Chapter 3 Selection

Having thumbed through sheaves of newsprint, clicked through scores of cyber pages and listened to hours of (usually unsolicited ) advice from innumerable, apparently knowledgeable well-wishers, you are exhausted. Even worse, you may have managed to confuse yourself more than ever!

Buying your very first home can be rather daunting considering the commitment required. But you are not alone. There are millions of first time buyers who have stood in your shoes and taken the very same steps you are about to take. The path is a well-trodden one, so the chances of your getting lost along the way are rather slim. All you have to do is take one step at a time.

Before you go ahead, gather your thoughts. Now is the time to get down to specifics – work out a process of elimination based on your preferences (or those of your better half). This sounds easier than it is and is guaranteed to trigger a few meaty arguments with your spouse. However, eventually with your broker’s help you should be able to get a short list of prospects.

By now, you also have a fair idea of how much your prospective home is likely to cost, so before you actually do any more leg-work you must ask yourself, “How much do I want to spend?”

Sit down with your family members and figure out how much money you're willing to spend on the house. Most of us would need to supplement this with a loan. Calculate your income level and living expenses. Take into account future considerations, children, add-ons, amenities, fix-ups, rising income levels, promotions and so on. Also, budget something for contingencies.

After that, use the simple formula: income minus Lifestyle = potential Mortgage Payment. Most housing finance companies will help you calculate this. They have their own norms which help calculate your “repayment capacity”, depending on your income. Based on this, they will tell you how much they are ready to lend you. Some of their websites have calculators that allow you to make your own calculations. (See chapter 5, for all you need to know about housing loans). Once you know how much you could afford to pay a lender every month, you can add the loan amount to your budget.

Your home is certainly worth a sacrifice but do not mortgage your entire future.

One piece of advice – when you set your budget limits, reduce it by 15-20%. Typically, brokers will show you properties that are on the outer limits of your budget and the temptation to overshoot could become overwhelming. Also, remember that there will be many leakages from your kitty along the way… Hidden costs and unplanned expenses. You will also need to furnish the house. Typically minor repairs or a paint job may be required. Costs invariably tend to overshoot our estimates, so it is a good idea to work with a target price lower than your limit.

Once you’ve organized your thoughts, checked your bank balances and are clear about what you want and can afford, you are ready to start visiting your prospective homes to evaluate them in greater detail. Its now time to inspect, inspect and inspect.

Do not fall in love with the house. Never let the heart rule over your head. You may be encouraged to go down that path by a seller who says things like, “Oh, this house is meant for you,” It really suits you” and “I can tell this is the house for you. Don’t you just love it?” Sure you love it, but love can fade very fast if the rain drips into the living room during the monsoons!

Inspect! Inspect! Inspect! Go over the property with a fine toothcomb. Come back at a different time and look at it again. Often, the first time around we tend to miss little details. Examine every nook and cranny, every room and space. Take your time over this and don’t let anyone hustle you. Do not take anything for granted, inspect everything! Try the light switches, pull the flushes, open and shut all the windows and doors. Try the locks and taps. Leave the water mains on, and look for leaks. As they say, better safe than sorry!

Put on that thinking cap. Imagine the property as it might look when furnished. Think of where you might want to put your favourite painting or sofa. Do not be swayed by beautiful furniture and decorating in a sample flat. Typically, a vacant house will appear bigger than it is. It does not hurt to take measurements of your furniture before going on your first showings. Else you’ll find yourself needing to redo your furniture as well.

Harpreet and Manjit Dhillion were fed up. All the flats they could afford were pokey and lacking ventilation. They had spent weeks climbing staircases and clambering over the debris of construction sites. There was still one more house to see, and when they got there, they were once again disappointed. With a sigh, Harpreet wondered if they would ever be able to buy a house they liked. Suddenly the broker had a brainwave. He suggested that they knock down the wall between the living room and the pantry. Since it was not a load-bearing wall, it would not affect the structure. At the same time, it would make the living room much larger, allow sunlight to get in and improve the ventilation. Today, the Dhillions are happily settled and have implemented several more innovative home improvement ideas.

View several homes. See at least 5 to 10 properties. The more the merrier! Do not move too slowly but do not move on the first property you see. After perusing a home, write down on a sheet how many of your needs the house meets and to also decide if the neighbourhood is right for you. Start the elimination process. If you liked the second house better than the first, throw out the first sheet. When you find the right property, you will realize all the legwork was worth it.