Confessions Of An Indian Real Estate Buyer
Home buying in India is a wholesome experience rather than an asset buying. Full of ups and downs, the journey of an Indian real estate buyer begins from the initiation of the idea of buying a property and ends at the time when he finally moves into the new address. So, here comes the first-hand experience and confession of a middle-class real estate buyer.
“I am Rajendra Prasad Gupta*, a 35-year old government servant. While most of us take offence of the term 'servant', my parents have always given me this learning that even if I am earning for myself; I am working for the people of this country. Never took bribes, neither gave any- just to keep my conscience clean that I am not amongst those who can go to any extent to get their work done. I lived in my parents' home for almost 30 years, since birth. And now, being married for three years, I wanted to move out in a modern home with all A-class facilities. As I discussed this idea with my father, the first question was too apprehensive, “Where will you get money from?”! While I have already decided that a part of the provident fund could be used for home buying, I was more interested in borrowing a home loan from a bank. The second and the most tricky question, I had to face was where I was going to invest? From choosing a location to finding a right kind of home, suddenly I started feeling that this was going to be the toughest thing and I shall put this money in stocks or equity. But then, I was determined, I had to make this investment; after all, I can afford one.
After doing all the math of funds available and the sum of EMI I could pay, I decided that I cannot invest more than Rs 70 lakh. At that time, I didn't know even stamp duty and registration charges are one of the major components in my property cost and I should keep a separate budget for them, for which I am was going to regret later. As my property hunt began, I consulted my relatives and friends for real estate advice. But as I started talking to them, being a naïve I was convinced enough to go by their choice. They made me believe about the returns I might get and each of them acted as an expert of real estate when they said, “Bhai ji, property ke daam triple 5 saalo me. Aankh band kr ke khareed lo!”
Here I want to confess that taking the real estate advice from relatives and friends is the most illogical thing I have done. Just because they have already bought property once or some of their distant relatives are serial investors, does not make them a real estate expert. While choosing a location, buying at any place just because your close friend of your relative had also bought at that place, is not an intelligent thing to do. I can tell you this because I have experienced this. Always, always, always, judge your needs while buying anything too expensive or which closely resembles a home. I didn't do this and ultimately my kid will be travelling 10km to and fro to reach his school.
Just because my office bestie bought a home in one of the localities which lie on the outskirts, I also started looking for options in that place. As I shortlisted three options with the help of a real estate broker, the deal got stuck when I started negotiations. The builder was asking 5 per cent of the property cost as cash, which meant this part will remain unaccounted. He tried to convince me with his full-proof logics which included saving on stamp duty and registration charges. But if I would have accepted his deal, the loan amount would have also got impacted. So I resisted against the 'universal law of bribery' and I ended up paying the entire amount. I confess that I would have fallen for this deal only if I had some extra cash available with me or to deal with so much of mathematics. Like a good citizen, I did pay the stamp duty and other charges but didn't what good it will bring to me as even the roads near my project were not built properly, the sewage was still poor and water logging was imminent during rainy season (I did realise this after living there for 3 months).
My struggle didn't end there. Although the project was approved by one of the nationalised banks of India, the paperwork and too much of due diligence killed my patience. Every other day, I had to pay a visit to the bank to know the status of my documents. To my disbelief, they had this 'special' charge to put the file on the fast track. Luckily, I had some acquaintances in the loan department; I was saved for the second time to fall in this trap of paying a bribe. After 60 days of finalising the property, I finally got the consent from the bank for the loan approval.
Here is yet another confession. The process of property buying is so cumbersome in India that I often got confused whether I have to make the down payment first or will I get the sale deed before that. The documentation process of the home is so confusing that at once you will feel like quitting the entire deal and choose another channel for investment.
As I got the keys to my new home, it's only after living there I realised that the area had frequent outages. There were very few schools in proximity and the only good school was 10km from this locality. I am not regretting my decision to buy this home but I think I would have made a better choice if I had chosen other formal ways of doing research like consulting an expert or even searching on the internet which would have given me real data about my property choice. Nevertheless, I am satisfied that I ended up finally owning a real estate asset, the basic necessity of our lives."