A good reputation means a lot to estate agents

Ten questions for Kenyan Macharia, Operations Director, Brilliant Ventures Limited

By Harold Ayodo

1. How can an investor identify an honest estate agent?

It is not easy for prospective home and land buyers to identify an honest agent. Agents sometimes identify themselves as experts in certain property transactions, but may not be unless they are registered.

Investors should find out whether the agents have listings or closed deals in particular neighborhoods and whether they can describe transactions they have successfully completed. They should also provide names of clients and the property addresses.

An investor should also find out whether the agent’s marketing material lists years of experience. A seasoned agent means getting the best deal. Therefore, investors should be vigilant because there are many con artists in the industry.

2. What criteria do agents use to charge clients?

The amount is not fixed and depends on the agreement with the client. Some charge up to ten per cent of the purchase price while others charge five per cent. The client can bargain.

3. Which areas in Nairobi are many people buying plots and what is the cost of an eighth and a quarter?

Most investors are eyeing property along Thika Road, especially after the construction the superhighway. The demand stretches up to Thika town. A quarter of an acre in areas like Juja and Ruiru costs over Sh5 million while an eighth of an acre goes for around Sh2.5 million.

There are also a number of investors buying property in Athi River, Kitengela and Isinya, following the expansion of Namanga Road, which has made prices of land double compared to last year. In these areas, prices for a quarter and eighth of an acre are about Sh6 million and Sh3 million respectively.

4. What are the challenges of being an estate agent and how do you overcome them?

The major hurdle is that some clients have the mentality that many agents are con artists, which is not the case. Therefore, many prospective buyers settle for established investors hence making it difficult for new agents. However, with a good track record, one is sure to attract and retain clients.

5. Which months do many people buy property and when are the sales low?

Many investors buy property from March to October. In January, there are minimal sales since many people argue that they have sent their children back to school and have spent huge sums in school fees. Sales are generally low in November and December because many people save for holidays.

6. What are the setbacks in transferring property at the Ministry of Lands? How can the processes be improved?

Staff at the Ministry of Lands have huge workloads and when investors don’t meet all the requirements, the documents are rejected. This means the applicants have to reapply or rectify the mistakes, which slows the process. Some applicants present legal documents without required certifications from an advocate of the High Court while others undervalue their property so as to attract less stamp duty than the required.

There is need for proper enlightenment for investors and agents who register property on behalf of clients to ease the process. The Ministry of Lands offices are characterised by power failures, which slows operations.

7. What are some of the common mistakes buyers make when purchasing land?

Many buyers are not offered proper guidance and information on the risks involved in an investment. They are also not aware of other development options and end up making rush decisions. In the excitement to own property, some buyers do not exercise due diligence, including considering the possible fluctuation of interest rates in future. Overbidding on property is one of the biggest long-term problems property buyers face.

8. Would you advise buyers to hire the services of lawyers (conveyancers)? If yes, why?

Yes, because such lawyers are trained and licensed to certify legal documents presented to the Ministry of Lands for transactions.

9. How would you tell a quack from a genuine agent?

A quack will give vague answers to specific questions and most of them do not have offices or permanent physical locations. They will instead meet in restaurants or cafeterias. If you are not satisfied with the particular property, they will charge you to view another one and will make you believe it is on high demand. This makes many buyers rush to secure the property.

10. How would you describe the real estate business for the years you have been part of it?

Real estate has great returns. I do not regret being in the business because I have seen people start small and expand tremendously. For instance, an investor can acquire a five-acre parcel of land at Sh10 million and sub-divide it into 37 plots measuring an eighth, with each selling at Sh750,000. This means a profit of Sh15 million.

It, however, requires patience as it may take as long as five years to sell the plots. Those who have ventured into the business have made lots of money because the value of the property always appreciates.

 

 

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