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IT IS FUNNY, UNTIL IT HAPPENS TO YOU

Steve Kivuva

PMP Certified | Infrastructure PPP | Executive Management | Real Estate Investment Consulting | Real Estate Investment Due Diligence| Project Management | Development Economics

发布日期: 2022年10月3日

She almost lost KES 4.8million in a land transaction, were it not that she send someone to the ground to check for the property pricing. Her disadvantage was that she resides in the diaspora.

You know how the script goes. Oh, there is a golf course coming up across the ridge. Oh, there is an airport coming up in this area; in fact, it has been tendered and the contract has been awarded. There is a big shot who bought a parcel of land some few yards away and is planning to put up a nice five-star hotel. And of course, the most rampant one is that of a golf course. The stories go on and on and on.

The import of all this is to create a reason to ramp up the prices of properties in a particular neighborhood. Can you now imagine what happens when you are incapacitated and unable to verify this seemingly juicy information, especially because you are far away? This has been an avenue for unscrupulous property dealers to qualify for increasing prices to unsuspecting buyers. Those of us in the diaspora are disadvantaged the most.

Recently a close friend called from Kuwait enquiring about a 4-acre property they intended to buy down in Machakos. And yes, the script was read to her. This time around, a senior government official in the rank of a cabinet minister, had recently bought a parcel of land about five hundred meters away. The land vendors knew pretty well that their would-be purchaser was miles away and didn’t have a way of verifying this information.

While land in the neighborhood was being sold for KES 4 million per acre, the vendor argued that the big shot purchased his portion at KES 5.0 million per acre. The vendor would then extend a gesture of friendship to offer her a rebated price of KES 4.7 million per acre. Of course, it sounds like a deal. Isn’t it?

Let me give you some bit of background. This vendor had recently purchased the land for KES 3.5 million per acre early sometime in June this year. Two months down the road, they are looking to flip the same property at KES 4.7 Million per acre. This translates to an upside of KES 1.2 million an acre and consequently, KES 4.8 million profit for the whole 4-acre parcel within two months of flipping.

What saved my friend is when she reached out to me, I made a quick dash to the ground to establish some facts. I did a thorough inquiry on going rates on the parcels in the neighborhood and advised her to push the bargain down to KES 4.0 million. Armed with this empirical data and facts, the vendor had not much room to wiggle. Seeing that my friend was well versed with the going-ons, they finally agreed on a KES 4.05million per acre purchase price. Of course, with the vendor being in the business of flipping properties had to make some money.

There are many instances that we have heard of unscrupulous agents loading prices to purchasers who have little access to information. Say an apartment is being offered for KES 10 million, they load an extra one or two million for themselves. This happens quite often. Everyone ought to safeguard their hard-earned monies.

Our friends in the diaspora are on many occasions disadvantaged by being far away. Don’t be in a rush to close. If you are unable to visit the site, procure someone to go probe the prices of the neighborhood. Enter the negotiation room armed with information. Spend an extra moment to verify and compare the prices quoted. There is information available for those who opt to do the homework. Savings follow.