The Investment Scientist

Buying My Primary Residence

Posted on: November 29, 2011

Less than a week after we were done with settlement on a rental home purchase, we bought a house for our primary residence. The decision process for our primary residence purchase was vastly different from that of the rental property. For one, I didn’t use cap rate to evaluate the primary residence. Instead, we followed these five decision steps.

1. School district

My two sons will grow up in this house, so the right school district was of the utmost importance. My wife did thorough research, and she declared Whitman to be the best school district in the whole state of Maryland, followed closely by Churchill. The first is in Bethesda, the second is in Potomac. These two areas happen to be the most expensive areas in Maryland.

2. Surrounding home prices

Home prices there range between just below $1 million to over $5 million. We wanted to buy a house in the cheaper end of that range. First of all, we wanted to pay for a good school district in the most property-tax-efficient way; secondly, cheaper houses in exclusive areas simply keep their values better.

Based on the first two criteria, my wife, the chief house hunter, went online. She searched all the houses below $1mm in the Whitman and Churchill school districts and found a house that had been sitting on the market for nearly two years. Its price had just been reduced to $990,000 from an original asking price of $1.15mm.

3. Feel it out.

We visited the house, and I liked it right away. It’s open, and it has plenty of natural light – even the walkout basement has natural light. The house has a solid feel.

It is a rather atypical house, however, since it was designed by an architect for his own family, and he had apparently experimented with the avant-garde. That’s why it did not sell quickly, since most home buyers in this area like the traditional colonial. Not my wife and I. We like the contemporary architectural style.

4. Sanity check

We did not bid on it right away, however, since we needed time to check out our gut feeling. We visited five other houses in the area, and they just didn’t give us the love-at-first-sight feel like the first one.

5. Build rapport with sellers

Once we more or less made our decision, we arranged another visit to the house. We took the time to engage in small talk with the sellers. To our delight, we found out this Jewish couple’s best friends are a Chinese couple. It turned out the rapport we built was crucial. In the end, there were three bidders. We were the lowest bid, but the sellers decided to sell the house to us.

Is there anything you can take away from our home buying experience?

Get my white paper: The Informed Investor: 5 Key Concepts for Financial Success.

1 Response to "Buying My Primary Residence"

I visited this blog…and i like very much..thanks for post…raffles-residence

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s


Michael Zhuang is principal of MZ Capital, a fee-only independent advisory firm based in Washington, DC.


%d bloggers like this: