Buying a house online: what you need to know

Construction cost spells value. PHOTO collage/Rachel Mabala/net

What you need to know:

With advances in technology, a growing diaspora clientele and fatigue from the hardships of constructing from scratch, the market for housing has gone digital and is expanding rapidly. As such, there are many offers online, some of them unbelievable.

A random online search about houses for sale in Kampala gives you approximately 6.2m results. Among the sites with houses for grabs is whose house and apartment prices range from Shs50m to Shs52m, Shs65m, Shs90m, Shs150m, Shs300m, and so forth. These are mostly located in the suburbs of Kampala City.

While some of these houses look like they have been lived in, there are also a number of those that are still under construction.

However, sometimes the price tags attached to online houses can seem too good and attractive to be true. For instance, an unfurnished newly-built two bedroom house with two bathrooms on a 50 by 50 plot of land is up for sale at Shs45m at Namugongo, Bukerere. The balcony and the house interior are already tiled.

As if the above deal is not sweet enough, one of the sites has a visibly well-finished three bedroom bungalow. Details of the house show it has two bathrooms, a garage and is roofed with maroon corrugated iron sheets. It is up for sale at Shs61m at Wampewo on Gayaza Road in the vicinity of Kampala city. The photos of the house do not show its interior.

What is a fair house price?

To Deus Turyamureeba, a fair house price is one that is determined, first, by the value or cost of land in a given area and the actual cost of putting up the house. This, Turyamureeba adds, is also determined by the location of the house.

“If it is an upcoming or developed suburb such as Bulindo where a 50x100 feet plot costs approximately Shs60m, constructing a three bedroom house is likely to cost aboutShs200m. On the market, such a house will cost in the region of Shs280m or utmost Shs300m because of the location factor,” Turyamureeba says.

“When it comes to far-flung suburbs especially those located on major highways leading out of the capital city such as Katende on Masaka Road and Buloba on Mityana Road, you can expect to buy a bungalow at Shs150m or Shs200m because the area is still developing and land is also still affordable,” Turyamureeba adds.

Davis Nsubuga, a real estate dealer agrees with Turyamureeba, opining that a fair house cost is one that not only suits its location but also the quality of the house itself. 

“The cost of a house in Kira will differ from the one at Kawanda or Nsangi because thelocations are different and they have experienced or are still experiencing different levels of development over the years,” Nsubuga explains.

The level and availability of social amenities such as schools, health facilities and shopping centres also differs in different locations and this will impact on house pricing.

“It is hard for social amenities such as hospitals to exist in places where there are no homes in their proximity. Homes support hospitals and hospitals are also supported by homeowners. At the end of the day, the existence of hospitals in a given place could determine the cost of houses in the area,” Nsubuga adds.

Points to note when buying online

Wilber Amanya, a prospective home owner says the pricing of online houses is two-way; there are those whose physical appearance is befitting of the price tag while there are prices that are overly exaggerated. The reason behind the exaggerated prices, Amanya opines, is because of liberalisation of the economy.

“Home owners and real estate companies upload houses for sale according to prices they deem right because there is no price control. Some may attach prices anyhow because of how they acquired the property,” Amanya says.  

On the other hand, Amanya opines that online houses also tend to have attractive prices because of underlying or fishy information the seller may not readily disclose to the prospective buyer until the deal is sealed. This is where you need to ask a lot of questions which the property dealer must answer. For instance, the house on sale could be a contested family property or the bonafide owner may be out of the country. The property dealer could also be operating a briefcase company with no permanent address, looking for their next victim.

“Where do I start to look for the seller in case a deal goes bad if the seller did not have a permanent address? Falling for (unusually) low property prices especially for finished houses is how unsuspecting home owners inherit or buy problems they do not know about. The trouble starts when the seller is not honest and the buyer did not probe or was not inquisitive enough and rushed to seal the deal because it was too good to turn down,” Amanya explains.

“The solution to this problem is to carry out a thorough background check, independent of the seller, to establish the proof of ownership. You could inquire from the local council leaders or immediate neighbours who have lived close to the property in question for a long time,” Amanya advises. 

Factors that determine the cost of a house

From an engineering perspective, construction cost is one of the things that determine the pricing of a house. A number of things contribute to construction cost. For example, if a building was built professionally using the right quality and quantity of materials, even with simple finishes using normal paint, the cost will tend to be higher.

“A homeowner who used the right mixtures of sand and cement and gravel at the foundation and roofed using quality iron sheets or tiles spent more money on the project. When they put up such a house for sale, they will obviously expect to fetch more money,” says, Joseph Oryang, a civil engineer at Century Investors Limited.

“The type of finishing used will also determine the cost of the house. For instance, if a home owner used stone dressing or stone pitching, which costs approximately Shs200,000 per square metre,  as their final finishing layer, they will set a highsale price compared to a house owner who used paint at Shs10,000 per square metre at finishing stage,” he adds.

Oryang agrees with Amanya that sometimes low house costs are suspicious. A house will appear beautiful and well finished on the outside but upon visiting, it may turn out to be incomplete especially with certain interior sections such as the bathroom requiring you to spend some money to finish it before you can move in. 

Then the supply and demand factors also play a role in house pricing. For instance, a house built within an estate environment that is well planned is always going to fetch a higher price than a house built close to or within a slum area.

“Even though you might have spent as much as a house owner who put up a house in a nice environment, the appeal at selling stage will decrease just because of the neighbourhood,” Oryang explains.  

For houses that are overpriced, some sellers, Oryang, opines, do not know how to calculate the value of a house and so they ask for much more than what the house is worth. In such cases, they may sometimes go for a long time without getting a buyer, whereas underpricing normally indicates something about the location, the state of the building and how it was built.

The appeal of online buying

One of the reasons prospective home owners have chosen to buy houses online is to escape the stress that comes with supervision of house construction from the foundation to finishing. This, according to Mable Ndagire, a prospective homeowner, could include theft of construction materials that are in most cases costly but also high labour costs for masons, site technicians and engineers.

“People have become busier and have resorted to buying everything including houses online. When you go through the process of building your house from one stage to another, you appreciate what it takes to build and the costs involved. Above all, you attach value to your house when it is complete because you oversaw its construction,” Ndagire thinks.

She is also quick to argue that buying a house online doesn’t give you room to have your house customised to your tastes and preferences. For example, you may want a master bedroom that is ensuite but end up with one that is not self-contained.

“You move into a house with very little or no structural changes to make. If you insist, it may come at a cost especially if it involves breaking some sections of walls to incorporate the changes. Unfortunately, you will never know what quality and quantity of materials were used in construction of such a house. You have no choice but to live in a house because it is within your budget,” Ndagire explains.