When in the market to purchase or sell a home for instance; you are bound to encounter a number of limitations and choices, along with risks to maneuver. It is important to engage good real estate agents as they will help you professionally navigate through these situations and provide guidance throughout the process.
Professional agents gather vast experience navigating through most neighborhoods and real estate, in property searches, over time. As a result, they accumulate knowledge on the concealed problems in the many neighborhoods, and are familiar with or can easily locate hidden gem properties. They will also assist you in conducting due diligence and ensuring regulatory compliance when selling or buying real estate. For example, on matters pertaining to taxation.
Despite the misconception, a good real estate agent will not necessarily be expensive. After all, whether you know it or not, agency fees is often already accounted for in a property’s purchase or selling price.
The return on such an investment is also almost always positive. An exception having been made for fraudulent agents and cases.
How To Identify Good Real Estate Agents
There are a number of considerations you can check when identifying a good real estate agent. These include, but are not limited to the following:
- Your real estate agent or their agency company should have all the necessary qualifications and proof of regulatory compliance.
- The agency should be familiar with the neighborhoods and property types you are interested in or looking at.
- Ask for relevant documentation and paperwork (if needed) to enter into an agency contract that suits your needs as the client.
- Where necessary, check for a satisfactory track record. Be it in buyer agency or seller agency.
- Also look at your agent’s availability and how easy or difficult it is to reach them. Consider their office or physical address.
- If you are selling a real estate property check that your agent or agency has access to a good listing and marketing platform. This will confirm that they can actually market, and will sell your property within the shortest time possible.
- If you are buying a house, you can ask them for referrals or testimonials from past clients. Also find out if your budget is within their working range.
- You should also look through your agent’s portfolio to see if they have, or deal in properties that you like.
The Cost of Real Estate Agency in Kenya
In many countries and jurisdictions, real estate agency is regulated by governments.
In Kenya, the Estate Agents Registration Board (EARB) is the government body tasked with registering and oversighting real estate agents and agencies. This is done in accordance with the Estate Agents Act.
The following are the appropriate fees payable for agency services as set out in the Estate Agents (Forms and Fees) Rules in the Act.
Note that: In many cases, marketing and advertising costs such as listing fees, are incurred and treated separately.
a) Agency fees payable to a seller’s agent for sale of property
- 10% of the first KES 100,000 plus,
- 6% on the next KES 900,000 plus,
- 3% of the residue for properties exceeding KES 1,000,000 in Value.
For context; if a property is sold for KES 3,000,000 only, the commission payable to the seller’s agent is KES 124,000 only.
b) Commission payable to a buyer’s agent for purchase of property
- 5% of the first KES 100,000 plus,
- 3% on the next KES 900,000 plus,
- 1.5% of the residue for purchases exceeding KES 1,000,000 in Value.
Where two agents collaborate on a transaction; for example a buyer’s agent and a seller’s agent, the overall agency commission is split between the two. Neither the seller nor the buyer is required to pay an extra amount in such a case. Provided that all the relevant agency contracts and paperwork are in place.
c) Commissions for residential lettings/renting
Calculated as follows:
- 7.5% of annual gross rent for leases of up to one year.
- 1 month’s rent for leases extending over 1 year.
d) Letting commission for commercial leases
Usually charged as follows:
- 7.5% of annual gross rent for a sole agency.
- 10% of annual gross rent for a general agency.
These commissions can be negotiated where property management, or other agencies are involved but should not be less than half the scale. As set out in the regulations.
How To Approach Real Estate Investing
Housing is a basic need. As such, a family house is usually the starting point of any journey in real estate investing.
However, as you start looking to purchase a second or subsequent real estate investment units, it is important to pay close attention to market conditions, signals, and forces.
Nonetheless, enlisting good realtors is always very crucial.
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Good article 👍
Thanks Alvan.
Professional agents really make Real Estate easy to navigate when investing.