Moving day had finally arrived and because it was April, I was worried that it would either rain or be extremely cold or both! Although it could not be considered warm or sunny, the weather was cooperative. My parents arrived the day before to help us finish up the packing, move the rest of the little items, and unpack the boxes we had moved. Most of the moving and unpacking was completed by the official moving day, which was my plan all along.

The movers, Moovers, were scheduled to arrive at 8am. The first dilemma was that the loading zone in front of our building is only enforced during business hours on weekdays. We moved on a Saturday. Therefore, almost the entire zone was covered in parked cars. The moving truck did not have room to park in the zone and could not park on the street. The security guard tried to call a person to move their vehicle, but to no avail. I was at a loss and both my boyfriend and the moving guys were looking toward me for the answer…which I did not have.

Minor caveat: I was also ill; so my body and brain were not functioning at the highest level during this move.

Back to the real story: Like a little girl, I pretty much ran upstairs to my dad and asked him to figure it out. My boyfriend, in the meantime, figured out that I was not going to live up to my problem solving capabilities and had already worked out a deal with the guard where the moving truck could block part of the garage exit. After that predicament, moving everything out of our old place went well because we just had to direct traffic and the two movers did everything.

Parking was not as large of an issue at the new place, although I am not entirely sure if where we parked was legal, but no tickets were written. As the movers were unloading the furniture, we received a call from the furniture store that was delivering our appliances. They were a few minutes away. So we had movers unloading our furniture and delivery people unloading our new appliances. Once they were all out, we were ready to install the new appliances and finish unpacking. We made two Home Depot runs for a step stool, toilet paper holders, towel racks, various appliance parts, a tree, and other miscellaneous items.

My dad had removed the old appliances the night before and put them in his trailer to take home. I refused to pay $60 per appliance to have the deliverymen install the appliances. I volunteered Dad to install them instead. My boyfriend was going to help. Welcome to dilemma #2, #3, and #4.

Let’s begin with the largest problem, the microwave.

Our old microwave was installed with a wall mount and then screwed into the top of the cupboards. We hoped that the old wall mount would fit the new microwave. It didn’t. By taking out the old one and installing a new wall mount, we were able to fit our new microwave in.  I don’t know how to describe the process, but it was definitely not easy. At one point, one of the brackets fell into the microwave and we had to remove the entire microwave case and find the bracket. If you have ever installed a microwave with a wall mount, you probably know exactly what I’m talking about. If you haven’t, be happy you don’t know what I’m talking about. The boys eventually got the microwave installed with minor help from my mom and me.

The dishwasher was next. Since we have granite countertops, we could not screw the dishwasher in place to the granite. We also could not screw it into the hardwood floor because there were cabinets in our way. We needed a side mounting kit, which of course did not come with the dishwasher. My dad was really trying to figure out what he could make from our miniscule supply of tools and doo-dads to get the dishwasher mounted that day. However, I eventually convinced him to let me order the side mounting kit. After reassuring him that both my boyfriend and I could use our college educations to figure out how to put the side mounting kit on the dishwasher and screw it to the cupboards, he gave up.

Another minor caveat: Receiving the side mounting kit was an interesting feat. I ordered it and did not see it arrive in the next two weeks. Eventually I remembered and asked my boyfriend if he had seen it. He claimed that he thought he got it from the security guard the Wednesday after we moved and put it on the kitchen counter. I looked EVERYWHERE for that kit. I have zero clutter in my house and I usually have tabs on everything. That kit was nowhere to be found. My boyfriend came to the conclusion that it had ended up being swept into the giant box of trash. I agreed with his conclusion because I pretty much threw anything and everything that I did not want into that box. I bought a new kit and it sat on the counter for a week or two. We cannot find the motivation to put the kit on. It’s very low on our priority list. My new goal is to wait until my dad visits again and have him do it. I know it’s sad that we can’t find 30 minutes to install our dishwasher properly, but that’s our life. And then a week ago, my boyfriend went downstairs to get a package from the security guard. Guess what? The security guard also said that he found another package in the very back of the shelf that was for us. Yes, it was the dishwasher mounting kit. I laughed, but I sort of wanted to cry. I returned one of the kits and there is still one sitting on our counter waiting for my dad to visit.

The final issue was that the stove power cord had a four-prong end and our outlet only had room for three prongs. Luckily, my dad was able to find the correct plug and attach it to the cord. It was a very minor problem, but Dad was pretty annoyed that another thing went wrong.

Eventually all of the appliances were installed and everything was unpacked. My parents left and we spent the next couple of weeks perfecting the space. I got my sewing space set up and my boyfriend set up his man cave/office. Our new couch and TV were delivered. I found the perfect color of towels for our master bathroom. We are still debating about placement for our pictures and shelves, but slowly making progress.

Stick around for the last post in The Adventures of a First Time Home Buyer series to see pictures of our beautiful and complete condo.

Although we had signed the papers, picked up the keys, and walked into our own home for the first time, we still could not move in right away. Walls needed repainting, carpets needed cleaning, and lights needed to be added. Likewise, everything needed to be sanitized and the locks changed.

Hiring painters and electricians is not easy. You want to hire somebody that will do a good job, but isn’t extremely expensive. I interviewed painters and electricians over my lunch break for an entire week. The following Saturday, my boyfriend and I laid out all of the quotes and chose a family-owned company that did both electrical work and painting. Their quote was not the lowest, but it wasn’t the highest. Additionally, the guy treated me like I was an adult and not a little girl, which I had to deal with at least twice during the interview process. I promise I will not subject you to my rant about being treated like a small child that needs things slowly explained to her in a condescending but polite tone. After we made our decision, we called the guy and told him he got the job. He asked us to choose paint colors so he could have the paint mixed on Sunday so he could begin on Monday.

The Paint

I had chosen paint colors at least a month before we closed, but we hadn’t tried the colors on the walls yet. We bought samples and painted small sections of a white wall. We ended up only liking one of my original colors and so we chose more colors and got more samples. I think we ended up with two more that we liked and asked our friends and family their opinion. This, of course, did not help make the decision any easier. I eventually had the painters choose the neutral colors for the two full bathrooms and everything turned out great. Always try the colors you choose on a white wall (preferably in the room where the color will go) with the lights turned on and off. We ended up being somewhat disappointed with one color we chose, but repainting it was too expensive and time consuming. Note to future self: I am hiring an interior decorator. Choosing paint was more stressful than trying to understand the loan terms. The painters were finished in a week and besides the slight disappointment with one color, we were very happy.

The Lighting

The guest bedroom had poor lighting because of the lack of windows and the ceiling fan with one light bulb. We wanted to put in can lights or track lighting. There were a number of worries including whether the breaker could handle the extra lighting and if the electrician could get up into the ceiling. We would decide between the can or track lighting once we found out if the ceiling was accessible. Building maintenance told us getting into the ceiling would not be difficult, but boy were they wrong. Apparently, the crawl space was blocked by an air conditioning unit and so lighting was no longer an option. I was somewhat relieved because that meant we wouldn’t have to pay to put lights in and could have the trim and baseboards painted instead. The painting process was also easier because we didn’t have to wait on the electrician to finish before beginning to paint. However, the room was still very dark. We ended up buying a huge light and replacing the ceiling fan, which actually solved the problem. A four bulb ceiling light puts out a lot of light. I hate ceiling fans more than I hate fireplaces. Our unit had both. There was nothing I could do about the fireplace because it’s apparently good for resale value. So I shut off the gas valve and pretend it doesn’t exist. I could do something about the ceiling fans. They were replaced with ceiling lights immediately. Ceiling fans collect dust and circulate dust. And although it isn’t entirely proven, if they are in your bedroom, I swear that they dry you out and cause headaches. If you have air conditioning, they are pointless in my opinion.

The Locks, The Carpet, The Cleaning

Hiring a locksmith was simple; the building used a specific locksmith because they needed a master key to all of the units in case of an emergency. I called them and they billed the building, which then billed us. Carpet cleaners were also simple because there were only a few that were able to do high-rise apartments. Our real estate agent recommended one and they were available the week after the painters were finished. The last thing was to have a cleaning company dust, treat the floors, clean out drawers, wash windows, and sanitize everything. I already had used a cleaning company I liked before and were always available, so I called them. They cleaned the day before we moved in.

Almost There!

In three weeks I interviewed painters and electricians, had the entire condo painted, dealt with the lighting situation, had the locks changed, the carpets cleaned, and the locks switched. My recommendation is to give yourself time. Purchasing a home and moving is mind-boggling enough without adding additional stressors.

Of course, during this time I was also slowly packing up our old place to prepare for the move, which was another interesting adventure.

There wasn’t actually any beer involved in this process for us which contradicts the title of this post. However, maybe one of the painters had a beer after a long day of painting our walls.

Get ready for Part 5 and the big move!

Why do we have so many homes that are underwater and so many foreclosures? Well, Americans wanted the biggest house they could afford (or thought they could afford); lenders were willing to give out loans like Happy Meal toys; and the combination has produced a system that needs to be fixed.

Unfortunately, the government’s plan for fixing the mess is just as flawed as the buy-beyond-your-means era. By pushing for mortgage loans only given to those who can put down 20 percent, the government and mortgage industry will unfairly alienate a new group of capable homeowners, the Millennials.

I feel strongly about this because I am one of those potential capable homeowners. I’m 26. I’m employed. I’m not married, but I’ve started to think about a family and started to think about owning a home. I’ve been out of college for four years now and had a full-time job for most of those four years; yet for me to even think about putting 20 percent down on a home is preposterous.

Even though I’ve been conservative with my spending throughout my adult life, I have not saved enough for that kind of down payment. And I live in Kansas City, an affordable city compared to most major metropolitan areas. Homes in the area where I would want to live and send my future kids to school range from $125,000 to $200,000, and those are what many would consider starter homes.

So let’s say I want to buy a $125,000 home, a 20 percent down payment would cost $25,000. The National Association of Homebuilders says that it would take a family earning a median income 14 years to save a 20 percent down payment on a new home, and that figure is pretty close to what I estimate it would take me to put aside that much money.

Now, I have always paid my bills on time, never fallen into debt and never been a big spender. As I said, I’m conservative and careful with how I spend my money. Why should I not have the opportunity to own a home? Just because I cannot afford a big down payment does not mean I would not pay my mortgage.

In fact, according to government data on loans made from 1997-2009 (read the Washington Post story about it here), credit history was a much better indicator on a homeowner’s ability and willingness to pay a mortgage than how much someone put down for a down payment.

According to the data, qualified borrowers with strong underwriting standards who made small down payments defaulted at 2.3 percent, which was about twice the rate of borrowers who met the same standards but put down 20 percent. However, the more telling number was this:

The default rate for borrowers with a poor history of paying their bills on time – those who put down 20 percent included – was 4.7 percent.

I hope the government and those providing mortgages take a closer look at this data and start to rework their qualifications for who they think is best qualified to own a home. I can see their logic. Bigger down payment equals a homeowner who has more invested in the house and is less likely to just walk away. But as the data proves, it is more important that homeowners feel it is their duty to pay their bills and be accountable.

I have no problem with making it more difficult to own a home for people with a poor credit history. We need to change, because what was going on before – giving anyone with a pulse a mortgage loan – was not working. But do not punish my generation for the mistakes of older generations. I like to think I’ve learned from their mistakes. I will not spread myself too thin by reaching and buying a house that probably isn’t in my price range. I’ll wait to buy a home until I know I can afford the monthly mortgage payment and will have enough for the many other costs that come with owning a home. I just hope I won’t have to wait 14 years longer than when I’m ready because of the down payment requirements.

Nothing compares to the confusion that occurs during the mortgage process, especially if you have never purchased a home. My advice is to find a loan officer or broker that has experience with first-time home buyers. Our loan officer was not unfamiliar working with first-time home buyers, but I would not call him experienced. Before I explain everything that confused me about the process, I would like to thank Mr. William Lewis for making me buy the textbook for his personal finance class. I definitely recommend taking a personal finance class while you are in college. I am a very prepared person when it comes to finances, but even I learned some extremely valuable information.

When you decide on a home that you would like to purchase, get pre-approved for a loan before you make an offer. Don’t waste your time or get your hopes up and settle on a price before you know that you can pay for the home. You can use a mortgage broker which will find a lender for you or you can go straight to the lender.

As I mentioned in a previous post, our real estate agent recommended a few lenders and we ended up using one of them. Once you find a lender, find out the minimum down payment needed, if the loan will be a 15- or 30-year loan, and whether the rate is fixed or not. Typically, if you don’t put 20 percent down, you will be required to have private mortgage insurance. We put down 20 percent to avoid the extra insurance payment. We chose a 30-year mortgage because the monthly payment was lower than the 15-year option. I would always recommend a fixed rate mortgage. We locked in at a very low rate and we never have to worry about it increasing. Of course, if you lock in a high rate, you can always refinance when rates are lower.

After the offer and acceptance, the fun part starts. It seems like you have to provide your loan officer with every single piece of your financial history. They need copies of your bank accounts, tax documents, 401K earnings, proof of employment, credit history, etc. Before you hand over everything to the lender, you have to sign disclosures that begin the mortgage process and give the lender the right to your personal information. I read through every single disclosure and it was a giant mess of confusion. Again, I would not have known what a Good Faith Estimate was if not for my personal finance textbook and good ol’ Google search. I wore out the index of that textbook and the keys on my laptop.

We had to sign a time-sensitive rate lock document to lock in our low interest rate. It’s hard to meet deadlines when you have tons of questions, but we were able to sign the document and get it back to our lender at the last minute.

In order for our lender to give us a breakdown of the monthly payment and closing costs, he needed the amount we would pay each month for our Home Owner’s Association (HOA) dues. We found out that the HOA amount on the listing sheet was incorrect. And of course it wasn’t lower. It took at least a week to get an answer of the exact amount.

The amount they finally gave us included the building HOA dues and reserves and the garage HOA dues and reserves. I was super unhappy that the listing had not been updated. I also asked for a definite amount before we made the offer and was told that the listing price was correct. That miscommunication was almost a deal breaker because I was worried that if they were not honest about the HOA dues, then other problems were going to appear. It ended up not being a deal breaker after I asked a series of questions to make sure we weren’t missing anything.

We also received a series of documents from our agent. They were a Condo Resale Certificate, Certificate of Liability Insurance, Evidence of Property Insurance, Seller’s Disclosure and Condition of Property Addendum, and Company/Franchise Disclosure Addendum. Huh? That’s exactly what I said, too. Millions of questions ensued. Again, thank you Google and my personal finance textbook.

Next, our lender provided us with the breakdown, some other documents to look over, and a purchase contract. For the breakdown, the monthly payment was reasonable. The closing costs and prepaid items were extremely confusing. These are just a few of the closing costs: Lender’s Title Insurance, Escrow, Owner’s Title Insurance, Recording, MERS, Flood Certification. Yes, I asked questions. Some things were obvious like credit report fee, appraisal fee, underwriting fee, closing fee, etc. But Flood Certification? Our condo is on the 9^th floor! Do they really need to pay for a report that says we are not in risk of a flood? Apparently the government requires a report (that you have to pay for) that states the flood zone status. Ridiculous.

Then there were the pre-paid items including 15 days interest and 14 months of hazard insurance. We didn’t have to pay two months of taxes because of the tax abatement for our building. Maybe I am too detail-focused, but I wanted to know everything we were paying and why we were paying it. So I had hundreds of questions on everything they sent our way.

Here are a few other things to keep in mind. You have to provide proof of homeowner’s insurance and all of the documentation. The home will need to be inspected, which costs money. Sometimes HOA’s have transfer fees, but ours didn’t. Earnest money can go toward closing costs. If you are receiving money from an outside resource, like your family, you will need to provide a signed gift letter. They will need to give you a cashier’s check for the amount, not a personal check. You’ll need a copy of the check, their bank account statement before the check clears the bank, and their bank account statement after the check clears.

Finally, you have to prove that you have at least two months of your mortgage and HOA payment in your account. F.Y.I. – After paying a down payment, breaking a lease, and dealing with all of the other costs, our bank accounts looked sad. For some reason, thousands of dollars for a down payment didn’t faze me (probably because we learned about that amount early on), but two months of a mortgage payment and a HOA payment freaked me out. We had the money, but suddenly it seemed like a lot. And you have to pay your agent. After ALL of that, we were ready to close.

Closing is the least exciting event in the entire process. At least it was for us. We were both busy at work on closing day so we wanted to wrap things up as quickly as possible and get back to our offices. We walked into the office, signed our names at least a hundred times while the closer explained everything, shook hands, and left. The keys were waiting at the front desk of our building and we could pick them up that evening. It was very uneventful, but life didn’t stay uneventful for long. There were changes and upgrades we wanted to make before we moved in. We had a month to make the changes and more unbeaten paths to discover.

In Part One, I explained how we found our condo. After that, we had to figure out how to pay for it. Let me explain some of our circumstances.

Positives

First, both my boyfriend and I have great credit scores thanks to awesome parental guidance, common sense, and our college finance classes. Second, the only debt we have is my student loans, which are minimal compared to most of my peers. Third, we both have stable, full-time jobs with good benefits. Fourth, our parents would do anything for us, including helping us with a down payment.

Negatives

First, we each had savings, but not a lot. Second, we still had a few months left on our lease. Third, we wanted to put down 20 percent so we didn’t have to pay any additional insurance.

We were recommended to two lenders by our real estate agent and my boyfriend also had spoken to a lender before. Our idea was to meet with the first two lenders and if they weren’t able to help us, then we would explore other options. The first meeting was disastrous. It snowed tremendously the day of the meeting and I missed the meeting because of traffic, so my boyfriend met with her alone. With that particular lender, we would need to put 25 percent down and five percent had to be our own money. It was looking bleak because she told us that it was unlikely we were going to find a lender willing to give us a better deal. Needless to say, I was stressed.

Luckily, the second lender had no gift limits and a low interest rate. Through many lenders, interest rates for condos are higher than housing rates because they consider it riskier. Some condos can be classified as non-warrantable, meaning they did not meet one of three classes of requirements. Our condo was not non-warrantable so we were safe. Other risks are that the condo association may face financial difficulties and owner occupancy rates may decrease. Did we not just have a housing crisis where people were buying houses they could not afford? I would think that after that debacle, lenders would be terrified of providing any loans whether they were for a condo or a home. But I’m not an expert and because of the economic situation, interest rates for condos were still incredibly low.

Because financing was no longer an issue (at least for now), we decided to make an offer. The listing price was significantly less than the original listing price and the unit had been on the market for over a year and a half. We were almost ready to make an offer! We needed to have our family look at the unit to get their opinion. Also, we had to look into utilities, Home Owner’s Association (HOA) dues, when the owners would be able to move, and ton of other tiny details.

Our family was extremely supportive and loved the place. HOA dues were reasonable and with a mortgage for the listing price, we would be paying less each month than we were in rent. Everything was falling into place and we made an offer that was a good amount less than the listing price. Our agent was sure we would not get the unit for much less than the listing price since it had already been significantly reduced. We paid one percent in earnest money with the offer. Ernest money basically tells the owners that you are serious about purchasing. Within 24 hours, they accepted our offer. We expected them to counter our offer and I was slightly worried when they just accepted. I wanted to know why they were so eager to move that they didn’t even try to get a better price. Our agent reassured us that they were so relieved to have a buyer after trying to sell for so long that they didn’t want to risk having us back out if they countered. We were willing to bargain and I will always wonder if we should have offered even less. But we had just committed to buying a condo and my mind was already racing with tons of little details that I didn’t dwell too much on the question.

Only a few minor bumps during this part. This was more of a pothole filled road. Part Three is where we really hit the dirt and trekked onward onto the unbeaten paths.

Once we had made the decision to buy a place, we just had to find the right one.

Making Contact

First, I am considering proposing a business idea to my boss: RealtorBoulevard. It’s like LenderStreet, but for people to find realtors and real estate agents. I understand that finding an agent is usually a word-of-mouth process, but I don’t know anybody who has bought a home in the area recently, so I went to the search engines.  I Googled and Binged agents around the Kansas City area until my fingers bled (not really) and either called or emailed every one of them. Since we wanted to buy a condo and not a house, our options for agents who were familiar with the condo market were limited. Sometimes I am not sure how I get so lucky, but the first agent to call me back was AMAZING! I could not have asked for a better agent. He listened to us and understood immediately what we wanted in a home. Also, he was not afraid to give his personal opinion, which is the type of reassurance that I need when making important decisions.

Home Tour

Luckily (although some may not consider this luck), the KC downtown condo market is miniscule. It’s growing, but will never be as large as Chicago or even St. Louis. There were only a handful of buildings that even met our requirements, which were two bedrooms, two baths, wood floors, granite countertops, tiled bathrooms, workout room, parking garage, and security. We rented a condo before on the 21^st floor a building and ideally wanted something with a similar view, but it was not a deal breaker. Of course, it needed to be in our price range and we wanted to stay downtown.

In one Saturday afternoon, we were able to view all of the condos that met our requirements and only one stood out. Guess what? That’s the one we ended up purchasing. Some of the places we looked at were interesting. One that was not downtown was extremely extravagant. The amenities included a cigar room, a massage parlor, a dog grooming station, an indoor and outdoor salt water pool, and a wine cellar. The closets were bigger than my entire freshman dorm room (and I lived in a suite!). However, the monthly Home Owner’s Association dues were more than the monthly mortgage payment. Also, the entire condo was carpet, which is one of my biggest fears. It’s a dust and germ haven and never feels clean. I feel the same way about ceiling fans and glass tables.

Our building was built in the 1980s and renovated in the last five years. The previous owners were in the unit for a little over four years. Our condo is a corner unit and although the view is not as breathtaking as our rental on the 21^st floor, we can see a lot of activity. Besides a few minor details (like the brown-ish granite in our bathroom that forced me to change our towels and paint), the place is perfect.

I have heard that there are many different factors that go into buying a condo versus buying a house. We didn’t have to worry about any utilities because the building obviously had to have them sorted out. Also, pests and flood issues are not in the picture. There’s no yard to worry about or outside exterior. We knew exactly what we wanted and what price range we could afford.

Things to Consider Before Beginning Your Search

My recommendation would be to write a list of the non-negotiables (things you absolutely cannot live without) and items you want but aren’t deal breakers. Also know exactly what the highest price you are willing to pay and do not go over it. My guess is that with certain requirements, wants, and price range, you’ll narrow your options pretty quickly, which only makes the decision process easier.

Everything went smoothly. We figured finding a place we loved was going to be the hard part, but everything seemingly fell into place. Little did we know that the rest of the road wasn’t the smooth pavement we were used to, but dirt.

My boyfriend and I are now the proud owners of a two-bedroom, two and a half bath, ninth floor condo. We are also the exhausted owners of a two bedroom, two and half bath, ninth floor condo. This is the first home we have bought. Honestly, I didn’t think I would be a homeowner until I was at least 30, but this was one of those “right place, right time” situations. However, there were definitely times throughout the process when I was confused and frustrated and not sure if it was right. In this series, we’ll follow the adventures of a first time homebuyer: me.

When we graduated college and moved to the city, my boyfriend and I believed that renting was the only option. Buying did not even cross our minds – OK, it crossed my mind but it quickly faded. After all, we had very little savings and we were already stressed about being in a relatively new city and having new jobs. We had found a two-bedroom, two-bath, 21st floor condo in the downtown area. It was new and contemporary with wood floors, tiled bathrooms, granite countertops and stainless steel appliances. It was basically a palace compared to the dumps I lived in throughout college. The condos were both for sell and for rent and the building was trying to get a better owner occupancy rate. Therefore, we also entered into a rent-to-own program so if we decided to buy, what we paid in rent would be taken off the price. If we decided not to buy, we would cancel the program and return to being regular renters. As the deadline approached to either purchase or cancel the program, we had not talked about what we wanted to do.

You’re probably having an internal scream fest, saying under your breath, “You had the perfect place! Why didn’t you just stay there?” Believe me. I know. But here’s a quick run down of the facts.

1. When we signed our lease, we were told that if a buyer wanted our exact unit, we would be given 60 days notice and would either be moved to another unit in the building or could move out entirely. I was not extremely happy about that little detail. Therefore, we entered into the rent-to-own program because we were guaranteed not to be kicked out at moment’s notice for at least the duration of the one-year program.
2. At the signing of the rent-to-own program, I asked about the price of our unit. It was RIDICULOUS! Or at least it seemed ridiculous to us. We were also told the building owner would probably not negotiate the price. That was a HUGE turn-off.
3. The units look very impressive, but things are not always as they seem. The pretty white tile in the bathrooms had a film over the top of it to make it look shiny. Once that film started to peel, it looked awful. Also, white tile showed every little spec of dirt or dust. The wood laminate floors were thin and pitted easily. The fan for the air conditioner and heater sounded like a hurricane wind. It turns out that the black granite countertops were impossible to keep smudge-free. Our dryer broke down at least once a week. And drafty is the perfect description for the windows.
4. The housing market was not exactly at its peak and other (nicer) condos in the area were selling for much less than the price on the condo where we were living.

Because all of these factors had weight in our decision making, you can see why we decided to move. There was also the matter of money. Before we could even think about looking at places to buy, we needed to make sure we would be able to afford a condo. Our parents had already offered to help us if we decided to buy. My boyfriend and his mother met with a lender and we found out we would most likely be approved for a loan. Also, the lender figured we would be paying less each month with a mortgage than what we were paying in rent. We both wanted to stay in the area for at least 10 years, so buying seemed like the right decision.

Next we had to determine where we wanted to buy, what we wanted to buy, and what the highest price we were willing to spend. That part was easy. We wanted to live downtown and we wanted a condo with the same features as the one we were living in…only better. The maximum price had already been determined in the meeting with the lender. Some of our parents were very hesitant about buying a condo versus a house. The idea of only owning a piece of a building instead of an entire building and land on and around that building was alarming to them. In the end, we explained our reasons (below) for not wanting a home and they understood:

1. Houses have lawns. We hate to mow.
2. There are no houses downtown. We are not the suburbia type.
3. Houses are usually larger than condos. And when there is extra room, you fill it with junk. We do not want junk.
4. Contemporary décor is hard to pull off in a house.
5. Houses do not have workout rooms unless you create one and furnish it.
6. Houses don’t have fun amenities like pools and movie theaters and entertaining areas. (I separated out the workout room because it is the most important to me.)
7. You have to paint the outside as well as the inside of a house.
8. If something goes wrong or breaks in a house, you have to fix it or find somebody who will.
9. A security system has to be installed in a house. Our building already has a security system and a security guard.
10. Houses are bigger and that means it takes longer to clean them.

In short, in my mind, grown-ups live in houses. We are mature young adults. There’s a difference. Condo hunting, which doesn’t sound as good as house hunting, had begun.

After reading a brief AdAge stat card report on the latest census and how it affects marketers, it appears that the housing market collapse was well documented.

According to the census, there are 131.7 million dwelling units; a rise of 13.6 percent. The problem is that only 116.7 million of these units are occupied while the other 15 million are, well, vacant.

And while “populated” homes rose almost 11 percent, vacant dwellings jumped nearly 44 percent.

Fun Fact No. 1: One out of every four vacant homes reside either in Florida, California, or Texas.

Fun Fact No. 2: 30 percent of these vacant homes are second or vacation homes.

Shall I begin to analyze the stigmatized trait of “excess” us Americans are known for abroad? Don’t think so.

As expected and known, the housing market is still in a slump but on the bright side, if you’re a new homebuyer, at least you have a plethora of homes to choose from!

You can read the full AdAge article here.

Any thoughts on the matter? Sound off below.

Alan Zibel from the Wall Street Journal wrote, “If the federal government shuts down, the FHA won’t be insuring any new loans. Banks will still be able to make FHA loans, but some will hold onto those loans until the government re-opens for business. While large lenders are likely to be able to take this risk, other may not be able to do so and could be forced to cancel pending loans.”

Read the full article, “Obama Official ‘Very Concerned’ About Mortgage Lending Shutdown” here.

Because the government may shut down due to the inability of the Senate to coherently agree on a budget for the current 2011 year (which, by the way, is halfway over), government funded entities, like the FHA, will cease to function.

So what does this mean for you, the borrower? If you are borrowing from a juggernaut organization like Freddie Mae or Fannie Mac, you need not worry. Both Mae and Mac are only under a federal government guardianship of sorts and are still, “legally separate from the federal government.”

Borrowing with an FHA loan is a different story. FHA loans are specifically backed by and guaranteed by the federal government. To put it more simply, if you defaulted on a loan, the lender would still be paid because the government would cover your failed costs with the upfront MIP (mortgage insurance premium of 1 percent) that you would already be paying along with the monthly fee of having an FHA loan in the first place. With that being said, a government shutdown means no money to government organizations, projects, etc., meaning no FHA loans for mortgage lenders to offer the home buying clients.

Homebuyers often prefer FHA loans because of the attractive 3.5 percent down payment whereas Freddie Mac and Fannie Mae require a 20 percent down payment unless you have insurance. The downside to the FHA loan is that sometimes the loan isn’t enough to cover large mortgages.

In short, you may want to consider your options when it comes to financing your home, especially in the shadow of this looming government shutdown.

More on FHA Loans and Freddie Mac.

Which way are you going to go?

It’s pretty simple. You’re taking the cash and you’re throwing a big bleeping party to celebrate finally getting rid of your house. Maybe you’ll send an invite along to the first buyer as a consolation prize.

This is the new reality for first-time homebuyers. You would think with house prices falling and more houses than buyers in the market, that first-time buyers would have all the power, and we would have more of them. But according to this Wall Street Journal story, first-time homebuyers make up 29 percent of purchases, down from 40 percent not that long ago.

The Mercury News reported this week that a record 31 percent of all homes and condos were sold in California without a mortgage in January, and the cash buyers are not going away.

From the Mercury News:

Experts say investors are sensing the market has hit its bottom and want to take advantage of low prices. Investors typically use the property as a rental or rehabilitate the property and sell it later. The median price paid for a California home purchased with cash was $160,000. The median price for all homes sold statewide in January was $239,000.

First-time homebuyers are also up against tougher lending standards, including larger down payments and rising fees associated with mortgages. And with the eventual elimination of Fannie Mae and Freddie Mac, mortgages are only going to get more expensive and harder to come by.

So what’s the answer for first-time homebuyers?

The Wall Street Journal provided three suggestions: put down more money, plan to stay in your home longer and be prepared for competition from cash buyers.

If you cannot put down a 20 percent down payment, there are ways to get help with the down payment. And to fend off the competition, come into the process prepared. Make sure to get approved for a loan before you even begin shopping – self-promotional plug: you can find a good loan officer to help take care of this on LenderStreet! – and be prepared to work with the seller and not make too many demands. Some requests, like a home inspection and appraisal, are necessary, but be respectful of the seller and they’ll be more willing to work with you.

There are still plenty of houses that are ready to be purchased by first-time homebuyers, but it’s important to understand there are more hurdles than there used to be. That’s not necessarily a bad thing. For instance, a bigger down payment reduces the chances you get in a home that ends up underwater. Just be prepared, save and be ready to be in it for the long haul.