Buying a house in Kenya might one of the most important decisions you’ll make in your life and it can also be a complex and overwhelming process. Our goal is to make it easy for you by providing you with the information you need to make a well-informed decision and avoid common mistakes.

8 Steps to buying a House in Kenya

The home buying process can seem overwhelming, but with a little bit of planning and preparation, you can make the process a lot smoother. Here is a step-by-step guide to the home buying process:

1. Determine your budget
2. Start looking for homes
3. Make an offer
4. Negotiate
5. Get a home inspection
6. Get a Conveyancer
7. Make a Payment Decision
8. Close on the home

1. Determine your budget

The first step in the home buying process is determining how much you can afford to spend on a home. Work with a lender to get pre-approved for a mortgage, which will give you a better idea of what you can afford.

When buying a house, it’s important to remember that there are additional costs beyond the down payment.

These include:

1. Title Search, which is a fee paid to verify that the seller actually owns the property
2. Stamp Duty, a tax paid to the Ministry of Lands, which varies based on the location of the property
3. Legal Fees, which can range from 1-2% of the house price, with a minimum fee of Kshs 35,000
4. Mortgage Fees, including interest rates of 12-14% and additional fees for loan processing and property valuation
5. Home Insurance, which has a minimum cost of Kshs 5,000 per year
6. Additional Costs such as home inspections, maintenance and repairs, moving expenses, and utility set-up fees.

2. Start looking for homes

A real estate agent can help you navigate the home buying process and find homes that meet your budget and needs. Choose an agent that has experience and a good track record of helping buyers find the right home

When searching for a new home, it can be overwhelming to navigate the many options available. However, with the convenience of online property search, you can easily filter properties by price, size, and location to find the perfect match for your needs.

Once you have a budget and an agent, it’s time to start looking for homes. Work with your agent to create a list of potential homes and schedule tours of the properties you are interested in.

It is important to keep in mind that house prices can vary greatly depending on location. According to the 2019 house price index, a growing number of individuals are opting to purchase townhouses outside of Nairobi due to the cost of living being more affordable in these areas. By carefully considering location, you can make an informed decision and ultimately find a property that fits your budget and lifestyle.

3. Make an offer

When you find a home you love, it’s time to make an offer. Your agent will work with you to determine a competitive offer and present it to the seller.

4. Negotiate

The seller may counter your offer, which means it’s time to negotiate. Work with your agent to come to an agreement that works for both parties.

5. Get a home inspection

Once your offer is accepted, it’s important to get a home inspection to make sure there are no major issues with the property. A home inspector will look for things like structural issues, plumbing problems, and electrical issues.

6. Hire a conveyancer

When buying a house, it is of the utmost importance to hire a conveyancer – a licensed lawyer who specializes in real estate law. Their expertise is invaluable in several areas:

Researching the property and performing background checks, representing your interests when working with a real estate agent, drafting and reviewing the contract of sale, providing legal advice on the sale of the property, and handling payments associated with the purchase of the house.

Property law can be complex and nuanced, but with the assistance of a legal expert, you can navigate the requirements and mitigate the risk of facing unnecessary legal issues. It’s crucial to have a professional by your side to ensure that all the legal aspects of the transaction are handled properly.

7. Make payment Decision

When it comes to buying a house, one option to consider is paying in cash. This can have its benefits, such as being in a better position to negotiate the price and potentially getting a discount, not having to pay interest, and being able to sell the property more quickly if needed.

However, it’s important to keep in mind that paying for a house in cash means tying up a significant amount of money and potentially limiting your ability to make other investments or handle unexpected expenses.

Another option is to get a mortgage. There are two main types of mortgage plans:Fixed-rate and adjustable-rate.

1. A fixed-rate mortgage means the interest rate on the loan will not change until the loan is paid off
2. An adjustable-rate mortgage (ARM) means the interest rate may fluctuate depending on market conditions. If you’re considering an ARM, it’s important to research how much your monthly payments would be if there is an interest rate cap and to consider how the rates are likely to change.

8. Close on the home

The final step in the home buying process is closing on the home. This is when you will sign the final documents and pay for the home. Documents you say? We mean An offer letter, a document that outlines the terms of a proposed purchase. It is a legally binding document that contains important information such as:

1. The amount you are willing to pay for the house
2. The down payment (usually around 20% of the value of the property)
3. Pre-approval information, the expiration date of the offer, and closing costs (fees paid to third parties to finalize the deal)
4. A list any conditions that the seller needs to agree to if they accept your offer.

When making an offer on a house, it is recommended to go 5% lower than the asking price. This gives you some flexibility in case the seller counters your offer. Once the seller agrees to the terms outlined in the offer letter, both parties will sign contracts to close the deal. Once the title has been transferred to you, the house is officially yours!

Common Mistakes to avoid when buying a house.

Buying and selling a home can be a complex and stressful process, especially in Kenya where
the real estate market is constantly evolving. It is important to be well-informed and avoid
common mistakes in order to ensure a smooth and successful transaction. Here are some
common mistakes to avoid when buying or selling a home in Kenya:

1. Not hiring a professional real estate agent

While it may be tempting to try to save money by going through the process on your own, a professional real estate agent can provide valuable guidance and assistance. They have the knowledge and experience to navigate the complex legal and financial aspects of the process and can help you avoid potential pitfalls.

2. Not getting a pre-purchase inspection

Before buying a home, it is important to get a thorough inspection to identify any potential issues or repairs that need to be made. This can save you a lot of money in the long run and ensure that you are not buying a home that requires significant repairs.

3. Not negotiating effectively

You might make a mistake of not negotiating effectively. It is important to be flexible and open to compromise in order to reach an agreement that is mutually beneficial.

4. Not understanding the legal process

The legal process of buying and selling a home in Kenya can be complex and confusing. It is important to fully understand your rights and obligations as a buyer, and to work with a professional lawyer to ensure that all necessary documents are in order and that the transaction is conducted legally.

5. Not being prepared for closing costs

Not being prepared for closing costs: Closing costs can be a significant expense when
buying or selling a home. It is important to be aware of these costs and budget
accordingly to avoid any unexpected expenses.

Conclusion

By following the steps, you can navigate the home buying process and find the perfect home for you. Remember to determine your budget, find a real estate agent, start looking for homes, make an offer, negotiate, get a home inspection, finalize your mortgage, and close on the home. With a little bit of planning and preparation, you can successfully buy a home.

By avoiding the common mistakes, you can increase your chances of a successful and stress-free home buying or selling experience in Kenya.