How the Real Estate Works in Kenya: A Guide for Buyers and Sellers

Are you interested in buying or selling a property in Kenya? If so, you might be wondering how the real estate market works in this country. In this blog post, we will explain the basics of the real estate process, the factors that affect the property prices, and the tips and resources that can help you make a smart decision.

What is Real Estate?

Real estate is the term used to describe land and any permanent structures on it, such as buildings, fences, or wells. Real estate can be divided into two main categories: residential and commercial. Residential real estate includes houses, apartments, and other dwellings that people live in. Commercial real estate includes offices, shops, hotels, and other buildings that are used for business purposes.

How Does the Real Estate Process Work in Kenya?

The real estate process in Kenya involves several steps, depending on whether you are buying or selling a property. Here is a general overview of the process:

Buying a Property

• Find a Realtor: A Realtor is a licensed professional who can help you find and negotiate the best deal for your property. A Realtor can also advise you on the legal and financial aspects of the transaction, and connect you with other professionals, such as lawyers, surveyors, and valuers. To find a reputable Realtor in Kenya, you can use online platforms, such as Realtor Kenya, Kenya Property Centre, or Property24.Just for recommendation Fortcom realtor is a reputable real estate company with  25 years experience.
• Search for a Property: Once you have a Realtor, you can start searching for a property that meets your needs and budget. You can use online tools, such as Zurple, to find properties that match your criteria and keywords, such as “homes for sale in Nairobi” or “luxury homes in Mombasa”. You can also visit the properties in person and inspect their condition, location, and amenities.
• Make an Offer: When you find a property that you like, you can make an offer to the seller. The offer should include the price, the terms, and the conditions of the sale. The seller can either accept, reject, or counter your offer. If the seller accepts your offer, you can proceed to the next step. If the seller rejects or counters your offer, you can either negotiate or walk away.
• Apply for a Mortgage: If you need financing to buy the property, you can apply for a mortgage from a bank or a lending institution. A mortgage is a loan that uses the property as collateral. You will need to provide proof of income, credit history, and other documents to qualify for a mortgage. You will also need to pay a deposit, which is usually 10% to 20% of the property price.
• Conduct Due Diligence: Before you finalize the sale, you need to conduct due diligence, which is the process of verifying the legal and physical status of the property. You will need to hire a lawyer, a surveyor, and a valuer to help you with this process. The lawyer will check the title deed, the ownership history, and the encumbrances of the property. The surveyor will measure the boundaries and the size of the property. The valuer will estimate the market value and the rental income of the property.
• Sign the Contract: Once you are satisfied with the due diligence, you can sign the contract of sale, which is a legal document that outlines the details and the obligations of the buyer and the seller. The contract will also specify the closing date, which is the date when the ownership of the property is transferred from the seller to the buyer.
• Pay the Stamp Duty and the Transfer Fees: After signing the contract, you will need to pay the stamp duty and the transfer fees, which are taxes and charges that are imposed by the government on the sale of the property. The stamp duty is usually 4% of the property value for urban areas and 2% for rural areas. The transfer fees are usually 2% of the property value. You will also need to register the property with the Ministry of Lands and the relevant county authorities.
• Move In: Congratulations, you are now the owner of the property! You can now move in and enjoy your new home.

Selling a Property

• Find a Realtor: Similar to buying a property, you will need to find a Realtor like Fortcom Realtor who can help you sell your property. A Realtor can help you market your property, find potential buyers, and negotiate the best price. A Realtor can also help you with the legal and financial aspects of the sale. To find a reliable Realtor in Kenya, you can use the same online platforms that we mentioned above.
• Prepare Your Property: Before you list your property for sale, you need to prepare it for the buyers. You need to make sure that your property is clean, tidy, and in good condition. You can also make some improvements, such as painting, landscaping, or repairing, to increase the appeal and the value of your property. You can also hire a professional photographer to take high-quality photos of your property.
• Price Your Property: One of the most important factors that affect the sale of your property is the price. You need to price your property realistically, based on the current market conditions, the demand and supply, and the features and location of your property. You can use online tools, such as Zillow, to find out the estimated value of your property. You can also hire a valuer to give you a more accurate appraisal of your property.
• List Your Property: Once you have prepared and priced your property, you can list it for sale on various platforms, such as online portals, social media, newspapers, or billboards. You can also use keywords, such as “property for sale in Kenya” or “best neighborhoods in Kenya”, to attract more buyers. You can also hold open houses or private showings to showcase your property to the buyers.
• Receive and Negotiate Offers: When you receive an offer from a buyer, you can either accept, reject, or counter it. The offer should include the price, the terms, and the conditions of the sale. You can negotiate with the buyer until you reach a mutual agreement. If you accept the offer, you can proceed to the next step. If you reject or counter the offer, you can either wait for another offer or lower your price.
• Conduct Due Diligence: Similar to buying a property, you need to conduct due diligence, which is the process of verifying the legal and physical status of the property. You will need to provide the buyer with the title deed, the ownership history, and the encumbrances of the property. You will also need to allow the buyer to hire a surveyor and a valuer to inspect and evaluate the property.
• Sign the Contract: Once you and the buyer are satisfied with the due diligence, you can sign the contract of sale, which is a legal document that outlines the details and the obligations of the buyer and the seller. The contract will also specify the closing date, which is the date when the ownership of the property is transferred from the seller to the buyer.
• Receive the Payment and the Transfer Fees: After signing the contract, you will receive the payment from the buyer, which is usually the balance of the property price minus the deposit. You will also receive the transfer fees, which are taxes and charges that are imposed by the government on the sale of the property. The transfer fees are usually 2% of the property value. You will also need to transfer the property with the Ministry of Lands and the relevant county authorities.
• Move Out: Congratulations, you have successfully sold your property! You can now move out and hand over the keys to the buyer.

What Factors Affect the Property Prices in Kenya?

The property prices in Kenya are influenced by various factors, such as:

• Location: The location of the property is one of the most important factors that affect the property prices. Properties that are located in urban areas, near amenities, or with scenic views tend to have higher prices than properties that are located in rural areas, far from amenities, or with poor views.
• Size: The size of the property is another factor that affects the property prices. Properties that have larger land areas, floor areas, or rooms tend to have higher prices than properties that have smaller land areas, floor areas, or rooms.
• Quality: The quality of the property is another factor that affects the property prices. Properties that have better construction, design, or finishes tend to have higher prices than properties that have poor construction, design, or finishes.
• Demand and Supply: The demand and supply of the property is another factor that affects the property prices. Properties that have higher demand and lower supply tend to have higher prices than properties that have lower demand and higher supply.
• Economy: The economy of the country is another factor that affects the property prices. Properties that are located in areas that have strong economic growth, stability, or opportunities tend to have higher prices than properties that are located in areas that have weak economic growth, instability, or challenges.

What Tips and Resources Can Help You Make a Smart Decision?

Whether you are buying or selling a property in Kenya, you need to make a smart decision that will benefit you in the long run. Here are some tips and resources that can help you:

• Do Your Research: Before you buy or sell a property, you need to do your research and gather as much information as possible about the property, the market, and the process. You can use online tools, such as [PropertyPro] or reach out Fortcom Realtors 0722 281 376 or visit their website www.fortcomrealtors.com