This home buyer wished to keep his identity confidential. The confessions are nevertheless relevant as it could be the psychograph of any other impulsive home buyer in any other city. Track2Realty carries this letter as it could serve as home buyer education for others.
I am a home buyer from Mumbai and I want to make a confession that I have survivor’s guilt. I could buy a house at a time others in my peer group could not. My problem is that how to say it loudly about my lack of vision when the world has appreciation in the eyes for my home ownership. But I know how much it is painful to buy a house.
When I bought my apartment in the wake of slowdown, I hardly had 20% margin money to pay to the developer. I was working on a very average salary and did not have any other financial backing or family-funded cash injection. But during those days in 2008 the real estate scene looked very different than now.
Some of my friends had already made fortunes in the last few years and I was very much on that impulse. Signing on the Builder-Buyer Agreement had given me a new high and the banks were also liberal with me even though my credit worthiness was short of desirable.
Unfortunately, I was hit with double blow. While the developer delayed the project endlessly and I was forced to cough up with both the EMI as well as the house rent, the expected price appreciation never happened the way it was projected. Adding insult to my injury has been the job market crash that was excuse enough for my employers not to give any salary raise.
Now I am left with a survivor’s guilt, even though I got in when most of my peer group did not and could not. Friends still ask me, “But how did you do it?” at a time when they should ask me “Why did you do it?” I am still carrying the burden of social compliments like, “Oh! You are so lucky.”
It was not luck but stupidity to make a commitment of 20 long years when I was not ready for it. Getting on to the ladder where others have failed can actually lead to resentment, I have learnt it the harsh way.
Finally, after a wait of nearly eight years I got the keys of my new house. Today, I have a house but no car and my credit card has been withdrawn by the bank. When I stalk on other friends and family members’ Facebook posts of glamorous overseas holidays I just envy. I cannot afford buying new gadgets and designer clothes. I cannot express how awful it is.
For the next 20 years of mortgage, more than 60 per cent of my income is destined to go straight to the bank while I manage with two minutes of noodles most often at least once a day. Trust me, there is nothing classy about home ownership and for next few years I will be giving up on the dream of leading a comfortable life with self-earning. I cannot even think of marrying a non-working partner now.
Earlier, I used to laugh at others house when it was a 1BHK or cramped apartment. Today, after having the ownership of 2BHK I often question myself did I need to play football in my living room. The club and the swimming pool that used to fascinate me whenever I visited someone’s house does not attract me anymore. These amenities are more to flaunt & brag than to enjoy on a routine basis, I have realized it the hard way.
When I bought the apartment probably my immaturity was looking for, or rather requesting, a collective pat on the back. Today, I am keeping my letter anonymous as I am not crying for sympathy. I just wish to share it with others as to how hard it is to buy a house when one goes beyond his/her means.
I am educated enough to understand that a typical home in a typical Indian city is not affordable if it costs more than the five years of earning. But me, and many others like me, get into the temptations to buy an apartment that costs up to 10 years of earnings, with sword of job insecurity hanging over the head.
A house also comes with a chaining curb over your career prospects in the early years of your career. Today, I cannot take a job in any other city, despite the current job sucking me up.
I am not saying give up on the dream of home ownership. Start saving, get financially savvy and find a way to make it work. If it does, then it is fine. But if it doesn’t then there is no shame or financial disadvantage in renting if you are parking your pennies in another growing asset. Be honest with yourself first – home ownership is not necessarily going to be fun and if you exceed your financial limitations life is going to look pretty different.
I realized this when I had to cut down on my basic luxuries that all other young and single friends enjoy. It is like no alcohol, no partying, cut off from fashion clothing and no recreation. Ok, you may say that it ends up cutting unnecessary expenses and saves up for future. But if you are that compromising with the basic needs you can save up money even without buying a house. And the best part is that you are not stuck up with all your saving into an asset class that is illiquid and not even growing up.
I am no one to recommend any cookie-cutter approach but all that I can say from my personal experience is the fact that my regret factor is pretty strong. A house is a basic need and the moment you want more than you need or afford then life goes for a toss. That is the sum total of my experience as an impulsive home buyer.
Track2Realty is an independent media group managed by a consortium of journalists. Starting as the first e-newspaper in the Indian real estate sector in 2011, the group has today evolved as a think-tank on the sector with specialized research reports and rating & ranking. We are editorially independent and free from commercial bias and/or influenced by investors or shareholders. Our editorial team has no clash of interest in practicing high quality journalism that is free, frank & fearless.
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