Thursday, April 17, 2014

4 Common Obstacles Homebuyers Face

Guest Post By Tali Wee of Zillow

Shopping for a house is an exciting and potentially life-changing endeavor, full of emotional highs and lows. Shoppers hunt weekend after weekend at open houses and search online hourly, all for the ultimate goal of finding the perfect place to call home. The process might seem exhilarating for first-time shoppers, but the pressure of time-sensitive decision-making can become overwhelming.

When buyers have their finances in order, their lists of must-have features and the perfect neighborhoods in mind, they’re ready to dive into the house-hunting mission. Here are a four more circumstances they should mentally prepare for to avoid emotional fatigue if the process gets tough.


1. Low Supply

All home shoppers have at least a general idea of the types of homes they’re looking for when they begin their searches. Typically, they research the ideal neighborhoods with the best schools and lowest crime rates. As long as properties are within their price ranges, the hunt narrows down to the specific features they desire. When qualifications are restricted to a single community, school district, square-footage and price range, the properties in the best condition receive widespread interest. Only so many homes are up for sale, so it takes time to find the perfect property.

Unless buyers adjust their must-have lists and open their minds to homes that need repairs, it’s easy to become discouraged by the lack of inventory. It pays to make a list of non-negotiable features, and otherwise broaden the search to a few optimal communities.


2. Market Pressure

House hunting is not easy for those seeking instant gratification. Although some buyers luckily find their ideal homes at their price points, many continue searching for months. One benefit of a long pursuit is that buyers learn a deeper understanding of the true value of homes on the market. With a better idea of value, they gain confidence in making fair offers.

Buyers may begin to feel the pressure of rising interest rates and home value appreciation. Instead of throwing offers at moderately desirable properties before prices rise, house hunters should reevaluate their non-negotiable features. Avoid buyer’s remorse by sticking to the essential search criteria and making reasonable offers. Don’t settle on such an expensive and long-lasting decision.


3. Competitive Buyers

Another discouraging obstacle in the home-buying process is the level of local competition. In popular markets with low inventory, multiple parties sometimes engage in bidding wars. Add investors with all-cash offers into the mix and the conventional or FHA loan with 20 percent down won’t make the cut. Some buyers try to increase the chances of their offers getting accepted by foregoing inspections or offering more than asking price. Buyers offering substantially more than asking price may end up purchasing properties for more than they are truly worth.

However, if a buyer completely falls in love with a house he or she might justify the additional monthly cost. For instance, a home priced at $200,000 with a 20 percent down payment ($40,000) on a 30-year fixed loan with a 4.3 percent interest rate would cost the buyer $1,058 monthly (including 1.2 percent taxes and $800 insurance). If buyers with the same loan terms and same $40,000 down payment committed to $210,000, they would pay $1,180 monthly. Depending on FICO and loan amounts, borrowers would also pay $32 to $55 in private mortgage insurance (PMI) each month until they had 20 percent equity. Although $10,000 is a large sum, it only affects the monthly payment by $154 to $177. At $20,000 above asking, the buyer pays $1,243 monthly plus $35 to $59 PMI, or $220 to $244 more. As long as the appraiser and lender approve the purchase price, buyers can offer more than asking price.


4. Inspections

When a shopper finally outbids other buyers on a house he or she feels confident about, the buyer still risks losing the house based on the inspection. Buyers get the opportunity to hire a professional inspector to evaluate the roof, attic, crawl spaces, etc. The buyer might opt to back out of the purchase if the report indicates the property has asbestos, mold, extensive water damage, pest infestations, major electrical damages or other serious issues.

The costs of repairs are not always worth the investment for the buyer. They can negotiate with the seller to correct the issues, pay for the repairs or reduce the purchase price low enough to cover the cost of repairs. If buyers and sellers cannot come to a compromise, then buyers face the disappointment of heading back to the buyer’s market.


Even though home shopping produces some challenging obstacles for buyers, it’s still an exciting journey. Competitive markets require homebuyers to make major life-changing decisions in just hours, all for the sake of finding the perfect property to feel at home. With proper preparation, the experience can be both thrilling and successful.


Bio: Tali Wee is a blogger for Zillow and other partners. She writes about home-related topics such as home improvements, interior design on a budget and financing mortgages.

Saturday, April 05, 2014

Is Malaysian Ringgit Currency Strong?

A lot of people say Malaysian Ringgit (MYR) currency is not strong and will be depreciating in long run and it is better we convert to foreign currency if we want to maintain the value. Is that true? So I dig a little bit research on the MYR currency trend in the past 10 years for your reference here.

The following graphs show you how much 1 MYR can be converted to foreign currency in the past 10 years. I list down the countries that I"m interested in. If the trend goes up, it means MYR currency is stronger and vice-verse.


AUD (Australia $) per 1 MYR



USD (United State $) per 1 MYR



EUR (Euro) per 1 MYR



GBP (British Pound) per 1 MYR




Well if you look at the starting point and ending point of these graphs, MYR currency is either stay stable or appreciate. To AUS and EUR currencies , MYR currency is stable. To USD and GBP, MYR currency is doing good (mostly due to subprime crisis I think).

Let's continue to see our neighbors...


HKG (Hong Kong $) per 1 MYR




SGD (Singapore $) per 1 MYR



CNY (Chinese Yuan) per 1 MYR




TWD (Taiwan New $) per 1 MYR




KRW (South Korea Won) per 1 MYR




IDR (Indonesian Rupiah) per 1 MYR




Compared to all our neighbours, MYR currency is doing good in the past 10 years except for for CNY (so, my previous prediction on RMB/CNY is correct? lol)  and SGD.  We only lost to these 2 countries. :)

Source: all charts are from www.xe.com


Conclusion

I"m not expert in Forex but just want to emphasize the perception on MYR currency has no value (or depreciate) in long run may not be true at least based on the past 10 years data, MYR currency is doing fine. Well, you can shorten to 5 years, it is not that great as 10 years but it is still considered okay in my opinion.

If you are really scare and don't trust MYR currency, it seems like CNY (Chinese Yuan) or SGD (Singapore Dollar) is the currency that you want to convert to based on the past 10 years trend above.

So, is Malaysia (MYR) currency strong? I think yes based the past 10 years. Just only 2 countries are doing better than Malaysia which is Singapore and China, I will consider that is doing quite good already. Agree?


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