes. This number is followed by those who settle for the lease purchase option which is in turn followed closely by the homeowners who purchase their homes in cash in a one-time payment. Subsequently, the research also revealed that both the VA and FHA loans are not popular in Beverly. This is an implication that the dwellers of this town do not prefer choosing either FHA or VA loans as their preferred modes of acquiring property. The figures obtained were as follows: H. Table 1.1 Purchase Options Percentage a) Mortgage Financing 43 b) Lease Purchase 33 c) Purchase in cash 14 d) VA and FHA loans 10 I. Why the figures were are shown in the table The most significant reason why the residents of Beverly preferred mortgage financing to other home purchase options is because most of them are employed. According to the conditions for purchasing a home through the mortgage mode of financing, one has to have a constant income guaranteed by the employer. It is for this reason that 47 of the 100 respondents interviewed during the research chose mortgage financing. A good percentage of the respondents settled for lease purchase as their preferred mode of purchasing their homes. Even though this percentage was lower than that of those who opted for mortgage financing, more respondents preferred lease purchase to purchase in cash. This is because most homes are relatively expensive in Beverly. In addition, Beverly is a region inhabited by the middle-class employees who would ordinarily fail to purchase expensive homes in cash. The fact that only a few residents of this region are overwhelmingly rich makes purchasing homes in cash rare. The research conducted by the researchers also revealed that the VA and FHA loans are not popularly used in Beverly. Despite the fact that is was comparatively difficult to ascertain the reasons why these modes of purchasing homes are not popular, the researchers were able to draw the conclusion that homeowners do not use these options because most of them are employed. This is an implication that most of them can meet the demands of other options as mortgage financing and lease purchase (Patton 324). J. Summary People purchase homes on a daily basis. However, most of them fall victims of fraudulent brokers who take advantage of their ignorance on matters concerning the available options that can be used to purchase a home. On most occasions, people tend to buy homes through financing schemes that do not suite their financial capabilities or family requirements. Others have also regretted having made certain choices during the purchase of their homes as a result of ignorance. One ought to note that he or she should not decide to buy a home without making comprehensive inquiries from professionals or seeking the assistance of those who understand how homes should be bought. For this reason, potential homeowners must seek the advice of professionals before deciding to buy a home through any of the available purchasing options. There are quite a number of real estate agencies that assist potential homeowners in making decisive choices when they want to buy homes. On normal occasions, such agencies require financial statements of their clients. These statements assist in determining the best home purchase scheme that best suits the client (Patton 154). Sometimes potential homeowners go an extra mile of outsourcing for information on their own after seeking the assistance of real estate agencies. This normally happens as a way of confirming the legitimacy of the information presented by a real estate agency (Nichole 172). The majority of respondents interviewed during this study were residents of Beverly. Additionally, all these respondents were adults. However, there was no discrimination of gender during the selection of the respondents. Half the respondents were potential homeowners while the other half was people who had bought homes. Even though a small percentage (17%) of the respondents were aware of the available options one can use to purchase a home before they sought assistance, the rest of the 83% were unaware of the options. K. Conclusions According to the research conducted, 43 percent of the respondents took mortgage financing as their preferred option for purchasing a home. The respondents who preferred lease purchase as an option for buying their homes were thirty-three while 14 of the respondents were comfortable with purchasing their homes through the purchase in cash option. Lastly, ten of the respondents resorted to purchasing their home through either the VA or the FHA loans. These statistics indicate that the majority of people in Beverly buy their homes through mortgage financing. The National Association of RELATORS is instrumental in assisting the residents of Beverly in making correct decisions when it comes to purchasing their homes. The officials of this company provide their clients with all the information they would need to help them make independent, decisive and proper choices while purchasing their homes. The researchers came across a number of respondents who were assisted by the operatives of National Association of RELATORS in buying their homes. In conclusion, therefore, it is imperative that homeowners in not only Beverly but the world over to seek professional advice from real estate agencies as National Association of RELATORS and others in order to make right decisions that best suit their financial capabilities (Patton 324). Recommendations The National Association of RELATORS and researchers who conducted the research gave a number of recommendations concerning the effective education of potential homeowners before they purchase their homes. a) Supplying brochures that contain relevant information regarding home purchase options to offices. b) Creating a culture where homes are sold through real estate agencies in order to help potential homeowners make wise decisions while buying their homes. Works Cited Denscombe, Martyn. Research Proposals: A Practical Guide. Maidenhead: Open University Press, 2012. Print. Hampshire, David. Buying a Home in Florida. London: Survival, 2002. Print. Lanier, Alison R, and Jef C. Davis. Living in the USA. Yarmouth (ME: Intercultural Press, 2005. Print. Nichole, Piper. Buying a House on a Shoestring: Find and Purchase the Home of Your Dreams Without Breaking the Bank. Franklin Lakes, NJ: Career Press, 2007. Print. Patton, Wendy. Investing in Real Estate with Lease Options and "subject-To" Deals: Powerful Strategies for Getting More When You Sell, and Paying Less When You Buy. Hoboken, N.J: Wiley, 2013. Internet resource. Read More