Are You Buying A Home In Nairobi, Kenya?

  • by Inyene
  • 3 years ago
  • Blog
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Navigating the real estate market in Kenya can be difficult and may get even more complicated when looking to buy a home in the large and beautiful capital city, Nairobi. Buying a home in Kenya as a citizen or a foreigner is an exciting venture that can quickly become a nightmare if you ignore the proper steps and procedures.  With the busy city of Nairobi, there is already an existing housing problem, so taking the vital steps will go a long way in helping you secure your dream home. This blog details some crucial tips you can follow to ease your house buying process in Nairobi, Kenya.

  1. Get A Real Estate Agent

One of the biggest pitfalls you’ll experience in the house buying process will be trying to navigate the real estate market on your own. You should engage the services of a real estate agent with experience in the Nairobi real estate market. A real estate agent will charge about 3% to 6% of the purchase price of the house, and this can either be a cost directly transferred to the seller or you, the buyer. So, you should clarify who is being changed before the transaction begins. Sometimes, the charges are also split between the buyer and the seller. A professional agent will advise on the market value of the house, assist with negotiating, and be a guide for the entire house buying process. It is possible to go on the entire house buying process yourself, but that is usually an exception to the rule. A real estate agent will save you from costly housing mistakes.

  1. Draw Out Your Housing Budget

This will narrow down the house-hunting process, as you will only be viewing houses that fall within your financial budget. Planning a budget before you begin the house search in Nairobi will let you know what to expect in the sense of areas of the city you want to live in and the type of houses you should have as prospects.  Having a budget for your house is just a clear picture of what you can afford at that point, and this will help you know the options open to you for financing the purchase of your house in Nairobi, Kenya. The options for financing a house purchase are the same as most other countries; mortgage or cash. Carefully consider your finances in terms of living expenses and others to know the best option to finance the purchase of your house.

  1. Consider Market Fluctuations

Waiting for the perfect time to buy a house can be a safe bet but can also be shooting yourself in the leg. Once you have your finances in order and you have found a house that best suits your needs, it is best to make a purchasing decision, if not, other buyers might put in an offer before you do. Paying attention to market fluctuations is very important. However, if you only focus on short-term fluctuations, it could never look like a great time to purchase a house, and you might eventually lose out.

  1. Take Cognizance Of Hidden Costs

Apart from the down payment on the house, which is usually 20% – 25% of the total cost of the house, there are still several charges that are not added to the total cost but are still mandatory to have a complete legal purchase of your home. Some of these fees include:

  • Stamp duty: This is a 2% to 4% fee of the total cost of the housing property paid to the Ministry of Land in Kenya through the Kenya Revenue Authority. The percentage charged depends on the region in Kenya. Although Nairobi has the highest percentage of stamp duty at 4%, there are still some districts within the city that are charged lower than the overhead fee based on the level of urbanization.
  • Legal fees: This fee varies depending on the lawyer or legal agency that handles the house buying process for you. Ideally, it costs about 1% -2% of the purchasing price.
  • Real estate fees: This may not be charged to you, but it is crucial to note and plan for it. It is usually 3% – 6% of the purchasing price.
  • Mortgage: The purchase of a house is usually a huge investment and a heavy financial burden, and most people choose a mortgage option to finance this investment. So, when planning for the purchase of a home, you should consider the value of the house in terms of the monthly mortgage fees you’ll be paying monthly. The interest charged for a mortgage varies depending on the bank. It is usually 12% -14% of the mortgage value, 1% as loan processing fees, and 0.5% as valuation fees.
  • Home Insurance: Home insurance is now a requirement for most governments, including in Nairobi, Kenya. The amount paid for home insurance is a minimum of Kshs 5,000 per annum but differs depending on the insurance provider, size of the home, type of the home, etc.
  • Miscellaneous: These miscellaneous costs include additional costs like home inspection costs before purchase, moving costs, repairs of your new home, if necessary, maintenance, and utility fees.

Buying a home in Nairobi is a big decision and should not be rushed. It is vital to draw a budget before you start the process as it will help save a lot of time since you can streamline the house-hunting to only those that fall within your budget. Remember to be patient and not show desperation when searching for a home, as shady agents will play on that desperation to cheat you. Remember to inspect the house before the purchase, and never downplay any flaws you might notice. Good luck on your Nairobi house purchase journey.

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