Frequently Asked Questions

Select one of the frequently asked questions below to learn more about buying, selling, and renting real estate. Also, begin to think about important things to consider when diving into your real estate search.

Question about Buying a Home

Getting pre-approved for a mortgage is the first step of the home buying process. Getting a pre-approval letter from a lender get the ball rolling in the right direction.

Here’s why:

First, you need to know how much you can borrow. Knowing how much home you can afford narrows down online home searching to suitable properties, thus no time is wasted considering homes that are not within your budget. (Pre-approvals also help prevent disappointment caused by falling in love unaffordable homes.)

Second, the loan estimate from your lender will show how much money is required for the down payment and closing costs. You may need more time to save up money, liquidate other assets or seek mortgage gift funds from family. In any case, you will have a clear picture of what is financially required.

Finally, being pre-approved for a mortgage demonstrates that you are a serious buyer to both your real estate agent and the person selling their home.

Most real estate agents will require a pre-approval before showing homes – this is especially true at the higher end of the real estate market; sellers of luxury homes will only allow pre-screened (and verified) buyers to view their homes. This is meant to keep out scammers and protect the seller’s privacy. What’s more, by limiting who enters their home, sellers are given extra security from potential thieves trying to case the home (like identifying security systems, locating expensive artwork or other high-value personal property).

From start (searching online) to finish (closing escrow), buying a home takes about 10 to 12 weeks. Once a home is selected the offer is accepted, the average time to complete the escrow period on a home is 30 to 45 days (under normal market conditions). Though, well-prepared home buyers who pay cash have been known to purchase properties faster than that.

Market conditions are a major factor in how fast homes are sold. In hot markets with a lot of sales activity, buying a home may take a little longer than normal. That’s because several parties involved in the transaction get behind when business suddenly picks up.

For example, a spike in home sales increases the demand for property appraisals and home inspections, yet there will be no increase in the number of appraisers and inspectors available to do the work. Lender turn-around times for loan underwriting can also slow down. If each party involved in a deal takes a day or two longer to get their work done, the entire process gets extended.

Home shoppers pay little or no fees to an agent to buy a home. These questions are always asked even by second-time buyers.

Here’s why:

For most home sales, there are two real estate agents involved in the deal: one that represents the seller and another who represents the buyer.

Listing brokers represent sellers and charge a fee to represent them and market the property. Marketing may include advertising expenses such as radio spots, print ads, television and internet ads. The property will also be placed in the local multiple listing websites, where other agents in the area (and nationally) will be able to search and find the home for sale.

Agents who represent buyers (a.k.a. buyer’s agent) are compensated by the listing broker for bringing home buyers to the table. When the home is sold, the listing broker splits the listing fee with the buyer’s agent. Thus, buyers don’t pay their agents.

The national average for down payments is 11%. But that figure includes the first time and repeat buyers. Let’s take a closer look.

While the broad down payment average is 11%, first-time homebuyers usually only put down 3 to 5% on a home. That’s because several first-time homebuyer programs don’t require big down payments. A longtime favourite, the home loan, requires 3.5% down. What’s more, some programs allow down payment contributions from family members in the form of a gift.

For many years, conventional loans required a 20% down payment. These types of loans were typically taken out by repeat buyers who could use equity from their existing home as a source of down payment funds. However, some newer conventional loan programs are available with 3% down if the borrower carries private mortgage insurance (PMI)

That’s up to you! For sure, home shopping today is easier today than ever before. The ability to search for homes online and see pictures, even before setting a foot outside the comfort of your living room, has completely changed the home buying game. Convenience is at an all-time high. But, nothing beats visiting a home to see how it looks and ‘feels’ in person.

Question about Buying Land

Every property has it’s own land registry. A search with the Land registries with relevance to the property you are buying will reveal:

  1. The true landowners and establish the presence of brokers if any.
  2. If the title has been charged or has a caveat e.g when title used to secure a loan, or there is a court order barring any transaction on that land, etc.

A search cost KSH 520/= and should be ready normally within two hours. A search is valid for a period not exceeding six months. If the Mother Title is under the vendor’s name, the vendor should then provide the sale agreement. Normally, you will be given the necessary documents showing the agreement between company X and the vendor. A consent letter showing company X now owns the property and is in the process of transferring the title should also be provided.

It is of great importance to inquire whether the title is freehold or on lease. If it’s on a lease, Company X should issue you with a certificate of Lease, if its freehold, then a title deed should be issued.

Armed with the map, the surveyor and the buyer should visit the land on the ground. It is advisable to carry a tape measure to confirm the dimensions of the land from the map drawn to scale. Make sure you the boundaries of the land are defined using clear & visible beacons.

Company X will provide the Sale agreement. This will be an agreement between the buyer and the vendor. It will secure your interest when purchasing the land as all details regarding the payments, legal matters and timelines will be included. The law requires any land transaction to be in writing. While it is not a must a lawyer to be involved it is very advisable to have a lawyer.

After this, everything now depends on the agreement. Payments can be made as a one-off cash payment or by installments as per the agreement signed by the buyer & the seller. Either way, the seller will demand some money. By the time the initial payment is made, the title deed and other legal documents should be in the custody of the lawyers.

After the buyer pays off the buying price in full, the buyer signs Land Transfer Forms. He/ She must include passport photos, KRA pin, copy of the sale agreement, and old title deeds. All these official documents should be presented to the land registries to change ownership. In the case where you buy a piece of property from a well-established company, the company is responsible for acquiring title deeds for their customers.

The buyer normally pays the stamp duty fee after fully paying the transaction cost of the land. The fee is normally 2% of the value of the land, normally weighs with the purchase price. However, several companies normally don’t charge the stamp duty fee as it is inclusive of the purchase price.

This will depend on the registry your title is being processed in. Some registries tend to prolong the process to a period of 9 months while others are very efficient & deliver titles in a period of 1-2 months. The timeline varies with the sale agreement between the purchaser and the vendor.

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