It is important to know the process of buying a house in Kenya if you have plans of becoming a homeowner.
Owning a house is a dream for many of us. However, it is also a process that makes buyers vulnerable to fraudsters and conmen. This makes it important to understand the process of buying a house in Kenya.
The process involves a lot of parties and there are also legal requirements to fulfill before getting the ownership.
Owning a house comes with numerous benefits for the buyer. Let us look at some of the main ones.
Advantages of owning a home
- It gives you exclusive rights over the house
Homeownership comes with additional rights that are different from when you are renting one. Some of these include the ability to make any necessary changes without having to request permission from anyone.
It also reduces the amount of rent or lease costs that arise if the house is not yours.
- It gives you a chance to sublet the extra rooms
Owning a house allows you to sublet some rooms that you do not use. Renting a house puts restrictions on you since some landlords have a strict policy against subletting in the lease agreement.
However, by owning a house, you can sublet the extra space and earn some passive income on the side.
- An investment
House ownership is an investment in general. Generally, a house is among the safest investments because it is an appreciating asset. Depending on your ownership motive, you can buy a house and sell it at a profit after appreciation.
Before you can even buy a house, you must undergo several necessary steps. Some of these include house hunting, payment, and registration process. On average, it takes about 3 months to finalize this process.
It could even take longer if you are using financing such as a mortgage to buy the house. As an example, buying a house through the Kenyan government’s affordable housing program could even take more time as the houses are not even complete.
Now that you understand some benefits of owning a house, it is time to look at the process of buying a house in Kenya
The Process of buying a house in Kenya
Below are the steps to buying a house in Kenya. It all starts with house hunting.
1. Identify the type of house you wish to buy
House hunting is a key process that ensures you find a house of your choice. Successful house hunting requires a plan that should start with identifying the features of the house you are looking for.
Some of the most important features to consider are the location of the house and the average price. Other critical details include the number of bedrooms you wish to have, the number of bathrooms, the size of the house, and the roof type.
This makes your house hunting journey easier and faster.
2. Plan your finances
Financing is a critical factor when you plan to buy a house. The availability of finances helps guide the type of house to buy.
You should ensure the finances are ready when you start house hunting. This helps to prevent delay once you identify the right house. A factor that could see another buyer taking it up.
Even though you will not all the funds ready, you should at least have some deposit. Normally, the deposit averages at least 10%. The deposit is an indicator of seriousness on the part of the buyer.
However, it comes with a timeline through which you risk losing it for failure to clear the balance as per the sale agreement.
Some of the ways through which you can buy a house in cash or by taking a mortgage. The mortgage takes longer to process hence the need to engage with your financial institutions earlier to understand the process and timelines.
3. Find a registered real estate agent
Real estate agents deal with selling and buying real estate properties. They help house buyers source available houses as per their requirements.
The right real estate agent should be reputable and legally registered. Dealing with a reputable and registered agent minimizes the chances of getting falling to fraudsters
To verify the agent’s validity, you can seek their registration details such as the agent’s ID and registration certificate to ascertain their identity. For additional safety purposes, you can ask for a copy of their ID to keep with you in case of anything.
Check for the validity of the registration certificate by searching it up with the Estate Agents Registration Board.
The advantage of using an agent is that they have more experience and are well-staffed to hunt for a house. Sellers also list their houses with them so your dream house could just be sitting on their database.
It is also important to note that agents provide their services at a fee. You need to factor this when budgeting as it increases the total purchase price.
4. Identify the seller
Once you identify the house to buy either by yourself or through the help of the agent, you should make it your priority to identify the seller.
However, the seller could be willing to make the transaction individually or could do it through an agent or a lawyer.
The best scenario is when you can engage the seller directly as it minimizes the third-party costs and also reduces the chances of fraud.
Similar to the real estate agent, you should also conduct due diligence to ensure you verify the seller’s identity before getting into any transaction.
5. Get a professional real estate inspector
A real estate inspector specializes in analyzing and reviewing the status of the house. This is a key step as it helps to ensure the house is in a good structural position.
It is important to seek the services of a real estate inspector as their advice could save you a lot of money in the long run. If the seller had already consulted the services of a real estate inspector, you can ask for the property review report that they received.
However, it is always best to hire a different inspector from the one used by the seller.
You should also ensure to include in the agreement who bears the burden of repairs in case the inspector identifies some gaps.
Once the contract is signed, you have the right to make a house inspection within 24 hours before the closing date of the contract.
6. Engage a legal expert
After identifying the type of house you need and engaging the seller, you can now engage a legal expert such as a lawyer to initiate the buying process.
The lawyer will help you in drafting an Offer to Purchase. It is also known as an Agreement of Purchase and Sale.
It is a legal document with the terms and conditions for the house purchase transaction. The document binds both the buyer and the seller to the terms agreed to facilitate buying of the house.
Some of the key details in the sale agreement include;
- Name of buyer
- Name of seller
- Property address
- Buyer’s price offer
- Deposit amount
- The offer’s expiry date
- A land survey request for the involved property
However, in case there is a dispute in any of the terms, there are always alternatives to solve them including;
- A counteroffer – This happens when the seller wishes to propose a different offer to you. It could be in terms of a different selling price or any other amended sections of your contract.
Once a counter offer is made, you can either;
- Accept the counteroffer
- Make another offer to the seller, offering a higher amount compared to your initial offer, but lower compared to their counter offer.
- Reject the offer if you do not accept the terms and look for another property.
- Accept the offer – In this case, you can proceed with the sale.
7. Closing the title
This is the final step of buying a house in Kenya. At this point, you should exercise your right to inspect the house one last time within 24 hours before signing the deed.
Once everything is finalized, the buyer and seller will sign the deed before the notary. It is advised to use this method, compared to signing the contract privately between you and the seller.
The process of buying a house in Kenya requires caution and adequate planning. This not only helps minimize the risks but also ensures you get the house of your choice.
Becoming a house owner comes with freedom and benefits that are different if you are renting. In case of any challenges in the process, you should engage the real estate agents who are numerous in the country.
You should also ensure there is an agreement in place just in case there are any disputes that may arise in the future.