Buying land is a communal process; you need the help of experts to navigate every step.
The experts you involve while buying land will help you at different stages, namely:
- Identifying land options
- Due diligence for the land
- Preparing legal documents
- Title transfer
You will need a different set of experts for every stage. Each expert will charge you a professional fee. The fees will vary depending on two major factors:
- A percentage of the value of the land.
- A standard fee set by the service provider.
If you choose to buy your land through a property company, they will cover these costs in the price of the land.
You need to speak to your sales agent to understand what the company covers in the selling price.
The Different Experts and Expenses to Consider While Buying Land
Identifying the Land You Want to Buy
You will need to travel to different parts of the country and speak to different sellers. This is a long and tedious process. It can take weeks or months to visit different parcels of land and identify the right one.
In this process, you can work with:
1. Private Landowner
You need to identify private landowners who are willing to sell.
Since there is no directory to help you, you will rely on a referral system.
This means calling your friends and acquaintances to connect you with landowners in their network.
Depending on your network, just getting leads to potential sellers can take several weeks. If you are looking for land in a specific location, this can take a couple of months.
While working directly with landowners, you exempt middlemen from the process. This can save you a significant percentage of the money.
Your expenses will include:
- Time and fuel spent looking for land. It can quickly add up if the process extends for a few months.
- The cost of the land. This will depend on the price set by the seller.
- Due diligence fees. Most private land sellers have little to lose and will transfer the due diligence cost to the buyer.
- Title transfer fees. Depending on the seller, this is either shared or falls on you. You must decide how to pay for this process before signing the lease agreement.
Brokers act on behalf of sellers and buyers.
They will spend time compiling a list of available options and present it to a buyer like you.
However, they have no legal right to the land. Once they take you to the parcel in question, they will connect you to the landowner.
While working with a broker, you will pay for:
- Viewing fees – This is charged upfront to cater for fuel spent visiting various parcels on the broker’s portfolio.
- Due diligence and title transfer fees – Since you’ll end up dealing with the private landowner, these costs will most likely fall on your end.
- Broker’s fee – Once you decide to buy, the broker will charge you a percentage of the buying price. This is in addition to the price you pay for the land.
Real Estate Companies
Real estate companies will buy land in various locations and resell it to customers.
They will buy big chunks (negotiating for the best rates) and then carry out value addition activities. Thereafter, they will subdivide it into smaller chunks, suitable to private investors and resell it.
Since they operate at a corporate level, they will often have the resources needed for value add activities such as:
- Bringing electricity to the property
- Sinking boreholes
- Perimeter fencing
- Tree planting on the property
Real estate companies such as Matla will often offer you options in various locations. They have a wide presence in different locations, making it easy for you to identify a suitable investment.
Land Due Diligence Experts
After identifying the land you want to invest in, you need to carry out due diligence.
Due diligence will protect you from fraudsters. It helps you identify if you are dealing with an honest seller.
Due diligence experts will often charge you a percentage of the value of the land or the selling price.
Depending on the value of your investment, this can add up quickly.
Some of the experts you can involve for the due diligence process include:
They will help you identify the value of the land. This will protect you against sellers who might exaggerate the price.
While working with a valuer, they can help advise you on whether the land matches your investment plans. This way, you make an informed decision.
Valuers will also help you:
- Verify the documentation provided for the land
- Verify the ownership, especially when dealing with a private seller
- Assess the potential viability of commercial land
- Advice on drainage in the area
Lawyers offer a different set of skills to the due diligence. They help you:
- Verify the existence of the land as a documented parcel.
- Verify ownership and legal status of the land. They will check if the land is mentioned in any ongoing legal courses or land reports.
- Check the sellers legal and criminal records.
Real Estate Companies
Real estate companies invest heavily in the due diligence process. They are interested in creating value for their customers, thus, they will leave no stone unturned.
The due diligence process for a company like Matla will involve several steps:
Getting a Valuer
The valuer will help them get the best deal and assess the viability of the property.
This helps them determine if this is a worthwhile investment for their customers.
At this stage, they can assess the value addition activities needed to ensure they get the best price for their customers.
Hiring a Lawyer
Often, real estate companies will buy from private landowners.
They will hire a lawyer to help them verify ownership and the integrity of the seller.
This way, they are sure of a clean bill of health while presenting the land to their customers.
Guerilla Due Diligence
While the above professionals offer a lot of value, a company like Matla prides itself in going the extra step.
This will involve:
- Visiting the area and learning more about the land. Neighbors can reveal important details such as family disputes that affect ownership.
- Meeting the local community leadership. A lot of land in Kenya is ancestral, thus, getting the community’s approval is important. Community leaders will advise on whether they are open to welcoming investors into their community.
- Sampling the soil in the area. This will help the company determine whether to advertise to people interested in construction or agriculture.
Once you are sure of your decision, you need to involve a lawyer to help you prepare the legal agreement.
If you worked with a lawyer for your due diligence, they are likely to prepare the sale agreement at a discount.
If this is not the case, you need to prepare for the additional cost of hiring a lawyer.
After completing your payments, you will need to follow through with the title transfer process.
This will require several visits to the local land office.
Alternatively, you can hire someone to help you with the process, which includes:
- Being present at the land board sitting
- Applying for the transfer
- Collecting the title
Why You Should Work With a Real Estate Company
As you’ve learned, the land buying process requires a lot of professional help.
While it is good to have these experts serve you, their fees can add up quickly.
With a real estate company like Matla, you will get a buying price inclusive of all costs.
Once you come to Matla Group, you will:
- Get a free site visit. You can call us at 0746 493 504 to book a seat on any weekend.
- Receive a due diligence report that combines both the lawyers and the land valuers’ findings. You can request for the report in your email.
- A legally prepared sale agreement. We have a company lawyer to help you prepare the document to meet your payment plan.
At Matla, we take care of the title processing. After you sign the sale agreement, we will follow up with the land transfer fees and then help you process your title.
With Matla Group, we will deliver the title to you at no extra cost. You can view our properties or call us at 0746 493 504 to start your land ownership journey.