How to avoid being conned when purchasing a home
The real estate sector has over the past attracted a number of scams associated with fake developers and rogue real estate agents who have swindled Kenyans millions of shillings. This comes at a time when statistics are showing that in Nairobi alone, close to 200,000 people are not housed and most of them are ready to get their own homes at all costs.
Johnson Denge, Cytonn Investment’s real estate services manager, says that the industry has remained lucrative, attracting a high number of cons.
In June 2016, Britam Asset Managers reported that Kenya’s real estate sector grew at 12 per cent between 2011 and 2015, contributing 7.5 per cent to the GDP.
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HassConsult’s market report for the last quarter of 2016 pointed out that home ownership and land buying appetite remained high, with property prices in Nairobi suburbs increasing by 0.1 per cent. On the land frontier, land prices in the last four years doubled even as oil and gas prices fell.
According to Denge, many Kenyans are falling into con-artists traps due to lack of information on how the industry operates. He advises buyers to tread carefully when engaging in land or home buying deals to avoid being conned by rogue developers and sellers.
“Owning a home is the ultimate dream of many Kenyans. We have seen some Kenyans all the way from abroad sacrificing so much to purchase a home for their loved ones back home,” Says Denge.
So, how do you identify a genuine real estate agent and developer? Lawyer Moses Karani says that those with dreams of one day buying a home should not be scared since it is easy to know a con developer if the buyer does due diligence. “A real estate agent is supposed to have been licensed and registered with the Estate Agents Registration Board, and they should have a certificate to prove their competence and have the ability to guide people properly when buying a house,” says Karani.
He says that if an investor is dealing with a developer, for purposes of openness, they should at least have been registered with the Kenya Property Developers Association.
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“KPDA members are people you can follow up through the association if something goes wrong,” he says, noting that the financial capacity of a developer is paramount. “A developer should be judged by the number of projects he has completed or he is undertaking.” “Financial capacity of a developer can be used to gauge a developer’s seriousness,” he says.