Final answer:
Upon transitioning from renting to home ownership, Sarah's financial liabilities include mortgage payments, property taxes, home insurance, and maintenance costs, while also allowing her to build equity over time.
Step-by-step explanation:
When Sarah transitions from renting to home ownership, her financial liabilities change significantly. As a homeowner, her financial responsibilities will now include mortgage payments, property taxes, home insurance, maintenance and repair costs, and possibly homeowner association (HOA) fees, depending on where she lives. It is important to evaluate the costs and benefits of renting versus buying before making the transition. For instance, while renting may have fewer upfront costs, homeownership provides the benefit of building equity over time, as indicated by the example of Freda, who has a house valued at $250,000 with no debt to the bank, giving her full equity in her property.