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Bob and Betty Buy a Home (Part 1): We Meet, Discuss Their Needs, and Crunch some Numbers

Kevin Boer, Broker Owner, 3 Oceans Real Estate, Inc. ()

March 4th, 2007 · 3 Comments

Let me introduce you to the two newest stars of this blog: Bob and Betty, a fictional family, sort of a composite blend of numerous past clients. In this x-part series, where “x” is currently an unknown number, I’ll walk you through how we got them into a home, despite the heroic efforts of a cantankerous market, an incompetent mortgage broker (soon fired), and a sleazy Realtor or two to thwart our plans. Enjoy the ride…


I first met Bob and Betty about a year ago at a social event hosted by mutual friends. They had moved up to the Bay Area from Los Angeles two years previously after finishing their graduate studies at UCLA — Betty an MBA, and Bob a PhD in bio-something-or-other.

We got talking about the real estate market — a common topic these days — and their sticker shock, only now wearing off, about Bay Area real estate prices. LA prices aren’t exactly cheap either, but the Bay Area certainly has it beat. Bob and Betty were doing what most young recently arrived Bay Area transplants do: renting. Though in no particular hurry to own their own place, they had begun to think about it, but were, quite naturally, concerned about what might happen to home prices. Their angst wasn’t helped much by a constant barrage of doom-and-gloom articles in the media.

We traded emails and spreadsheets a few times, then met for coffee a few weeks later. Since they were both interested in the numbers, I walked them through my “buy vs. rent” analysis, which basically shows that in the short run, it’s definitely cheaper to rent than to buy, but in the long run, with even modest growth assumptions, it’s definitely better to buy than to rent. They appreciated the analysis, but were still skeptical.

Fair enough. The primary motivator for buying a personal residence is usually emotional — stability, putting down roots, raising a family — and the analysis at which I excel (pun intended) is usually just the icing on the cake once they’ve made the emotional commitment to home ownership.

We spent some time talking about what their ideal home might be. They love entertaining, and Bob loves cooking, so a nicely done-up kitchen opening up to an entertaining area would be ideal. Not being much in the handyman department, they prefer a home that’s move-in ready, not a fixer. Bob works in South San Francisco for a biotech company, and Betty in Sunnyvale for a tech startup, so anywhere in between the two — preferably along the 101 corridor — would work. Three bedrooms or more, 1.5 baths or more, roughly 1600 square feet. Betty is somewhat noise sensitive, so too near the highway, a busy road, or the train might not be good. They don’t have kids, and probably won’t for a few years, so being in a good school district isn’t that important.

We talked about their budget, and ran some quick numbers. It seemed that a $950,000 home would be well within their reach.

We made arrangements to meet again the next weekend, when I would show them a half-dozen or so homes that might work, and start to get them acquainted with the neighborhoods.

An excellent first meeting, I thought, though I sensed a certain amount of hesitation in them. I made a note to explore that hesitation further the next time we met.

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Tags: Buy vs. rent · Home buying · Real estate

3 responses so far ↓

  • 1 Ann O'Connell // Mar 6, 2007 at 2:02 pm

    I’m looking forward to hearing how Bob and Betty fare in their Bay Area home search!

  • 2 Kess // Mar 23, 2007 at 7:46 pm

    Wow, your “young couple” are doing pretty well! They must live in a parallel universe where first time home buyer, fresh out of grad school (student loans, anyone?) are buying a million dollar home.

  • 3 Kevin Boer, Realtor, 3 Oceans Real Estate // Mar 23, 2007 at 11:23 pm

    Hi Kess,

    Actually, we do sort of live in a parallel universe here in the Bay Area. A couple two years out of grad school — one with an MBA, and one with a science-related PhD — can quite realistically pull in a combined salary of $300K. On that salary, a $950K home is a stretch (unless they have a lot saved up for the down payment) but certainly doable.

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