Like most people in Mumbai me and my family lived in this tiny two bedroom apartment that was a little over 800 square feet. There was one master bedroom for my parents and a living room for us kids. The living room was magical since it donned different garb at different hours of the day. For instance in the day it was living room, by noon it was our eating space, by evening it became entertainment/dining room and at night it was bedroom for me and my sister. For sixteen years I grew up in that lilliput size of a home and not once did I feel that anything was missing from my life. I had my parents, sister and all my loved ones right there in that small apartment. During festivals it could hold close to fifteen people who shared the same bathroom and slept wherever they found place. No one cribbed not me or my relatives. We all knew having a two bedroom apartment in Mumbai in a strategic location was like owning a house in paradise.
Everything seemed normal till my parents decided to move to Bangalore. Now Bangalore you see in the 90's was much greener and less crowded than it is right now. I remember teasing my parents. I used to call Bangalore the "Retirement Zone." Alas! not for long. Today Bangalore is anything but a retirement zone. Of course I am glad that India's economy is taking a new form and being a hard core economist at heart I applaud the growth in all major cities of India. Now when I talk to my parents they find it hard to keep up with the pace. My father goes,"I might as well live in Mumbai." And I feel why not? Mumbai being my birthplace wins hands down and never stops to fascinate me. I crave for it all the time. Guess that's how we Mumbaikar's are. No matter where we go we always compare the city with Mumbai and go,"Un Huh nothing can beat Mumbai."Once someone in the US asked me,"So where are you from?" And I replied,"I am from Mumbai." And the guy went,"So you are an Indian?" I answered yes I am an Indian from Mumbai. Well that is how it is for us unique Mumbai people.
Anyways I came to Bangalore and realized that most houses in Bangalore were actually HOUSES. I mean they were independent unlike apartment and generally bigger in size than an apartment. Some of them were very big and when I say that I am not joking. When I was in Bangalore in the 90's apartments where a rare sight to see. My parents happily settled down in Bangalore with my sister and her family. They lived up stairs in a five bedroom bungalow with my sister and her family. That is when I first developed taste for big houses. I liked the idea of walking for thirty seconds to reach the bathroom. The bungalow bug bit me hard in the 90's and has ever since been growing inside me. The bug has quadrupled over years and now in the US I keep telling my husband about how much I love big homes and that I dream to buy one someday .
There was a time in 2007 where my husband and I had almost decided to buy a home.We had made intelligent (at least that is what we thought) assumptions about the market and houses. We totally got into the mode of buying a big home or bungalow as I call them and started the process of looking for homes through a website which gave information about houses, area and their prices. The deal was I would list down all the areas and houses which fell into our lousy budget of peanuts and the next weekend my husband and I would visit them. One time we drove fifty miles only to turn back in the middle of the way because of the huge back up on the freeway. I remember saying,"I do not think this will work for us. I want a house not a vacation rental." We were new to California from Texas. In Texas driving to do grocery is a journey in its own way. The only difference is traffic. It is not just as crowded as California is. When we drove those fifty miles on a weekend we realized there was too much traffic. Think about driving during peak hours. We probably might never make it to the destination on time.
That first encounter woke us up a little but not altogether. We then decided to try closer areas and ended up visiting a house in south San jose. An area I would never ever visit again. The houses were more like Ghettos in Chicago. I was so shaken by that experience that I said," Chethan I think we are doing a big mistake and we should do this through an agent."
Next we visited an agent who asked us whether we had gotten a pre-approval from the bank for a loan. Finding that amusing I decided to go to the nearest bank where I met this banker who convinced me that we could get loans for 'zero' down payment.He took a long time to explain what fixed interest or variable rate of return was and so on. I shook my head and applied for a pre-approval of loan for an amount that even I was ashamed to quote. But then I was naive and arrogant at the same time. You know I over rode the feeling that because I was young I was invincible and that knowing to count meant that I was good at math. Of course I knew the feeling was not right but I anyways chose to believe it just for the heck of it.
The next time we met the agent we proudly listed our accomplishments. The agent looked at us and said," So how much are you paying down?" At this question my husband and I went blank. We thought we could buy a home for 'zero' down payment. Where was this agent from? Mars? Did he not know that? Then his question made me angry. But today I am glad that we met such a caring agent. When the agent saw us looking at each other he instantly knew we were amateurs and that were in real need of guidance. As a part of a workshop he explained that getting a pre-approval involved dipping credit score which was an essential in getting home loans. When we heard that we were both worried but glad that now we knew what mistakes not to do. As they say its all about the learning curve. The agent then took us through various areas and explained that houses in bay area were determined by the school districts they belonged to. Good school district meant good price for the house and zero spending on kids education. Whereas not so good school district meant spending around $3000 for four hours every week at a private school for a three year old kid. And the fees increased as the kid grew.
So the first lesson we learnt was to never go for pre-approvals without having money ready for down payment. My uncle whom I later consulted said not to go for zero down payment ever or adjustable mortgage since refinancing could be expensive and the rates could fluctuate to any level.
The next one was to know how to tap areas with good school district or tap good areas themselves with smaller houses. The agent had suggested this plan that young couples could always follow. As a young couple, the agent explained, that we did not have to worry about buying big house at the very beginning. The strategy, he said, was to first buy a small home so that we can rent it when we wanted to transit to a bigger home or at least sell it profitably in order to transit to a bigger home.
Third lesson we learnt was to find a good agent like the one we had and never just buy a home on our own. There are so many things that the agents know and we do not. For example there was this beautiful house in Fremont which apparently as it so happens was built on some graveyard. Had the agent not told us that we would have had been in great trouble. Since not every one feels comfortable living and walking on people's dead body. It's like making the expression,"Over my dead body" true.
After this eye opening experience Chethan and I decided to hold on our horses. It is not that we did not know what we were told. It is just that we never thought about all these things. Our only focus was home. We wanted to buy a home. Period. We had to learn from the Japanese swordsman Miamoto to not only concentrate on the point of the enemy's sword but also on other sides since the attack always comes from the less obvious place. Well better late than never.We took it in the right spirit and decided to carry on with our lives and work our way towards buying the home we both so very much want. Meanwhile I got busy with school and Chethan got busy with work.
Today when we visit people's home we mentally appraise the value and discuss about the pros and cons. Getting everything such as good school district, beautiful house and wonderful neighbors is a gift bestowed upon a very few. What we as individuals can do is try. Try our best to not make the choice of our first home a disaster. That is the reason when I meet people who are house hunting I suggest they go to a good real estate agent. These are people who if good can help and save you from so much trouble and the unknown. At least our real estate agent did help us and for that we are ever indebted to him. And for the ones who have already bought a home and feel that they probably made the wrong decision I say,"No worries. What makes a home invaluable is not the area or the school district. It's the moment you spend with your family, the memories you make and the laughs and cries you share with your loved ones." Just live in that home and enjoy every single minute of it.
Most of the time we as individuals think we know everything but sometimes knowing everything but missing pieces can prove financially fatal. What is important is not brooding over the past. Key is to learn from the curve and make prudent choices in future and that is what Chethan and I did. For now we have other agendas to think about and home is not our main plan but it is definitely there on the list. As we move up the list I am sure we will one day own a den that we will proudly call,"Home Sweet Home."
All the best! :)
ReplyDelete