HOW TO BUY AN AFFORDABLE RESIDENTIAL HOME IN COVID-19 PANDEMIC?
May 14, 2020
The Covid 19 Pandemic has shaken the world with its effects being felt everywhere. The disease was identified on December 2019 and has gradually spread across the entire globe. The effects of the disease continues to take its toll (as of May 2020) on every industry including the real estate industry. Due to fears of being infected with the disease, clients are wary of leaving their homes and meeting agents and/or property owners. Regardless, most property owners are eager to selling/letting out their properties amidst the Covid-19 outbreak. An important point to note however is that, if you are looking at renting or purchasing a property during the existing outbreak, you may be in line of obtaining an attractive deal, one that you simply may not be able to say no. Here is why!
Due to the Covid-19 outbreak, the real estate market has slowed down. The slow growth has made it difficult for property owners to either sell their properties or rent out their properties. Believe it or not this is the perfect time to obtain a favorable deal as a client if you are looking at obtaining an affordable residential home. Most owners of residential properties in Kenya are willing to be more flexible in the negotiation process during this difficult time. this is because the financial situation in the economy has taken a hit, employees are being laid off to accommodate the high costs that companies are experiencing due to lack of demand, salaries of employed personnel in many companies have also been affected due to the lack of affordability of the businesses to fully pay their employees, the unemployment rate is rising hence making it further difficult for most people to commit their funds in an investment they aren’t sure will pay off. Residential property owners are aware that interests in purchasing properties or renting out properties are scarce thus they are willing to seriously consider every offer they get for the properties they own. Furthermore, due to the lack of consistent income they may be obtaining, they would therefore consider getting the extra funds that may result from the property deal that would accommodate the implications they may be experiencing elsewhere.
The oversupply of residential properties in Kenya does not help the situation for property owners. The market is incredibly competitive as a result real estate consultants are battling it out for every potential tenant they can obtain. The Covid-19 outbreak has further increased the competitive nature of real estate consultants, this is so because as inquiries and interests for properties reduce, the minority of clients who are willing to proceed with viewing properties and renting/purchasing the properties are being handled like diamonds by real estate consultants and property owners so that the lead doesn’t fall through. Every lead is handled with great care by real estate consultants and property owners, as a result, agents and property owners are more willing to reason with the client’s requests and also be more reasonable in the negotiation process.
The current market forces are more favorable to clients than it is towards landlords. The current Covid-19 pandemic is making it tougher for landlords to sell off or rent out their residential properties in Kenya for the desired price and this gives more room for negotiation than would have been possible before the Covid-19 outbreak. This is well known by both parties, landlords and clients, as a result this is the perfect time for clients to try their luck and negotiate a price well below the market price of the given property. Given the Covid-19 outbreak, clients may reach an agreement for a property at a better deal than they would have expected due to the increased flexibility of many landlords to well consider the offer presented to them on the table.
Real estate consultants also play a major role in this process, as, in situations where they represent the landlords, they are also willing to consider the offers they receive even though the offer falls well below the price advertised. Real estate consultants have it hard during the Covid-19 outbreak due to a fall in demand leaving them with a portfolio of properties that are not receiving offers at all or frequent offers for that matter. This plays in the hands of the clients as real estate consultants have a role of advising landlords on the current market situation and also stress to landlords to consider the offers they get as they rather receive some sort of frequent income in terms of rent as compared to not receiving anything at all or be it to receive a bulk of funds if it’s a sale process. Most landlords would rather receive income even though its less than what they hoped for instead of having their property vacant during this extremely difficult period of time.
The current Covid-19 situation has dealt a major blow to property investors and has in fact placed clients in a much more demanding situation in the agreement and negotiation process. This swing is advantageous for clients as compared to the situation most landlords find themselves in during this trying times of the global Covid-19 pandemic however how the real estate market will respond post the pandemic situation is difficult to predict.
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