The Essential Guide for First-Time Home Buyers in Kenya
The home-buying process includes a checklist of requirements, which helps you narrow down your needs and priorities. Start by defining your requirements to determine whether you’re buying a home to live in or as an investment and what features you need or want.
The research done before buying a home makes the home-buying process less daunting for first-time home buyers. During your real estate market study, you will come across the key steps in buying a home in Kenya, including budgeting, searching for properties, and securing financing.
For a first-time buyer, you might think that the costs of buying a house are only down payments, but the truth is that additional costs are pretty expensive. The earlier you budget for costs like stamp duty, legal fees, valuation fees, moving expenses, and future maintenance costs, the better. This article will reveal the most significant steps in buying a home in Kenya.
Buying your first home is like starting a new fitness routine; except this time, your financial health needs the workout instead. It's Time to breathe deeply and stretch those budgets! Your first assessment includes calculating your monthly expenses to determine how much you can set aside for a down payment and monthly mortgage payments.
Check your credit score using credit score calculators like Credit Info. A good credit score can help you qualify for better mortgage rates. Start saving money early and aim to save at least 5% of the purchase price for a down payment.
Research mortgage loans and compare the lenders' interest rates, repayment terms, and eligibility requirements to find the best option. Consider your debt-to-income ratio, which can be calculated online or by a professional mortgage broker or financial advisor. Ensure you can afford the mortgage payments and other expenses.
If you thought research homework ended with school, wait until you start your home ownership journey; you'll be back to researching square footage like it’s a science fair project. Deep research about the property market, including current trends, prices, and location preferences, is essential.
The good thing is that there is always a smart kid to do the work assignment for you at a fee. In this case, it's a real estate agent. Work with an agent with local market knowledge and experience working with first-time homebuyers.
The real estate agent will help you navigate the location and accessibility, consider the neighborhood, and whether it meets your needs and preferences. Property value appreciation is essential; a property valuer helps estimate the potential for long-term growth in property value.
Before working with real estate agents, it's important to understand the agent’s role. The agent can help you navigate home-buying, finding properties, and negotiating prices.
Find a reputable real estate agent knowledgeable about the local market and with experience working with first-time homebuyers. Ask around about their experience to ensure the agent has experience working with first-time homebuyers and has knowledge of the local market.
It is essential to check the agents' credentials. In Kenya, real estate agents are licensed by the Estate Agents Real Estate Board. Ensure the agent is licensed and has a good reputation. Consider the agent's responsive and communicative communication style, which helps make the process seamless and aligned.
Write down the specific location and size in your home-buying journey checklist. The checklist allows easier navigation and research for properties, especially on an online listing platform.
To find properties that meet your criteria, ensure you visit them in person . Hiring a property inspector helps do the home inspection carefully and can identify any damages or issues.
In Kenya, hiring a property valuer is necessary not only for the mortgage lender but also for the government. The government valuer conducts valuation to determine the stamp duty fees.
It's important to consider your lifestyle before making a home purchase. Try asking yourself questions like, "Does this property fit my lifestyle?" A real estate agent can provide valuable insights if you give them all the haves and have-nots for your dream home in Kenya.
When you thought your dream home was within reach, along comes the legal fees, politely reminding you that paperwork is never free. As a first-time homebuyer, you need to research the legal aspects thoroughly. Hiring a qualified lawyer who has experience with property law is important as they guide you through the process.
Remember to budget for the legal fees. Paperwork feels more expensive than the down payment itself. This happens because of additional costs like stamp duty, legal fees, and the added conveyancing process fee.
The conveyancing process involves transferring property ownership from the seller to the buyer. It can take weeks to months. Don't be in a hurry to make the purchase, as most times, hurrying makes you miss good deals.
Before making an offer, ensure all necessary approvals are in place. A lawyer can help you navigate the regulatory requirements.
Before making an offer, ensure you have a good understanding of the market value. Understanding the market value of the property helps you make informed decisions. Different neighborhoods vary in price and value due to location or the number of bedrooms. For example, a three-bedroom in your preferred location might be a bit over your budget, and you might opt for an alternative that is at a lower price but still a good deal.
Learning how to negotiate is a skill you'll need to employ, especially when you want to buy land. Consider making a lower offer than the actual house price. Negotiating the price and terms of the sale helps you get the best deal for your new home. An agent can also negotiate on your behalf.
Always be prepared to walk away if the terms aren’t favorable. Acting desperate makes you get a bad deal that you might regret later.
When you finally find the property that best fits you, write an offer letter to the seller. The offer letter is a legally binding document that contains the terms of the sale. Once the seller accepts the sales agreement, you are a step closer to closing the deal.
There are various financing options in Kenya. The mortgage options have competitive interest rates, repayment terms, and eligibility requirements. Do your due diligence on the research or find a good mortgage broker to find the best option.
The mortgage broker will provide you with a step-by-step guide to help you understand the mortgage process. The process involves applying for a loan and meeting the lender’s requirements. One of the details they will require is information about your finances, such as your credit score. A good credit score can help you qualify for better mortgage rates.
When it comes to buying a home, sticking to your budget is like walking a tightrope, but with enough effort and a few adjustments, you’ll make it work. Ask for a loan estimate from the mortgage provider; this helps you budget for monthly payments and other expenses.
A mortgage calculator on online platforms like Zillow helps you estimate the payments. Consider seeking professional advice from a financial advisor to help you navigate the mortgage process. Start saving money for the downpayment, as most times, the mortgage loan does not cover all the expenses.
Ensure all the required documents are in place before closing the deal. The lawyer can help you navigate the regulatory requirements, freeing them from legal disarray.
The closing process involves transferring property ownership from the seller to the buyer. A real estate agent can help you navigate the closing process and finally close the deal.
It's time to celebrate your achievement; congratulations on becoming a homeowner! Now that the paperwork’s done your wallet can finally catch its breath—well, almost.
As you wrap up your first-time home-buying journey, it’s important to keep a few things in mind. First, don’t forget about property maintenance costs; your dream home won’t stay dreamy without a bit of upkeep. Repairs and renovations can sneak up on you, so it’s always a good idea to start saving money early.
Also, think about your long-term goals. Will this three-bedroom still suit your needs in five or ten years? Whether you're planning to expand your family or finally build that home office, consider how this property will continue to fit into your life.
Keep a close eye on the property market as well. Home value appreciation can be a game-changer, so buy in an area with growth potential. Who knows, your first home could turn into a significant investment!
This essential guide will walk you through the home-buying process in Kenya as a first-time home buyer, from finding a reputable real estate agent to navigating legal fees and understanding the real estate market. With the help of a real estate agent, you can make a significant investment in a property with the potential for property value appreciation.
Ready to take the next step? We’re here to guide you through every part of your home-buying journey. So, why wait? Reach out to us today, and let’s find your dream home together!
Start by assessing your budget, getting pre-approved for a mortgage, and researching neighborhoods.
Aim for 10-20% of the home’s price, though some options may require less.
Expect closing costs, taxes, insurance, and maintenance expenses.
Consider proximity to work, schools, amenities, and safety.
Grace, M. (n.d.). What is a mortgage broker?. Business Insider. https://www.businessinsider.com/personal-finance/mortgages/mortgage-broker?r=US&IR=T
Ndege, C. (2024, August 27). Real estate financing options available to Kenyan home buyers. Business Daily. https://www.businessdailyafrica.com/bd/opinion-analysis/columnists/real-estate-financing-options-available-to-kenyan-home-buyers-4740826
Real estate agent roles and duties. (n.d.-e). https://www.indeed.com/hire/c/info/real-estate-agent-roles-and-duties
Estate agency. Estate Agency – Institution of Surveyors of Kenya. (n.d.). https://isk.or.ke/estate-agents-chapter/
