Image Courtesy: Rui Ornelas
Only Q1 done and the year 2010 has already attained a status of significance in my life. Last month, my family (Me, my wife and my little angel) moved into our ‘own’ apartment – lock, stock and barrel! From where I come from, it is quite an achievement indeed. And still, for many it is a distant dream that takes a lifetime to achieve. My tryst with the real estate industry started early last year and has left me a lot wiser, than when I started off. Here’s my story…..
Early last year 2009 (somewhere in April), as all naturally naive people, my wife and I decided one day, “OK, lets buy an apartment!” and began our arduous journey with that *know it all* confidence. The modus-operandi? Ads in the paper, internet classified postings, word of mouth enquiries to friends, etc. etc. Well, the usual. We shortlisted a few apartments; liked some; really liked some and pooh-poohed a few others. With absolutely no clue about what we really wanted, one day, the criteria was a “pool and gym” and the next day suddenly children’s play area took pride of place on our list of priorities for shortlisting an apartment. Quite a confusing, but exciting phase nevertheless. We felt so confident of ourselves in our knowledge of how this industry works.
After going through a couple of apartments and eventually freezing our requirement list, we came across a very nice apartment complex, situated on the (now old) Airport Road, behind the HAL Helicopter Division, in Bangalore. It was a re-sale apartment and had a quirky clause in it – but more on that a bit later. The best thing was that we liked it ‘instantly’. In fact, we liked it so much that we made a ‘spot’ decision to stretch our budget (BIG MISTAKE – Never Ever Do This. Always Freeze Your budget first. Of course be flexible with about 2-5% just in case you stumble upon an irresistible deal). We did buy some time for ourselves, so that we could discuss it out and make up our minds, because in spite of our excitement, we had the good sense that we need to discuss things out before making such a big decision.
The Deal – The deal on offer was indeed irresistible (on hindsight, they all are, to the uninformed). Here was a house that was located in a quiet cozy corner of the city and it was only 15 minutes away from work (That was indeed the clincher). And it was not registered by the original buyer. The plan was that whoever bought the house, can get it registered as a first party – very tempting indeed. And we were in. Now the catch here was that the builder had to agree to this arrangement and issue a ‘No Objection’ certificate. It is needed because builder has to assist the buyer with the registration and in this specific scenario, the builder was actually losing one potential customer, at the hands of an existing one. So, it was all the more important to have the consent of the builder in writing. Armed with this confidence, we merrily entered into a Memorandum of Understanding, without taking any legal opinion. (Mistake 2! Never Ever sign *ANY* legal document, without consulting your lawyer OR better still without him/her by your side).
The pitfall – When there is big money involved, someone surely gets greedy! I don’t know who, but one of the two (i.e. the original buyer or the builder) thought of extracting some more money out of us. Exactly one day before the property needed to be registered, the builder called me and said that I need to shell out an extra Rs.4,30,000.00 for “Miscellaneous”. Quite a well planned move, I’d say because by this time, my wife and I had already paid the seller an advance consisting of, more or less, our entire career savings to date – it was big money. And we had no leverage left. (Mistake 3! Never put yourself in a situation where you have absolutely no leverage on the situation.)
The Fallout – It was quite apparent, by the timing of the turn of these events, that the intention was to extract some “easy money” from us. Unfortunately, us software folks are thought of as people who somehow get paid, just for showing up at office. So people think it is “OK” to take us for a ride – very sad. So this new demand was made but I promptly refused to pay. It was not mentioned in our original MOU so it must not come up now. That was our stand and we were very clear. Once we took this stance, the real ordeal began. Officially, our money (the big advance) was now stuck – we had no house and we had no money either. Now our only goal was to somehow get our “hard earned” money back. And it was quite clear that its going to be an arduous task.
The Result – Well, what else? The deal was called off and this time we engaged a lawyer for getting direction and advice on how to proceed with the matter. Although much too late in the day, yet it was one very wise thing that we did. Otherwise this was a such an emotionally charged situation that we could have easily done something really stupid and then repented it for the rest of our lives. The time it took for us to recover our money was one filled with immense mental agony and frustration. For those frightening four months, we had almost forgotten how to even smile. But then as luck would have it, somewhere in the month of August, the buyer agreed to return our advance (we are extremely fortunate that we got back the ‘entire’ sum). and that was, I can say, the closure to this nightmare. Thanks to the legal help that we got, we were able to settle it in an amicable and peaceful fashion.
Suggestion: Always try to resolve a situation peacefully first. Never rush for the jugular!
After August 2009, we managed to put this episode behind us and re-started our house search with renewed enthusiasm, but this time, we were much more informed and definitely wiser than our previous apartment-search episode. And this time we ensured we had legal help at hand, right from the word GO! As luck would have it, we found a nice little apartment in Electronic City, Bangalore. We moved in and are gradually and happily adjusting to the new surroundings :).
I’d say, we were simply very fortunate to come out of this situation un-scathed, but there are many others who aren’t so lucky. And I hope this post serves as a guide to them.
Do Share Your fantastic thoughts with me, by leaving a comment.
Coming up …. Part 2: What to lookout for when buying an apartment.