At some point in life, we all want to sleep in a house we can call our own and this was exactly what Dr Godfrey Habomugisha was dreaming of.
For a number of years, he went home to a government house in one of the flats in town. But as his family expanded, he realised that he needed more than a two-bedroom house and a place he could call his own.
The gynaecologist had saved some money in anticipation of acquiring a house. But because of his demanding job, he could not have the adequate time to look for land, supervise its levelling and be at the site to monitor the construction.
To settle his worries, he moved around looking at the offers that the different local real estate companies offered in regards to buying houses. He settled for Akright Property Consultants Limited.
“I found that Akright was offering a better deal. We had been putting some money aside. When we talked to Akright, we found we could buy land from them and then have them build for us.
We could pay for the plot of land and start paying for the house as our property later on,” the medic explains.
He adds that before settling for that option, Akright gave them two choices.
There was the option of either buying an already finished house or buying a plot and have the company construct for them a house of their choice. “We opted for the latter.”
HOW TO BUY FROM REAL ESTATE DEALERS
Dr Godfrey Habomugisha a gynaecologist explains, “The terms Akright gave us were flexible. We could deposit some money and pay the balance over a period of time.
We bought the plot of land at Shs30m which covered 30 decimals (slightly more than quarter an acre of land) in their Kakungulu Estate. We felt that was good enough. The whole structure was valued at Shs270m. I initially paid a quarter of that amount.”
The medic says he is still paying and Akright is very understanding. He says that it is common for people to take long to acquire decent accommodation because of money issues.
However, real estate companies are one way to acquire a home especially when you have some money but not enough to build a house at once.
“Obviously, because you are going to pay over a long period, there will be some interest but by and large, if you think of it critically, it is more advantageous,” he advises.
Instalment payment basis
Anatoli Kamugisha, the Managing Director at Akright Projects Limited says people have a chance to acquire land and a house through real estate companies like Akright on an instalment payment basis.
He explains, “When you contact us, you describe the kind of house you want and what your budget is. We agree on the terms of payment. After other few modalities, you start on the payment, either the full amount or installment payment.
“Upon completion of the payment, the title is issued to the owner, along with the transfer forms. Six months later we check on you to see how you are enjoying the property. This is for people who want to buy an already built structure.”
Florence Nasaka, a front desk operator at Zion Estates explains that their three-bedroom houses in Matugga on 50ft by 100ft plots of land cost Shs50m.
“If you want any of these houses, you deposit 30 percent (Shs15m) of the Shs50m, we give you the keys to the house and a year to complete the payment,” she says, explaining that you can do this by either paying personally or getting a mortgage from Microfinance with an initial deposit of 30 per cent.
Nasaka says you will have to pay the balance in a period of one to five years with a 30 per cent interest rate per annum.
Having the house constructed
However, if you want to buy land and have Akright build you a house of your choice, Kamugisha explains that they ask you to pay half of the value of the house.
“But we can negotiate and come to a common payment plan. Many people prefer to finance their houses through the bank and these mortgages can be financed between 15 to 20 years.”
He adds that the marketing team at Akright can help you acquire a house through a bank mortgage which can be arranged through Barclays, KCB, Housing Finance, dfcu and Stanbic.
David Dansor Ninyikiriza, Head Mortgage and Development Finance Business at Housing Finance Bank Ltd explains how you can use mortgage financing to buy a house.
He says, at Housing Finance Bank Ltd, they provide a wide range of mortgage products used for either purchasing or construction of both residential and commercial property.
“One is able to acquire a house nowadays without having to save all the money needed. With our mortgages, you are given a period of up to 20 years to pay back with manageable periodic payments,” Ninyikiriza explains.
Ninyikiriza says anyone with regular income is eligible, whether employed or self-employed. He says, when you apply, you get the money in two to three weeks. He however adds that the challenge they have faced marketing this concept among Ugandans is the difficulty in ascertaining incomes of people who are self-employed.
“The income levels of people who do not get salaries are generally low. Accumulating a down payment therefore takes long.
Again, supply of affordable houses is also limited. Property prices are high compared to their incomes,” Ninyikiriza adds.
He further explains that the financing plan for houses is such that individuals need to save for a down payment of between 10 to 30 per cent of the property value and the difference will be a loan repayable in a period of up to 20 years.
However, “In cases where you default, you are given a few months to resolve your problems then resume payment of the mortgage.”
The house must be in an urban location with a land or condominium title and an approved plan.
But if you are busy, there is someone who is working to make things as easy as a click of your mouse. Shakib Nsubuga the Country Manager for Lamudi Uganda, an online real estate market place that provides information on properties available for rent, sale or lease.
He explains that they work with real estate agencies, developers and owners to collect their real estate portfolios and display them in a manner that provides information to potential clients on what is on the market.
“Lamudi is majorly a hub for real estate solutions. When one finds a listing (property) of interest, they have two options, they can either send an email or click to view a phone number that will grant the potential client access to the seller. These two options put the potential client directly in touch with the seller. This could be the property agent, developer or owner,” Nsubuga explains.
He adds, “With such services, you have a chance to compare sellers and what they can provide. We do our best to vet the sellers that register on Lamudi.”
Nsubuga adds that for authenticity, all sellers that have been vetted get a ‘Lamudi trusted seller badge’ that is a vote of confidence in the agents. “This helps to reduce the well-known incidences of fraud associated with online transactions.”
So it might not matter that you do not have all the money you need to stay in your dream house. Sometimes all you need is save up and pay a good deposit and turn your rent into that monthly repayment for a mortgage- it is one sure long term way to buy a home.
Precautions before buying
Land title. A clear title to a property is one of the most important factors to be considered before purchasing a house.
Inspect sanctioned plans. Sanctioned plans should be inspected, especially for buildings under construction. If the building is not built in accordance with sanctioned plans, the completion certificate will not be granted.
Permitted user and Restrictions.This aspect should be verified as well. For example, one should see whether the property is residential or commercial.
Documentation. Proper documentation should be put in place for purchase of the property. The sale document should be properly stamped and registered and the original title deeds should be taken by the purchaser from the seller.